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Appeals Nos. 244 and 245 of 1958. Appeal by special leave from the judgment and decree dated February 19, 1953, of the Madras High Court in Second Appeals Nos. 2120 and 2121 of 1947. A. V. Viswanatha Sastri and M. section K. Iyengar, for the appellants. K. N. Rajagopala Sastri and M. section K. Sastri, for respondent No. 1A. section V. Venugopalachari and R. Gopalakrishnan, for respondent No. 8A in Appeal No. 244 and respondent No. 7A in Appeal No. 245. April 27. The Judgment of the Court was delivered by SUBBA RAO, J. These two appeals are directed against the judgment of the High Court of Madras dated February 19, 1953, setting aside that of the District Judge, Tirunelveli, and restoring that of the Subordinate Judge, Tuticorin, in O. section Nos. 45 and 46 511 of 1945 on his file, and they raise the question of maintainability of a suit in regard to honors and perquisites in the temple of Athinathalwar in Alwar Tirunagari. At Alwar Tirunagari in Tirunelveli District there is a famous temple called Athinathalwar temple. The presiding deity in the temple is Lord Vishnu. Its origin is lost in antiquity. In 'the 10th and 11th centuries Vaishnavite saints, called Alwars and Acharyas, who were ardent devotees of Lord Vishnu, worshiped at the temple and sang in praise of the Lord. As time passed by, 20 smaller temples were erected to commemorate the lives of Alwar8 and Acharya8. Within the compound of the main shrine, there are three minor shrines of Nachiar, Nammalwar, and Garuda; the rest of the smaller shrines are outside the premises of the main temple. Each of the said temples has its own manager, archakas and separate endowments; but, presumably because of the fact that the Alwar8 and Acharyas, whose idols are installed in the smaller temples, were originally devotees of Sri Athinathalwar, an interesting and novel practice of mutual and regular exchange of visits between the idols in the smaller shrines and the idol of Athinathalwar has grown over the years. During certain specified occasions in the year, the idols in the minor temples are brought to the main temple for worship; so too, on specific occasions the idol of Athinathalwar is also taken to the minor shrines; such visits being reminiscent of the days when the Alwars and Acharya8 worshiped in the temple of Athinathalwar. Sri Ramanujacharya was one of the greatest of the devotees of Lord Vishnu and is well known throughout this vast country as the progenitor of an important school of Indian philosophy. He died in the year 1127 A. D. In the 13th century a shrine was built in his honour and his idol was installed therein. Sri Ramanujacharya is also known as Udayavar or Emberumanar and the shrine built in his dedication is known as Emberumanar temple. The manager and archaka of the said temple is known as Emberumanar 512 Jeer. Emberumanar temple also is outside the precincts of the temple of Athinathalwar. There are also mutual visits between the idol of Emberumanar and the idol of Athinathalwar to each other 's temple. The present Emberumanar Jeer is the plaintiff in the suits out of which the appeals have arisen. There is a mutt called the Vanamamalai Mutt in the said District and the head of the mutt is known as Vanamamalai Jeer. He is a sanyasi held in reverence by Vaishnavites of South India. He is the first defendant. The heads of the Ahobilam Mutt and the Tirukkurungudi Mutt are the second and third defendants respectively. The fourth defendant is the Executive Officer of the temple of Sri Athinathalwar and he was appointed by the Hindu Religious Endowments Board, Madras. The records disclose that, at any rate from the middle of the last century, there have been disputes between the various Jeers and others as regards the order of priority in which certain honours have to be distributed among the said Jeers when they attend the temple of Sri Athinathalwar for worship. In the ghoshties (group of worshipers in front of the deity) both on ordinary and special days the said Jeers are shown honours befitting their rank. The honours consist of distribution of theertham, thulasi, satari and viniyogam, and a few more similar items. Each of the said Jeers is allotted a particular place in the ghoshti and a certain order of precedence is observed inter se between them. This order of precedence in the matter of receiving honours has become an unending source of bickering between the religious heads; with the result, the Madras Hindu Religious Endow ments Board, constituted under Act 1 of 1923, with jurisdiction to administer the endowments in the Madras State, had to interfere and settle the disputes inter se between the various Jeers. On May 12, 1927, the said Board fixed the order of precedence for honours between the various Jeers to be observed both on ordinary and special days. By the said order the Board recognized the Emberumanar Jeer 's right 513 to the honours and perquisites in precedence over the other Jeers on all the days other than Vaikasi festival days, except the 7th day, and as regards the other days of the festival, namely, 1st to 6th and 8th to 10th days, the Board directed that the other Jeers should be shown on the respective days both the ordinary and special honours in precedence over the rest of the Jeers, including the Emberumanar Jeer. Not satisfied with the said order, the Emberumanar Jeer filed O. section No. 320 of 1933 in the Court of the District Munsif, Tirunelveli, which was later transferred to the Court of the Subordinate Judge, Tuticorin, as O. section No. 45 of 1945, against the other Jeers and the Hindu Religious Endowments Board, for the declara tion of his right to the first theertham and other per quisites in precedence over all the others in the ghoshties of Sri Athinathalwar temple on the ground that he was entitled to them as the office holder of the, temple of Emberumanar. Subsequent to the filing of the suit, the Board, by its order dated May 15, 1935, altered the order of precedence giving the Vanamamalai Jeer precedence over the Emberumanar Jeer; and this led to the Emberumanar Jeer filing another suit O. section No. 201 of 1941 in the Court of the District Munsif, Srivaikuntam, for a declaration of his right to the first theertham, etc., in precedence over all the others. This suit was later transferred to the Court of the Subordinate Judge, Tuticorin as O. section No. 46 of 1945, to be tried along with O. section No. 45 of 1945. To the suits the Emberumanar Jeer, the Vanamamalai Jeer, the Ahobilam Jeer and the Tirukkurungudi Jeer, and the Executive Officer of the Hindu Religious Endowments Board were made parties. These suits have had a chequered career. But we shall briefly refer only to those stages of the long drawn litigation which have some bearing on the questions raised in the present appeals. O. section No. 320 of 1933 was finally numbered as O. section No. 66 of 1936 and was disposed of on March 25, 1941, by the District Munsif, Tirunelveli. The learned District Munsif dismissed the suit on the ground that it was not maintainable as the plaintiff had no legal right in respect 514 of which he could seek relief in a civil court. On appeal, the learned Subordinate Judge, Tirunelveli, came to the conclusion that, as the plaintiff had come to court to establish his right of precedence to receive the theertham, etc., as forming part of the emoluments of his office of aradanaikar in the suit temple, the suit could not be dismissed on the preliminary ground that it was barked under section 9 of the Code of Civil Procedure; on that basis, he set aside the decree of the District Munsif and remanded the case for trial on other issues arising in the case. Both the parties preferred appeals to the High Court of Madras and they were numbered as C. M. As. Nos. 1 and 155 of 1943; on January 31,1945, Chandrasekara Aiyar, J., dismissed both the appeals. The learned Judge propounded alternative theories, and he expressed himself thus: "Of course, before he (plaintiff) can succeed in the suit, the plaintiff has to make out that he being the Aradanaikar and trustee of the Emberumanar temple amounts to his holding an office in the suit temple." The learned Judge agreed with the Subordinate Judge that the suit could not be dismissed in limine without deciding the said question of fact. On remand, the learned Subordinate Judge, Tuticorin, to whom the said suit and the connected suit, being renumbered O. section Nos. 45 and 46 of 1945, were remanded came to the conclusion that the Emberumanar temple was a sub shrine attached to the main temple of Sri Athina thalwar, and that the plaintiff, who was the aradanaikar of the sub shrine, would be virtually an office holder in the main temple. He further hold that the privilege of first theertham was attached to the said office as part of its remuneration and, therefore, the suit was one of civil nature falling under section 9 of the Code of Civil Procedure; in that view, having held on the merits that the plaintiff had established his right of precedence, he decreed both the suits. As many as six appeals were preferred against the decrees in the two suits by the aggrieved parties to the District Court; and the learned District Judge in a common judgment disposed of them on January 23, 1947. 515 The learned District Judge, on a review of the evidence in the case, held that the institutions were not interdependent or intimately connected in such a way that an office holder of the Emberumanar temple was necessarily an office holder of the Athiiiathalwar temple. On that finding, he held that the plaintiff was not an office holder of the Athinathalwar temple and, therefore, he was not entitled to file a suit with regard to his rights of precedence in being given the theertham, etc. In the result he allowed the appeals and dismissed both the suits with costs throughout. Against the said judgment, the plaintiff preferred second appeals to the High Court of Judicature at Madras, being Second Appeals Nos. 2120 and 2121 of 1947. They were heard by Krishnaswami Nayudu, J., who on a reconsideration of the evidence disagreed with the finding arrived at by the learned District Judge and accepted the finding given by the learned Subordinate Judge. Not only the learned Judge accepted the finding of the learned Subordinate Judge that the plaintiff as the aradanaikar or the archaka of the sub shrine was virtually an office holder in the main temple, he also went further and held that, as one of the theerthakars, the plaintiff could be considered to be the holder of the office of arulipad in the main temple. In the result the learned Judge set aside the decree of the District Judge and restored the decrees of the learned Subordinate Judge. As leave to appeal to a division bench was not given by the learned Judge, the first defendant, i.e., the Vanamamalai Jeer, in the suits, by special leave, has preferred these appeals against the judgment of the High Court. Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, raised before us the following points: (1) A suit for a declaration that the plaintiff is entitled to honours in a temple would not lie unless he establishes that he holds an office in the said temple and that the said honours form part of the perquisites attached to the said office, and that, as in the present case the plaintiff claimed that he was an aradanaikar and trustee of only the Emberumanar temple and as such entitled to honours in Athinathalwar temple, 516 the suits should have been dismissed in limine on the ground that the plaints did not disclose any claim of civil nature falling under section 9 of the Code of Civil Procedure. (2) The Courts were not justified in allowing the plaintiff to make out a now case not disclosed in the plaints, namely that the Emberumanar temple was a subordinate shrine of the Athi nathalwar temple and, therefore, the plaintiff was the office holder of the latter temple; assuming that there was justification for the courts in allowing the plaintiff to develop a new case at a very late stage of the proceedings, there was a clear finding of the District Court based on the evidence adduced in the case that the Emberumanar temple was not a sub shrine of the Athinathalwar temple, and the High Court had no jurisdiction to set aside that finding in second appeals. Mr. Rajagopala Sastri, learned counsel for the respondents, contended that the plaintiff 's alternative case was not really a new one, but all the relevant facts in support of that case were disclosed in the plaints, and that the finding of the District Judge was not a finding of fact but was either a legal inference from proved facts or a mixed question of fact and law. He argued that the contention of learned counsel for the appellant ignores the religious background and ideas of the class of persons with which we are now concerned, and that, if the matter is approached from a correct perspective, as the High Court did, it would be realized that there was such an association between the two temples as it could be said that one is subordinate to the other leading to the only irresistible inference that the plaintiff, the office holder of the sub shrine, could claim honours in the main temple of which the sub shrine is only a part in the larger sense. At the outset it would be convenient and necessary to notice briefly the law pertaining to the maintainability of suits in civil courts in respect of honours in temples. Section 9 of the Code of Civil Procedure describes the nature of suits which a court has jurisdiction to entertain. It can entertain every suit of a civil nature excepting suits of which its cognizance is 517 either expressly or impliedly barred. As a corollary to this, it follows that a court cannot entertain a suit which is not of a civil nature. Prima facie suits raising questions of religious rites and ceremonies only are not maintainable in a civil court, for they do not deal with legal rights of parties. But the explanation to the section accepting the said undoubted position says that a suit in which the right to property or to an office is contested is a suit of civil nature notwithstanding that such right may depend entirely on the decision of a question as to religious rites or ceremonies. It implies two things, namely, (i) a suit for an office is a suit of a civil nature; and (ii) it does not cease to be one even if the said right depends entirely upon a decision of a question as to the religious rites or ceremonies. It implies further that questions as to religious rites or ceremonies cannot independently of such a right form the subject matter of a civil suit. Honours shown or precedence given to religious dignitaries when they attend religious ceremonies in a tem ple cannot be placed on a higher footing than the religious rights or ceremonies, for they are integral part of the said rites or ceremonies in the sense that the said honours are shown to persons partaking in the ceremonies. Prima facie honours, such as who is to stand in the ghoshti, in what place, who is to get the tulasi, etc., in which order, and similar others, cannot be considered to be part of the remuneration or perquisites attached to an office, for they are only tokens of welcome of an honoured guest within the precincts of a temple. One would have thought that it would even be a sacrilege to claim a right of precedence in the presence of the Almighty God, for all go before him as humble devotees to earn his blessings and not to assert their self importance or claim their right to preferential treatment. But a century of case law in that part of the country has recognized certain rights of different grades of devotees and they and their innumerable followers began to cherish them or even to fight for them in criminal and civil courts. This Court, therefore, does not propose to reconsider the 66 518 question of honours on first principles but only will resurvey the law on the subject with a view to ascertain, and if possible to clarify, the legal position. The earliest decision is that in Striman Sadagopa vs Kristna Tatachariyar (1). There, the plaintiff was the gurukkal of Sri Ahobilam Mutt and he sued the trustees of Sri Devarajaswami temple at Conjeevaram for damages for injuries done to him by withholding from him certain honours and emoluments and also sought to have his right to such honours and emoluments established for the future. Two Schedules were attached to that plaint and they showed inter alia that what was claimed as honours were such as garlands, cocoanuts, prasadams and other paraphernalia attending the ceremonial recitation when the gurukkal visited the temple. Scotland, C.J., formulated the legal position thus: ". . . these clearly show that every one of the matters in respect of which the suit is brought is purely a matter of religious and sacred observance in connection with the worship and ceremonials at the pagoda, and is claimed by the plaintiff as a matter of devotional respect and display due to his priestly rank or as a votive offering made to him whilst passing in procession through the temples, and when brought to the presence of the principal idol. " Then the learned Chief Justice proceeded to state: "He (the plaintiff) is not officially connected in any way with the management or control of the pagoda, or its property or funds; and the alleged dues of his office have no doubt been owing to the great reverence at one time entertained for his sacredotal rank in the Hindu religion, and the importance from a religious point of view of his mere presence at the pagoda." He concluded thus: "Such honours and emoluments cannot in any respect be considered as remuneration for duties or ministrations performed by the plaintiff in the secular affairs or religious services of the pagoda." (1) ,3o6. 519 This decision, which has stood the test of time, clearly lays down that a suit to enforce the rights of persons holding offices connected with the management and regulation of temples and for honours and emoluments connected therewith would lie in a civil court; but a suit by a plaintiff, who does not hold an office in the temple, claiming honours customarily shown to him as a matter of devotional respect and display due to his rank is not of a civil nature. The principle laid down in this case and restated in subsequent cases has been applied by a division bench of the Madras High Court to a claim for first theertham, etc., in Sri Rungachariar vs Rungasami Buttachar (1). That decision was given in an appeal arising out of a suit for a declaration that the plaintiffs had a hereditary miras right to the offices of Sthalathar, Kutumba First Theertham, Muntrapushpam, Vedaparayanam and Adyapakam from times immemorial in the temple of Sri Parimala Ranga nathaswami at Tiruvilandur, and, by virtue of such right, were entitled to a fourth share of the honours and emoluments due to their offices as detailed in schedule A of the plaint. The learned Judges, on the evidence, came to the following conclusion: ". . the plaintiffs as hereditary Sthalathars are bound to perform, besides the duties of superintendence attached to their office of Sthalathar, the ceremonial duties of vedaparayanam, etc., and are entitled to receive remuneration for the performance of those duties. Included in this remuneration is the privilege of first theertham ' from which the plaintiffs are called 'theerthakars". Then the learned Judges proceeded to observe: "Taking the findings to be, as we do, that the privilege of the first theertham is attached to the hereditary office of the plaintiffs as a part of the remuneration of the office, the Court must, to protect the plaintiffs in the enjoyment of the office, declare what is the honour to which they are entitled. " This decision recognizes that a suit for a declaration of a plaintiff 's right to an office and for the honours, (1) Mad.291, 208.520 such as first theertham, etc., as part of the remuneration will lie in a civil court. Athan Sadagopachariar Swamigal vs Elayavalli Sri nivasachariar (1) is a decision relating to honours in Athinathalwar temple itself. The plaintiff in that case was a trustee of a temple called Pillalokacharyar 's temple. The principal object of the suit was to prevent the first defendant from claiming to be one of the Adhyapaka Mirasidars in the temple of Nammalwar and Adinathar in Alwar Tirunagari. It was contended that the first defendant was one of the seven Adhyapaka Mirasidars in the temple and his rank in the ghoshti was just above the plaintiffs. Sadasiva Aiyar, J., posed the question raised and gave his answer thereto thus: "The legal question I wish to say something about is whether a suit for the honours mentioned in the second item of the 2nd Schedule to the plaint is maintainable in a Civil Court. It is clear that if those honours are not attached to any office in the temple, no such suit could lie. The first branch of the question, therefore, is a question of fact, viz., whether these honours are attached to the Adhyapaka Miras office in the temple." After considering the evidence and other relevant decisions, the learned Judge came to the following conclusion: "I see no difficulty whatever in holding on the evidence in this case that the plaintiffs and the 1st defendant and the 5 other Adhyapaka Mirasidars get their rank in the Goshti and their rank in the distributions of prasadams not because those honours are part of the Adhyapaka Miras office to which they are entitled but because of their being Acharya Purushas or of their families having been very respectable religious families for long or because the mere respect due to their offices has been considered as making them fit in a social, and religious point of view to obtain such honours. " That would be enough to dispose of that appeal, but the learned Judge proceeded to make certain observations even on the assumption that the said honours (1) , 299, 300, 301. 521 had been attached to emoluments so far as the 7 Adhyapaka Mirasidars were concerned. The observations of the learned Judge, though obiter, deserve to be quoted not only because of his vast experience in matters of Hindu religion but also because of his well known reformative zeal to remove the cobwebs that shroded the Hindu religion by superstitious ignorance and perverted imposition. The learned Judge says: ". . the next question of law is whether such honours to be shown in the presence of God can be legally attached to the office as emoluments, in other words, can honours be legally claimed by anybody as receivable by him in a temple? When a trustee chooses to parade the temple elephants and dancing girls before a high official or any other person and gives him prasadams, etc., he does it in order to show 'honours ' to that person and when he does it without prejudice to the conduct of the rituals and ceremonies in the temple, he always says that the God of the temple Himself condescends to treat the official or other persons as God 's guest and shows him these 'honours '. Such persons to whom respect is shown cannot in my opinion claim such 'honours ' as a legal right, but as a favour shown by the temple Deity. Such honours in the strict eye of the Shastras cannot be called honours at all but as doles condescendingly given by the temple Deity as a 'favour '. One of the honours, as is well known, shown to a, Hindu in a Vaishnava temple is to place the impression of the feet of the Deity upon the head or shoulders of the devotee. Another is the distribution of the 'leavings ' of the food offered to the Deity to the distinguished devotee. The sandal paste of the feet of the Deity and the leaving of his food and the garland worn by the God are given as marks of pure grace and not as rights and hoilours claimable by the devotee. . This clearly shows that while we ought to humbly accept the Deity 's leavings given through the trustee or an archaka, a claim for 'honour ' to be shown in the presence of God is a sinful claim and is illegal and unshastraic. I would therefore respectfully confine the decision in Sri Bungachariar vs Bungaswami Buttachar(1) to cases in which the receiving of the first theertham by an office holder has become indissoluble part of the ritual to b e performed by the recipient as an office holder and the extension of the principle should be carefully guarded against. These are weighty observations and if they were appropriate in the year 1913 they should be much more so in the year 1961." We respectfully accept these observations as laying down the correct proposition, namely, that a party claiming an honour like first theertham, etc., has to prove not only that he is an office holder of the temple and that he has been receiving the first theertham in the Ghoshti but also that the receipt of the first theertham, has become an integral part of the ritual to be performed by him as an officeholder; for, the receipt of the first theertham would be consistent with its being shown as a grace from the Lord and also as its being a part of the remuneration to the office. Another division bench of the Madras High Court in Vathiar Venkatachariar vs P. Ponappa Ayyengar (2) had to consider the question of a claim to a religious honour which consisted of receiving theerthams and prasadams in the temple in certain order of precedence. This case also relates to Athinathalwar temple and to the question of precedence among the theerthakars. The first question raised was whether there was such an office as theertham office in the temple. Krishnan, J., delivering the leading judgment, in rejecting that there was such an office observed: "It may be mentioned that among the Theer thakars there are some 5 or 7 in number, who are called Adhyapakamdars, whose special duty it is to recite these Prabandams and they are remunerated by Inam lands given to them. They are what may be called the official reciters in this temple." Adverting to the question raised, the learned Judge proceeded to observe: "It is clear that, to constitute an office one, if not (1) Mad, 291, 298. (2) 961, 962.the essential, thing is the existence of a duty or duties attached to the office which the office holder is under a legal obligation to perform and the nonperformance of which may be visited by penalties ,such as a suspension, dismissal, etc." Applying the test in the case of Theerthakars and other Adhyapakamdars, the learned Judge said: "The only difference between the outsiders and the Theerthakars, as shown by the evidence, is that the Theerthakars have special places allotted to them in the temple to stand and recite and they are given the honour of Theertham and Prasadam, before the outsiders get them; and they have what is called an 'Arulapad ', that is, their names are called out by the Archaka in a certain order, when, if present, they have to respond by saying 'Nayinde ', meaning 'I am here '. This does not seem to show that they are anything more than a recognized and privileged class of worshipers who are shown special consideration by having places allotted to them in the temple and by being given the honours before the ordinary worshipers in an order of precedence fixed by the usage of the temple." On a consideration of the evidence in that case, the learned Judge stated: "On the evidence as set out it must be held that the plaintiffs have not made out the existence of any obligatory duty on the part of the Theerthakars or Of any office called the Theertham office." This judgment, therefore, establishes that there is no office called the theertham office in the temple, as there is no obligatory duty on the part of the said theerthakars in the temple. As the claim to the said honour was not established to have been attached as emoluments to the religious office the suit was dismissed. Sri Emberumanar Jeer Swamigal vs The Board of Commissioners for Hindu Religious Endowments, Madras (1) is a decision of a single Judge of the Madras High Court in a writ petition filed by Emberumanar Jeer questioning the order of the Religious Endowments Board which is the subject matter of (1) , 591. 524 the present appeals. That writ petition was dismissed on the ground that the Board 's order related to administrative matter and, therefore, a writ of certiorari would not lie to quash the same; but in the course, of the judgment, Pandurang Row, J., made certain relevant observations and they are: "What was determined by the Board was the order of distribution of theertham and honours connected with theertham. This matter cannot in my opinion be regarded as a determination of any rights of subjects. The rights of subjects referred to in the rule are rights which can be legally enforced and not mere honours or precedence claimed or recognized as a matter of courtesy or usage. It is not seriously disputed that the right to obtain the theertham or honours in a particular order of precedence is not a civil right which can be enforced or declared in a Civil Court." After citing the observations in Sriman Sadagopa vs Kristna Tatachariyar (1), the learned Judge observed: "Indeed the rule that Civil Courts cannot take cognizance of claims to mere honours or privileges of the nature referred to above has been unquestioned for many years and every attempt to evade that rule has met with failure." The observations of the learned Judge are rather wide, for, as the earlier decisions show, though a suit for privileges or honours per se may not lie in a Civil Court, if they are annexed to an office, they can be agitated therein. This judgment was taken in appeal to a division bench of the High Court, consisting of Leach, C. J., and Somayya, J., who confirmed the same. They observed: "It is acknowledged that a question relating to the distribution of theertham or other temple honours cannot be made the subject matter of a suit as it is not a question which affects a legal right." The remarks we made in regard to the observations of Pandurang Row, J., would equally apply to these observations. They do not represent the entire law on the subject, but only a part of it. (1) 525 It is not necessary to refer to further citations, for the decisions already cited lay down the relevant principles of law clearly. For convenience of reference we may summarize the law on the subject thus: (1) A suit for a declaration of religious honours and privileges simpliciter will not lie in a civil court. (2) But a suit to establish one 's right to an office in a temple, and to honours and privileges attached to the said office as its remuneration or perquisites, is maintainable in a civil court. (3) The essential condition for the existence of an office is that the holder of the alleged office shall be under a legal obligation to discharge the duties attached to the said office and for the non observance of which he may be visited with penalties. (4) So judged, there cannot be an independent office of theerthakar, for a theerthakar has no obligatory duties to perform; nor can there be an office of arulipad; the said word only connotes that the names of the theerthakars are called out by the archaka in a certain order. (5) Even if theertham is given or other honours are shown in a particular order to a person holding an office, it does not necessarily follow that the said honours are part of the remuneration attached to the office; but it is a question of fact to be ascertained on the evidence whether the said honours are attached to the office as part of its per quisites in the sense that they have become an integral part of the ritual to be performed by the recipient as the office holder or are only shown to him as a mark of respect on the occasion of his visit to the temple. Having regard to the said principles, lot us now look at the contentions raised in this case. The first submission of learned counsel for the appellant is that, in view of the said principles, the suit should have been dismissed in limine on the basis of the allegations in the plaint. In paragraph 4 of the plaint in O. section No. 45 of 1945, the claim of the plaintiff to the office is stated thus: "The plaintiff is the present Emberumanar Jeer and as such the aradhanaikar and trustee of the said 67 526 Emberuraanar temple having been appointed and nominated by his predecessor Sri Sadagopa Ramanuja Jeer who died in 1930. " In paragraph 7 of the plaint, his claim to the honours is stated thus: "In his capacity as holder of the office of aradhanaikar and trustee of the Emberumanar temple and as emoluments attached to the said office, the Emberumanar Jeer is by immemorial usage and custom entitled to receive, in the ghoshties that are formed before all the sannidhies in the Adhinathalwar temple on all occasions of each day on all the days of the year without exception, the first theertham and other honours described in Schedule 1 below and the perquisites described in Schedule 11 below." In paragraph 9 it is further stated: "In his capacity as holder of the office of Aradhanalkar and trustee of Emberumanar temple and as emoluments attached to the said office the Emberumanar Jeer is entitled to receive on the 7th day of Vaikasi festival in the Athinathalwar temple, in addition to and along with the honours and perquisites described in Schedules 1 and 11, certain other honours such as the tying of the silk gear, etc., more particularly described in Schedule III hereto. These are known as special honours while the honours described in Schedules I and II are known as ordinary honours." It is clear from the said allegations that the claim of the plaintiff to the ordinary and special honours in the Athinathalwar temple is based upon his capacity as office holder as Aradhanaikar and trustee of Emberu manar temple. There is no allegation that he is an officeholder in Athinathalwar temple. In the written statements filed by the defendants the claim of the plaintiff to the said honours is denied. In O.S. No. 46 of 1945 also the claim of the plaintiff to the honours is based upon the same allegations that are made in the plaint in O. section No. 45 of 1945. In the written statement filed by the defendants the said claim is denied. Indeed, the original issues reflected 527 only the allegations found in the pleadings. If the courts had directed their minds to the pleadings, as they should have done, instead of traveling beyond them in search of some plausible basis to sustain the plaintiff 's claim the suits would have been dismissed for the simple reason that on the allegations in the plaint the plaintiff was not an office holder in the temple of Athinathalwar and, therefore, he ' could not claim the honours shown to him in the said temple as perquisites attached to his office; but unfortunately this was not done, and we think that it is too late to dismiss the suit on that ground when all the parties adduced voluminous evidence on the alternative ground and took the decision of the courts. We shall, therefore, pro ceed to consider the case on the alternative basis on which the claim has been put forward on behalf of the plaintiff in the courts below. To appreciate the said basis, it is necessary to re capitulate the relevant facts. Originally, the District Munsif dismissed the suit O. section No. 320 of 1933 (0. section No. 45 of 1945 on the file of the Court of the Subordinate Judge, Tuticorin) on the ground that the plaintiff has no legal right in respect of which he could seek relief in a civil court. But on appeal the learned Subordinate Judge set aside the decree and remanded the suit for trial. In paragraph 18 of his judgment, the learned Subordinate Judge stated: "In view of the above authorities I am of opinion that when the present plaintiff has come to Court with a specific case set out in paragraphs 7 and 9 of his plaint that his right of precedence to receive theertham, thulasi, satari, prasadam and other per quisites forms part of the emoluments of his office of aradanaikar in the suit temple, the suit cannot be dismissed on the preliminary ground that it is barred under Section 9, Civil Procedure Code. There is an obvious mistake in this statement, for in the paragraphs mentioned therein it is not alleged that the plaintiff has an office in the Athinathalwar temple." Presumably this mistake lead the learned Judge to come to the conclusion which he did. On appeal, in the High Court it was pointed out to the court that 528 temple. But Chandrasekara Aiyar, J., for the first time, allowed the plaintiff to make out a new case. The learned Judge stated the said case in the following words: "One view to take up in this case is what was adopted by the District Munsif, namely, that as the plaintiff admittedly holds no office in the Athinathalwar temple he cannot claim these honours. The other view which found favour with the Subordinate Judge is that owing to the alleged associations of the two temples, their interlinking and their interdependence, the Aradanaikar and trustee of the Emberumanar temple might claim to be regarded as an office holder in the Athinathalwar temple." The learned Judge did not decide the point, but he observed: "But the idea of two temples or Mutts, of equal rank and co ordinate and independent authority or where one is the primary institution and the other its subsidiary or adjunct being linked together for certain purposes of worship and observance of rituals cannot be said to be entirely foreign to Hindu notions." He concluded thus: "Of course, before he can succeed in the suit, the plaintiff has to make out that he being the Aradanaikar and trustee of the Emberumanar temple amounts to his holding an office in the suit temple." The question whether the origin of this new case is found in the judgment of the Subordinate Judge or that of Chandrasekara Aiyar, J., need not detain us. This is a new case not disclosed in the plaint; but after remand both the parties directed their attention to this question and adduced all the relevant evidence pertaining thereto. On remand, the learned Subordinate Judge in an elaborate judgment considered the said aspect of the case. He considered the evidence under three heads, namely, (i) historical, (ii) administrative, and (iii) financial. On the first head after considering the origin of the two temples, the learned Judge came to the 529 conclusion that the idea that the Emberumanar temple was historically connected with Athinathalwar temple could not be "poopoohed". Under the administrative head, he found that till 1926 Emberumanar temple was merely a sub shrine attached to the bigger Athinathalwar temple, and the trustees of the latter temple were exercising administrative control over it as such. Coming then to the financial side, he found that there was sufficient evidence to justify the inference that the two were intimately connected even financially. Passing on to the question of ceremonial and religious association between these two temples, the learned Judge found that there was similarity in the mode of routine and day to day worship in the two temples; but there was no interlinking or interdependence between them in that matter. Then the learned Subordinate Judge pointed out that notwithstanding that there was no interlinking and interdependence in that matter, they were so intimately associated with each other in other religious rites and ceremonies as to lead to the inference that the Emberumanar temple was after all only a sub shrine attached to the main temple of Athinathalwar. Then he pointed out that the question in the said form was not before Chandrasekara Aiyar, J., but thought that it was open to him to go into the said question. After going into the evidence, he finally came to the conclusion that apart from historical and secular association, there had been also ceremonial and religious association between the two temples and, therefore, the Emberumanar temple was nothing but a sub shrine attached to the main temple of Athinathalwar. On that finding he further held that the plaintiff who was admittedly the aradhanaikar of the said temple was virtually an office holder in the main temple. In the appeals filed by the various parties against the decrees of the learned Subordinate Judge, the learned District Judge of Tirunelveli reviewed the evidence once again under the said three heads and came to a contrary conclusion. On the administrative side he found that the Emberumanar temple was not subordinate to the 530 temple of Athinathalwar, in the sense that the authorities of the latter temple could give orders to the authorities of the Emberumanar temple, that is, the former was not subordinate to the latter temple administratively. On the financial side, he was equally emphatic that the two institutions were not interdependent. On the religious or ritual aspect, the learned District Judge held that, as both the institutions were constructed in the same place, there must have been some connection between the two and in that sense in a general way the Emberumanar temple might be described as a sub shrine. On the said facts, the learned Judge posed the following question for his consideration: "What is the inference to be derived? On the evidence, he answered the question thus: "I hold on the evidence that these institutions are not interdependent or intimately connected in such a way that an office holder of Emberumanar temple is necessarily an office holder of the Athi nathalwar temple. I hold therefore that the plaintiff is not an office holder of the Athinathalwar temple and therefore he is not entitled to file a suit with regard to his rights of precedence in being given theertham." This finding is certainly a finding of fact based upon the entire evidence in the case. In the second appeal, the learned Judge of the High Court, on a review of the evidence, disagreed with the learned District Judge and accepted the finding of the learned Subordinate Judge, and held, for similar reasons, that the plaintiff was virtually an office holder in the main temple; he further held that the plaintiff could also be considered to be the holder of the office of arulipad and, in that capacity also he was entitled to the first theertham and other honours. The first question is one of fact. The learned District Judge, though he differed from the Subordinate Judge, held, on a consideration of the entire evidence that the plaintiff was not an office holder in the Athinathalwar temple. It has now been well settled that the High Court has no jurisdiction to entertain a second appeal on the ground of erroneous finding of 531 fact however gross the error may seem to be. The judgment of the learned Judge does not disclose that there are any permissible grounds for interference with the finding of the District Judge. The second ground of decision of the High Court is based upon a case that was raised for the first time before it. Nowhere in the plaints or before the two subordinate courts the plaintiff attempted to sustain his claim on his being the holder of the office of arulipad. The High Court, therefore, was not justified in allowing the plaintiff to set out any such claim for the first time in the second appeal. That apart, it does not appear that there is an office called arulipad. A division bench of the Madras High Court in Vathiar Venkatachariar vs P. Ponnappa Ayyengar (1) had an occasion to define the word "arulipad". There, a claim was made to the office of Theerthakar. On the evidence it was held that the plaintiffs had not made out the existence of any obligatory duty on the part of Theerthakar in the temple. In that context Krishnan, J., observed thus: ". . . the Theerthakars have special places allotted to them in the temple, to stand and recite and they are given the honour of Thertham and Prasadam, before the outsiders get them; and they have what is called an "Arulipad", that is, their names are called out by the Archaka in a certain order, when, if present, they have to respond by saying 'Nayinde ', meaning 'I am here '." It is, therefore, clear that there is no office designated as " arulipad", but that word only describes the duty of the archaka to call their names to ascertain whether the theerthakars are present in the ghoshti. There is no evidence in this case that the plaintiff, as a theerthakar, has any obligatory duty in the Athinathalwar temple to perform and, therefore, it is not possible to treat him as an office holder in that capacity in the said temple. This leads us to the argument of the counsel for the respondent that, though it cannot be said that the Emberumanar temple is a part or a subordinate of the Athinathalwar temple in the sense that all the (1) 532 office holders of the former are the office holders of the latter, there is sufficient ritual connection between the two which in the consciousness of the religious public is treated as sufficiently intimate to make the one subordinate to the other. This intimate religious connection, the argument proceeds, flows from the historical, administrative and financial ties, however loose they may be, that have existed for over a century between the said two temples. This argument may have some validity in a theological discussion or an ecclesiastical court, but cannot obviously be accepted in a civil court. Krishnaswami Nayudu, J., sum marizes the facts in his judgment which, in his view, support the conclusion that the Emberumanar Jeer was virtually an office holder in the Athinathalwar temple. As the correctness of the said facts is not questioned before us, it will be convenient to extract them in the words of the learned Judge: "In all Vaishnavite temples, the Alwars and the Acharyas take a prominent place in the religious ceremonies and observances of the temple. An attempt was made to show that there has been an interlinking and interdependence of the ritual and ceremonies between these two temples, but, as rightly found by the learned Subordinate Judge, in the matter of routine and day to day worship and rituals such interlinking and interdependence have not been satisfactorily made out. The rituals or the manner of performing divine service are uniform in every Vaishnavite temple. But, as found by the learned Subordinate Judge, though a ritual in the main temple is not dependent upon the ritual in the sub shrine, the Emberumanar deity being an Acharya is intimately associated with the deity in the main temple in all the important festivals, the most important of which are the Margali and Vaikasi festivals and other religious ceremonies. There are several Mandagapadis for the Athinatha Alwar in the Emberumanar temple. There is Sethu Thirumanjam for the Athinatha Alwar and Embe rumanar deities on three occasions, two of them in the Emberumanar temple and one in the main 533 temple. Then there is what is called Alwar Sayanam which has to take place on the 10th day of the Margali festival and which is performed in the main temple. There are several other similar religious observances, where the two deities meet and certain rituals and religious ceremonies are gone through. The daily ritual in a Vaishnavite temple is a routine matter and on occasions, for instance, in the months of Margali and Vaikasi and on other festival days, there is necessity for the Alwars and the Acharyas to meet the main deity and ceremonies suitable to the occasions are performed. It is not possible to imagine a temple where God Vishnu is installed without the presence of the Alwars and Acharyas. Alwars and Acharyas are devotees of God Vishnu who have received divine recognition in their lives and the festivals in relation to them depict incidents of such manifestation of divine grace to his devotees. It may also be mentioned that the installation of each Emberumanar Jeer,, who it may be stated is a Sanyasi, is in the Athinatha Alwar temple under its Dwajasthamba, the flag staff, and the declaration of the status of the succeeding Jeer is made only ill the presence of the deity of the main temple. " We may also add to the said facts that at one time the share of tasdik allowance to the Emberumanar temple was paid through the trustee of Athinathalwar temple and there was also an occasion when a trustee of the Emberumanar temple was dismissed by the trustee of the Athinathalwar temple. On the other hand, both the temples are under different managements, they have their separate officeholders, distinct rituals, different budgets, and separate endowments; and in the year 1926 on an application filed by the Emberumanar Jeer, the Religious Endowments Board declared the temple as an excepted temple indicating thereby that the Emberumanar temple was a separate legal entity and that the said Jeer was its hereditary trustee. only question, therefore, is whether the said facts enable a court to 68 534 hold that one temple is subordinate or part of the other temple, so that the office holders of one temple would become the office holders of the other. The facts clearly establish that in fact and in law the two institutions are different legal entities. In the past, the trustees of Athinathalwar temple might have disbursed tasdik allowances contributed by the Government to the various temples, including the Emberumanar temple, but it is well known that for convenience of administration the services of the trustees of a larger temple were very often utilized by the Government in that regard; it might have been that sometimes the amounts payable to the smaller temples were allowed to lapse, but there is nothing on the record to show that it was not out of negligence of the trustees of the minor shrines in not making any pressing demands on the trustees of Athinathalwar temple; it might also have been that the trustee of the bigger temple, in his supervisory capacity, dismissed once in a way the trustee of a smaller shrine in the locality, but that could be explained by the paramount position of the trustee of the bigger temple in the locality compared to that of the minor temples. These and such acts may show that the trustee of the Athinathalwar temple had exercised similar supervisory control in the past over the minor temples; but that in itself does not make the trustee of the temple of Emberumanar an office holder in the bigger temple. It is well known that in the past the temples were under the supervision of the Revenue Board and later on under various temple committees. It cannot be suggested that on that account. the trustees of the minor temples were officers in the Revenue Board or the temple committees, as the case may be. We cannot also appreciate how the mutual visits of the idols to the other 's temple and the honours shown to the idols on such visits could have any bearing on the question to be decided, though they reflect the intimate relationship that exists between the Lord and his ardent devotee Ramanuja in the public consciousness. But such cordial relationship existing between two independent temples cannot in the eye of law make the 535 one a part of the other. Two independent institutions legally cannot, except in the manner known to law, be amalgamated into one institution by developing merely sentimental attachment between them. This argument was rightly rejected by the learned District Judge, and the High Court went wrong in accepting it. Before we close we must make it clear that by this judgment we have not in any way intended to express our view in the matter of honours that are customarily shown to one or other of the parties in these appeals in the temple of Athinathalwar. In the result we hold, agreeing with the District Judge, that the suits were not maintainable in the civil court. The appeals are, therefore, allowed with costs throughout. Appeals allowed.

The respondent as the aradanaikar and trustee of the Emberumanar temple, dedicated to Sri Ramanujacharya, which was one of the group of temples built around the main temple of Athinathalwar in the Tirunelveli District, brought the two suits, out of which present appeals arose, for declaration of his right to the first theertham and other honours and perquisites in precedence over all other worshippers in the temple of Athinathalwar and his case was that he was entitled to them by virtue of his office in the Emberumanar temple. The matters came up to the High Court. There was a remand order and the Subordinate Judge who tried the suits thereafter held that the Emberumanar temple was a sub shrine attached to the main temple and as such the plaintiff was virtually an office holder in the main temple and the precedence claimed by him was attached to that office as part of the remuneration and decreed the suits. On appeal the District judge, on a review of the entire evidence, set aside the findings arrived at by the trial court and dismissed the suits as not maintainable. The appeals to the High Court were heard by a single judge who, on a reconsideration of the evidence, reversed the findings of the District judge and affirmed those of the Subordinate judge and decreed the suits. It was, further, held by the High Court that, as one of the theerthakars, the appellant could be considered to be the holder of the office of arulipad in the main temple. Held, that although it was not permissible under section 9 of the Code of Civil Procedure for a civil Court to entertain a suit for a declaration of religious honours and privileges simpliciter, it could entertain a suit to establish one 's right to an office in a temple and to the honours and privileges attached to such office as its remuneration or perquisites. But the essential condition for the existence of an office was that its holder must be under a legal obligation to discharge the duties attached to it and be liable to penalty on failure to do so. So judged, there could neither be an independent office of theerthakar, for he had no obligatory duties to perform, nor that of an arulipad, since that word only connoted that the names of theerthakays were called out by the archaka in a particular order. 65 510 The question whether first theertham or any other honours shown to a person were merely as a mark of respect on the occasion of his visit to the temple, or were part of the remunera tion attached to his office, must in every case be decided on evidence and in the latter case such honours must be shown to have formed an integral part of the ritual to be performed by the recipient as the holder of the office. Athan Sadagopachariar Swamigal vs Elayavalli Srinivasa chariar, , approved. Striman Sadagopa vs Krishna Tatachariyar, (1863) 1 M.H.C.R. 301, Sri Rungachariar vs Rungasami Buttachar, (1909) I.L.R. and Vathiar Venkatachariar vs P. Ponappa Ayyangar, , referred to. Sri Emberumanar jeer Swamigal vs The Board of Commissioners for Hindu Religious Endowments, Madras, (1936) 71 M.L.J. 588, considered. Held, further, that it was well settled that the High Court bad no jurisdiction to entertain a second appeal on the ground of erroneous finding of fact, however gross the error might seem to be. In the instant case, the High Court was clearly in error in reversing the finding of the District judge, which was one of fact, that the Emberumanar temple was neither subordinate to, nore part of the Athinathalwar temple and no office holder of the former could, therefore, become an office holder of the latter.

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 Nellore Ramapuram route passing over a short dis tance of 8 K.m. through Tamil Nadu was proposed to be natio nalised by the Andhra, Pradesh Government. The appellant an existing private operator on the route challenged the scheme on the ground that the route being an inter state route, noncompliance with section 68 D(3) of the aborted the Nationalisation. The High Court held that the decisive test turned on whether both the termini fall within the same state and it did in this case and so on question of inter state route arose. On appeal by Certifi cate the court HELD: (1) (a) The route Nellore Ramapuram is an inter state route; (b) the Scheme of Nationalisation is operative even in the absence of the previous approval of the Central Government so far as the portions which fall within Andhra Pradesh are concerned and (c) the nationalisation cannot become effective over the strip in Tamil Nadu and ,private operators may still be permitted to ply their services over that strip by the concerned authority within Tamil Nadu State, but (d) The Andhra Pradesh State Transport Corpora tion may ply its buses over the Tamil Nadu enclave even without counter signature, exemption having been granted in that behalf by the 2nd proviso to section 63(1 ) of the . [567H, 568 A B] (2) The definition of 'Route ' in section 2(28A) of the Act is not a notional line "as the crow flies" but the actual highway as a motor vehicle traverses from one terminus to another. A route is transformed into an inter state one, if the highway it covers passes through more than one state. An inter state route may be of the categories either con necting two states or traversing two or more states. [564 D E] (3) Ordinarily not invariably the two termini test is a, working solution and not an inflexible formation. The termini test may lead to strange results, fatal to federal ideas. A route which originates in Srinagar, runs down South to Kanyakumari and rises North to end again in Kashmir, completing a Bharat Darshan, cannot sensibly be called an interstate one, without doing violence to lan guage, geography and federalism. And in the absence of a statutory definition of inter state route non violence to English and conformance to commonsense dictate the adoption of the conventional meaning that if a route traverses more than one state it is inter state. [564 B C, D] (4) Undoubtedly, where the termini fall in different states the route is inter state. But that does not ex clude other categories of inter state route such as where it crosses a state other than the originating state although gets back into it later. If the territory of more than one state is covered even if both the termini eventually fall within the same state, the route is inter not intra state. [564H, 565A] 563 Kazan Singh ; ; Ahwathanarayan vs State ; pp. 100 101. explained. (5) If the whole of the route lies within a single state it is intra state and not inter state, even though the road over which the route lies runs beyond the borders of that single state as national highways do. It is elementary that there can be inter state routes which run into or through more than one state. A part of that long route may itself be a separate route and may fall wholly within a single state in which case the former may be inter state while the latter will be an intra state route. [565G H, 566A] (6) There can be no doubt that the scheme notified by one State will, even in the case of an inter state route, operate to the extent it lies within that State. Its extra territorial effect depends on securing of prior Cen tral Government approval under the proviso to Section 680(3). However, the permit granted in one state may still be valid in. another state, if the condition specified in the 2nd proviso to section 63(1) is fulfilled. The portion of the route, in the instant case, falling outside Andhra Pradesh (both termini being within that state) is admittedly less than 16 k.m. and so no question of countersignature by the State Transport Authority or the Regional Transport Authority of Tamil Nadu arises. The portion of the inter state route which fell within Andhra Pradesh stand nationa lised and consequently exclude private operators. But that strip of the inter state route which falls within Tamil Nadu cannot be taken to have been nationalised to the exclusion of private operators although the Andhra Pradesh State Transport Buses could ply on that strip also in view of the 2nd proviso to section 63(1) of the . [567 A B, E F]

One Yesaji 2, ancestor of the parties rendered meritori ous military service to Ranaji Scindia and in recognition thereof, the Raja of Gwalior granted permanent jagir of Chandurpura village together with the buildings situated in 100 Bighas of land and the residential Bada with right of enjoyment and succession from generation to generation. By virtue thereof, the ownership, possession and enjoyment was continued successively for seven generations upto Dwarkanath by rule of primogeniture. Dwarkanath was the nephew (broth er 's son) Of the respondent and father of appellant Nos. 1 and 2. Dwarkanath being minor at the time of his succession to the estate, the court of wards took over the management and the respondent was appointed as Superintendent and on his death, since appellants 1 and 2 were minors Aruna Rai, their mother, initially managed the estate with the assist ance of the respondent and subsequently the respondent came into full control and management. The respondent filed a suit for partition .in the year 1962 of the plaint schedule 1 to 3 properties in equal moiety and allotment of one such share to him. He pleaded that the properties are coparcenary joint family properties and he is entitled to a half share therein. The respondent received maintenance from the jagir income at the rate of Rs.125 per month. The appellants defendants disputed the nature of the properties as joint family, status of the respondent and the appellants as coparceners. They referred to various accretions made to the jagir estate by their father and mother and pleaded that the jagir being an impartible estate is the separate and self acquired properties of Dattatraya 1 Dwarkanath by rule of primogeniture and the concept of coparcenary and joint family status ' are inapplicable to it, and that the respond ent has thus no share therein, but has only a right of maintenance as per the law and the Custom of Gwalior State. It was also added that the respondent and his wife were given jewellery at. the time of their mar 645 riage which belonged to the family of the appellants and some of them are stridhana of the 3rd defendant; the re spondent had no share therein or in the utensils etc. The trial court found that till the date of death of Ghanshyam 2 in 1909, he was jagirdar. Dattatraya 1 and Dwarkanath suc ceeded as Jagirdars by rule of primogeniture. After the abolition of the Jagir, compensation was paid to Dwarkanath during his life time as the eldest member of the family and the appellant No. 1 also had been paid balance of compensa tion. If a joint family possesses property which was admit tedly joint, the presumption would he that the property continued to be joint and the burden lies upon the member who claims as separate property to plead and prove it as separate or self acquired property. On this reasoning, the trim court granted preliminary decree for partition of half share in schedule 1 and 2 and half share in the moveable property viz., compensation amount jewellery and utensils. The High Court substantially upheld the findings of the trial court. It held that rule of primogeniture and survi vorship was introduced by the Manual of Jagirdars of the Gwalior State (Qwaid Jagirdaram) in the year 1913 and with the abolition of the Jagir in 1951 under the Madhya Bharat Abolition of Jagir Act 28, 1951, the properties became the ancestral Hindu Joint family properties and they are parti ble, irrespective of the fact in whose name it was entered either as Bhumidar in revenue papers or Jagirdar. The High Court while confirming the decree of the trial court, di rected the respondent to bring into hotch potch his jewel lery and the appellants to have a half share therein and accordingly dismissed the appeal and the cross objections. Hence this appeal by the appellants defendants by special leave. Partly allowing the appeal, this Court, HELD: Liability to partition is an ordinary feature of joint family property, but it must not be supposed that joint property and partible property are mutually converti ble terms. [652F] Succession to an impartible estate is governed by rule of primogeniture and the eldest male member of the family would succeed by survivorship to the impartible estate. [653H 654A] The impartible estate, though descends by rule of primo geniture and survivorship on the eldest male member of the family, it must also be proved that the junior members gave up expressly or by implication his right to a share therein.[655G] The income of an impartible estate is not income of the undivided 646 family but is the income of the present holder, notwith standing that he has sons or brothers from whom he is not divided. The fact that the son 's or brother 's right to maintenance arises out of the eldest brother 's possession of impartible estate and is a right to be maintained out of the estate, do not make it a right of a unique or even excep tional character or involve the consequence at Hindu Law that the income of the estate is not the holder 's income. Income is not jointly enjoyed by the party entitled to maintenance and the party chargeable nor can it be said that the respective chances of each son to succeed by survivor ship make them all co owners of the income with their father or make the holder of the estate a manager on behalf of a Hindu family of which he and they are the male members of the family. [658C E] The right of joint enjoyment which is ordinary incident to a coparcenary, where the joint estate is partible, is excluded by the rule of primogeniture and impartibility. The income of an impartible estate and the accumulation of such income are the absolute property of the holder. The immova ble properties would be incorporated with impartible estate. It must be proved that the holder had impressed the immova ble properties as part of the estate. But the movable properties will not. Movables are not an accretion to the estate as in the case of an ordinary joint family estate. [659E]. The grant of Chandurpur Jagir was in perpetuity and the enjoyment is from generation to generation. Geneology ex tracted herein before establishes that devolution by survi vorship to the eldest male member continued till time of Dwarkanath and the respondent received only maintenance from the Jagir estate. What was implicit was made explicit by Qwaid Jagirdaran issued in Samvat 1970 by Maharaja Scindia of Gwalior State. [659F G] Thus it is indivisible and impartible and succeeded by lineal eldest descendent of the family by rules of primogen iture. [659H] Baijnath Prasad Singh vs Tej. Bali Singh, 48 Indian Appeals 195 A.I.R. 1921 P.C. 62; Katama Natchiar vs Raja of Shivganga, [1863] 9 Noore Indian Appeals, 588 (P.C.); Sartaj Kuari & Anr. vs Deoraj Kuari, 15 Indian AppealS, 51; Pratap Chandra Deo vs Jagdish Chandra Deo, 54 Indian Appeals 289 A.I.R. 1927 P.C. 159; Anant Shikkappa Patil vs Shankar Ramchandra Patil, A.I.R. 1943 P.C. 196 at 201; Amrendra Man Singh vs Sanatan Singh, 60. Indian Appeals 142 A.I.R. 1933 P.C. 155; Shiba Prasad Singh vs Rani Prayag Kumari Debi & Ors., 59 Indian Appeals 351 A.I.R. 1932 P.C. 216; Chin 647 nathayi @ Veeralakshmi vs Kulasekara Pandiya Naicker & Anr. , ; ; Smt. Rani Prabha Kumari Bibi vs Jagdish Chunder Dhabal, 29 Indian Appeals 82=ILR 29 Calcutta 433 P.C.; Janki Pershad Singh vs Dwarka Pershad Singh, 40 Indian Appeals 170=ILR 35 Allahabad 391 P.C.; Murtaza Husain Khan vs Mohd. Yasin Ali Khan, 43 Indian Appeals 269=A.I.R. ; Jagdamba Kumari vs Wazir Narain, 48 Indian Appeals 195=A.I.R. ; Commissioner of Income tax, Madras vs Honble Sri Ravu Swetachalapati Ramakrishna Ranga Rao, Rajah of Babbili, ; Commissioner of Income tax, Punjab vs DeWan Bahadur Dewan Krishna Kishore, Rais, Lahore, A.I.R. 1941 P.C.120; Mirza Raja Shri Pushava thi Viziaram Gajapathi Raj Manne Sultan Bahadur & Ors. vs Shri Pushavathi Visweswar Gajapathi Raj & Ors., ; ; Muttu Baduganadha Tevar vs Periasami @ Udayana Tevar, 23 Indian appeals 128 P.C.; Ravi Janardhana Krishna Ranga Rao vs State of Madras, A.I.R. 1953 Madras 185; Tha kore Shri Vinayasinghji vs Kumar Srinatwarsinghji & Ors., [1988] (Supp.) S.C.C. 133; Sri Raja Rao Venkata Mahipati Gangadara Rama Rao Bahadur vs Raja of Pittapur, 47 Indian Appeals 354=A.I.R. ; Maharajah of Jeypore & Anr. vs Vikrama Deo Garu, 52 Indian Cases 333=A.I.R. 1919 P.C. 126; Anant Kibe & Ors. vs Purushottam Rao & Ors., [1984] (Suppl.) S.C.C. 175, referred to.

The respondent applied for registration of the trade name "Lakshmandhara" in relation to the medicinal preparation manufactured by him at Kanpur since 1923. It was admitted that the respondent 's product was mainly sold in the State of Uttar Pradesh. The appellant opposed the registration on the ground that it had an exclusive proprietary interest in the trade mark "Amritdhara" in relation to a similar medicinal preparation which had acquired considerable repu tation since 1903 and that the respondent 's trade name "Lakshmandhara" was likely to deceive and cause confusion and therefore the registration was prohibited by section 8 of the Trade Marks Act. The Registrar of Trade Marks held that there was sufficient similarity between "Amritdhar 'a ' and "Lakshamandhara" so as to cause confusion and it was likely to deceive the public, but the acquiescence of the appellant in the use of the trade name "Lakshmandhara" by the respondent in the relation to his product for a long period to the knowledge of the appellant was special circumstance under section 10(2) entitling the respondent to have his name registered along with the appellant 's trade name. He, however, confined the registration to sales with the State of Uttar Pradesh. Both the appellant and the respondent appealed to the High Court which allowed the respondent 's appeal holding that the words "Amrit" and "dhara" were common words in the Hindi language as also the words "Lakshman" and "dhara" and that there was no possibility of any Indian confusing the two ideas. The High Court further held there had been honest concurrent user by the respondent. ,, On the question of acquiescence it held against the respondent. On appeal by special leave. Held, that the question whether a trade name is likely to deceive or cause confusion by its resemblance to another al. ready registered is a matter of first impression and one for decision in each case and has to be decided by taking an over. all view of all the circumstances. The standard of comparison to be adopted in judging the resemblance is from the point of 485 view of a man of average intelligence and imperfect recollection. Pianotist Co. 's Application, , referred to. Corn Products Refining Co., vs Shangrila Food Product8 Ltd., , referred to. Held, further, that the two names as a whole should be considered for comparison and not merely the component words thereof separately. William Bailey (Birmingham) Ltd. '8 application, (1935) 52 R. P. C. 137, referred to. Held, also, that in the present case the similarity in the two name in respect of the same description of goods was likely to deceive or cause confusion; but the facts found by the Registrar established the plea of acquiescence so a to bring the case within sub s.(2) of section 10, and the Registrar was right in imposing the limitation which he imposed.

Held, that sections 21, 30(2), 31, 55, 56 and 63 to 69 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951) are ultra vires articles 19(1)(f), 25 and 26 of the Constitution of India. Section 76(1) of the Act is void as the provision relating to the payment of annual contribution contained in it is a tax and not a fee and so it was beyond the legislative competence of the Madras State Legislature to enact such a provision. That on the facts of the present case the imposition under a. 76(1) of the Act, although it is a tax, does not come within the latter part of article 27 because the object of the contribution under the section is not the fostering or preservation of the Hindu religion or any denomination under it but the proper administration of religious trusts and institutions wherever they exist. 130 1006 The word " property " as used in article 19(1)(f) of the Constitution should be given a liberal and wide connotation and should be extended to all well recognized types of interest which have the insignia or characteristics of proprietary right. The ingredients of both office and property, of duties and personal interest are blended together in the rights of a Mahant and the Mahant has the right to enjoy this property or beneficial interest so long as he is entitled to hold his office. Therefore he is entitled to claim the protection of article 19(1)(f). A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered. It is not possible to formulate a definition of fee that can apply to all cases as there are various kinds of fees. But a fee may generally be defined as 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 such expenses are arbitrarily assessed. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is a payment for a special benefit or privilege. " Scope of articles 25 and 26 discussed. Meaning of the term " Mathadhipati " and religion explained. Vidya Varuthi vs Balusami (48 I.A. 302), Monahar vs Bhupendra , Ganesh vs Lal Behary (63 I.A. 448), Bhabatarini vs Ashdlata (70 I.A. 57), Angurbala vs Debabrata ([1951] S.C.R. 1125), Davis vs Benson; , , The State of West Bengal vs Subodh Gopal Bose (civil Appeal No. 107 of 1952 decided by the Supreme Court on the 17th December, 1953), Adelaide Company vs The Commonwealth ; , 127), Minersville School District, Board of Education etc. vs Gobitis ; , West Virginia State Board of Education vs Barnette ; , Murdock vs Penissyl vania ; , Tones vs Opelika (316 U.S. 584), Matthew 's V. Chicory Marketing Board ; , 276), Lower Mainland Dairy vs Crystal Dairy Ltd. ([1933] A.C. 168) referred to. (Findlay Shirras on Science of Public Finance, Vol. I. p. 203).

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.

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.

No. 36 of 1960. Petition under article 32 of the Constitution of India for the enforcement of fundamental rights. N. C. Chatterjee, D. R. Prem, B. Ganapathy Iyer and G. Gopalakrishnan, for the petitioner. 412 B. Sen, R. H. Dhebar and T. M. Sen, for the respondents. April 26. The Judgment of Gajendragadkar, Wanchoo and Ayyangar, JJ., was delivered by Ayyangar, J., and that of Sarkar and Das Gupta, JJ., was delivered by Das Gupta, J. AYYANGAR, J. This is a petition, under article 32 of the Constitution praying for a writ, order or direction in the nature of certiorari calling for the records relating to the levy of customs duty and penalty on certain cycles and cycle parts imported by the petitioners, to quash the said order and for a direction to the respondents to restore and refund to the petitioners the customs duty and the penalties realised from them for releasing their goods. The Chief Controller of Imports and Exports, Pondicherry, The Collector of Customs, Pondicherry, The Central Board of Revenue, New Delhi, Chief Commissioner, Pondicherry and the Union of India have been made respondents to the petition. From the nature of the order sought and the array of the respondents it would be apparent that the matter involved in this petition is whether the respondents were justified in (a) levying customs duties on the goods imported by the petitioner and (b) imposing a penalty on them for effecting these imports. We shall now briefly narrate the facts necessary to understand the points arising for decision. The petitioners who are citizens of India placed an order on August 6, 1954, with certain firms in the United Kingdom for the despatch of cycles and cycle parts to Pondicherry which was at that date the principal French establishment in India. According to the law which then obtained in Pondicherry territory, merchants desiring to do business there had to have "a patent" or licence from the authorities for carrying on such business. The petitioners applied for such a "patent" to the authorities on August 14, 1954, and they were granted one on August 18, which was to be effective from August 1, 1954. The order placed with U. K. firms was accepted and the goods covered by the indents were shipped from the U. K. ports on 413 October 11, 1954. The foreign exchange needed for effecting this import could under the French Law have been obtained either from or on the authorization of the Head of the Department of Economic Affairs at Pondicherry or by what has been termed purchase in the open market. In pursuance of these facilities the moneys required were transmitted through bankers who made payments on behalf of the petitioners in the United Kingdom and the goods arrived in Pondicherry on December 4, 1954, the Bill of Entry being presented to the Customs Authorities for clearance on the 17th of that month. Meanwhile, political changes took place in the governance of Pondicherry and other French settlements. An agreement was entered into between the Governments of the Union of India and of France under which the administration of the French Settlements, including Pondicherry, was ceded to the Union Government. This agreement which was signed on behalf of the two Governments on October 21, 1954, was to be effective from November 1, 1954. On October 30, 1954, two notifications were issued by the Ministry of External Affairs in pursuance of the agreement dated October 21, 1954, between the two Governments. They were respectively S.R.O. 3314 and S.R.O. 3315. As the questions arising for decision in the petition turn on the proper construction and legal effect of these two notifications, it would be necessary to deal with them in some detail, but for the purpose of the narration of facts, it would be sufficient to say that while S.R.O. 3314 saved the operation of the pre existing French Law except in so far as it had been affected by S.R.O. 3315, the latter repealed such laws to the extent they were inconsistent with the Indian enactments set out in the Schedule whose operation was extended to Pondicherry and the French settlements. Among the Indian enactments so applied to Pondicherry were the Foreign Exchange Regulation Act, 1947, the Import and Export (Control) Act, 1947, the , and the Tariff Act, 1934. 53 414 The Bill of Entry was, as stated earlier, presented to the Customs Authorities at Pondicherry on December 17, 1954, and it would be seen that by that date Pondicherry was being administered as part of the Union territory with the Indian laws referred to operating in the area. The customs authorities at Pondicherry took the view that as the, consignment imported by the petitioners did not reach the port of Pondicherry before November 1, 1954, when the Union Government took over the territory, the importation was without authorization of the Indian law and therefore in contravention of the Import and Export Control Act and the Orders issued therein, the , the Tariff Act and the provisions of other relevant enactments. After a notice to the petitioners to show cause why the goods should not be treated as having been imported without a licence granted under the lmport and Export (Control) Act, the Customs authorities at Pondicherry after considering their explanation decided against the petitioners and directed them to clear the goods on payment of duty and of a penalty which was levied under section 167(8) of the . This order was passed on March 3, 1955. The petitioners thereupon preferred an appeal to the Central Board of Revenue who dismissed it by their order dated July 31, 1956, and thereafter the petitioners filed a revision to the Cen tral Government who dismissed it by their order dated January 8, 1957, but reduced the penalty imposed. It is in these circumstances that the petitioners have approached this Court for the reliefs set out at the beginning of this judgment. The following facts would emerge from the above narration: (1) that firm contracts had been entered into by the petitioners with the foreign sellers long before November 1, 1954 the date of the transfer of Pondicherry, (2) that the petitioners had the authorization of the French law by holding the "patent" granted to them on August 18, 1954, and effective from August 1, 1954, to carry on business in Pondicherry, (3) that the foreign exchange requirements for effecting the importation had been provided for by the 415 petitioners in a manner authorized by the French law, (4) the goods, however, arrived in Pondicherry after the date of the de facto transfer. In these circumstances the questions raised for decision are: (1) whether under the terms of the relevant notifications, to which we shall immediately refer, the importation was unauthorized for want of an import licence so as to render the petitioners subject to the levy of a penalty under section 167(8) of the , (2) whether the petitioners have a right under the relevant notifications to have the imported goods cleared from the Pondicherry port without the payment of the customs duty leviable under Indian law in the area from and after November 1, 1954. We have already referred to the two notifications by the External Affairs Ministry, the details of which we shall now proceed to state. By virtue of the jurisdiction obtained by the Union Government under the agreement between the two Governments dated October 21, 1954, S.R.O. 3314 was issued in exercise of the powers conferred by the , and came into force on November 1, 1954, when the agreement became effective. Its principal function was to provide for the continuance of the law which previously prevailed in Pondicherry except in so far as it was varied by other notifications issued by the Union Government extending Indian Laws to that territory. Paragraph 5 of section R.O. 3314 provided: "5. All laws in force in the French Establishments or any part thereof immediately before the commencement of this order and not repealed by paragraph 6 of the French Establishments (Application of Laws) Order, 1954, shall continue to be in force until repealed or amended by a competent autho rity. " The other provisions of this order are designed with the same objective, viz., the continuance of laws until other provisions are made by a competent Legislature or authority. The provisions contained in S.R.O. 3315 are of more immediate consequence for the purpose of this petition. Paragraph 3(1) of this order provided; 416 "The enactments specified in column 3 of the schedule as in force before the commencement of this order are hereby applied to, and shall be in force in the French Establishments subject to: (a). . . . . . . . . (b). . . . . . . . . (c) The subsequent provisions of the order. " Paragraph 6 which was in the nature of a saving clause ran: "Unless therefore specially provided in the schedule, all laws in force in the French Establishments immediately before the commencement of this order, which corresponds to the enactments specified in the schedule shall cease to have effect save as respects things done or omitted to be done before such commencement." Among the laws extended to Pondicherry under S.R.O. 3315 were, as already noticed, the , the , the Imports and Exports Trade (Control) Act, 1947, the Foreign Exchange Regulation Act, 1947, and the Indian Tariff Act, 1934. In the absence of the saving contained in the last words of paragraph 6 of S.R.O. 3315 "as respects things done or omitted to be done before such commencement", the previous French law or the authorizations or permits obtained thereunder, would have become repealed or exhausted and the import to be legal would have to be in conformity with the laws applied to the territory by virtue of paragraph 3 with the result that the orders of the Customs Authorities in the present case could not be open to challenge. The questions therefore are whether this saving protects the petitioners from: (a) the liability to the penalty, and (b) from payment of customs duty. We shall deal first with the levy of the penalty. This matter is wholly concluded in favour of the petitioner by the judgment of this Court in Universal Imports Agency vs The Chief Controller of Imports and Exports (1). There, as here, a contract had been entered into with a foreign supplier for the despatch of goods (1) ; 417 to the port of Pondicherry in the months preceding the transfer. The goods however arrived after November 1, 1954, and the customs authorities acting under the provisions of the , treated the import as unauthorized, and adjudged the goods to confiscation and also inflicted a fine. Petitions were then filed under article 32 for quashing these orders of confiscation and fine and for directing the return of the goods. It may be mentioned that the present petitioner was an intervener in the petitions then before this Court. This Court held that the words "things done" in paragraph 6 of S.R.O. 3315 were comprehensive so as to include a contract effected before November 1, 1954, though its legal effect and consequence projected into the post transfer period and the goods were imported only after November 1, 1954. The petitioners then before the Court having authority under the French law which prevailed before November 1, 1954, to import the goods and having placed the orders and effected the imports in pursuance of that law, this Court held that the imported goods could not, notwithstanding that they were actually brought into the territory after November 1, 1954, be confiscated on the ground that they were imported without a licence required under the Imports and Exports (Control) Act and the Sea Cus toms Act. Mr. Sen learned Counsel for the respondent urged some points of distinction between the facts in the Universal Imports Agency 's case( ') and the case now before us, but having examined them we find there is no substance in the argument. Learned Counsel submitted that in the present case the import was effected not by opening Letters of Credit but by payment by bankers ' draft and secondly, that the foreign exchange required for payment to the U. K. supplier was met in the present case by open market purchases and not by the purchase of foreign exchange from French Banking Establishments. In our opinion, these are wholly immaterial. Learned Counsel had to admit that there was no legal requirement to have a (1) ; 418 Letter of Credit and also that it was not in contravention of French law which prevailed before November 1, 1954, to obtain foreign exchange requirements by what are termed "open market purchases". In fact, in the case of the Universal Imports Agency( ') the orders impugned were passed and were sought to 'be supported before this Court on the ground that the foreign exchange requirements were met by "open market purchases" and that in consequence the importation was not authorized by the French law, and this contention was expressly negatived. We therefore hold that the petitioners are entitled to relief so far as the petition relates to the quashing of the order imposing the penalty and for a direction to refund the same. We now proceed to examine whether the claim of the petitioners that they are entitled to import the goods without payment of duty is justified by the saving contained in the last words of paragraph 6 of S.R.O. 3315. Mr. Chatterjee learned Counsel for the petitioners had to admit that this matter was not the subject of decision in Univeral Imports Agency '8 case (1). Nor is it a matter for surprise that it was not, because the petitioners then before this Court had never objected to the payment of the duty, and indeed the request they made to the Customs Authorities and which was rejected, which led to the petition, was that the authorisation which they had under the French law should be re validated by the Indian Customs Authorities so as to permit the importation on payment of normal duty as if the same were licensed under the Import and Export (Control) Order; and that on payment of the duty they were entitled to a customs clearance under sections 87 and 89 of the . This being the nature of the controversy raised in this Court, the petitioners relied on article 17 of the Articles of Agreement between the two Governments, to which we shall advert later, in support of their submission that while the Indian authorities were entitled to levy such customs duties as were fixed under law for the several articles imported, the import (1) ; 419 itself should be treated as authorised by the previous law whose operation was continued by the last words of cl. 6 of S.R.O. 3315 of 1954. Further, as we shall presently show, there are passages in the judgment of Subba Rao, J., who spoke for the majority, that on an importation effected after November 1, 1954, customs duty would have to be paid according to the rates fixed under the relevant Indian legislation. The submission of Mr. Chatterji however was that this relief which he claimed followed logically from the reasoning of Subba Rao, J., and in particular he relied on the following passage: ". . A purchase by import involved a series of integrated activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods into the importing country and the purchase and resultant import formed parts of a same transaction. If so, in the present case the bringing of the goods into India and the relevant contracts entered into by the petitioners, with the foreign dealers formed parts of the same transaction. The imports, therefore, were the effect or the legal consequence of the 'things done ', i. e., the contracts entered into by the petitioners with the foreign dealers before merger. " The argument of the learned counsel based on this passage was on the following lines: This Court has held that it is the agreement concluded with the foreign seller under which goods are contracted to be imported, which constituted the "thing done". The legal consequence of that "thing done" was the act of importation, because that was the object and purpose of the contract, so far as the buyer was concerned. This Court has held that the previous authorization by the French law, as it were, projected into the post transfer period so as to justify the importer claiming that the importation was authorized and this is the ratio of the decision. But this does not, learned counsel urged, exhaust the entirety of the rights of the importer. The previous French law authorized the import into a territory which was "a free port". When therefore the importation was made by virtue 420 of the authorization contained in the previous law, its effect should extend not merely to justify the claim to have the import treated as one authorized under the relevant Indian law, but logically also as entitling the party to effect the importation without payment of customs duty. We find ourselves unable to accept this argument. The expression "free port" in the case of Pondicherry merely meant freedom from restriction as to importation in the shape of licence, etc., and not a complete absence of duties leviable on importation. But that apart, if the submission of the learned counsel amounted to saying that the point about the exemption of the petitioner from payment of customs duty is also covered by the decision of this Court in Universal Imports Agency 's case (1), we consider it wholly unjustified. As we have already shown, the liability to pay customs duty was admitted by the petitioner and the reasoning by which he sought relief in this Court proceeded on the basis that such duties were exigible. Besides, the entire reasoning of Subba Rao, J., was directed to show that the authorization under the French law to effect the import should be held to protect the petitioners then before the Court from being treated as having imported goods without a licence under the Import and Export (Control) Act, and that is why in the penultimate paragraph of the order the conclusion reached is thus set down: "We would therefore hold that paragraph 6 of the order saves the transaction entered into by the petitioners and that the respondents had no rights to confiscate their goods on the ground that they were imported without licence. " It is in this context that the observations extracted earlier on which Mr. Chatterji relies have to be understood. Besides, there are passages in the judgment which expressly refer to the fact that goods imported after November 1, 1954, would be liable to be charged duty under the relevant Indian fiscal statute. In making this observation we have in mind the reference by the learned Judge to the Notification (1) ; 421 of the Central Government dated November 1, 1954, and to the terms of article 17 of the Articles of Agreement dated October 21, 1954, between the two Governments (to both of which we shall advert later). The decision of this Court is not, therefore, an authority to support the petitioner on the point regarding the right to import without payment of duty and we have to deal with the matter on the footing that it is res integra. Nor can the plea based on the logic of the ratio of the decision in the Universal Imports Agency 's case (1) assist Mr. Chatterji to any material extent, because the content of the saving as respects "things done", must ultimately be determined not by any interpretation of these two words in vacuo, but in the context of the entire scheme of the two section R. Os. read in the light of other material which could assist in arriving at their scope. Thus, for instance, if S.R.O. 3315 contained a specific proviso excepting from the saving as regards ' things done" the obligation, say, to pay duties of customs, it could hardly be contended that as the imports under pre transfer contracts should be deemed to be authorised even if the goods arrive subsequent thereto, they should be exempt from the payment of duty. No doubt there is no such express provision but such a situation can also arise by necessary intendment. The right to exemption from payment of duty claimed by the petitioners would therefore have to depend on the proper interpretation of the relevant notifications, because as already seen as the and the Tariff Act, etc., having been extended to Pondicherry territory, etc., from and after November 1, 1954, prima facie duty would be payable on the import. We have already pointed out the inter relation between S.R.O. 3314 and 3315 which were issued on the same date and by virtue of the same provisions and power. Paragraph 6 of S.R.O. 3314 which provided for the continuance of the previous existing laws ran: (1) ; 54 422 "All taxes, duties, cesses or fees which, immediately before the commencement of this order were being lawfully levied in the French Establishments or any part thereof shall, in so far as such levy has not been discontinued by any of the laws extended to the French Establishments by the French Establishments (Application of Laws) Order, 1954, continue to be levied and applied for the same purpose until other provisions are made by a competent Legislature or authority". This would be some indication that taxes, duties, cesses and fees imposed by reason of the extension to that territory, of Indian laws under the French Establishments (Application of Laws) Order, 1954, (S.R.O. 3315) would be operative from and after November 1, 1954. On November 1, 1954, the Government of India appointed a Controller of Imports and Exports for the French Establishments and paragraph 4 of that notification also contained the following: " As regards orders placed outside the Establishments and finalised through the grant of licence by the competent French Authorities in accordance with the Laws and Regulations in force prior to 1st November, 1954, licence holders are advised to apply to the Controller of Imports and Exports for validation of licences held by them. No fees will be charged for these applications". This notification, though it has no statutory force, was obviously part and parcel of S.R.O. 3314 and 3315, in so far as these related to the administration of the Import and Export (Control) Act, the and the Tariff Act and would therefore throw considerable light on what was intended by the framers of S.R.O. 3315. The effect of this notification was that the authorization granted by or the permission acquired from the French authorities was made to serve the same purpose as the grant of a licence to import under the Import and Export (Control) Act and nothing more. If its effect was in terms confined to this, there could be no contention that goods imported in pursuance of the authorization should be exempted from customs duty. 423 Besides this, we might also draw attention to paragraph 17 of the Articles of Agreement dated October 21, 1954, under the terms of which the transfer of Pondicherry to the Union Government was effected. No doubt, that was an agreement between two Governments whose terms and covenants are not justiciable in municipal courts but as the two S.R.0s. themselves proceed on the basis of this agreement and have been issued by virtue of the authority acquired by the Union Government under the Agreement, a reference to the terms thereof would be pertinent for understanding the scope or intent of the provisions in these two orders S.R.O. 3314 and 3315. Paragraph 17 of the Agreement dated October 21, 1954 which has been referred to also by Subba Rao, J., in the Universal lmports Agency 's case (1) in support of the position that the authorization under the French law to effect importation of goods into Pondicherry was tanta mount to and had the same effect as the obtaining of a licence under the Import and Export (Control) Act, 1947 expressly made provision for the Government of India applying to the Establishment the relevant Indian laws relating to the imposition of customs and other duties in respect of goods which entered the port after November 1, 1954. It reads: " All orders placed outside the Establishments and finalised through the grant of a Licence by competent authorities in accordance with the laws and regulations in force, prior to the date of the de facto transfer, shall be fulfilled and the necessary foreign currency granted, as far as the goods are imported within the period of validity of the relevant Licence. The goods shall, however, be liable to customs duty and other taxes normally leviable at Indian ports. . . . . As we have already pointed out, this is exactly what is sought to be achieved by the conjoint operation of paragraph 6 of S.R.O. 3314 and the extension of fiscal laws to Pondicherry effected by paragraph 3 of S.R.O. 3315. It is precisely this that is also brought out by paragraph 4 of the notification dated November 1, 1954, extracted earlier. In the circumstances (1) ; 424 it looks somewhat curious that the petitioners now before us, who as interveners in the petitions by the Universal Imports Agency, etc., supported the invoking of para. 6 of S.R.O. 3314, or article 17 of the Articles of Agreement and para. 4 of the notification dated November 1, 1954, as an aid to the construction of the words "things done" in para. 6 of S.R.O. 3315 the Government resisting their use as an aid, should now take up the position that these materials are irrelevant for determining the scope of those crucial words. In our opinion the petitioners are not entitled to have their goods imported into Pondicherry after November 1, 1954, without payment of duty notwithstanding that the contracts, by reason of which the goods were imported, were entered into or the shipment took place before that date. The result is that the petition is allowed and the orders of the Government, of the Central Board of Revenue and the Collector of Customs are quashed only in so far as they impose a penalty on the petitioner for importing goods without a licence under the Import and Export (Control) Act, 1947, and the Import Control Order. The respondents were entitled to demand and to enforce the payment of customs duty and the relief prayed in the petition in so far as it relates to the quashing of the order in that respect and the refund of the duty collected, fails and is rejected. In the circumstances there would be no order as to costs. DAS GUPTA, J. We agree that in view of this Court 's decision in M/s. Universal Imports Agency vs The Chief Controller of Imports and Exports (1) the petitioners are entitled to relief as against the order imposing penalty for importation of goods into Pondicherry, even though the actual importation took place, after November 1, 1954, as the contract in pursuance of which the importation took place had been concluded prior to that date. We are not able to agree however that the position is different as regards the (1) [1061] 1 S.C.R. 305. 425 petitioners ' prayer for relief against the levy of customs duty on this very importation. With great respect to our learned brethren, who have taken the contrary view, we are of opinion that as long as the Universal Imports Agency case (1) is not held to have been wrongly decided, we are bound by the authority of that decision to hold that the petitioners are entitled to relief against the levy of customs duty as well. In all the three petitions which were before the Court in the Universal Imports Agency Case, the petitioners had entered into firm contracts of purchase by import with foreign sellers, before the date of merger of Pondicherry with India; in all the cases, the goods reached the destination, the port of Pondicherry, after the date of merger. By that date (which was November 1, 1954) however the entire administration of Pondicherry had become vested in the Government of India, but Pondicherry still remained a foreign territory. Under section 4 of the , an order had been made on October 30, 1954, being notification S.R.O. 3315, in consequence of which the Import and Export (Control) Act, 1947, and the , along with several other Indian statutes became laws in force in Pondicherry. 6 of this order was in these words: "Unless otherwise specifically provided in the Schedule, all laws in force in the French Establishments immediately before the commencement of this order which corresponds to the enactments specified in the Schedule shall cease to have effect, save as respects things done or omitted to be done before such commencement. " When the goods arrived at the Port of Pondicherry they were confiscated, on the ground that they had been imported without licence. But an option was given to pay a penalty in lieu of confiscation. The petitioners paid the penalty and then came to this Court for relief In making the order of confiscation and giving an option to the petitioners to pay penalty in lieu of confiscation the Collector of Customs proceeded on the (1) ; 426 basis of section 3(2) of the Imports and Exports Trade (Control) Act read with section 67(8) of the . The ground on which relief was sought from this Court was that to this act of importation, the Indian statutes mentioned in notification S.R.O. 3315 did not apply because this was "a thing done" before the commencement of the order. If this contention succeeded, there was no escape from the conclusion that the order of confiscation had no legal basis, for the laws in force in the French Establishments regarding the importation of goods into Pondicherry did not require such licence. The controversy before the Court therefore was whether the import was or was not "a thing done" within the meaning of the saving provisions of para. 6 of the order. On the one hand, it was urged that only the conclusion of the contract was "a thing done" before the commencement of the order and the importation the bringing of the goods across the customs barrier at Pondicherry port which was the mere consequence of the contract could not, without undue strain on the language, be said to be a thing done before the commencement of the order. Against this it was urged on behalf of the petitioners that the words "things done" included not only the things actually done and completed, but also their consequence. The majority decision of this Court accepted the petitioners ' contention and also held that an import was the legal consequence of the contract that had been entered into by the petitioners with the foreign dealers and so where the contract was concluded before the date of commencement of the order, the import by bringing the goods into Pondicherry Port was also a "thing done" before the commencement of the order. It is helpful in this connection to reread what was said by our brother Subba Rao, J., speaking for the majority. After setting out the relevant facts he proceeded to say: "On the said facts a short question arises whether paragraph 6 of the Order protects the petitioners. While learned counsel for the petitioners contends that "things done" take in not only things done but also their legal consequences, learned 427 counsel for the State contends that, as the goods were not brought into India before the merger, it was not a thing done before the merger, and therefore, would be governed by the enactments specified in the Schedule. It is not necessary to consider in this case whether the concept of import not only( takes in the factual bringing, of goods into India, but also the entire process of Import commencing from the date of the application for permission to import and ending with the crossing of the customs barrier in India. The words "things done" in para. 6 must be reasonably interpreted and, if so interpreted they can mean not only things done but also the legal consequences flowing therefrom. If the interpretation suggested by the learned counsel for the respondents be accepted, the saving clause would become unnecessary. If what it saves, is only the executed contracts, i.e., the contracts where under the goods have been imported and received by the buyer before the merger, no further protection is necessary as ordinarily no question of enforcement of the contracts under the preexisting law would arise. " After pointing out that the phraseology used had been copied from various previous statutes and referring to several English decisions as regards the interpretation of the words "things done" the conclusion of the majority was stated in these words: "We therefore hold that the words "things done" in paragraph 6 of the, Order are comprehensive enough to take in a transaction effected before the merger, though some of its legal effects and consequences projected into the post merger period. " The question whether imports were the conse quences of the contract that had been entered into before the date of merger was next examined even though this position does not appear to have been seriously disputed, and the conclusion was stated thus: ". . It may be stated that a purchase by import involves a series of integrated activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods 428 into the importing country and that the purchase and resultant import form parts of the same transaction. If so, in the present case the bringing of the goods into India and the relevant contracts entered into by the petitioners with the foreign dealers form parts of the same transaction. The imports, therefore, were the effect or the legal con sequences of the "things done", i.e., the contracts entered into by the petitioners with the foreign dealers. " Applying the principles of law thus enunciated the majority held that para. 6 of the order saved the transactions entered into by the petitioners and that the respondent had no right to confiscate their goods on the ground that they were imported without licence. Accordingly it gave the petitioners the relief they sought for. In the present case also the question is whether the act of importation can get the benefit of the saving provisions in para. 6 of the order. We cannot see how that benefit can be denied in respect of customs duty, unless we refuse to apply the principles laid down in the Universal Imports Agency case; and we cannot see how we can refuse to apply these principles. It is true that in that case the Court had not to deal with the question of customs duty. The questions for decision were however pure questions of law: (i) whether the imports were the effect or the legal consequence of the "things done", i.e., the contracts entered into by the Indian buyers with foreign dealers and (ii) whether "things done" mean not only things done but also the legal consequences flowing therefrom. Whether these questions of law fell to be decided in a case, where the benefit of the saving clause is sought against an order of confiscation or as in the present case it is sought against an order for payment of customs duty is wholly irrelevant for the decisions of these questions of law. We wish to make it clear that we have no opinion to express as regards the decisions of these questions of law by the majority in the Universal Imports Agency case. What we cannot ignore is that the law laid down by the majority on 429 those questions in that case is law and should be followed by this Court as it has to be followed by other courts, the only difference being that this Court can overrule those decisions. But so long as that is not done the law as laid down there is good law, which we in deciding the present case must obey. Applying c. that law we are of opinion that we are bound to hold that the provisions in the for levy of customs duty on imports of the goods which were imported by the petitioners in the present case do not apply to these imports unless there is something in the order itself which deprives the act of importation from the benefit of the saving clause in respect of the customs duty. No such thing can be seen in the order. Of the 6 paras of which it consists the first merely gives its name and says that it will come into force on the 1st day of November, 1954. The second para. defines the French Establishments. The third para. which is the operative para. says that the enactments specified in col. 3 of the Schedule as in force before the commencement of this order are hereby applied to, and shall be in force in French Establishments subject to (a) amendments, (b) modifications, if any, specified in column 4 of the Schedule and (c) the subsequent provisions of the order. 4 contains a rule of construction, viz., reference in any enactment, notification, rule, order or regulation. applied to the French Establishments by this order, to India or to States or State generally shall be construed as including a reference to the French Establishments; and some other similar provisions. 5 empowers the court, tribunal or authority required or empowered to enforce any specified enactment, in the French Establishments, to construe the enactment with such alte rations, not affecting the substance as may be necessary or proper. 6 which has already been set out contains the saving clause. It is worth noting that the provisions for the application of the enactments to the French Establishments is in terms made subject to subsequent provisions of the order and thus clearly to the provisions of para. There is thus 55 430 nothing in the order itself, which makes the saving provision in para. 6 inapplicable to the levy of customs duties. Nor has our attention been drawn to any later law which would have the effect of depriving the petitioners from the benefit of those saving clauses. On behalf of the State reference was made to para. 17 of the Articles of Indo French Agreement. After stating that all orders placed outside the Establishments and finalised through the grant of a licence by competent authorities shall be fulfilled and the necessary foreign currency granted, so far as the goods are imported within the period of the validity of the relevant licence, goes on to say, the goods shall however be liable to customs duty and other taxes normally leviable at Indian ports. It is argued that this expression of intention by the Government of India as mentioned in this Agreement to realise customs duty on goods imported after the merger should be taken into consideration in applying the saving provisions of the order in notification section R. O. 3315. We are unable to persuade ourselves that there is any justification in reading into the order section R. O. 3315 anything to the contrary that might have been expressed in the Indo French Agreement. It is true that the provisions of this para. of the Indo French Agreement were referred to in the majority judgment in the Universal Imports Agency case and it was said that the conclusion already reached were reinforced by what appeared in para. It is one thing however for a court to consider that conclusions reached on legal principles is in keeping with the intention expressed in a document between high contracting parties, it is quite another thing to say that the conclusion reached on legal principles should be departed from because it seems to be at variance with what has been said in such a document. In view of what was agreed to in para. 17 of the Indo French Agreement there would have been no difficulty for the Government of India to make provision when providing for the saving of the operation of certain laws to be applied to the French Establishments in respect of "things done" 431 before the commencement of the order to exempt the levy of customs duty from such saving. That was not done. There is nothing in law that we are aware of which would compel the Government of India because of the above Agreement in para. 17 to extend the provisions of levy of customs duty in the in respect of things done before the com mencement of the order. Though the Government of India could have well made the exception when inserting the saving clause in the order section R. O. 3315 in respect of levy of customs duty they did not do so. It will be improper in our opinion to hold that even though the Government of India did not expect it we should do so to give effect to what is considered to be the Government of India 's intention as expressed in the Indo French Agreement. Reference has also been made to another order made by the Government of India, i.e., section R. O. 3314 which saved the operation of the preexisting French law except in so far as it had been affected by section R. O. 3315. Paragraph 5 of this order provides that all laws in force in the French Establishments immediately before the commencement of the order and not repealed by paragraph 6 of the French Establishments (Application of Laws Order) 1954 that is the order in section R. O. 3315 shall continue to be in force until repealed or amended by competent authority. 6 of the same order (section R. O. 3314) provides that all taxes, duties, cesses or fees which immediately before the commencement of the order were being lawfully levied in the French Establishments in so far as such levy has not been discontinued by any of the laws extended to the French Establishment by the French Establishments (Application of Laws Order) 1954 continued to be levied. Thus if any customs duty had been pay. able under the French law which was in force prior to November 1, 1954, that would have continued to be payable in respect of "things done" which are saved from the operation of the Indian laws in the matter by para. 6 of section R. O. 3315. We are unable to see how either of these provisions in S.R.O. 3314 or anything else therein can deprive 432 the petitioners from the benefit of the saving clause in para. 6 of the French Establishments (Application of Laws Order) 1954, in respect of the levy of customs duty. What is it that is saved by this saving provision in para. 6? It is the things done before the commencement of the order. If the thing done did not include the bringing of the goods across the customs barrier, it would not have been saved. It was held in the Universal Imports Agency case that bringing the goods across the customs barrier was a "thing done" before the commencement of the order when the contract in pursuance of which this was done, was concluded before the date of commencement of the order. Under the saving clause in para. 6, this "thing done" i.e., the bringing the goods across the customs barrier is saved from a body of Indian laws and is intended to be controlled by a corresponding body of the previously prevailing French laws. It is not possible without reading into para. 6, some words like"provided that in respect of levy of customs duty under the , the corresponding French law will cease to have effect, if the actual import takes place after the commencement of the order" to hold that the levy of customs duty will be governed by the Indian law, in respect even of an import which was a "thing done" before the commencement of the order. We are of opinion that on the law as laid down in the Universal Imports Agency case the importation of goods in the present case in pursuance of a contract which was concluded before the date of the commencement of the order (S.R.O. 3315) was governed by the French laws and not by the Indian laws, no less as regards the question of levy of customs duty than as regards the question of import licences. Under the French law no duty was payable on these imports. Consequently these petitioners were not liable to pay duty on these imports. In our opinion, the petitioners are entitled to the relief they have prayed for, both against the levy of 433 customs duty and against the order imposing penalty for importation without licence. We would accordingly allow the petition. By COURT. In accordance with the opinion of the majority, the petition is allowed in part and the orders of the Government in so far as they impose a penalty on the petitioners for importing goods without a licence, are set aside; except to this extent, the petition shall stand dismissed.

The petitioners entered into agreements with certain British firms for the import of cycles and cycle parts to Pondi cherry, which was then a French Establishment, in the manner provided by French law. The goods arrived at Pondicherry after the French Establishments had merged into India on the basis of the Agreement dated October 21, 1954, between the Union of India and France, which was to be operative from November 1, 1954. By virtue of the said Agreement two Orders, dated October 30, 1954, were issued by the Ministry of External Affairs under the Foreign jurisdiction Act, 1947, being S.R.O. 3314, the French Establishments (Administration) Order, 1954, and S.R.O. 3315, the French Establishments (Application of Laws) Order, 1954. The first saved the operation of the preexisting French Law except in so far as it was repealed by the second, which extended to French Settlements certain Indian Statutes specified in the Schedule and amongst these were the , the Tariff Act, 1934, the Import and Export (Control) Act, 1947, and the Foreign Exchange Regulation Act, 1947. These Orders came into force on November 1, 1954. On the same day the Government of India, by a Notification, appointed a Controller of Imports and Exports for the French Settlements. Paragraph 4 Of this notification called upon the licence holders under the French Law to apply to the Controller for validation of the licences held by them. Paragraph 17 Of the Agreement, while saving import of goods validly ordered prior to the de facto transfer, made such goods liable to customs duty. As the goods arrived at Pondicherry on December 4, 1954, the Customs Authorities took the view that the import was in contravention of the Indian Statutes and ordered the petitioners to pay a penalty under section i67(8) of the , as also customs duty. The Central Board of Revenue on appeal upheld the order and the Central Government in revision, while affirming that decision, reduced the penalty. Paragraph 6 of S.R.O. 3315 provided as follows, 411 " Unless therefore specially provided in the schedule all laws in force in the French Establishments immediately before the commencement of this order which correspond to the enactments specified in the schedule shall cease to have effect, save as respects things done or omitted to be done before such commencement". The question for determination was whether the petitioners were liable to pay the penalty under section i67(8) of the , and also the Customs Duty. Held, (per curiam), that in view of, the decision of this Court in Universal Imports Agency vs The Chief Controller of Imports and Exports, the petitioners were not liable to pay the penalty under section i67(8) of the . Universal Imports Agency vs The Chief Controller of Imports and Exports, ; , followed. Per Gajendragadkar, Wanchoo and Ayyangar, JJ. That decision of this Court, however, did not apply to or absolve the petitioners from the liability to pay the customs duty. In order to determine the exact scope of the words "things done" occurring in para. 6 of S.R.O. 3315, the two orders, S.R.O. 3314 and S.R.O. 3315 must be read along with para. 17 of the Agreement and para. 4 Of the Notification of November 1, 1954, appointing the Controller and so determined there could be no doubt that the saving clause afforded no protection to the petitioners so far as their liability to pay the customs duty was concerned. Per Sarkar and Das Gupta, JJ. The words "things done" occurring in para. 6 of S.R.O. 3315 as construed by this Court in Universal Imports Agency vs The Chief Controller of Imports and Exports, cover the petitioners ' liability to pay not only the penalty but also the customs duty and so long as that decision stands, it has to be followed. Universal Imports Agency vs The Chief Controller of Imports and Exports, ; , discussed. There is nothing in the Order S.R.O. 3315 itself which renders the saving provision in para. 6 inapplicable to the levy of customs duty nor does any later law deprive the petitioners of its protection. There can be no justification for reading into the Order S.R.O. 3315 anything to the contrary contained in para. 17 of the Articles of the Indo French Agreement.

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 State of Bihar filed a number of suits in this Court under article 131 of the Constitution in connection with the delayed delivery of iron and steel materials for its Gandak project. In six of the suits the defendants were: The Union of India (Defendant No. 1 ) and Hindustan Steel Ltd. (Defendant No. 2). In six other suits the defendants were: The Union of India (Defendant No. 1) and The Indian Iron & Steel Co. Ltd. (Defendant No. 2). The prayers in all the suits were that decrees for specific sums of money be passed either against the Union of India or the second defendant. Identical preliminary issues were set down for consideration in all the suits, namely: (1) whether the cause or causes of action in this suit are within the scope of article 131 of the Constitution? (2) Whether the suit is within the scope of article 131 of the Constitution in view of a non State viz. defendant No. 2, having been made a party to the suit ? (3) Whether the suit is barred by the provisions of section 80 C.P.C. for want of notice to defendant No. 1. HELD: (i) The specification of the parties in article 131 is not of the inclusive kind. The express words in cls. (a), (b) and (c) of the Article exclude the idea of a private citizen, a firm or a corporation figuring as a disputant either alone or even along with a State or with the Government of India in the category of a party to the dispute. The contents of the corresponding section, of the Government of India Act, 1935 namely section 204, and the legislative history culminating in the adoption of article 131 of the Constitution support the conclusion that so far as the parties to a dispute are concerned, the framers of the Constitution did intend that they could only be the constituent units of the Union of India and the Government of India itself arrayed on one side or the other either singly Or jointly with another unit or the Government of India. For other types of controversies or disputes special provision has been made in the sonstitution e.g. in article 143 257, 262 and 290 A dispute in which a private party, is involved must be brought before a court other than this Court having jurisdiction over the matter. [52.6 D F; 530 B; 531 C, F, H; 532 C] The United Provinces vs The Governor General in Council, and State of Seraikella and Others vs Union of India and another, [151] S.C.R. 474, referred to. The enlarged definition of 'State ' given in Parts III and IV of the Constitution is not attracted to article 131 of the Constitution and a body like the Hindustan Steel Ltd. could not be considered to be "a State" for the purpose of article 131 of the Constitution. [532 G] Rajasthan State Electricity Board vs Mohan Lal, ; , distinguished. 523 In view of the above finding on issue No. 2 the suits did not lie in this Court under article 131 of the Constitution and the plaints must be returned; it was accordingly unnecessary to decide issues Nos. 1 and 3. [532 H] Article 131 does not prescribe that a suit must be filed in the Supreme Court for the complete adjudication of the dispute envisaged therein or the passing of a decree capable of execution in the ordinary way as decrees of other courts are. Once this Court has given a declaration of its rights to the aggrieved party the function of the Court under article 131 is over. [525 C F]

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.

The petitioners, who were tenure holders, challenged the constitutional validity of the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958 and in particular sections 3 and 4 read with section 6 of that Act, as infringing their fundamental rights guaranteed by articles 14, 19 and 31 of the Constitution. Their case in brief was that those provisions by making certain non permanent tenants permanent as from the commencement of the Bombay Taluqdari Tenure Abolition Act, 1949, enabled them to acquire occupancy right by payment of six times the assessment or the rent under section 5A of that Act instead of 20 times to 200 times the assessment under section 32H of the Bombay Tenancy and Agricultural Lands Act, 1948, 412 as amended in 1956, and thereby substantially deprived the petitioners of the rights acquired by them on the 'tillers ' day, April 1, 1957, when they ceased to be tenure holders. It was urged that the impugned Act was a piece of colourable legislation in that it had confiscated, under the guise of defining a permanent tenant or changing a rule of evidence, a large part of the purchase price the petitioners were entitled to from their tenants, and that the State Legislature had not the competence to enact it as it was not saved by article 31A of the Constitution. ^ Held, (Sarkar and Mudholkar, JJ., dissenting), that ss.3, 4 and 6 of the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958, in so far as they deemed some tenants as permanent tenants in possession of Taluqudari land, were unconstitutional and void. Under the guise of changing the definition of a permanent tenant and changing a rule of evidence, they really reduced the purchase price that the petitioners were entitled to receive under section 32H of the Bombay Tenancy and Agricultural Lands Act, 1948, as amended in 1956, from some of their tenants on the "tillers ' day. " Per Sinha, C.J., and Das, J. There can be no doubt that section 4 of the impugned Act, properly construed, created a new class of permanent tenants not contemplated by section 83 of the Bombay Land Revenue Code, 1879, and not in existence on the 'tillers ' day", and the combined effect of sections 3, 4 and 6 of the impugned Act was that if the tenure holder did not make an application under section 6 within six months from the commencement of the impugned Act for a declaration that a tenant under him was not a permanent tenant, the name of the tenant would be recorded as a permanent tenant if he fulfilled the conditions laid down by section 4 and thereafter he would be deemed under section 3 to be a permanent tenant and under section 4 all the provisions of the Taluqdari Abolition Act 1949, would apply to him. The result of this combined effect would be to deprive the tenure holder of any real opportunity of contesting the claims of the tenant and deprive him of the purchase price prescribed by section 32H of the Bombay Tenancy and Agricultural Lands Act, 1948. The right of the petitioners to the said purchase price from those of their tenants who were non permanent on April 1, 1957, was a right of property guaranteed by article 19 (1) (f) and the impugned sections adversely affected that right with retrospective effect Section 6, tested in the light of article 19(5), could not be said to impose a reasonable restriction in the interest of the general public. 413 Bombay Dyeing and Manufacturing Co. Ltd. vs State of Bombay; , , applied. Sri Ram Ram Narain Medhi vs The State of Bombay. [1959] Supp. 1 S.C.R. 489, referred to. Article 31A of the Constitution had no application. The relation between the tenure holders and the tenants had changed from that of landlord and tenant to that of creditor and debtor on April 1, 1957, and the impugned Act which affected such rights, did not come within the protection of that Article. In view of the true scope and effect of sections 3, 4 and 6, the impugned Act could not fall within any entry of List II or List III of the Seventh Schedule to the Constitution and was a piece of colourable legislation. K.C. Gajapati Narayan Deo vs State of Orissa ; , referred to. Per Sarkar and Mudholkar, JJ. Section 4 of the impugned Act did not expand the definition of a permanent tenant and did not take away any property that was vested in the landlord on the "tillers day". Nor did it confer any new property on the tenant. It only applied to and rescued a permanent tenant faced with the task of proving the nature of his tenancy, by raising a presumption of permanency in his favour. If in fact his tenancy was not permanent and had been extinguished by law but he was tentatively recorded as permanent, the landlord could rebut the presumption in a proceeding under section 6 (1) by producing the documents in his possession or otherwise by showing that the tenancy was not in fact permanent and, therefore, had been extinguished by section 32(1) of the Bombay Tenancy and Agricultural Lands Act, 1948, and claim compensation or the purchase money under section 32H(1)(II) of the Act, that right of his not having been affected in any way by the impugned Act. If he failed, he would get the purchase price according to section 5A of the Bombay Taluqdari Tenure Abolition Act, 1949, which would not be and was not challenged. Dhirubha Devisingh Gohil vs State of Bombay, ; , referred to. The impugned Act dealt with matters arising out of the relationship between landlord and tenant. Its provisions were not intended to apply where such relationship did not subsist. The Act was, therefore, within the competence of the Legislature under entry 18 of List II of the Seventh Schedule to the Constitution and was thus not a piece of colourable legislation. 414 There was, therefore, no infringement of article 31(1) and the Act was within the protection of article 31A of the Constitution and its Constitutional Validity could not be challenged under article 14 and 19(1)(f) of the Constitution. Held, further, that the distinction made between tenure villages and non tenure ones was a classification based on the extent of availability of the material for raising the inference or the presumption and such classification had a reasonable nexus with the object sought to be achieved by the Act. Per Ayyangar, J. There was no basis for the argument that section 4 of the impugned Act merely intended to provide a rule of evidence for determining who was a permanent tenant under section 83 of the Bombay Land Revenue Code, 1879, and did not extend the category of such tenants. It enacts a positive rule of law by which a person in possession of holding of a tenure land must be "deemed" to be a permanent tenant on fulfilment of the three specified conditions. This is evident from the provisions of section 6(1) under which every person who satisfied the definition of a permanent tenant under section 4 was entitled automatically and without applying for to be entered as a permanent tenant in the record of rights by the Mamlatdar unless the tenure holder filed an objection in writing. Obviously such objection could only be on grounds open to him under section 4. Section 4(b) and s.6(1) of the impugned Act had to be read together as forming an integrated whole. The entire object and purpose of the impugned enactment was not, therefore, to enact a rule of evidence for determining who were permanent tenants under the pre existing law but to define and create a new class of permanent tenants who satisfied section 4 of the Act.

Item 42 of Part IV of the Import Trade Control Schedule permitted "fodder. . " to be imported without a special import licence from a soft Currency area. Item 32 of the same Schedule related to "grain. and included oats; and a licence was necessary for importing goods covered by this item. The respondent imported from Australia, without a licence, goods described as "feed oats" for feeding race horses. He claimed that the goods were covered by Item 42 and could be imported without a licence. The customs authorities held that the goods were "grains" within the meaning of Item 32 which could not be imported without a licence, confiscated the goods and imposed a penalty in lieu of confiscation. The respondent moved the High Court for the issue of a writ of mandamus under section 45 specific Relief Act. The High Court held that the 278 goods were covered by item 42 and issued a writ prohibiting the authorities from recovering the penalty imposed. Held, that the High Court had no, jurisdiction to interfere with the decision of the customs authorities that the goods fell within item 32. It is primarily for the Import Control authorities to determine the head of entry under which any particular commodity falls, and only when the construction adopted is perverse are the courts entitled to interfere. In the present case the decision of the customs authorities was not one which could not be supported on any,reasonable basis, and could be called perverse. Venkatesvaran vs Wadhwani, A. I. R. , referred to. Held, further that the goods imported fell within item 82 and not within item 42. Oats are undoubtedly grain. Any particular species of grain cannot be, excluded, from the item "grain" merely because it is capable of being used as cattle or horse feed. The matter is made clear by the reference to "coats" in item 32 where grain is classified into two categories, oats and "other gains".

The petitioner was detained under rule 30 of the Defence of India Rules 1962, by an order of the District Magistrate and the necessary formalities were gone through. He filed a petition under article 32 and contended : (1) The order of the District Magistrate was mala fide as he had not applied his mind to tile specific activities of the petitioner and there was complete absence of material before him to suggest that the conduct of the petitioner would be prejudicial to the defence of India etc. (2) One of the grounds of detention mentioned in the order was that the petitioner was a member of the Leftist Communist Party of India and Secretary of one of its branches. This consideration was not relevant as the said party had not been declared illegal or banned by the Government. HELD : (i) It was open to the petitioner to challenge his detention on the ground of mala fide or on the ground that all or any of the grounds mentioned in the order of detention were irrelevant. Such pleas were not covered by article 358 and were outside the purview of the Presidential Orders under article 359(1). [576 D] Makhan Singh Tarsikka vs State of Punjab, referred to. (ii) Taking into account the affidavit filed by the District Magistrate it could not be said that he did not apply his mind to the specific activities of the petitioner or that there was no material before him to justify the order. [577 C] (iii) It was not correct to State that the activities of the Leftist wing of the Communist Party cannot in any circumstances be illegal and would necessarily be irrelevant merely because the Government of India has not declared the Party illegal or imposed a ban. In the light of the reports received by the District Magistrate the political association of the petitioner and his membership of a particular political group was a relevant consideration in the matter of detention of the petitioner. This ground had close and proximate connection with the security of State and maintenance of public order as contemplated by rule 30 of the Defence of India Rules. [578 A C]

Under section 3 of Imports & Exports Control Act 18 of 1947 all goods to which any order under sub section (1) applied shall be deemed to be goods of which the Import & Export has been prohibited under section 19 of the Sea. Customs Act 8 of 1878, and all the provisions of.that Act shall have effect accordingly. In exercise of power conferred by sections 3 and 4A of the Act 18 of 1947 the Central Government issued the Imports control) Order 1955. Clause 3 of the Order prevented the importation of any goods of the description specified in Schedule except under and in accordance with a licence or a customs clearance permit granted by the Central Government or by any officer specified in Sch. Section 5 of Act 18 of 1947 as originally enacted provided : "If any person contravenes any order made or deemed to have been made under the Act, he shall without any prejudice to any confiscation or penalty to which he may be liable under the provisions of the , as applied by sub section 2@ of section 3 be punishable with imprisonment for a term which may extend to one year, or with fine, or with both. " By the Imports & Exports (Control) Amendment Act 4 of 1960 contravention of any conditions of a licence ranted in accordance with The terms of any order passed under the Act was also made punishable under section 5. The respondents imported certain goods from West Germany under licence granted by the Ministry of Commerce. According to the Government the goods imported were in excess of the terms of the licence and accordingly the respondents were charged with having committed ' offences under section 167(8) 'read with section 3(2) of Act 18 of 1947 and the a good s imported by them were confiscated. In lieu of the confiscation, however, a fine of Rs. 20,000/ was imposed an the respondents. A personal penalty of Rs. 25000/ was also imposed. The respondents filed ' a writ petition in the High Court which was dismissed by the Single Judge but 'allowed by the Division Bench. With certificate the Collector of Customs appealed. The only question for consideration was whether for breach of a condition of the licence penalty may be imposed under section 5 of Act 18 of 1947 read with section 167(8) of Act 8 of 1878. HELD: The appeal must be dismissed. For breach of any condition of a licence it is open to the authorities. under section 5 of Act 18 of 1947 as amended, to direct prosecution but no, 682 order confiscating goods and imposing penalty in lieu thereof could be made. The order of confiscation could only be made under section 167 cl. 8 ,of Act 8 of 1878 : in terms cl. 8 of section 167 provides for confiscation of the goods importation or exportation of which is for the time being prohibited or restricted by or under Ch. IV of the . The notification of which the contravention was alleged was not issued under section 19 of the but under the Imports & Exports (Control) Act 1947. The High Court was therefore right in holding that the scope of power under the was not enlarged by the amendment to section 5 of the Imports & Exports (Control) Act. There is nothing in the amended section 5 of the imports & Exports (Control) Act which warrants the view that the provisions of the , may be invoked to punish the breach of a condition of a licence granted under the Imports & Export , (Control) Act, 1947. [686 B C]

Appeal No. 43 of 1958. Appeal by special leave from the judgment and order dated April 11, 1956, of the former PEPSU High Court in Civil Misc. Case No. 173 of 1955. Naunit Lal, for the appellants. section M. Sikhri, Advocate General, Punjab, Gopal Singh and D. Gupta, for the respondents. 504 1961. April 27. The Judgment of the Court was delivered by DAB GUPTA, J. The 51 appellants all of whom belong to village Simla, Tehsil, Narwana, filed in the Pepsu High Court at Patiala a petition under article 226 and article 227 of the Constitution for relief against an order made by the Divisional Canal Commissioner, Narwana, for payment of certain water rates and Tawan. It appears that on the night of September 1, 1951, there was a cut on the left bank of Sirsa Branch Canal. Certain persons were prosecuted on a charge for having damaged the Canal but they were acquitted. Thereafter, the Divisional Canal Officer, Narwana, on the recommendation of the Sub Divisional Officer, Canal, Narwana made an order levying special charges against these appellants. On appeal the Divisional Canal Officer, Narwana, ordered in partial modification of the order made by the Sub Divisional Officer, the levy of six times the crop rates on cultivated area and six times the charges on uncultivated area and single bulk rate on water store of village Simla. This levy was made on the basis of his conclusion that the villagers of Simla were responsible for the cut and joined hands for the common good. The High Court dismissed the application by a short order stating that the points involved in this petition were fully covered by the decision of a Division Bench of the same High Court in Mukandi Ram vs The Executive Engineer (LPA/FAO No. 58 of 1954) and that the counsel for the petitioners had therefore nothing to say in support of the petition and did not press it. Against this order of dismissal the present petition has been filed by special leave obtained from this Court. Before mentioning the points raised by Mr. Naunit Lal in support of the appeal it would be convenient to refer to the provisions of law that require consideration. Section 31 of the , which admittedly applies to the Sirsa Branch Canal provides for the levy of water rates for 505 supply of canal water taken in the absence of contract at the rates and subject to the condition prescribed by the rules to be made by the State Government in respect thereof. No rules have however been made as regards the rates to be charged for such unauthorised supply of canal water in respect of the Sirsa Branch Canal which was in the State of Patiala. Rules had however been made by the 'Punjab Government in respect of the Sirhind Canal and branches thereof as also the Western Jumna Canal and branches thereof as early as April 1873 and August 1878 respectively. These rules had been amended from time to time. At the time the Sub Divisional Officer made his recommendation and the Divisional Canal Officer made his order these rules had not been extended to the Pepsu. It was when the appeal was pending before the Commissioner that the Pepsu Sirhind Canal and Western Jumna Canal Rules (Enforcement and Validation) Act No. IV of 1954 was passed by the Pepsu State Legislature. Section 3 of this Act applied with retrospective effect from August 1, 1948, the Sirhind Canal Rules and the Western Jumna Canal Rules to the Pepsu State. Section 4 provided that as from August 1, 1948, anything done or any action taken in accordance with the Pepsu Sirhind Canal Rules or the Western Jumna Canal Rules shall not be called in question in any proceedings before any court or other authority merely on the ground that the Sirhind Canal Rules or the Western Jumna Canal Rules were not in force in the Pepsu State on the date on which such thing was done or such action was taken. It may be mentioned that this Act replaced the Pepsu Sirhind Canal and Western Jumna Canal Rules (Enforcement and Validation) Ordinance, 1954, which had been made shortly before this. In Mukandi Ram vs The Executive Engineer (1), on the basis of which without further discussion the petition in this case was dismissed the Pepsu High Court held on facts practically identical with the facts of this case that the levy of special rates by the Canal Commissioner was justified under Rule 32 and in any case (1) LPA/FAO No. 58 of 1954. 506 under Rule 33 of the Sirhind Canal Rules read with section 31 of the Act. The main contention raised by Mr. Naunit Lal before us in support of the present appeal is that section 3 and section 4 of the Pepsu Sirhind Canal and Western Jumna Canal Rules (Enforcement and Validation) Act No. IV of 1954 are unconstitutional being in contravention of article 20(1) of the Constitution. Other points that he wanted to urge were (i) that the provisions of Rules 32 and 33 do not apply to the facts of the present case and (ii) that the notice served before the levy was made was not sufficient. As however it appeared clear to us that neither of these points was taken before the High Court we have not given him permission to raise these points before us, in the circumstances of this case. Another point that Rules 32 and 33 are beyond the scope of the rule making provisions of the Act was mentioned by the learned counsel but was later abandoned. The only point for our consideration therefore is whether section 3 and section 4 of the Pepsu Sirhind Canal and Western Jumna Canal Rules (Enforcement and Validation) Act, 1954, infringes the provisions of article 20(1) of the Constitution. article 20(1) provides that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. It is argued on behalf of the appellants that the application by these sections of rules allowing the imposition of special rates which have been imposed under the provisions of Rules 32 and 33 of the Pepsu Sirhind Canal Rules, which could not have been imposed at the time the water was used is bad, as thereby the appellants have been subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. This argument is based on the assumption that the use of water by the appellants was an "offence" and 507 that the imposition of an enhanced water charge under Rules 32 and 33 read with section 31 of the Canal Act for such use was "a penalty" for such an "offence". This assumption is clearly wrong. "Offence" s as was pointed out by this Court in Maqbool Hussain 's case (1) where article 20(2) of the Constitution came up for consideration has not been defined in the Constitution. So under article 367 which provides that the , shall apply for the interpretation of the Constitution the word "offence" in the several clauses of article 20 must be understood to convey the meaning given to it in section 3(37) of the . That section defines an "offence" to mean an act or omission made punishable by any law for the time being in force. Punishment is the mode by which the State enforces its laws forbidding the doing of something, or omission to do something. Punishment may take different forms. It may be a mere reprimand; it may be a fine; it may be whipping; it may be imprisonment simple or rigorous; it may even extend to death. But whatever the form, punishment is always co related to a law of the State forbidding the doing or the omission to do something. Unless such a law exists, there is no question of any act or omission being made " punish able". Have we in the present case any law forbidding the unauthorised user of the water which section 31 of the Canal Act provides will be charged at rates that may be prescribed by rules? Quite clearly, there is none. In providing for a charge to be made for use of water at rates that may be prescribed by rules the legislature is not prohibiting the use of water. The word "unauthorised use" in the section does not import any idea of prohibition. The intention of the law clearly is to obtain payment for water used; and the fact that the rates prescribed may be high cannot alter this position. We are therefore of opinion that the use of the water by the petitioners was not an "offence" and the order for levy of special rates for user thereof was not (1) ; 508 the imposition of a penalty for an offence. When the Sub Divisional Canal Officer or the Canal Commissioner was dealing with the matter they had to decide whether these petitioners had used water in an unauthorised manner and if so at what rates they should be charged for such use. In doing this, they were not trying anybody for any offence; and the fact that special rates were imposed did not deprive these rates of their essential character of a charge for water used and did not convert them into any penalty for the commission of an offence. There is therefore no scope here for the application of the provisions of article 20(1) of the Constitution. The appeal is accordingly dismissed with costs. Appeal dismissed.

Certain persons were prosecuted but acquitted of a charge of having damaged a canal. Thereafter the canal officers levied special canal charges on the appellants on the basis of the conclusion that the villagers were responsible for a cut in the canal. The High Court is missed the appellants petition under articles 226 and 227 of the Constitution on the ground that the case was covered by the case of Mukundi Ram vs The Executive Engineer, decided by the High Court (LPA/FAO NO. 58 of 1954), On appeal by special leave the appellants contended that sections 3, and 4 Of the Pepsu Sirhind Canal and Western jamuna Canal Rules (Enforcement and validation) Act (No. IV of 1954) are unconstitutional being in contravention of article 20(1) of the Constitution inasmuch as they have been 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. Held, that the use of water by the appellants was not an "offence" and the levy of special rates under Rules 32 and 33 of the Sirhind Canal Rules read with section 31 of the Northern India Canal and Drainage Act, i873, for such use was not the imposition of a "penalty" for an offence as contemplated under article 20(1) of the Constitution. Maqbool Hussain 's case; , , referred to.

In the village of Challayapalam, there were six inams, namely, the Challayapalam Shrotriem and five minor inams but there was no information as to when the inams were created and by whom. In two suits, one filed by the shrotriemdars, against the tenants for a declaration that the tenants did not have occupancy rights in the lands in their occupation, and the other by the tenants for a declaration that they had occupancy rights, the question arose whether the shrotriem was an "estate" within the meaning of section 3 (2) (d) of the Madras Estates Land Act, 1908, as amended by Act 18 of 1936. The trial court held, on a review of the evidence, that the grant was of the whole village within the meaning of the section and that the tenants had occupancy rights. On appeal, the High Court held that the evidence on record was inconclusive, that the onus of proving that the ant was of an estate lay upon the tenants, and that, since the tenants had Failed to discharge the onus, the question should be decided against the tenants. In the appeal to this Court by the tenants, the question was : if there was no evidence justifying an inference that the grant was of a whole village, whether explanation 1 to section 3(2)(d) (added by Act 2 of 1945) gave rise to a presumption in favour either of the shrotriemdars or the tenants. HELD : The suit of the shrotriemdars must fail, because, the Explanation raises a presumption, where a grant is expressed to be of a named village, that the area which formed the subject matter of the grant shall be deemed to be an estate. Raising of the presumption is not subject to any other condition. The legislature has, by the non obstante clause in the Explanation, affirmed that such presumption shall be raised even if it appears that in the grant are not included certain lands in the village, which have, before the grant of the named village been granted on service or other tenure or have been reserved for communal purposes. The party contending that the grant in question falls outside the definition in section 3(2) (d), has to prove that case, either by showing that the minor inams not comprised in the grant were created, contemporaneously with or subsequent to the grant of the village, by the grantor. [857 D E; 861 C E] By enacting the Explanation the intention of the legislature was to declare occupancy rights of tenants in inam villages. It would be attributing to the legislature gross ignorance of local conditions. if it was held that the legislature intended to place upon the tenant the onus of establishing affirmatively that the minor inams were granted before the grant of the named village and that if he fails to do so his claim is liable to fail. It is well nigh impossible to discharge such a burden in normal cases. Nor was it intended that, when the evidence was inconclusive, the person who approached the Court for relief must fail, for, as in the present 842 843 case, if the inamdar as well as the tenant sue for relief, the application of the rule would require the court to adopt the anomalous course of dismissing both the actions. In cases, which arose after the Amending Act of 1936, reference to the presumption in section 23 of the Act would be wholly out of place, the applicable presumption being the one prescribed by Explanation 1. The presumption under section 23, that a grant in favour of an inamdar was of the melvaram only, applied only in cases which arose before the Amending Act of 1936. [857 G; 858 B; 860 B; 862 F G] District Board of Tanjore vs M. K. Noor Mohammad Rowther, A.I.R. 1953 S.C. 446 and Varada Bhavanarayana Rao vs State of Andhra Pradesh, ; , explained.

The appellant was appointed a qanungo in Pepsu and latter as Assistant Consolidation Officer. Complaints having been received against him, an enquiry was held as a result of which he was dismissed by the Revenue Secretary. Against this order he preferred an appeal to the State Government. The Revenue Minister Pepsu wrote on the file 'chat dismissal would be too hard and instead he should be reverted as qanungo but no written order to that effect was served upon the appellant. After merger of Pepsu with Punjab, the Revenue Minister Punjab sent up the file to the Chief Minister with the remarks "C.M. may kindly advise". The Chief Minister passed the order confirming the dismissal. and the order was duly communicated to the appellant. The appellant challenged the order of the Chief Minister Punjab on the ground that the Chief Minister Punjab could not sit in review on the order of the Revenue Minister Pepsu and that the Chief Minister was not competent to deal with the matter as it pertained to the portfolio of the Revenue Minister. Held, that the order of the Revenue Minister Pepsu could not amount to an order by the State Government unless it was expressed in the name of Rajpramukh as required by article 166(1) of the Constitution and was then communicated to the appellant. Until the order was so communicated it was only of a provisional character and could be reconsidered over and ever again. Before communication the order was binding neither on the appellant nor on the State Government. State of Punjab vs Sodhi Sukdev Singh A.I.R. (1961) 2 S.C.R. 3 71 referred to. 714 Held, further, that the Chief Minister Punjab was competent to deal with the appeal and to pass the order which he did. Under r. 25 of the Rules of Business of the Punjab Government the matter undoubtedly related to the portfolio of the Revenue Minister. But since tinder r. 28(1)(ii) and (xix) which provide that cases involving questions of policy and cases of administrative importance and such other cases or classes of cases as the Chief Minister may consider necessary shall be referred to the Chief Minister, the case was properly referred to the Chief Minister. Under r. 4 the order passed by the Chief Minister, even though it pertained to the portfolio of the Revenue Minister, would be deemed to be an order of the Council of Ministers. It would be the Chief Ministers advice to the Governor, for which the Council of Ministers Would be collectively responsible and action taken thereon would be the action of the Government. Departmental proceedings cannot be divided into two parts : (i) enquiry and (ii) taking of action ; there is one conti nuous proceeding though there are two stages. Any action decided to be taken against a public servant found guilty misconduct is a judicial order and as such it cannot be varied at the will of the authority.

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 Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949. The assessments were challenged in the High Court but the petitions were dismissed. While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents. The respondents challenged the attachment proceedings but their petitions were again dismissed. In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded. This Court thereafter allowed the appeals by the respondents. Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court. However, when. the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again. Those petitions were allowed and the appellant appealed to this Court. While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section (3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law. But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968. Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected. [293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court. It markes a direct inroad into the judicial powers of the State. The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively. By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective. But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts. Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution. 1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr. No. 75/69 dt. 289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed. The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution. State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.

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 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]

These appeals are by tenants against the land owners. One Bishan Das owned considerable extent of land in Pakistan. He died on April 11, 1948 after he had migrated to India. After his death the Rehabilitation Department allot ted 124 standard acres and 4 I/4 units of evacuee land to Respondents Nos. 2 to 5 his sons and to Nos. 6 & 7 who were the legal heirs of one his deceased son. Each of the five sons was deemed entitled to 24 standard acres and 13 units of land and accordingly mutuation in respect of each of them was allowed by the Rehabilitation Department. Permanent rights in regard to the allotted land were also conferred by the authorities on the said respondents. Thereupon the said respondents land owners initiated ejectment proceedings under sec. 9(1)(i) of the Punjab Security of Land Tenures Act, 1953 against the tenants who were then in occupation of the Lands in question on the ground that each one of them was a small land owner as defined in Section 2(2) of the Act and that they required the land for self cultivation. The Assistant Collector, Hissar rejected the application. Their appeals were dismissed by the Collector on 4.4.1965. Their revision preferred before the Commissioner, Ambala Division was also rejected. Land owners ' further revision to Finan cial Commissioner also failed whereupon they filed a Writ Petition before the High Court on the ground that the land had been allotted to them in lieu of the land owned by their father in Pakistan and consequently the permissible area of each of them was to be computed under the proviso to section 2(3) of the Act, and so computed the holding of each of the five was well below the permissible limit of 30 standard acres prescribed thereunder. The High Court dismissed the Writ petition. Respondents preferred Letters Patent Appeals wherein the High Court held that in view of the Explanation to the proviso to section 2(3), the heirs and successors of the displaced persons to whom lands were allotted could not claim the benefit of the proviso and that the permissi 210 ble area under the substantive part of section 2(3) was 60 ordinary acres, The respondents preferred appeals to this Court. This Court confirmed the view of the High Court. However this Court accepted an argument advanced on behalf of the re spondents land owners that in computing the permissible area of each of the land owner, the uncultivated area of "banjar Jadid", "banjar Kadim" and "gair Mumkin" lands as on April 15, 1953 could not be included. As the authorities had wrongly included these types of lands, their orders were set aside and the case was remanded to the Collector concerned with a direction that should ascertain the extent of "banjar Jadid", "banjar Kadim" and "gair mumkin" lands of the Re spondents allotted as on 15.4.1953. When these proceedings were pending, applications filed by the appellants tenants under section 18 of the Act for purchase of surplus area also came to be considered by the authorities. When the matter came up before the Financial Commissioner he set aside the orders of the Collector and remanded the appel lants tenants cases for purchase of surplus land with a direction that the Collector must decide the cases of sur plus area after allowing the permissible 60 acres to the land owners. In a subsequent proceedings, the Financial Commissioner directed the Collector to determine the permis sible area after excluding all "banjar lands". The tenants filed Petitions before the Financial Commissioner against the order. However by the time these cases came up for orders, this Court had decided the land owners ' eviction cases viz in Munshi Ram & Ors. vs Financial Commissioner. Haryana & Ors., ; As such the revision Petitions were dismissed and the Collector was asked to determine the permissible area with reference to relevant date viz., April 15, 1953. By his order dated 6.5.82 the Collector accordingly determined the area held by each of the land owner after excluding the "banjar lands", as less than the permissible area and found that no area owned by them could be declared surplus and on that footing dismissed the purchase applications filed by the appellantstenants. Their Petitions having been dismissed by the Authorities under the Act, they fried Writ Petitions questioning the dismissal of their purchase applications. The High Court having dismissed the Writ Petitions, they have filed these appeals. Dismissing the appeals, this Court, HELD: The Punjab Security Land Tenures Act 1953 is intended to 211 place a ceiling on holding of land by fixing a maximum area permissible to be held by a land owner. In other words the excess over the permissible area shall be available as surplus area to be dealt with under the provisions of the said Act. [217H] In calculating the total extent held by a person on the date of the Act for purposes of determining whether a person is small land owner, the banjar lands cannot be taken into account. [216C] The need to make a reservation would arise only when the land owner on the relevant date held land in excess of the permissible area. [217C] The right of reservation given to a person who holds land in excess of the permissible area is, among others to give him an option to select that land which he would like to retain for himself and avoid one of the consequences of enabling the tenant to choose under section 18 of the Act any land including that which is under the personal cultiva tion of the land owner. [218B] It is not necessary and the Act does not make it obliga tory, on pain of consequences provided under section 5C, for a small land owner to make a reservation under sections 3, 4, 5, 5A or 5B. [218C] Bhagwan Das vs State of Punjab, ; Gurbux Singh vs State of Punjab, AIR 1964 SC 502, referred to.

Appeal No. 1 of 1958. Appeal from the judgment and order dated April 18, 1956, of the former Judicial Commissioner, Ajmer, in Civil Writ Petition No. 1 of 1956. G. C. Kasliwal, Advocate General for the State of Rajasthan, section K. Kapur and D. Gupta, for the appellant. section section Deedwania and K. P. Gupta, for respondent No. 1. B. P. Maheshwari, for respondent No. 9. 1961. April 27. The judgment of the Court was delivered by 435 WANCHOO, J. This is an appeal on a certificate granted by the Judicial Commissioner, Ajmer. The brief facts necessary for present purposes are these. ,, There is a Bank in Ajmer known as the Commercial Co operative Bank Limited, Ajmer (hereinafter referred to as the Bank), which is registered under the Cooperative Societies Act, No. 11 of 1912 (hereinafter referred to as the Act). Dharam Chand, respondent No. 1 (hereinafter referred to as the respondent), along with certain other respondents were members of the managing committee of the Bank. One Nandlal Sharma was the paid manager of the Bank. This man disappeared in 1953 and thereafter defalcation to the extent of about Rs. 6,34,000 was detected. Consequently, the managing committee passed a resolution suspending the business of the Bank subject to the approval of the Registrar. The then Registrar Shri Nagar approved the resolution and appointed an Inspector of Co operative Societies to hold an immediate inquiry. He also appointed a firm of Chartered Accountants as investigating auditors. On investigation by the auditors embezzlement to the extent of about Rs. 6,34,000 was found. Thereupon the successor Registrar, Shri Chitnis, gave notice to the respondent and other members of the managing committee on February 26, 1955, asking them to show cause why the committee should not be suspended under r. 30(3) of the Rules framed under the Act. A reply to the notice was given by the respondent and others in which they denied allegations of mismanagement, etc. The then Registrar Shri Chitnis however appointed an administrator of the Bank after removing the managing committee. In the meantime, an application was made under r. 18 of the Rules by seven shareholders of the Bank to the Registrar on April 4, 1956. Rule 18 authorises the Registrar to decide any dispute brought before him under that rule either himself or through the appointment of one or more arbitrators. Any dispute concerning the business of a Co operative Society between members or past members of the Society or persons claiming through them, or between a member or past member or person 436 so claiming and the Committee or any officer can be referred under r. 18. Such reference can be made by the Committee or by the Society by resolution in general meeting or by any party to the dispute, or if the dispute concerns a sum due from a member of the committee to the Society by any member of the Society. In consequence of this application the then Registrar appointed Shri Hem Chand Sogani, an advocate, as an arbitrator. The application was in the nature of a misfeasance proceeding against the members of the managing committee and the prayer was for an award against thirteen persons (including the respondent) directing them to pay certain amounts including the entire loss amounting to about Rs. 6,34,000, which was said to have been occasioned on account of glaring breach of law and the rules and the bye laws of the Bank and betrayal of confidence by the members of the managing committee. The appointment of the arbitrator was challenged by the president of the managing committee before the Deputy Commissioner through a revision petition but the challenge failed. As however Shri Sogani was in ill health, he expressed his inability to act as arbitrator. Consequently, on December 13, 1955, the then Registrar set aside the order appointing Shri Sogani as arbitrator and informed the parties that he would decide the dispute himself. This order was also challenged in revision before the Deputy Commissioner; but the attempt failed. Thereafter the present petition was filed by the respondent before the Judicial Commissioner, Ajmer, and a large number of grounds were urged in support of it, and it was prayed that the Registrar be prohibited from proceeding to deal with the application under r. 18 and the proceedings arising therefrom be quashed. The petition was decided by the Judicial Commissioner on April 18, 1956. He negatived all the contentions raised on behalf of the respondent except one; and it is with that contention only that we are concerned in the present appeal. That contention is that the Registrar is in the position of a party and had expressed his opinion unequivocally against the respondent and other members of the committee in the notice 437 which he gave on February 26, 1955, and therefore his constituting himself as a tribunal to decide the dispute under r. 18 was against the principles of natural justice, inasmuch as a party constituted himself the judge. This contention found favour with the learned Judicial Commissioner and he held that although the Registrar had no pecuniary or proprietary interest in the dispute yet in view of the circumstances of the case there was a strong likelihood of bias and therefore the Registrar 's acting as the tribunal would be against the principles of natural justice. He further held that if the Registrar had not suffered from the disability inherent in the situation, he would have been the most proper person to decide the dispute. The petition was therefore allowed and a writ of prohibition was issued to the Registrar directing him not to proceed with the dispute before him. This was followed by an application to the Judicial Commissioner for a certificate of fitness in order to file an appeal to this court, which was granted; and that is how the matter has come up before us. The official bias of the Registrar is sought to be based on two circumstances: the first is the notice issued by the then Registrar on February 26, 1955, asking the members of the managing committee (including the respondent) to show cause why they should not be suspended, and the second is that the Registrar is the head of the Co operative Department and as such has certain legal powers over all Co operative Societies (including the Bank) in his administrative capacity and therefore he would not be an impartial person to decide this dispute, particularly in view of the provisions of section 17 of the Act. We are of opinion that there is no force in either of the contentions. Turning to the notice of February 26, 1955, we are of opinion that there can be no inference of bias against the Registrar as such because he gave that notice and afterwards ordered the removal of the managing committee. That notice was based on the report of the investigating auditors and was concerned with the collective responsibility of the 56 438 managing committee in the discharge of their duties. The proceedings under that notice have nothing in ,common with the proceedings in the present dispute which, as we have already said, are in the nature of misfeasance proceedings against certain members of the managing committee and in which their individual responsibility as members of the managing committee to make good the loss caused by the embezzlement falls to be considered. So far as the proceedings under the notice are concerned, the only question was whether on the facts found by the investigating auditors the managing committee should as a whole be allowed to act as such and all that the Registrar in that connection did was to decide on the facts found by the investigating auditors that the managing committee should no longer be allowed to manage the affairs of the Bank. That is a very different matter from the dispute in the present pro ceedings, namely, whether the particular members of the managing committee against whom the application under r. 18 has been made are responsible for making good the loss caused to the Bank by the embezzlement, the fact of which is not in dispute. In the present proceedings therefore the Registrar will have to decide the individual responsibility of the various members of the managing committee (including the respondent) in the matter of making good the loss caused to the Bank. We are therefore of opinion that the fact that the Registrar gave that notice for the purpose of the removal of the managing committee is no reason to hold that he would be biased in the investigation of individual responsibility of various members of the managing committee in this matter. We cannot therefore agree with the Judicial Commissioner that there can be any official bias in the Registrar on this ground in connection with the present dispute and that such bias disentitles him to act as a judge or arbitrator under r. 18. The next contention is that the Registrar being the administrative head of the Department is in control of all the Co operative Societies in Ajmer, including the Bank. It is said that because of that administrative control which the Registrar exercises through his 439 subordinates in the Department, he is interested to see that the blame is put on the managing committee and that his Department is freed from all blame. In, particular our attention has been drawn to section 17 which enjoins that the Registrar shall audit or cause to be audited by some person authorised by him the accounts of every registered society once at least in every year. It is said that under this provision the Registrar has been appointing Chartered Accountants to audit the accounts of the Bank and that nothing wrong was discovered in the annual audits till the paid manager Nandlal absconded and the defalcations came to light. We fail to appreciate how this general supervision of the Registrar over all Co operative Societies can be said to amount to a bias in him so as to disentitle him to act as a judge or arbitrator under r. 18. It is not the respondent 's case that the Registrar is in any way responsible for the day to day working of the Bank. All that he is concerned with is to see that the accounts of the Bank are audited yearly, and if necessary, to make inspections of the Bank, if so authorised by the Act and the Rules. That, however, does not mean that the Registrar is bound to shield the auditors or his subordinates who might have made the inspection of the Bank and would so conduct the proceedings as to put the blame on the members of the managing committee. Even if some blame attaches to the auditors appointed by the Registrar or to his subordinates who might have inspected the Bank, their fault would be that they failed to detect the embezzlement till the paid manager absconded. That, however, does not mean that the Registrar was at any time a party to the fraud which resulted in the embezzlement. Even the Judicial Commissioner recognises that the Registrar has no personal interest in the matter and that he would but for the bias found by the Judicial Commissioner have been a most proper person to decide the dispute. Therefore even if we bear in mind the fact that the Registrar is the administrative head of the Department, we see nothing inherent in the situation which shows any official bias whatsoever in him so far as adjudication of this dispute is concerned. 440 We have no reason to suppose that if any of his subordinates or the auditors appointed by him are in any way found to be connected with the fraud he would not put the responsibility where it should lie. We are therefore of opinion that the Judicial Commissioner was wrong in the view that there was anything inherent in the situation which made the Registrar a biased person who could not act as a judge or an arbitrator in this case. It seems to us, therefore, that the learned Judicial Commissioner was in error in thinking that the Registrar was biased. For the reasons earlier mentioned, we do not think that any such blemish attached to the Registrar. That being so, no question of his inability to act as a judge under the rule of natural justice that no man shall be judge in his own cause, arises. The judgment of the learned Judicial Commissioner has to be set aside on this ground alone. We do not wish however to be understood as having made any pronouncement that if it had been proved that the Registrar was suffering from any bias, then the present would have been a fit case for the issue of a writ of prohibition as asked by the respondent. Before the writ could be issued a further question would have to be decided whether in view of the statute, that is, r. 18 of the Rules framed under section 43 of the Act, there was any scope for applying the rule of natural justice on which the contesting respondent relied. A question of this kind was mentioned in Gullapalli Nageswar Rao and Others V. State of Andhra Pradesh and Others (1). In the view that we have taken it is unnecessary to go into that question and we do not do so. The result is that the appeal is allowed and the judgment of the Judicial Commissioner is set aside. The petition will stand dismissed. Respondent No. 1 will pay the costs throughout. We trust that there will be no further reason to delay the termination of the proceedings under the rules by the Registrar. Appeal allowed. (1) ; , 587.

An investigation of the affairs of a Co operative Bank registered under the , on the disappearance of the manager of the bank in 1953, showed that a very large amount of money had been defalcated. On February 26, 1955, the Registrar of Co operative. Societies gave notice to the members of the managing committee of the bank asking them to show cause why the committee should not be suspended, under r. 30(3) Of the Rules framed under the Act. In reply the members denied allegations of mismanagement etc., but the Registrar, however, appointed an administrator of the bank after removing the managing committee. In the meantime, some of the shareholders of the bank made an application before the Registrar under r. 18 of the Co operative Societies Rules, in the nature of a misfeasance proceeding against the members of the managing committee, praying for an award directing them to pay the amount found defalcated, on the ground that it had been occasioned by a glaring breach of the law and the rules 434 and the bye laws of the bank and betrayal of confidence by the members of the committee. The Registrar originally appointed an arbitrator for this purpose, but, on the inability of the arbitrator to act due to his illness, the Registrar informed the parties that he would decide the dispute himself. The legality of the procedure adopted by the Registrar was challenged in a petition filed before the judicial Commissioner, on the ground that he was in the position of a party and had expressed his opinion unequivocally against the members of the committee in the notice he gave on February 26, 1955, and therefore his con stituting himself as a tribunal to decide the dispute under r. 18 was against the principles of natural justice, inasmuch as a party constituted himself the judge. The judicial Commissioner took the view that although the Registrar had no pecuniary or properties interest in the dispute yet in view of the circumstances of the case there was a strong likelihood of bias and therefore his acting as the tribunal would be against the principles of natural justice. Held, that the notice dated February 26, 1955, was concerned with the collective responsibility of the members of the managing committee in the.discharge of their duties, while the application made under r. 18 of the Co operative Societies Rules was in the nature of misfeasance proceedings in which their individual responsibility as members to make good the loss caused by the embezzlement fell to be considered, and consequently there could be no inference of bias against the Registrar simply because he gave notice to show cause against the removal of the managing committee, as the two matters were quite different. Held, further, that the fact that Registrar had general supervision over all co operative societies could not be said to amount to a bias in him so as to disentitle him to act as a judge or arbitrator under r. 18.

The respondent made an application against the appellant under section 14 of the Delhi Rent Control Act. In reply the appellant pleaded 182 that the respondent had no right to recover rent from him as a notice under section 46(5A) of the Indian Income tax Act had been issued by the Income tax Officer, that the respondent had no locus standi as the property was in the custody of the Court and a receiver had been appointed and that his professional fees were agreed and be adjusted towards the rent dues. The Rent Controller recorded the statement of the appellant and after hearing arguments directed the appellant under section 15(1) of the Delhi Rent Control Act, 1958 to deposit back rents at Rs. 300/ per month. On appeal the decision of the Rent Controller was affirmed, and a further appeal to the High Court also failed. The appellant contended that the order under section 15(1) for deposit of rent could only be made at the end of the case and not at an interlocutory stage. Held:(i) that the order under sub section (1) of section 15 is not a final order but is preliminary to the trial of the case and is made only wherer the rent has in fact not been paid. For the purpose of an interim order it was not necessary that there should have been a fun trial and, that this was clear from the latter part of sub section (1) of section 15 because under it not only the arrears have to be deposited but rent as it falls due has to be deposited month by month by the 15th of each succeeding month. Nalinakhya Bysack and Anr. vs Shyam Sunder Halder, A.I.R. , distinguished. (ii)The notice under section 46(5A) of the Income tax Act did not amount to a garnishee order and the appellant could make payment to the rent controller without incurring personal liability because the rent controller had stated in his order that the amount would not be paid to any one till a clearance certificate was obtained from the Income tax Department.

The respondent had an overdraft account with the Erattupetta Branch of the Kottayam orient Bank Ltd. at the foot of which he owed a sum of over Rs. 3000/ to the Bank. The said Bank which was a 'Banking Company ' as defined in the Banking Regulation Act, 1949, was amalgamated with the appellant Bank with effect from June 17, 1961. The appellant Bank filed a suit (O,S, 28 of 1963) in the Sub Court, Meenachil, against the respondent for recovery of the amount due from him in the overdraft Account with the Kottayam orient Bank, the right to recover which had come to be vested in the appellant as a result of the scheme of amalgamation. The suit was decreed in favour of the appellant but when it took out execution proceedings in the Sub Court, Kottayam, the respondent filed an application under section 8 of the Kerala Agriculturists ' Debt Relief Act claiming that being an agriculturist within the meaning of that Act, he was entitled to the benefit of its provisions including those relating to the scaling down of debts. The learned Subordinate Judge dismissed the application holding: (i) that the respondent was not entitled to the benefit of the provisions regarding scaling down of the debt because the debt, having been once owed by him to the Kottayam orient Bank Ltd. which was a Banking Company as defined in the Banking Regulation Act, 1949, was outside the purview of section S of the Act which provided for the scaling down of debts owed by agriculturists; and (ii) that he was only entitled to the benefit of the proviso to section 2(4) (l) of the Act under which the amount could be repaid in eight half yearly instalments The Revision Application preferred by the respondent was referred to the Full Bench of the High Court. It was contended on behalf of the appellant Bank that the debt owed to it by the respondent was excluded from the operation of the Act by reason of section 2 (4) (a) (ii) and section 2 (4) (1) of the Act. By its judgment dated February 1, 1978 the High Court rejected that contention, allowed the Revision Application and held that the respondent was entitled to all the relevant benefits of the Act, including the benefit of scaling down of the debt and hence the appeal by special leave. 339 Dismissing the appeal, the Court ^ HELD: 1:1. The appellant Bank will not be entitled to the benefit of the exclusion contained in section 2 (4) (a) (ii) of the Kerala Agriculturists ' Debt Relief Act, 1970 in view of clause (B) of the proviso to the section and the respondent 's claim to the benefits of the Act will remain unaffected by that provision. [345H, 346 A] 1: 2. The respondent is admittedly an agriculturist and he owes a sum of money to the appellant Bank under a decree passed in its favour by the Sub Court, Meenachil, in O.S. No. 28 of 1963. The liability which the respondent owes to the appellant Bank is, therefore a "debt" within the meaning of section 2 (4) of the Act. [344 F G] However, since the appellant Bank, namely, the State Bank of Travancore, . is a subsidiary bank within the meaning of section 2 (k) of the and also as contemplated by sub clause (ii) of clause (a) of section 2(4) of the Act, the decretal amount payable by the respondent to the appellant Bank will not be a debt within the meaning of section 2(4) of the Act. [345 C D] 1: 3. By reason of clause (B) of the proviso to section 2 (4) (a) (ii) of the Act, which proviso is in the nature of an exception to the exceptions contained in the said section the amount payable to a subsidiary bank is not to be regarded as a debt within the meaning of the Act, only if the right of the subsidiary bank to recover the amount did not arise by reason of any transfer effected by operation of law subsequent to July 1, 1957. Here, the notification containing the scheme of amalgamation was published on May 16. Thus, the right of the appellant Bank, though is a subsidiary Bank, to recover the amount from the respondent arose by reason of a transfer effected by operation of law, namely, the scheme of amalgamation, which came into effect after July 1, 1957. [345 D E, G] 2: l. The State Bank of Travancore, is not a 'company ' properly so called. It is a subsidiary bank. It was established by the Central Government in accordance with The Act of 1959 and is not a 'company and, therefore not a banking company. Therefore, the decretal debt which the respondent is liable to pay to the appellant is not owed to a "banking company". It was indeed not owed to any "banking company" at all on July 14, 1970 being the date on which the Act came into force. [346 G H, 347 A] 3: 1. The exclusion provided for in clause (I) of section 2 (4) of the Act can be availed of, if the debt is due to a banking company at the time of the commencement of the Act. [352 D E] 3: 2. The object of the Act is to relieve agricultural indebtedness. In order to achieve that object, the legislature conferred certain benefits on agricultural debtors but, while doing so, it excluded a class of debts from the operation of the Act, namely, debts of the description mentioned in clauses (a) to (n) of section 2 (4). One class of debts taken out from the operation of the Act is debts owed to banking companies, as specified in clause (1). The reason for this exception being that, unlike money lenders who 340 exploit needy agriculturists and impose upon them harsh and onerous terms while granting loans to them, representative institutions, like banks and banking companies, are governed be their rules and regulations which do not change from debtor to debtor and which, if anything, are intended to benefit the weaker sections of society. [348 A C] 3: 3. Relief to agricultural debtors who have suffered the oppression of private money lenders, has to be the guiding star which must illumine and inform the interpretation of the beneficient provisions of the Act. When clause (1) speaks of a debt due "before the commencement" of the Act to a banking company, it does undoubtedly mean what it says, namely, that the debt must have been due to a banking company before the commencement of the Act. But it means something more: that the debt must also be due to a banking company at the commencement of the Act. Reading into the clause the word "at" which is not there, is the only rational manner by which meaning and content could be given to it, so as to further the object of the Act. [349 B E] Further clause (I) speaks of a debt due before the commencement of the Act, what it truly means to convey is not that the debt should have been due to a banking company at some point of time before the commencement of the Act, but that it must be a debt which was incurred from a banking company before the commencement of the Act. [349 E F] Thus, the application of clause (I) is subject to these conditions: (i) The debt must have been incurred from a banking company; (ii) the debt must have been so incurred before the commencement of the Act; and (iii) the debt must be due to a banking company on the date of the commencement of the Act. These are cumulative conditions and unless each one of them is satisfied, clause (I) will not be attracted and the exclusion provided for therein will not be available as an answer to the relief sought by the debtor in terms of the Act. [349G H, 350 A] 3: 4. Section 2 (4) which defines a "debt" had to provide that debt means a liability due from or incurred by an agriculturist "on or before the commencement" of the Act. It could not be that liabilities incurred before the commencement of the Act would be "debts" even though they are not due on the date of commencement of the Act. The words "on or before the commencement" of the Act are used in the context of liabilities "due from or incurred" by an agrieculturist. For similar reasons, clause (j) had to use the expression "at the commencement" of the Act, the subject matter of that clause being debts due to widows. The benefit of the exclusion provided for in clause (j) could only be given to widows to whom debts were due "at the commencement" of the Act. The legislature could not have given that benefit in respect of debts which were due before but not at the commencement of the Act. Thus, the language used in the two provisions is suited to the particular subject matter with which those provisions deal and is apposite to the context in which that language is used. [350 C F] 3:5. The object of the Act being to confer certain benefits on agricultural debtors, the legislature would be under an obligation, while excepting a certain category of debts from the operation of the Act, to make a classification which will answer the test of article 14. Debts incurred from banking companies and 341 due to such companies at the commencement of the Act would fall into a separate and distinct class, the classification bearing a nexus with the object of the Act. If debts incurred from private money lenders are brought within the terms of clause (I) on the theory that the right to recover the debt had passed on to a banking company sometime before the commencement of the Act, the clause would be unconstitutional for the reason that it accords a different treatment to a category of debts without a valid basis and without the classification having a nexus with the object of the Act. [350G H, 357A B] State of Rajasthan vs Mukanchand ; ; Fatehchand Himmatlal vs State of Maharashtra, ; , applied.

The appellant plaintiffs filed a suit in February 1956, for the eviction the respondent on the ground that the premises were required for their own use, that the defendant already owned a suitable house of his own, and that the respondent had defaulted in payment of rent, after the defendant had flied a written statement and issues had been framed a joint application was made by them that a compromise had been effected. The trial court decreed the suit in the plaintiff 's favour in terms of the compromise which provided inter alia, for the ejectment of the defendant after 31st December 1958, and fixed the standard rent as agreed. The defendant, however, did not vacate the premises in December 1958, and presented an application in February 1959 under section 47 C.P.C., challenging the validity of the decree alleging that it had been passed in contravention of the provision of Delhi and Ajmer Rent Control Act, 1952 and contending that the decree was, therefore, a nullity. He 'failed before the Sub Judge and also in appeal before the Senior Sub Judge. However, the High Court in revision held in his favour. appeal to this Court, HELD: The High Court has rightly held that the decree was a nullity as the order passed on the basis of the compromise did not indicate that any of the statutory grounds mentioned in section 13 of the Act existed. [1050 B] Bahadur Singh vs Muni Subrat Dass, , followed.

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.

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.

The petitioner was appointed as Excise Sub Inspector in February 1964 in the State of U.P. and was later promoted as Excise Inspector on ad hoc basis on February 24, 1972. He was confirmed as Excise Sub Inspector w.e.f. April 1, 1967. Though promoted on ad hoc basis, the petitioner has continuously been working as Excise Inspector since February 24, 1972. Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner i.e. after 24.2.1972. They were promoted to the post of Excise Superintendent on 29.9.1983 and the petitioner was ignored. Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution. According to the State and other respondents, the petitioner 's promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules, he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules. His name has not been shown in the seniority list of Excise Inspectors. According to them his case has rightly not been considered for further promotion. On the other hand, it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution. It is submitted on his behalf that the petitioner is, in any case, entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards. Respondents concede that the petitioner can be appointed under 1983 rules, but contend that he is not entitled to the benefit of past service for purposes of seniority. 885 Allowing the writ petition this Court HELD: When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors. The nature of duties of both the cadres were similar. The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of excise Sub Inspectors under them. The Excise Sub Inspectors were thus natural contenders for the post of Inspectors. There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors. Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules. [890H 891B] It is not disputed that under the 1983 rules, the petitioner is eligible to be promoted and appointed as Excise Inspector. [891C D] The 1983 rules came into force on March 24, 1983. There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today. Inaction on the part of the State Government is wholly unjustified. The petitioner has been made to suffer for no fault of his. He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily. [891E] Rule 21(i) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date. In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner. The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion. Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972. The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector. The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post. The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post. [891G, 892B E] None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated. The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary. [892F] Masood Akhtar Khan & Ors. vs State of Madhya Pradesh, ; Direct recruits Class II Engineering Officers Association vs State of Maharashtra & Ors., ; ; P. Mahendran & Ors, etc. vs State of Karnataka Singh & Ors. , ; ; Krishena Kumar & Ors. vs Union of India & Ors. , ; ; A.K. Bhatnagar & Ors. vs Union of India & Ors. , ; ; Baleshwar Dass & Ors. etc. vs State of U.P. & Ors. , [1981] 1 S.C.C. 449; Narender Chadha & Ors. vs Union of India & Ors. , ; and Kumari Shrilekha Vidyarthi etc. vs State of U.P. & Ors. , , referred to.

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

Appeal No. 301 of 1960. Appeal from the judgment and decree dated September 24, 1958, of the Allahabad High Court (Lucknow Bench) at Lucknow in First Execution of Decree Appeal No. 8 of 1953. C. B. Agarwala, Shankar Prasad and C. P. Lal, for the appellant. Iqbal Ahmed, N. C. Chatterjee, D. N. Mukherjee and B. N. Ghosh, for the respondent. April 27. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Allahabad High Court. The brief facts necessary for present purposes are these. The appellant 's father Rana Umanath Bakshsingh was the Talukdar of Khajurgaon. On July 13, 1914, Rana Umanath Bakshsingh executed a simple mortgage in favour of the Allahabad Bank Limited (hereinafter called the respondent). The mortgage was for a sum of Rs. 6,00,000 and the property mortgaged consisted of sixty seven villages. In May 1924, the respondent filed a suit for the recovery of the balance of the unpaid mortgage money by the sale of the mortgaged property. In January 1925 a preliminary decree for the recovery of rupees four lacs and odd was passed, which was made final in July 1926 and directed the sale of the mortgaged property, namely, the proprietary rights of Rana Umanath Bakshsingh in the sixty seven villages. Then followed execution applications with which we are not concerned. In 1934, the U. P. 443 Agriculturists ' Relief Act was passed and thereupon an application was made by the judgment debtor for the amendment of the decree under that Act. On October 19, 1936, the decree was amended under the provisions of that Act and thereafter the pending execution proceedings were dropped as installments had been fixed. Eventually, the respondent applied for execution on May 25, 1940. Objection was taken to this application on the ground that it was barred by time; but this matter was decided against the judgment debtor and thereafter the execution has been proceeding uptil now on this application. On July 1, 1952, the U. P. Zamindari Abolition and Land Reforms Act, 1950 (1 of 1951), hereinafter called the Act, came into force. As a consequence of this enactment, the zamindari rights of the judgment debtor were abolished and it was no longer possible to sell these rights in the sixty seven villages. Consequently, on September 29, 1952, the respondent made an application that as the zamindari rights could not be sold, only such rights of the judgment debtor as remained in him after the coming into force of the Act might be sold, namely, the rights in trees and wells in abadi and buildings situate in various villages under sale. It was also prayed that the judgment debtor 's proprietary rights in grove land and sir and khudkashat land had been continued under section 18 of the Act and these constituted substituted security in place of the proprietary rights mortgaged with the respondent and they should also be sold Finally it was prayed that compensation money payable to the judgment debtor on the acquisition of the proprietary rights by the State might be treated as substituted security. The appellant objected to these applications on various grounds. The execution court held that the buildings, trees and wells situated in the abadi were liable to be sold in execution of the decree. It further held that the respondent was entitled to compensation amount granted by the State to the appellant in lieu of zamindari rights as substituted security. Finally, it held that the bhumidari rights acquired by the 444 appellants under section 18 of the Act could also be sold in execution of the decree. The appellant then took the matter in appeal to the High Court, and the two points urged before the High Court were (i) that the bhumidari rights created by section 18 (i) of the Act could not be sold in execution of the decree, and (ii) that the application dated September 20, 1952, was a fresh application for execution and as it was filed over 12 years after the date of the amended decree it was barred by time. The High Court repelled both these contentions, and held that execution could proceed against the bhumidari rights created in favour of the appellant under section 18 of the Act and further that the application dated September 20, 1952, was within time as it was not a fresh application and the decree holder was only seeking to execute the decree in respect of the property for the sale of which he had already applied within time allowed by law. The High Court therefore dismissed the appeal. The appellant then obtained a certificate to appeal to this Court; and that is how the matter has come up before us. The main point urged on behalf of the appellant is that the decision of the High Court that bhumidari rights created under section 18 of the Act can also be sold in execution of the decree, is not correct. Under the mortgage deed, the property mortgaged consisted of the property forming part of the Talukdari of Khajurgaon detailed at the foot of the mortgage, namely, the sixty seven villages. Thus the mortgage consisted of the proprietary interests only of the mortgagor in the sixty seven villages, and as it was a simple mortgage, possession of no part of the property was given to the mortgagee. it is therefore contended by Mr. Aggarwala on behalf of the appellant that as the proprietary right in the sixty seven villages vested in the State under the Act, the respondent who was only entitled to get the proprietary rights sold under the mortgage can now fall back only on compensation payable to the appellant under the Act, and reliance in particular is placed on section 6 (h) of the Act in this connection. On the other hand, the contention on 445 behalf of the respondent is that bhumidari rights arising under section 18 of the Act are liable to be sold as they represented the proprietary rights which were mortgaged and in any case they can be sold as substituted security in place of the property mortgaged. We have therefore to look into the scheme of the Act in order to decide between the rival contentions. It is not in dispute that the Taluka of Khajurgaon was an estate within the meaning of the Act. It may be mentioned that the judgment debtor had certain sir and khudkashat lands and zamindar 's grove in the sixty seven villages comprised within the Talukdari estate. Section 4 of the Act provides for vesting of an estate in the State on the making of a notification thereunder and the Taluka of Khajurgaon has vested in the State by virtue of such a notification made under section 4. Section 6 prescribes the consequences of the vesting arising under section 4 and we may refer to section 6(a) (i) as that will show in what the interests of the judgment debtor ceased and became vested in the State: "(a) all rights, title and interest of all the intermediaries (i) in every estate in such area including land (cultivable or barren), grove land, forests whether within or outside village boundaries, trees (other than trees in village abadi, holding or grove), fisheries, tanks, ponds, water channels, ferries, pathways, abadi sites hats, bazars or melas (other than hats, bazars, melas held upon land to which clauses (a) to (c) of sub section (1) of section 18 apply), and . . . . . . . . . shall cease and be vested in the State of Uttar Pradesh free from all encumbrances. " Clause (h) of section 6 is also material and is in these terms: "(h) no claim or liability enforceable or incurred before the date of vesting by or against such intermediary for any money, which is charged on or is secured by a mortgage of such estate or part thereof shall, except as provided in section 73 of the , be enforceable against his interest in the estate. " 57 446 All lands therefore whether cultivable or barren or grove lands vested in the State on the notification under section 4 having been made save as otherwise provided in this Act. Therefore, proprietary rights in Sir and khudkashat land and grove land would vest in the State on the coming into force of the notification under section 4 unless there was some provision otherwise in the Act. The contention of the respondent therefore that sir and khudkashat land and grove land continued to be the property of the appellant and would therefore remain liable to be sold in execution proceedings would fail in view of the notification under section 4, unless of course there is a provision otherwise in the Act. The only provisions otherwise on which the respondent relies are sections 9 and 18 of the Act. So far as section 9 is concerned, it is certainly a provision otherwise and it provides as follows: "All wells or trees in abadi, and all buildings situate within the limits of an estate, belonging to or held by an intermediary or tenant or other person, whether residing in the village or not, shall continue to belong to or be held by such intermediary, tenant or person, as the case may be, and the site of the wells or the buildings with the area appurtenant thereto shall be deemed to be settled with him by the State Government on such terms and conditions as may be prescribed. " This provision clearly creates an exception to the property which vests in the State on the making of a notification under section 4. The exception is in favour of all wells and trees in abadi and all buildings and it is significant to note that these things will continue to belong to the intermediary, though the further provision shows that the site of the wells, and buildings with the area appurtenant thereto would vest in the Government and would be deemed to be settled with the intermediary on such conditions and terms as may be prescribed. The effect therefore of section 9 is that wells, trees in abadi and buildings apart from the land under them continue to belong to the intermediary (and the appellant is undoubtedly an intermediary within the meaning of the Act); but even here the 447 land on which the buildings and the wells stand vest in the State and it is deemed settled with the intermediary on terms and conditions to be prescribed. So far therefore as wells and trees in abadi and all buildings are concerned, these continue to belong to the appellant and if they are covered by the mortgage they would be liable to sale. As we have already pointed out, there was no dispute before the High Court with respect to wells, and trees in abadi and buildings and it was conceded there that these were liable to be sold, the only dispute being with respect to bhumidari rights created under section 18. Let us now turn to section 18 and see whether it is also a provision otherwise like section 9. The relevant part of section 18 for our purposes is in these terms: "(1) Subject to the provisions of sections 10, 15, 16 and 17, all lands (a) in possession of or held or deemed to be held by an intermediary as sir, khudkashat or an intermediary 's grove, on the date immediately preceding the date of vesting shall be deemed to be settled by the State Government with such intermediary, lessee, or tenant, grantee or grove holder, as the case may be, who shall subject to the provisions of this Act be entitled to take or retain possession as a bhumidar thereof. " It is well to contrast the language of this section with the language of section 9. Section 9 lays down that trees and wells in abadi and buildings shall continue to belong to the intermediary and that shows that it was a provision otherwise excepting these three items from vesting in the State by virtue of the notification under section 4 and its consequence under section 6; but there is no provision in section 18 of the Act to the effect that sir and khudkashat land and intermediary 's grove shall continue to belong to the intermediary. Therefore, sir and khudkashat land and grove land would vest in the State by virtue of section 6 (a) (i) for there is no provision otherwise in section 18 in that behalf. In this connection we may refer for comparison to section 23 of the 448 Rajasthan Land Reforms and Resumption of Jagirs Act, No. VI of 1952 (hereinafter called the Rajasthan Act) which provides that "notwithstanding anything contained in the last preceding section (i.e. section 22, which refers to consequences of resumption), all khudkashat lands of a Jagirdar etc. shall continue to belong to or be held by such jagirdar or other person". If the intention of the Act Was not to vest sir and khudkashat land and grove land in the State we would have found an exception similar to that found in the Rajasthan Act. Section 9 itself shows in what manner the legislature was making an exception when it did not intend that a particular property should vest in the State. If the intention were that sir and khudkashat land and grove land should not vest in the State, section 18 would have been worded in the same way as section 9. Further the way in which section 18 is worded, (namely that khudkashat and sir land and an intermediary 's grove shall be deemed to be settled with the intermediary and he would have bhumidari rights therein) shows that these three kinds of property vested in the State under section 6(a)(1) and were then resettled with the intermediary on a new tenure and not in the same right, which he had in them before the vesting. The legislature was therefore creating a new right under section 18 and the old proprietary right in sir and khudkashat land and any intermediary 's grove land had already vested under section 6 in the State. Therefore, it cannot be said that section 18 is an exception to the consequences provided in section 6 and therefore sir and khudkashat land and grove land continue to be the property of the judgment debtor in this case in the same manner as they were his property at the time of the mortgage and would therefore be available in execution of the decree as the proprietary rights mortgaged. We are of opinion that the proprietary rights in sir and khudkashat land and in grove land have vested in the State and what is conferred on the intermediary by section 18 is a new right altogether which he never had and which could not therefore have been mortgaged in 1914. Our attention in this connection was drawn to the 449 compensation sections in the Act, and it was urged that what was given to the intermediary under section 18 was really his old right because no compensation was to be paid to him with respect to what was left to him under section 18. The first section to be considered in this connection is section 39 which deals with gross assets of a mahal. In these gross assets the amount computed at the rates applicable to the ex proprietary tenants of similar land for land in the personal cultivation of or held as intermediary 's grove, Khudkashat or sir by all the intermediaries in the estate was to be included subject to certain exceptions which are immaterial for our purposes. The very fact that in the gross assets the rents of these lands in which the bhumidari rights were created under section 18 were taken into consideration shows that these lands also vested in the State; if that were not so there was no necessity for including these assets in the gross assets for the purposes of compensation. Here again we may refer to a similar provision in the Rajasthan Act for purposes of comparison. The second Schedule to that Act provides how gross income is to be calculated and in calculating the gross income the income from khudkashat land has not been taken into account because it was excepted from the consequence of resumption under section 23 of that Act. It is true that under section 44 of the Act when calculating net assets, the income from sir and khudkashat land and grove land has been excluded on the ground that bhumidari rights have been conferred therein under section 18 of the Act. That is however for the purposes of calculating what should, be paid to the intermediary as compensation and in that connection it was necessary to take into account the fact that the legislature was creating a new right in the intermediary with respect to certain lands and therefore it was not necessary to give money as compensation. That would not however make any difference in our view as to the legal effect of the notification under section 4 and under the notification sir and khudkashat land and grove land would vest in the State and would not be an exception to the consequences of vesting in section 6 and therefore the proprietary right in sir 450 and khudkashat land and grove land which were mortgaged would be extinguished and the bhumidari right which is created by section 18 would be a new right altogether and would not therefore be considered to be included under the mortgage in this case. This brings us to a consideration of section 6(h) of the Act. That lays down that "no claim or liability enforceable or incurred before the date of vesting by or against such intermediary for any money, which is charged on or is secured by a mortgage of such estate or part thereof shall, except as provided in section 73 of the , be enforceable against his interest in the estate". This provision has in our opinion a, two fold effect. In the first place, it makes it impossible for the mortgagee to follow the proprietary right after it vests in the State. Secondly, it provides that the only way in which the mortgagee can recover his none advanced on the security of the property which vested in the State by virtue of the notification under section 4 and the consequences thereof under section 6 is to follow the procedure under section 73 of the . Section 73(2) provides that "where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act, 1894 (1 of 1894), or any other enactment for the time being in force providing for the compulsory acquisition of immovable property, the mortgagee shall be entitled to claim payment of the mortgage money, in whole or in part, out of the amount due to the mortgagor as compensation". There is no doubt that the property mortgaged has been compulsorily acquired in this case by the State under the Act. Therefore, section 6 (h) read with section 73 directs that the mortgagee shall proceed in the manner provided in section 73, namely, follow the compensation money, and there is no other way possible for him in view of section 6(h) with respect to the property which has been acquired under the Act. We have held that sir and khudkashat land and grove land have been acquired under the Act and have vested in the State; therefore the mortgagee is relegated to enforce his rights against the mortgagor in the manner provided in section 73 of the 451 and in no other way. What we say here does not affect that property which is not acquired by the State, for example, property excepted under section 9 of the Act; but where the property has vested in the State by virtue of a notification under section 4 and its consequences under section 6, the only course open to the mortgagee is to follow the compensation money under section 6(h). The bhumidari rights created under section 18 are not compensation; they are special rights conferred on the intermediary by virtue of his cultivatory possession of the lands comprised therein. The respondent therefore cannot enforce his rights under the mortgage by sale of the bhumidari rights created in favour of the appellant under section 18 so far as his sir and khudkashat land and grove land are concerned; it can only follow the compensation money as provided in section 6(h). The argument that bhumidari rights can 'be followed as substituted security must therefore equally fail. Our attention in this connection was drawn to section 8(2) of the U. P. Zamindars Debt Reduction Act, No. XV of 1953. That Act provides for scaling down of debts of zamindars whose estates have been acquired under the Act. It also provides that the debts due shall be realisable from the compensation and rehabilitation grant, and in particular section 8(2) provides that "notwithstanding anything in any law the reduced amount found in the case of a mortgagor or judgment debtor as the case may be, under section 3 or 4 as respects mortgaged estates shall not be legally recoverable otherwise than out of the compensation and rehabilitation grant payable to such mortgagor or judgment debtor in respect of such estates". We have not been able to understand how the provisions of the U. P. Zamindars Debt Reduction Act can affect the con struction of section 6(h) of the Act read with other provisions of the Act. It is not necessary for us therefore to construe section 8(2) of the U. P. Zamindars Debt Reduction Act, for we are clear on the provisions of section 6 (h) and the other provisions of the Act that bhumidari rights created in favour of the appellant cannot be sold in execution of the decree held against him by the respondent under the mortgage of 1914. 452 This brings us to the question of limitation. Mr. Aggarwala conceded that if the appellant succeeds on the first point it would not be necessary for us to consider the question of limitation. Therefore, as the appellant succeeds on the first point we need not consider whether the application for execution by sale of bhumidari rights created under section 18 is barred by limitation. We therefore allow the appeal and direct that the execution of the decree by the respondent will not be levied against the bhumidari rights created in favour of the appellant under section 18 of the Act. The appellant will get his costs of this court and of the High Court. Costs of the execution court will be at the discretion of that Court. Appeal allowed.

The appellant 's father, a Talukdar of the Estate of Khajur gaon, executed a simple mortgage of his proprietary interest in the estate consisting of sixty seven villages to the Allahabad Bank Ltd. While execution proceedings were pending, the U. P. Zamindari Abolition and Land Reforms Act, 1950, came into force from July 1952. As a result, the Zamindari rights of the appellant judgment debtor were abolished and it was no longer possible to sell these rights in the 67 villages. The respondent Bank made an application before the executing court that as the Zamindari rights could not be sold, only such rights of the judgment debtor as remained in him after coming into force of the Act might be sold along with certain other rights. Objections were taken and finally the matter came up by appeal to the High Court and it, inter alia, upheld the view of the executing court that the execution could proceed against the Bhumidari rights created in favour of the appellant under section 18 of the Act. The question was whether the Bhumidari rights created under section 18 of the Act could also be sold in execution of the decree in view of the fact that the proprietary rights bad vested in the State. Held, that the intention of the U. P. Zamindari Abolition and Land Reforms Act was to vest the proprietary rights in the Sir and Khudkast land and grove land in the Estate by virtue of section 6(a)(i) and resettle it on the intermediary not as compensation but by virtue of his cultivatory possession of lands comprised therein and on a new tenure and confer upon the intermediary a new and special right of Bhumidari, which he Dever had before, by section 18 of the Act. The proprietary rights in Sir, Khudkast land and grove land which were mortgaged were extinguished, and the Bhumidari right which was altogether a new right could not be con sidered to be included under the mortgage. 442 The mortgagee could only enforce his rights against the mortgagor in the manner as provided by section 6(h) of the Act read with section 73 of the Transfer of Property Act and follow the compensation money; and so far as the Sir, Khudkast land and grove land were concerned, he could not enforce his rights under the mortgage by the sale of the Bhumidari rights created in favour of the mortgagor against them as a substituted security. In the instant case the Bhumidari rights created in favour of the appellant could not be sold in execution of the decree held against him by the respondent under the mortgage Of 1914.

On July 29, 1945 the predecessor in interest of the appellant mortgaged his house in Ratlam to K for a sum of Rs. 3,100 with possession. According to the deed of mortgage interest would run on the said sum at Rs. 0 10 0 per cent per annum till realisation. The period of redemption was two years. Simultaneously with the mortgage a rent note was executed by and between the parties under which the mortgagor was to continue to Occupy the premises, at a rental of Rs. 20/ per month. The rent note provided inter alia that if the executant (i.e. mortgagor) made default in payment of two months ' rent the mortgagee would be entitled to get him evicted. The mortgagee was also entitled to increase or decrease the rent and the executant was to vacate the. house whenever asked to do so. K filed a suit on his mortgage in 1954 and a preliminary decree was passed in his favour. On his death his legal representatives were substituted in his place on record. For some reason no application for a final decree for sale of the property was made within the period fixed under the Limitation Act. The application for this purpose made by the executors to the estate of K was dismissed on July 29, 1960 as barred by limitation. On December 27, 1960 the said executors filed a suit for ejectment of the appellant alleging that the 'rent for the premises had remained unpaid from September 19, 1957 till November 28, 1960. The trial judge dismissed the suit. In first appeal the plaintiffs claim was allowed in full. The High Court in second appeal maintained the decree of the appellate court. Appeal by special leave was filed in this Court against the High Court 's judgment. It was contended by the appellants that : (i) The rent note executed simultaneously with the mortgage was a mere device to secure payment of interest and did not represent an independent transaction. Further it did not create any relationship of landlord and tenant; (ii) The plaintiffs ' right as mortgagee merged in the decree and execution thereof being barred by the laws of limitation the plaintiffs had lost all their rights; (iii) The mortgage being extinguished the mortgagor could not bring a suit for redemption on account of section 28 of the Limitation Act, 1908. HELD : The appeal must be dismissed. (1) The contents of the documents executed by the parties showed that the relationship between the parties was not simply that of a mortgagee and mortgagor the creditor also had the rights of a landlord qua his tenant besides other rights conferred on him which were greater than those possessed by an ordinary landlord. [728 F] In all such cases the leasing back of the property arises because of the mortgage with possession. It cannot however be held that the mortgagee 724 does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid. If the security is good and considered to be sufficient by the mortgagee there is no reason why be should be driven to file a suit an his mortgage when be can file a suit for realisation of the moneys due under the rent note. The position of the creditor is strengthened where as in the present case, the interest on the amount of the mortgagee is not the same as the rent fixed. If during the continuance of, the security the mortgagee wanted to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there could be no legal objection to it. Under the provisions of 0.34 r. 4 of the Code of Civil Procedure he could deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage. It may be (without a final opinion being expressed on the point) that a mortgagee who secured decree for payment of rent cannot put the property to sale for realisation of the amount decreed, but there cas be no objection to his suing for possession if the rent note entitles him to do so. So long as the mortgagor has a right to redeem the mortgage fie can always pay off the mortgagee and get back possession. This position would continue so long as the property is not sold under a final decree for sale under the provisions of 0. 34 C.P.C. [732 D G] Lalchand vs Nenuram, I.L.R. , approved. Harilal Bhagwanji vs Hemshanker, A.I.R. 1958 Bombay 8, Ramnarain vs Sukhi, A.I.R. 1957 Patna 24, Umeshwar Prasad vs Dwarika Prasad, A.I.R. 1944 Patna 5, Ganpat Ruri vs Mad. Asraf Ali, A.I.R. 1961 Patna 133 and Jankidas vs Laxminarain, I.L.R. , 'referred to. (ii) Since the mortgagee had only lost his 'right to recover the money by sale of the mortgaged property, his security otherwise remaining intact, and the mortgagor also continued to have his right to redeem the property, the contention on behalf of the appellant that the rights of the mortgagee merged in the preliminary decree could not be accepted. [732 H] (iii) If the mortgagee had an independent right on the strength of the rent note which continued to be in force notwithstanding that the period for a final decree for sale had expired, there could be no extinction of his right to sue for possession because of section 28 of the Limitation Act. [733 C]

In 1947 S conveyed by a sale deed to M an undivided half share of Land in his village. On the same day S executed a Kabulayat for 5 years in respect of the same land for cultivation. In 1951 the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1951, came into force and the Compensation Officer started enquiry about assessment of compensation. M claimed to retain possession of the half share in all the fallow lands in the village which had been leased by him for cultivation to S on the plea that these lands were 'home farm '. The claim 711 was rejected by the Compensation Officer and confirmed by the Additional Settlement Commissioner. The High Court of Nagpur quashed the order. In appeal to the Supreme the Additional Settlement Commissioner contended that in respect of an undivided interest in the land, the superior holder is not entitled to the benefit of section 4(2) of the Act because it is not a 'holding ', alternatively, that the land which was, at the date of vesting, lying fallow otherwise than in accordance with the usual agricultural practice could never be regarded as 'home farm '. ^ Held, that a part of a holding or an undivided interest in a " holding" in Berar may also be 'home farm ' land if it otherwise fulfils the requirement of cl. (i), (ii) or (iii) of sub cl. (3) of section 2(g) of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1951. The land having been granted in lease for cultivation it is by virtue of section 4(2) of the Act to be retained in the possession of the proprietor. Grant of a lease for cultivation evidences an intention on the part of the proprietor that the land is to be converted to agricultural purposes, and default on the part of the lessee to cultivate the land will not deprive the lessor proprietor of the benefit granted to him by the statute.

Being in need of money, respondent entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and rent note, of her house situated near Sarafa Bazar in Amravati. These documents were executed on January 7, 1953. The respondent continued in the possession of the house property throughout and carried on repairs from time to time. Since the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent and the said suits had resulted in a decree, the respondent filed a suit for declaration that she was and continued to be owner of the house property. The documents executed on January 7, 1953, it was said, were never intended to be acted upon. In defence, the appellant maintained that the sale deed represented a genuine transaction, and ownership of the house property had passed to her. It was further pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction. Reliance was also placed on section 92 of the Indian Evidence Act. Dismissing the appeal by special leave, the Court ^ HELD: 1:1. When a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property. In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit. A matter which is collaterally or incidentally in issue for the purpose of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata. A question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised. [H81 G 1182A C] 1177 1:2. Explanation VIII to section 11 of the Code of Civil Procedure operates only where an issue has been heard and finally decided in the earlier suit. [1182 D E] 1:3. In the instant case, the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata. [1182 E] Poholi Mullick vs Fukeer Chunder Patnaik, (1874) 22 Suth W.R. 349; Chet Ram and Others vs Ganga, 1886 Allahabad Weekly Notes; Anwar Ali vs Nur Ul Haq and Another, ; Khandu Valad Keru vs Tatia valad Vithoba, (1871) 8 Bombay H.C.R.A.C. 23(24) (DB); Mohd. Yusuf and another vs Abul Wahid, A.I.R. 1948 All. 296 and S.A.A. Annamalai Chettiar vs Molaiyan and others, A.I.R. 1970 Mad. 396, approved. Muhammad Abdul Ghafur Khan vs Gokul Prasad and others, A.I.R. 1914 All. 527; Gulabchand Chhotalal Parikh vs State of Bombay, ; Madan Kishor and Another vs Mahabir Prasad and others, A.I.R. 1929 All. 816; Ram Dayal Sonar vs Sukh Mangal Kalwar, A.I.R. 1937 All. 676; Ganga Prasad vs Nandu Ram, A.I.R. 1916 Patna 75; Ganesh Das vs Feroze Din, A.I.R. 1934 Lahore 355, Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, XV Bombay Law Reporter 773; Asgarali Roshanalli and another vs Kayumalli Ibrahimji, A.I.R. 1956 Bombay 236: Lala Jageshwar Prasad vs Shyam Behari Lal, A.I.R. 1967 All. 125; Shyam Behari Lal vs Lala Jogeshwar Prasad, ; Manzural Haq and another vs Hakim Mohsin Ali, A.I.R. 1970 All. 604; Pateshwari Parshad Singh vs A. section Gilani, A.I.R. 1959 Punjab 420, referred to and dissented from. The bar imposed by sub section (1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms. The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham. Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever. For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties. [1183 C F] Tyagaraja Mudaliyar and another vs Vedathanni, A.I.R. 1936 Privy Council 70, followed.

The appellants who were the assignees of a decree for specific performance of an agreement to reconvey property, filed an application for execution of the decree under Order XXI, rule 16 of the Code of Civil Procedure. Notice of the application was issued to the respondent judgment debtor as well as the original decree holder. The judgment debtor filed objections contending that the execution application was not maintainable. The application was adjourned from time to time. In the meanwhile the original decree holder and the judgement debtor moved the executing court to record full satisfaction of the decree, stating that they had entered into a compromise and that the decree was proposed to be satisfied by payment of a fixed sum of money in cash. The money was paid in cash by the judgment debtor to the original decree holder in open court and satisfaction of the decree was recorded by the Executing Court which also observed that the compromise would not have any effect whatsoever on the rights, if any, of the transferee decree holder who had already filed the execution application pursuant to the deed of assignment. The execution application filed by the appellants was thereafter taken up and dismissed on the ground that the assignees had no right to execute the decree after the judgment debtor had satisfied the original decree holder by entering into a compromise with him. In the appeal, the District Court held that the appellants had the right to execute the decree and that their right could not be defeated by the collusive compromise entered into between the judgment debtor and the original decree holder subsequent to the date of assignment and with notice of assignment. In the further appeal to the High Court by the judgment debtor, it was held that the assignee of the decree had no right to execute the decree until the assignment was recognised by the Court and until that was done, it was open to the original decree holder to put the decree in execution and it was also open to the judgment debtor to satisfy the decree fully by payment to the decree holder or by other adjustment. In the appeal to this Court by the assignees of the decree on the question whether the adjustment of the decree between the judgment debtor and the transferor decree holder barred execution of the decree by the transferee: ^ HELD: 1. The High Court was wrong in holding that the adjustment between the judgment debtor and the transferor decree holder even after notice 470 of the application under Order XXI, rule 16 had been served on the transferor and the judgment debtor barred execution of the decree by the transferee. [475 D] 2. Property in a decree must pass to the transferee under a deed of assignment when the parties to the deed of assignment intend such property to pass. It does not depend on the Court 's recognition of the transfer. Order XXI rule 16 neither expressly nor by implication provides that assignment of a decree does not take effect until rcognized by the Court. [473 D] 3. While Order XXI rule 16 enables the transferee to apply for execution of the decree, the first proviso to Order XXI rule 16 enjoins that notice of such application shall be given to the transferor and the judgment debtor and that the decree shall not be executed until the court has heard their objections, if any, to its execution. [473 E] 4. The transfer as between the original decree holder and the transferee is effected by the deed of assignment. If the judgment debtor has notice of the transfer, he cannot be permitted to defeat the rights of the transferee by entering into an adjustment with the transferor. If the judgment debtor has no notice of the transfer and enters into an adjustment with the transferor before the transferee serves him with notice under Order XXI Rule 16 the judgment debtor is protected. [473 G] In the instant case, the original decree holder and the judgment debtor had colluded to deprive the appellants of their rights under the deed of assignment and the Executing Court tacitly gave its seal of approval by permitting satisfaction of the decree to be entered despite the fact that the decree had already been assigned to the knowledge of the judgment debtor. The process of the Court cannot be reduced to a mockery and the procedure prescribed by the Code of Civil Procedure does not permit this to be done. [472 C] Dwar Buksh Sirkar vs Fatik Jali I.L.R. 26 Calcutta 250 @ 253, 254; Avrapalli Ramrao vs Kanumarlapudi Ranganayakulu and others AIR 1964 A.P. 1; Sadagopa Chariar vs Raghunatha Chariar ILR , approved. Puthiandi Mammed vs Avalil Moidin ILR , disapproved.

D executed a document in favour of M hypothecating an eight annas share in a village for the purpose of discharging a debt of Rs. 29,496 payable by him to Al. In respect of this property there was a pre existing think in favour of j for a period of 9 years, under which D took Rs. 2,205 as peshgi money without interest and the annual rent was fixed at RS. 2,205. The document provided that (i) interest at 1/2 per cent. per month was payable on the sum Of Rs. 29,496 ; (ii) (luring the subsistence of the thika M would receive the rent from j and appropriate Rs. 1,769 12 o towards interest and pay Rs. 435 4 o as rent to D ; (iii) after the expiry of the thika M would take physical possession of the land and appropriate the produce towards interest and Pay Rs. 435 4 o as rent to D; (iv) on the expiry of the thika M would repay the peshgi amount of Rs. 2,205 to j and this sum was added to principal amount due ; (v) on the expiry of 15 years, or after the extended period, D would repay the entire principal amount; (vi) and the property was given as security for the amount payable by D. The respondents who are successors of D instituted a suit for redemption on the basis that the transaction was a usufructuary mortgage, for rendition of accounts and for recovery of surplus profits. The appellant, successor of M, contended that the suit for redemption was not maintainable as the transaction was not a mortgage but a lease, and that even if it was a mortgage there was no statutory liability to render accounts as the document provided that the receipts were to be taken in lieu of interest and the case was governed by section 77, Transfer of Property Act : Held, that the transaction was a mortgage and not a lease. The guiding rule of construction is that the intention of the parties must be looked into and that once there is debt with security of land for its redemption the arrangement is a mortgage by whatever name it is called. Held, further, that there was a contract between the mort gagor and the mortgagee within the meaning Of section 77, Transfer of Property Act to the effect that the receipts from the mortgaged property be taken in lieu of interest and consequently the mortgagee was not liable to render accounts. The stipulation 1086 in the document for payment of Rs. 435 4 0 to the mortgagor was a personal obligation of the mortgagee and he had a right to take the entire receipts from the land in lieu of interest. Though the rate of interest is stated as per cent. per month it was mentioned to enable the parties to approximately fix the amount to be appropriated by the mortgagee from and out of the rent received from the thikadar. The mere fact of the mention of the rate of interest could not make section 77 inapplicable in view of the clearly expressed intention of the parties. Pandit Bachchu Lal vs Chaudhri Syed Mohammad Mah, (1033) , referred to.

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.

Plot No. 4635A (old number 5199) admeasuring bigha and 2 biswas and located in the Meerut municipal area was leased by the Lala Nanak Chand Trust to the predecessor in interest of the present respondents. According to the lease deed dated June 23, 1926 the lease was granted "for the purpose of planting a grove, erecting buildings and digging wells etc.". The period of the lease was 30 years but the lessor agreed that on the expiration of that period he would at the request of the lessee renew the lease for another 30 years. On the expiry of the initial period of 30 years on July 1, 1956 the lessor Trust instituted a suit for recovery of possession of the aforesaid land. The suit was dismissed by the trial court but decreed by the first appellate court. The respondents thereafter, on permission granted by the said first appellate court instituted a suit for the specific performance of the agreement to re let the land for another term of 30 years. The suit was dismissed on the ground of limitation by the trial court, as well as the first appellate court. In both the suits the present respondents filed second appeals in the High Court. While these appeals were pending the U.P. Urban Areas Zamindari Abolition and Land Reforms Act, 1956 was enforced in the city of Meerut. The land in dispute was declared an agricultural area ' under the Act and a notification under section 8 of the Act vesting the land in the State was issued on July 16, 1964. Rule 39 of the Uttar Pradesh Urban Areas Zamindari Abolition and Land Reforms Rules, 1957 provided for abatement of certain suits and appeals. Applying the rule the High Court abated the two aforesaid appeals filed by the respondents before it. The Trustees appealed to this Court by special leave. They also filed a writ petition under article 32 of the Constitution praying that the notifica tion under section, 8 of the Act dated July 16, 1964 be quashed as violative of Articles 14, 19(1)(f) and 31 of the Constitution. It was further contended that section 2(1)(d) of the Act whereby land held on lease duly executed before the first day of July 1955 for the purposes of erecting buildings thereon was included in the term 'agricultural area ' was protected by article 31 A of the Constitution. HELD : (i) The lease was not exclusively a building lease. Admittedly no building had been constructed. The respondents claimed to have planted a grove. If so, the land would be covered by section 2(1)(c)(viii) The lease could not therefore be held to fall exclusively under section 2(1)(d). [790B] 784 (ii) In Durga Prasad 's case the Allahabad High Court has pointed out the history of cl. The High Court has taken the view that section 2(1)(d) is limited to lands which are being used for agricultural purposes. The conclusion must be held to be correct though for different reasons, On this construction of section 2(1)(d) it cannot be said that this provision is not connected with agricultural reforms. It could accordingly receive the protection of article 31A and would be immune from attack on the ground of violation of Articles 14, 19 and 31. [792C] Durga Prasad vs Board of Revenue U.P. Allahabad and others, A.I.R. 1970 All. 159, referred to. (iii) The report of the Commission would not show that the land in dispute was a grove within the meaning of section 2(6) of the U.P. Tenancy Act, 1939. As the appellants had given the old number of the plot in their petition the Government did not reply to the allegation in the petition. Accordingly it was not possible to express any concluded opinion on the question whether the land in dispute was an 'agricultural area ' on the date specified under section 2(1) and was being used for horticulture. , The issue must be decided afresh by the appropriate authority under the Act. If it is held by him that the land in dispute is an 'agricultural area ' and the State Government issues a notification under section 8 of the Act with respect to the land, the appeals will be, disposed of by the High Court in accordance with the provisions of the Act. [793C] [Notification dated June 16, 1964 quashed, and orders of the High Court abating the appeals and suits set aside.]

Appeals Nos. 645 and 646 of 1957. Appeal from the judgment and decree dated August 1956, of the Patna High Court, in Second Appeals Nos. 2155 and 2156 of 1948. A. V. Viswanatha Sastri and R. C. Prasad, for the appellant. B. K. Garg, M. K. Ramamurthi, section C. Agarwal, and D. P. Singh, for respondents Nos. 1 to 4. 1961. April 28. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. These are appeal against the judgment of the High Court of Patna in Second Appeals Nos.2155 and 2156 of 1948 on certificates granted by the High Court under article 133(1)(c) of the Constitution. The facts leading to this litigation lie in a narrow compass. One Prithi Dubey died on July 14, 1932, leaving him surviving, his widow Laung Kuer, who succeeded as heir to his estate. For the purpose of discharging debts due by the deceased Laung Kuer executed on June 21, 1935, a Zerpeshgi deed in favour of two persons, Rajdewan Dubey and Kailash Dabey, who were also the next reversioners, for a sum of Rs. 1,100. It is not in dispute that this deed is binding on the reversioners. On June 17, 1943, Laung Kuer sold to the appellant a portion of the properties which were the subject matter of the Zerpeshgi deed dated June 21, 1935, for a consideration of Rs. 1,600 Out of this amount, a sum of Rs. 1,100 was reserved with the purchaser for redemption of the Zerpeshgi, and the balance of Rs. 500 was paid in cash. It is recited in the deed of sale that a sum of Rs. 100 was required to effect repairs to the family dwelling house, a sum of Rs. 200 for purchasing two bulls for agricultural purposes, and a sum of Rs. 200 for repairing a well, which had been constructed by the deceased for user by the public and which was then in a ruined condition. It is to meet these expenses that Laung Kuer raised Rs. 500. After obtaining the sale deed, the appellant sought 561 to redeem the Zerpeshgi, but the Zerpeshgidars refused to receive the amount and surrender possession of the properties. The appellant deposited the mortgage amount in court under section 83 of the Transfer of Property Act and then instituted Title Suit No. 69 of 1944 for redemption. Meantime the reversioners, the respondents herein, had filed Title Suit No. 126 of 1943 for a declaration that the sale deed in favour the appellant was not binding on the reversioners. And both the suits were tried together. The parties were at issue on several questions of fact of which the only one material at this stage is whether the sale in favour of the appellant was supported by necessity and binding on the reversioners. The District Munsif of Palamau who tried the suits held on a review of the evidence that necessity was established in respect of all the four items of consideration and that the sale was binding on the reversioners. He accordingly dismissed Title Suit No. 126 of 1943 filed by the respondents and granted a decree for redemption in Title Suit No. 69 of 1944 filed by the appellant. The respondents herein, the reversioners, preferred appeals against both the decrees passed by the District Munsif of Palamau and they were heard by the Subordinate Judge of Palamau, who, agreeing with the findings given by the District Munsif, affirmed the decrees and dismissed the appeals. Against these decrees, the respondents preferred Second Appeals Nos. 2155 and 2156 of 1948 in the High Court of Patna. While these appeals were pending, Laung Kuer died on March 14, 1952, and on the application of the respondents, the plaint in Title Suit No. 126 of 1943 was amended by adding reliefs for possession and mesne profits. The appeals were then heard by a Bench consisting of Rai and Misra, JJ., who in separate but concurring judgments, held that the sale deed in favour of the appellant was not binding on the reversioners. Misra, J., who delivered the leading judgment did not disagree with the finding of the courts below that all the four items of consideration were supported by necessity. Indeed, being a finding of fact, it would be binding on the court in Second 562 Appeal. He, however, held, following the decision in Dasrath Singh vs Damri Singh (1) that a widow cannot by selling properties subject to usufructuary mortgage jeopardise the right of the reversioners to redeem, and that, therefore, the sale would not be binding on them. A different view was taken in Lala Ram Asre Singh vs Ambica Lal (1), where it was held that a widow was not debarred from selling properties subject to mortgage where there was necessity for it merely by reason of the fact that they were subject to usufructuary mortgage which contained no personal covenant to pay. But the learned Judge declined to follow this decision and stated the reason thus: "Following, therefore, the settled practice of this Court as laid down in a number of decisions, the only course left open to us in the circumstances would be either to follow the previous Division Bench Ruling in preference to the later or to refer the case to a larger Bench for settling the position. In my opinion, however, the present case is not one in which it is desirable to refer this case to a larger Bench. Following, therefore, the authority of this Court in Dasrath Singh 's case which completely covers the present case, it must be held that the courts below were in error in relying upon the decision in Lala Ram Asre Singh 's case." In the result the learned Judge held that the sale deed in favour of the appellant dated June 17, 1943, was not binding on the reversioners. Rai, J., expressed the view that as the bona fides of the sale in favour of the appellant was questioned by the reversioners and as there had been no finding on that point by the Subordinate Judge, the matter might have to be remanded for a finding on that question, but that, as the sale deed was not supported by necessity, he agreed with the conclusion of Misra, J. The Second Appeals were accordingly allowed and consequential reliefs granted. Thereafter, the appellant applied in the High Court under article 133 for leave to appeal to this court, and in granting certificates, Ramaswami, C. J., and Raj Kishore Prasad, J., observed in their (1) 8 Pat.L.T. 314; A.I.R. 1927 Pat.(2) 1i Pat.L.T. 6; A.I.R. 1929 Pat.563 Order dated November 27, 1956, that there being a conflict between the decisions in Dasrath Singh 's case (1) and Lala Ram Asre Singh 's case (2), the point was one of sufficient importance for grant of leave to appeal to this Court. They also stated that the question as to the practice to be followed when there was a conflict of decisions, was likewise one of public importance, which ought to be settled by this Court. They accordingly granted certificates under article 133 (1)(c) and that is how these appeals come before us. Before considering the two questions referred to in the order of the High Court granting certificates, we shall deal with a contention raised on behalf of the respondents, which if well founded would necessitate a remand of these appeals. It was argued that the sale deed in favour of the appellant was not bona fide, that it had been so held by the District Munsif, but that the Subordinate Judge had failed to record a finding on this question, and that therefore there should be a remand for a decision on that point. As already stated, Rai, J., appears to have been impressed by this contention. But when the contention is further examined it will be found to be wholly without substance. What the District Munsif said was that "after the death of Prithi Dubey the relatives of Lawan Kuer had fallen on her property like vultures", and that it was quite possible "that the transaction in question was also brought at their instance and they were also benefited by it." This only means that the relatives of Laung Kuer were guilty of spoliation of the estate. But that would not affect the rights of the appellant unless he was a party to it, which, however, is not the case, and that is what the District Munsif himself observes with reference to this aspect: "But in the present suit I have got to consider the interest of Jaisri Sahu who has in good faith already paid Rs. 500 to the Mostt.and has deposited the balance of Rs. 1,100 in court for the redemption of the Zarpeshgi." This finding that the appellant himself acted bona fide was not challenged before the Subordinate Judge (1) 8 Pat.L.T. 314.A.I.R. 1927 Pat. 219.(2) 11 Pat.L.T. 6; A.I.R. 1929 Pat.564 on appeal and the point is accordingly not open to the respondents. Dealing next with the points mentioned in the Order of the High Court dated November 27, 1956, the first question that arises for decision is whether a sale by a widow of properties which are the subject matter of a usufructuary mortgage is beyond her powers when the mortgagee cannot sue to recover the amount due on the mortgage. This has been answered in the affirmative by the learned Judges of the High Court on the strength of the decision in Dasrath Singh vs Damri Singh (1). There the last male holder, one Sitaram Singh, had created a usufructuary mortgage, and after his death the widow sold the property for the discharge of this debt and of certain other debts, and for meeting the marriage expenses of her daughter and grand daughter. It was held by Das and Adami, JJ., that all these items of consideration were supported by necessity, but nevertheless the sale was not binding on the reversioners. Das, J., who delivered the judgment observed as follows "It is contended that under the terms of the usufructuary mortgage it would be open now to the plaintiffs to redeem that mortgage and it is pointed out that their right to redeem should not have been jeopardised by the widow by the transfer of the property to the mortgagee. In my opinion this argument is right and should prevail." If the learned Judge intended to lay down as an inflexible proposition of law that, whenever there is a usufructuary mortgage, the widow cannot sell the property, as that would deprive the reversioners of the right to redeem the same, we must dissent from it. Such a proposition could be supported only if the widow is in the position of a trustee, holding the estate for the benefit of the reversioners, with a duty cast on her to preserve the properties and pass them on intact to them. That, however, is not the law. When a widow succeeds as heir to her husband, the ownership in the properties, both legal and beneficial, vests in her. She fully represents the estate, the interest of (1) 8 Pat.L.T. 314; A.I.R. 1927 Pat.565 the reversioners therein being only spes successionis. The widow is entitled to the full beneficial enjoyment of the estate and is not accountable to any one. It is true that she cannot alienate the properties unless it be for necessity or for benefit to the estate, but this restriction on her powers is not one imposed for the benefit of reversioners but is an incident of the estate as known to Hindu law. It is for this reason that it has been held that when Crown takes the property by escheat it takes, it free from any alienation made by the widow of the last male holder which is not valid under the Hindu law, vide: Collector of Masulipatam vs Cavaly Venkata (1). Where, however, there is necessity for a transfer, the restriction imposed by Hindu law on her power to alienate ceases to operate, and the widow as owner has got the fullest discretion to decide what form the alienation should assume. Her powers in this regard are, as held in a series of decisions beginning with Hanooman Persaud vs Mussamat Ba booee (2), those of the manager of an infant 's estate or the manager of a joint Hindu family. In Venkaji vs Vishnu (3) it Was observed that "A widow like a manager of the family, must be allowed a reasonable latitude in the exercise of her powers, provided. . she acts fairly to her expectant heirs '." And more recently, discussing this question, it was observed in Viraraju vs Venkataratnam ( '): "How exactly this obligation is to be carried out, whether by a mortgage, sale or other means, is not to be determined by strict rules or legal formulae, but must be left to the reasonable discretion of the party bound. In the absence of mala fides or extravagance, and so long as it is neither unfair in character nor unreasonable in extent, the Court will not scan too nicely the manner or the quantum of the alienation." Judged by these principles, when there is a mortgage subsisting on the property, the question whether (1) (1861) 8 M.I.A. 529.(3) , 536.(2) (4) I.L.R. 231.72 566 the widow could sell it in discharge of it is a question which must be determined on the facts of each case, there being no absolute prohibition against her effecting a sale in a proper case. What has to be determined is whether the act is one which can be justified as that of a prudent owner managing his or her own properties. If the income from the property has increased in value, it would be a reasonable step to take to dispose of some of the properties in discharge of the debt and redeem the rest so that the estate can have the benefit of the income. In this view, the decision in Dasrath Singh 's case,( ') in so far as it held that a Bale by a widow of a property which is subject to a usufructuary mortgage is not binding on the reversioners must be held to be wrong. In Lala Ram Asre Singh 's case (2), which was a decision of Das and Fazl Ali, JJ., the facts were similar to those in Dasrath Singh 's case (1). Dealing with the contention that a sale by the widow of properties which were the subject matter of a Zerpesbgi deed was not binding on the reversioners because the Zerpeshgidar was in possession of the properties and he could not sue to recover the amount due thereunder, Das, J., delivering the judgment of the court observed: "This in my view is an impossible argument. The debt was there; it was a subsisting debt, only the creditor was in possession of a part of the estate and was unable to recover it by instituting a suit in the civil courts. But the result was that a considerable portion of the income was withdrawn from Basmati Kuer who had succeeded her husband. It is well established that where a case of necessity exists, an heiress is not bound to borrow money, with the hope of paying it off before her death. Nor is she bound to mortgage the estate, and thereby reduce her income for life. She is at liberty, if she thinks fit, absolutely to sell off a part of the estate." In our judgment these observations correctly state the position in law. It will be noticed that Das, J., deli (1) 8 Pat.L. T. 314; A.I.R. 1927 Pat.219, (2) ii Pat.L. T. 6; A.I.R. 1929 Pat.567 vered the judgment in both Dasrath Singh 's case (1) and Lala Ram Asre Singh 's case (2 ) and that the decision in Dasrath Singh 's case (1) is not referred to in the judgment in Lala Ram Asre Singh 's case (2). It has been found in this case that Laung Kuer had to raise a sum of Rs. 500 for necessary purposes. She could have done that by mortgaging other properties, but that would have reduced the income available for enjoyment by her. On the other hand, by a sale of a portion of the properties covered by the Zerpeshgi deed dated June 21, 1935, she was able to redeem the other properties and the estate had the benefit of the income from those properties. The District Munsif and the Subordinate Judge on appeal have both of them held on a review of all the facts that the sale in favour of the appellant is a proper one binding on the reversioners. We are of opinion that this finding is not open to attack in Second Appeal. Then there is the question of the practice to be followed when there is a conflict among decisions of Benches of the same High Court. When a Bench of the High Court gives a decision on a question of law, it should in general be followed by other Benches unless they have reasons to differ from it, in which case the proper course to adopt would be to refer the question for the decision of a Full Bench. In Buddha Singh vs Laltu Singh (3), the Privy Council had occasion to discuss the procedure which should be adopted when a Bench of a High Court differs from the opinion given by a previous Bench. After referring to Suraya Bhukta vs Lakhshminarasamma (4) and Chinnasami Pillai vs Kunju Pillai (5), where decisions had been given based on the opinions expressed by Devananda Bliatta in the Smriti Chandrika, the Privy Council observed: "Curiously enough there is no reference in either of the Madras judgments referred to above to a previous decision, Parasara Bhattar vs Rangaraja Bhattar (6) of the same court to which Turner, (1) 8 Pat.L.T. 314; A.I.R. 1927 Pat.(2) 11 Pat.L.T. 6; A.I.R. 1929 Pat.(3) All. (4) Mad.(5) Mad.152 (6) Mad.2. 568 C. J., was also a party. In that case the rule of the Smriti Chandrika was not accepted nor was the literal construction of the Mitakshara followed. It is usual in such cases where a difference of opinion arises in the same court to refer the point to a Full Bench, and the law provides for such contingencies. Had that course been followed their Lordships would probably have had more 'detailed reasoning as to the change of opinion on the part at least of one Judge." (pp. 622, 623). Considering this question, a Full Bench of the Madras High Court observed in Seshamma vs Venkata Narasimharao (1): "The Division Bench is the final Court of appeal in an Indian High Court, unless the case is referred to a Full Bench, and one Division Bench should regard itself bound by the decision of another Division Bench on a question of law. In England, where there is the Court of Appeal, Divisional Courts follow the decisions of other Divisional Courts on the grounds of judicial comity; see The Vera Cruz (No. 2) (2), Harrison vs Ridgway Ratkinsky vs Jacobs (4) and Phillips vs Copping If a Division Bench does not accept as correct the decision on a question of law of another Division Bench the only right and proper course to adopt is to refer the matter to a Full Bench, for which the rules of this court provide. If this course is not adopted, the courts subordinate to the High Court are left without guidance. Apart from the impro priety of an appellate Bench refusing to regard itself bound by a previous decision on. a question of law of an appellate Bench of equal strength and the difficulty placed in the way of subordinate Courts administering justice, there are the additional factors of the loss of money and, the waste of judicial time." Law will be bereft of all its utility if it should be thrown into a state of uncertainty by reason of conflicting decisions, and it is therefore desirable that in (1) I.L.R. , 474.(2) (3) (4) (5) [1935] 1 K.B. 15.569 case of difference of opinion, the question should be authoritatively settled. It sometimes happens that an earlier decision given by a Bench is not brought to the notice of a Bench hearing the same question, and a contrary decision is given without reference to the earlier decision. The question has also been discussed as to the correct procedure ' to be followed when two such conflicting decisions are placed before a later Bench. The practice in the Patna High Court appears to be that in those cases, the earlier decision is followed and not the later. In England the practice is, as noticed in the judgment in Seshamma vs Venkata Narasimharao (1), that the decision of a Court of Appeal is considered as a general rule to be binding on it. There are exceptions to it, and one of them is thus stated in Halsbury 's Laws of England, third edition, Vol. 22, para. 1687, pp. 799, 800: "The court is not bound to follow a decision of its own if given per incuriam. A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of a co ordinate jurisdiction which covered the case before it, or when it has acted in ignorance of a decision of the House of Lords. In the former case it must decide which decision to follow, and in the latter it is bound by the decision of the House of Lords." In Virayya vs Venkata Subbayya (2) it has been held by the Andhra High Court that under the circumstances aforesaid the Bench is free to adopt that view which is in accordance with justice and legal principles after taking into consideration the views expressed in the two conflicting Benches, vide also the decision of the Nagpur High Court in Bilimoria vs Central Bank of India (3 ). The better course would be for the Bench hearing the case to refer the matter to a Full Bench in view of the conflicting authorities without taking upon itself to decide whether it should follow the one Bench decision or the other. We have no doubt that when such situations arise, the Bench (1) I.L.R. , 474.(2) A.I.R 1955 Andhra 215, 217.(3) A.I. R. 570 hearing cases would refer the matter for the decision of a Full Court. In the result these appeals are allowed and the decrees passed by the trial court restored with costs throughout. One set of hearing costs. Appeals allowed.

P died on July 14, 1932, leaving behind his widow, L as his heir. On June 21, 1935, L executed a Zerpeshgi in favour of the respondents for an admittedly binding purpose, and on June 17, 1943, she sold to the appellant a portion of the properties which were the subject matter of the Zerpeshgi deed for the purpose of redeeming the Zerpeshgi and for certain other necessary purposes. The respondents who were the reversioners 559 instituted a suit challenging the validity of the sale. The trial court and the lower appellate court held that the sale was a proper one binding on the reversioners. On second appeal, a Division Bench of the Patna High Court took a contrary view and allowed the appeal. One of the judges while he did not disagree with the findings of fact of the courts below as to the necessity for the sale followed a decision of the same High Court to the effect that a widow cannot by selling properties subject to usufructuary mortgage jeopardise the right of reversioners to redeem them. A different view of the law had been taken in a later decision of that court, but the learned judge declined to follow that decision observing that the practice of that Court was either to follow the previous Division Bench ruling in preference to the later or to refer the case to a larger Bench for settling the position, but that in the present case it was not desirable to adopt the latter course. The other learned judge was of the opinion that the sale deed was not supported by necessity. Held, that the High Court was in error in holding that the sale deed in favour of the appellant was not binding on the reversioners. When there is a mortgage subsisting on the property, the question whether the widow could sell it in discharge of it is a question which must be determined on the facts of each case, there being no absolute prohibition against her effecting a sale in a proper case. What has to be determined is whether the act is one which can be justified as that of a prudent owner managing his or her own properties. Hanooman Persaud vs Mussamat Babooee, , Vankaji vs Vishnu, Bom. 534 and Viraraju vs Vankataratnam, I.L.R. , relied on. Dasrath Singh vs Damri Singh, A.I.R. 1927 Pat. 219, dis approved. Lal Ram Asre Singh vs Ambica Lal, 1929 Pat. 216, approved. Held, further, that when a Bench of the High Court gives a decision on a question of law, it should in general be followed by other Benches unless they have reasons to differ from it, in which case the proper course to adopt would be to refer the question for the decision of a Full Bench. Where two conflicting decisions are placed before a later Bench, the better course for the latter is to refer the matter to a Full Bench without taking upon itself to decide whether it should follow the one Bench decision or the other. Buddha Singh vs Laltu Singh, All. 604, Seshamma vs Venkata Narasimharao, I.I.R. , Bilimoria vs Central Bank of India, A.I.R. 1943 Nag. 340 and Virayya vs Venkata Subbayya, A.I.R. 1955 Andhra 215, con sidered.

D executed a document in favour of M hypothecating an eight annas share in a village for the purpose of discharging a debt of Rs. 29,496 payable by him to Al. In respect of this property there was a pre existing think in favour of j for a period of 9 years, under which D took Rs. 2,205 as peshgi money without interest and the annual rent was fixed at RS. 2,205. The document provided that (i) interest at 1/2 per cent. per month was payable on the sum Of Rs. 29,496 ; (ii) (luring the subsistence of the thika M would receive the rent from j and appropriate Rs. 1,769 12 o towards interest and pay Rs. 435 4 o as rent to D ; (iii) after the expiry of the thika M would take physical possession of the land and appropriate the produce towards interest and Pay Rs. 435 4 o as rent to D; (iv) on the expiry of the thika M would repay the peshgi amount of Rs. 2,205 to j and this sum was added to principal amount due ; (v) on the expiry of 15 years, or after the extended period, D would repay the entire principal amount; (vi) and the property was given as security for the amount payable by D. The respondents who are successors of D instituted a suit for redemption on the basis that the transaction was a usufructuary mortgage, for rendition of accounts and for recovery of surplus profits. The appellant, successor of M, contended that the suit for redemption was not maintainable as the transaction was not a mortgage but a lease, and that even if it was a mortgage there was no statutory liability to render accounts as the document provided that the receipts were to be taken in lieu of interest and the case was governed by section 77, Transfer of Property Act : Held, that the transaction was a mortgage and not a lease. The guiding rule of construction is that the intention of the parties must be looked into and that once there is debt with security of land for its redemption the arrangement is a mortgage by whatever name it is called. Held, further, that there was a contract between the mort gagor and the mortgagee within the meaning Of section 77, Transfer of Property Act to the effect that the receipts from the mortgaged property be taken in lieu of interest and consequently the mortgagee was not liable to render accounts. The stipulation 1086 in the document for payment of Rs. 435 4 0 to the mortgagor was a personal obligation of the mortgagee and he had a right to take the entire receipts from the land in lieu of interest. Though the rate of interest is stated as per cent. per month it was mentioned to enable the parties to approximately fix the amount to be appropriated by the mortgagee from and out of the rent received from the thikadar. The mere fact of the mention of the rate of interest could not make section 77 inapplicable in view of the clearly expressed intention of the parties. Pandit Bachchu Lal vs Chaudhri Syed Mohammad Mah, (1033) , referred to.

A group of persons residing in a village and professing the Sikh religion made an application to the State Government to declare the religious and charitable institution described in the application as a Sikh Gurdwara. This application was published in the Officer Gazette and respondent No. 1 filed objections under section 8 of the Sikh Gurdwaras Act, 1925 contending that the institution was not a Sikh Gurdwara and that he was entitled to raise the said contention because he was the holder of the hereditary office of mahant of the institution. The application was forwarded by the State Government under section 14 to the Sikh Gurdwara Tribunal which held that the respondent was the hereditary holder of the office of mahant of the institution and that the institution was a Sikh Gurdwara and was governed by the Act. The respondent thereupon filed an appeal in the High Court which held that the institution was set up by a mahant for commemorating the memory of his Guru and that the land on which the institution was set up with the grant of Muafi had been donated by a Muslim ruler. After considering of the entries in the land records, the High Court further held that institution was not only serving as a Gurdwara for the worship of Granth Saheb but was also used as a Dera or lodging house or Sadhus or Faqirs of the Udasi Sect and that there was a duality of faiths in the institution. The High Court concluded that the institution was catering to the religious views and beliefs of both the sects amongst the local population and that the Tribunal was in error in declaring that the institution was a Sikh Gudrwara which would permit one of the communities to appropriate the institution to its exclusive use and to deprive the other community or sect from the dual use to which the institution has been put ever since it was founded or established. The High Court, consequently allowed the appeal and set aside the declaration made by the Tribunal. Dismissing the further appeals to this Court 373 ^ HELD: 1. The appraisal of the evidence by the High Court is correct and unexceptional. The evidence discloses that the institution in question was not shown to have been established for use by Sikhs for the purpose of public worship and therefore one of the material conditions for attracting section 16(2)(iii) of the Sikh Gurdwara Act, 1925 was not established. It is immaterial that at the time of presentation of the petition it was along with the followers of Udasi Sect used for worship of Granth Sahib by the Sikhs. [382E F] 2. In order to bring a case under section 16(2)(iii) of the Act it must not only be established that the institution was established by Sikhs for the purpose of public worship but was used for such worship by Sikhs before and at the time of the presentation of the petition. The use of the conjunctive 'and ' clearly imports that in order to attract Section 16(2)(iii) both the conditions must be cumulatively satisfied. [380A B] Gurmukh Singh vs Risaldar Deva Singh & Ors., AIR 1937 Lahore 577, allowed. Udasis form an independent sect : They do venerate Sikh Scriptures. Therefore, in an institution of Udasis sect, one can visualise reading of Granth Sahib or veneration of Sikh scriptures. That itself is not decisive of the character of the institution. If the succession was from Guru to Chela and those Gurus were followers of Udasi faith and the institution was known as Dera of Udasi Bhekh and they followed some of the practices of Hindu traditional religion that would be completely destructive of the character of the institution as Sikh Gurdwara. [381E F] Mahant Daram Dass etc. vs The State of Punjab & Ors. ; Hem Singh & Ors. vs Basant Das and Anr. , AIR 1936 PC 93 at 100 and Pritam Dass Mahant vs Shiromani Gurdwara Prabhandak Committee, C.A. No. 1983 of 1970 dated 16.2.84 referred to. In the instant case, there is no evidence to show that the institution was established for use by Sikhs for the purpose of public worship. Though the institution may be established by anyone may be a Sikh or follower of any other faith, but it must be established for use by Sikhs for the purpose of public worship. The original grantor was a Muslim ruler but there is nothing to show that when Gulab Das Faqir of Udasi Sect established the institution, he did it for use by Sikhs for the purpose of public worship. Later on as the majority of the population of the village were followers of Sikh religion and as Udasis also venerate Granth Sahib, reading of Granth Sahib may have commenced and therefore, generally speaking people may describe, and revenue record may show it to be Gurdwara, but that would neither be decisive of the character of the institution nor sufficient to bring the institution within Section 16(2)(iii) of the Act. [380D F]

The plaintiffs brought a suit for partition, two of them claimed to be the reversioners of Chandrappa and the third a purchaser of the interest of the reversioners, defendants 4, 5 and 7. They were thus entitled to a 5/6th share of the properties while the 6th defendant was entitled as a reversioner of Chandrappa to the remaining 1/6th share. The property was in the possession of the three sons of Nagayya, the first three 986 defendants, who denied these properties ever belonged to Chandrappa and also that the plaintiffs 1 and 2 or defendants 4 to 7 were his reversioners. The main defence was that even if the properties belonged to Chandrappa, the defendants ' father Nagayya became entitled to these as Chandrappa 's illatom son in law, on the basis that Chandrappa had brought Nagayya into his family under an arrangement that the latter would marry his wife 's sister 's daughter Mangamma and inherit the entire property after Chandrappa 's death. The trial court dismissed the suit. On appeal the High Court set aside the order and decreed the suit. On certificate, the only contention, raised by the appellant in this court was that even though specific performance had not been sought, the contract itself would have the effect of transferring interest in the property to Nagayya on Chandrappa 's death. Held that after enactment of section 53A in the , the only case in which the English doctrine of equity of part performance could be applied in India is where the requirements of section 53A are satisfied. In the instant Case, 53A has no application. It must be held therefore that the considerations of equity cannot confer on Nagayya or his heirs any title in the lands which under the statute could be conferred only by a registered instrument. The appeal, therefore, must be dismissed. Challa Papi Reddi vs Challa Koti Reddi, (1872) 7 Mad. H C. R. 25; Bha 'a Nahana vs Parbhu Hari, (1877) 2 I.L.R. Bom. 67; Asita, Mohan Ghosh Moulik vs Mohan Ghosh Moulik, (1016) 20 G.W.N. 901; Venkatayyamma Rao vs Appa Rao, (1916) L. R. 43 1. A. 138; Ariff vs Jadunath Majamdar, Cal. 1235, held inapplicable. Ariff vs Jadunath Majumdar, (1931) L. R. 58 I.A. 91, relied on.

In response to a notice issued under Section 10(2) of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960, the appellant contended that he was not in possession of 23.61 acres of surplus agricultural land as set out in the said notice, and that the authorities had failed to notice that he had transferred by means of a registered deed of gift dated January 7, 1972 an extent of 12.35 acres of land to his invalid daughter who remained unmarried inspite of being 30 years old because she was born a crippled child, and that the lands were part of Abadi and, therefore, stood excluded from the operation of the said Ceiling Act. The Prescribed Authority as well as the Appellate Authority did not find favour with the aforesaid contentions, and held that the appellant had failed to establish that the transfer of land in favour of his daughter was made in good faith, and was not intended for the immediate or deferred benefit of the appellant and other members of his family, and furthermore the transfer appeared to be a device to defeat the provisions of the Act. Being aggrieved with the order of the Prescribed Authority, that was affirmed by the Appellate Authority the appellant approached the High Court by way of Writ Petition to quash the said orders. The High Court, however, dismissed the Writ Petition. In the appeal to this Court it was contended on behalf of the 541 appellant: ( 1 ) though the registered deed of gift had been executed after the prescribed date viz. January 21, 1971, the transfer was in pursuance of an earlier family arrangement to provide maintenance for the invalid daughter and, therefore, the transfer falls outside the purview of Section 5(6) of the Act; (2) if the transfer attracted the operation of Section 5(6) and did not constitute an excepted transfer under Clause (b) of the proviso to Section 5(6), then Section 5(6) should be held ultra vires Article 31 A of the Constitution; (3) the Ceiling Act is violative of Article 14 of the Constitution in that it discriminates between major unmarried daughter and minor unmarried daughter by excluding the former from the definition of family ' under Section 3(7) of the Act. Dismissing the Appeal, ^ HELD: 1(i) From the definition of 'family ' in Section 3(7) it can be seen that a major daughter of a tenure holder, even if she is unmarried. is undoubtedly not treated as a member of the family. [544D] (ii) The Legislature has provided by section 5(6) that any extent of land transferred after 24.1.197l has also to be included in the total extent of holding of the tenure holder for the purposes of calculation of the ceiling area, unless the transfer falls within the category of excepted transfers under clauses (a) or (b) of the proviso. [544E] In the instant case, the finding of the Prescribed Authority and the Appellate Authority, which has found acceptance with the High Court, is a finding of fact and as such its correctness cannot be canvassed in an appeal under Article 136 of the Constitution. Even otherwise, the appellant had failed to prove that there was an earlier family arrangement and if there was one, to explain why he had delayed the execution of gift till after the Ceiling Act came into force, especially when the purported gift would only result in himself and his sons being in possession of the land and enjoying the income therefrom. [544F G] 2. There is, no scope for the appellant to raise any contention that section 5(6) is ultra vires Article 31 A. Its constitutionality cannot be assailed by reason of the immunity enacted in Article 31 B. [545A,B] 3. The provisions of the Ceiling Act do not discriminate between man and woman qua man and woman but merely organise a scheme where life 's realism is legislatively pragmatised. [545E] D.G. Mahajan vs Maharashtra, ; and Ambika 542 Prasad vs U.P. State, ; , referred to.

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 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

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.

Appeals Nos. 499 to 502 of 1958. Appeals from the judgment and decree dated July 13, 1956, of the former Travancore Cochin High Court in A. section Nos. 94, 95, 96 and 156 of 1952. G. section Pathak and G. C. Mathur, for the appellants (in C. As. 499 to 501 of 58). P. George and M. B. Krishna Pillai, for the appellants (in C. A. No. 502 of 58). T. N. Subramania Iyer, B. Ganapathy Iyer and G. Gopalakrishnan, for the respondent. January 27. The Judgment of the Court was delivered by KAPUR, J. These four appeals are brought against the judgments and decrees of the erstwhile High Court of Travancore Cochin. The appellants were the plaintiffs in the respective suits out of which these appeals have arisen and the respondent was the defendant in all the suits. As all the suits involve a common question of law, it will be convenient to dispose of them by one judgment. The facts of the cases are these. On September 9, 1943, the Nagercoil Municipal Council the respondent, passed a resolution under section 78 of the Travancore District Municipalities Act (Act XXIII of the Malayalam year 1116), hereinafter called the Act. By this resolution, it was resolved to levy a profession tax at the rates specified in the schedule. This was notified in the Government Gazette of September 26, 1943, under the name of the Commissioner of the respondent Council. In this notification, it was stated : " Any inhabitant of the local municipal town objecting to the proposal may submit his objection in writing to this office within 30 days of date of publication of this notification in the Government Gazette. This notification was also published in a local newspaper called the Abhimani. It does not appear, nor is there any assertion or allegation that any 611 objection was raised to this tax by the appellants or any one else. On January 12,,1944, a resolution under section 79 of the Act wag passed, by which the profession tax became payable from the beginning of the second half of the Malayalam year 1119. A trust, Kottar Chetty Ninar Desikavinayaga Swamy filed a suit on February 10, 1946, challenging the legality of this tax. C.A. 502 of 1958 has arisen out of that suit. Amongst other allegations, which are common to the other suits, which will be mentioned presently, the trust pleaded that it was not carrying on a profession within the meaning of the word used in the Act and that it was only a religious trust and had no profes sion. That suit was tried by the Munsif and was decreed. An appeal was taken against that decree to the District Judge. Three private limited companies carrying on business brought three suits challenging the legality of the imposition of the tax out of which the other three appeals, i.e., Civil Appeals Nos. 499 to 501, have arisen. In these suits, it was alleged that the publication of the resolution was not in accordance with the provisions of section 78 of the Act in so far as (1) it was not published by the respondent Municipal Council, but by the Commissioner; (2) the newspaper in which the advertisement was published was not selected by the Council; (3) time given in the notification was fixed not by the Council, but by the Commissioner; and (4) the period prescribed in the notification, that is, " within 30 days ", was not fixed by the Council and was not in accordance with the Act. The respondent Municipal Council denied these allegations and several issues were raised and the suits were decreed. The appeal which had been taken in the suit by the Trust was also decided in favour of that plaintiff. The result was that all the suits and the appeal were decided against the respondent Municipal Council. It took four appeals to the High Court. The decrees were reversed and the suits of the various plaintiffs were dismissed. Against those judgments and decrees, these four appeals have been brought by the plaintiffs, in the various suits, who are now the appellants. 612 In Civil Appeals Nos. 499 to 501, Counsel for the appellants has raised two points (1) that the publication was not by the Council and (2) that the time given in the notification, i.e., " within 30 days " was not in accordance with the law and as these were conditions precedent to the legality of the resolution under section 79 the resolution was ultra vires and therefore the imposition of the tax was illegal. It is, therefore, necessary to examine the various provisions of the Act upon which the whole argument has proceeded. Chapter VI of the Act deals with Taxation and Finance. In section 77 are enumerated the various taxes which can be levied by Municipal Councils. Section 78 gives the procedure for the levying of the tax and when quoted it is as follows: "section 78. Resolution of Council determining to levy tax or tolls. Any resolution of a municipal council determining to levy a tax or toll shall specify the rate at which any such tax or toll shall be levied and the date from which it shall be levied: Provided that before passing a resolution imposing a tax or toll for the first time or increasing the rate of an existing tax or toll, the council shall publish a notice in Our Government Gazette and at least in one Malayalam or Tamil newspaper having circula tion in the municipality of its intention, fix a reasonable period not being less than one month for submission of objections, and consider the objections, if any, received within the period specified." (Italics are ours). After the various steps given in section 78 have been taken, a Municipal Council has then to adopt the taxes proposed by means of a resolution under section 79, which provides : "S.79. Notification of new taxes and tolls When a municipal council shall have determined subject to the provisions of Section 78 to levy any tax or toll for the first time or at a new rate the executive authority shall forthwith publish a notification in Our Government Gazette and by beat of drum specifying the rate at which the date from which, 613 and the period of levy, if any, for which such tax or toll shall be levied. " The functions of the executive authority, that is, of the Commissioner of the Council are contained in section 16 of the Act, which is as follows : "section 16. Functions of the Executive Authority. The executive authority of the municipal council shall (a) carry into effect the resolutions of the council; (b) furnish to the council such periodical reports regarding the progress made in carrying out the resolutions of that body in the collection of taxes as the council may direct; and (c) perform all the duties and exercise all the powers specifically imposed or conferred on the executive authority by this Act, and subject, whenever it is hereinafter expressly so provided, to the sanction of the council, and subject to all other restrictions, limitations and conditions hereinafter imposed, exercise the executive power for the purpose of carrying out the provisions of this Act and be directly responsible for the due fulfilment of the purposes of this Act. " Section 16, which contains the power of the executive authority, does not support the contention of the appellants, because it provides that the executive authority has to give effect to the resolutions of the council and has to perform all duties specifically imposed on the executive authority by the Act and can also exercise executive power for the carrying out of the provisions of the Act and can act without sanction, unless the Act otherwise requires. Therefore, when the Commissioner of the respondent council got published a notification of the resolution under section 78 of the Act to impose a tax, he was acting within his powers and the fixing of the time in which objection had to be made was provided under the Act and was not exercise of authority by the executive which it did not possess. The only serious question which arises for decision is whether the period of " within thirty days " given" in the notification was compliance with the provisions of the Act or not. If it was not then is the period of 614 time mentioned a mandatory requirement, a breach of which makes the tax illegal? Counsel for the appellants in the first three appeals argued, and that argument was adopted by counsel for the appellant in the fourth appeal, that the words used in the first proviso to section 78 required that a clear period of one month had to be given for inviting objections and as "within thirty days" was not a clear period of one month, the provisions of the section had not been complied with. In support of his contention that the provision as to time was a mandatory requirement, he particularly stressed three words and phrases used in that proviso: (1) "before passing a resolution " ; (2) " shall publish " ; and (3) " fix a reasonable period not being less than one month for submission of objections. " The argument was that where these words are used, the effect was that the requirements were mandatory and not merely directory. It was submitted that the words "before" and ",shall " provided that what was mentioned in the proviso were conditions precedent for giving power to the Municipal Council to pass a resolution under a. 79 and when those two words were read along with " not being less than one month ", it was a clear indication of the mandatory nature of the requirements of the section. Quite a number of cases were relied upon by Counsel and besides this it was also emphasized that sections 78 and 79 concerned taxing matters and as the liability of the taxpayers arises after the tax is legally imposed, strict compliance with the provisions was necessary. It is not necessary to discuss all the cases on which reliance was placed. The words " not being 'less than one month " do imply that clear one month 's notice was necessary to. be given, that is, both the first day and the last day of the month had to be excluded. To put it in the language used by Maxwell on Interpretation of Statutes, 10th Edition, p. 351 : ". when. . not less than ' so many days are to intervene, both the terminal days are excluded from the computation," 615 That does not seem to have been done in the present case. But in order to decide whether this portion of the proviso is a mandatory provision, it is convenient to see the object for which it has been enacted. Under section 78, the procedure is laid down for the levying of a. new tax, which has to be done by a resolution. But in the proviso, it is stated that before such a resolution can be passed, a notice to that effect has to be published in the official gazette and also in one Malayalam or Tamil newspaper having circulation within the municipality. Then comes the period for inviting objections. The object of notifying in the Gazette and Local Newspaper is both to give notice to the public and particulary to the persons who are likely to be taxed and to invite their objections. For this purpose, the proviso requires a reasonable period of not less than one month to be given. The object of the provision is to give reasonable time and opportunity and it is given as a guidance that reasonable time would be a month. The use of the words "I reasonable period" before the words ,not being less than one month " is significant. If sufficient time has been given for the invitation of the objections which only just falls short of the period mentioned in the proviso, then it would serve the object of the legislature. The provision in regard to time in the context must be held to be directory and not mandatory. The cases under the Income tax Act like the Commissioner of Income tax vs Ekbal and Co. (1) where the notice under section 22(2) of the Income tax Act (which requires the furnishing of a return within such period not being less than thirty days) of 30 days only was held to be bad, because it was not a notice of thirty clear days, were so decided because that notice is the basis of the jurisdiction to tax, and a legal notice is an obligation imposed in order to tax an individual and it is a mandatory provision. Similarly, cases under Rent Act will also not apply. In Thompson vs Stimpson (2) the law required that not less than four (1) [1945]13 I.T.R. 154. (2) , 79 weeks ' notice shall be given for vacation of premises on a weekly tenancy and only one week 's time was given. It was held there that it was a bad notice. It was further held that four weeks ' notice was a condition precedent and the words had been used which had been interpreted in the past as providing for four clear weeks and also it was construed as four clear weeks, so that there might be certainty in the matter. In other cases, that were relied upon and which related to taxing statutes, the Municipal Council, Cuddapah vs The Madras and Southern Mahratta Railway Ltd. (1), The Borough Municipality of Amalner vs The Pratap Spinning, Weaving and Manufacturing Co. Ltd., Amalner (2) and Kalu Karim vs Municipality of Broach (3) ; it was held that taxing statutes have to be strictly construed and requirements which are precedent to the imposition of the tax have to be complied with before tax can be legally imposed. In every case the words have to be construed in the context taking into consideration the language used and the object to be achieved. As we have said above, the use of the words " not being less than one month " implies the giving of a clear month excluding both the first and the last day of the month. There is no dispute as to the meaning of that expression alone which has been so construed and the observations of Lord Parker in Thompson vs Simpson (4) will apply. But the question that arises in the present case is: what is the exact significance of these words when used in the context of the other words used in the proviso. The power of the municipality to levy the tax does not depend upon a period prescribed for notice for objections. The power to tax is derived from the Statute; the provisions relating to the length of notice inviting objections and publication are merely procedural. The object of the notification is to inform the future rate payers and to invite objections from them. The proviso itself uses words " reasonable time" '. Reading " reasonable time " and " not being less than one month" together, it is clear that the (1) Mad. 779. (2) I.L.R. (3) Bom. (4) 617 time given must be reasonable and the legislature has only added a guide so that periods shorter than a month may not be fixed. In the present case the whole of the period except one day has been fixed and in view of the other facts it must be regarded as reasonable and to have complied with the provision which is directory in its later part. Counsel for the appellants in C. A. 499/501/58 wanted to raise a further objection to the legality of the tax levied and that ground was that the appellants were not carrying on a profession as they were only engaged in motor business and trade. This question was never raised at any previous stage and was not taken in the statement of the appellants ' case. Therefore, it cannot be allowed ' to be raised. Besides it is without any substance in view of the definition of profession as given in section 91 of the Act, which includes business. In our opinion, the High Court ,Was right in so holding and the three appeals Nos. 499 to 501 of 1958 are dismissed with costs, one hearing fee. Coming now to Civil Appeal No. 502 of 1958, in the plaint it was alleged that the trust was a religious trust and was following no profession and therefore it did not fall within the definition of the word " profession " as used in section 91 of the Act. The defendant joined issue and the matter was put in issue in the following form: "Is the taxation by defendant of plaintiff illegal and in contravention of the provisions of the District Municipalities Act ?" Although no specific finding was given as regards the operation of section 91, the suit was decreed and the question whether the trust followed a profession or not seems to have got lost at the subsequent stages of the proceedings, that is, in appeal in the court of the District Judge and in the High Court. It is this point which was urged by counsel for the trust; his plea was that his case was not covered by section 91, as being a religious trust it had no profession and was carrying on none. That is a matter which, in our opinion, should have been decided, and as neither the District 618 Judge nor the High Court has given a finding on that point, it is necessary to remit the case to the High Court with the direction that the appeal be reheard and that particular question be decided on the materials on the record. Nothing that has been said in this judgment must be taken to be an expression of opinion on the merits of this plea taken by the appellant Trust. Appeal No. 502 of 1958, is therefore, allowed and the case remitted to the High Court for decision. The costs in this Court and in the High Court will abide the decision of the appeal in the High Court. Appeals nos. 499 to 501 dismissed. Appeal No. 502 allowed. Case remitted.

The imposition of "profession tax" by the respondent Municipal Council under the Travancore District Municipalities Act (Act XXIII of the Malayalam year 1116) was challenged on the grounds, inter alia (1) that the requisite notification was not published by the Municipal Council but by its commissioner, (2) that the period of thirty days which was given for filing objections to the imposition was insufficient in law which required a period of " not less than a month ", and (3) that this was a mandatory provision under the proviso to section 78 of the Act. Held, that under section 16 the Commissioner being the executive authority of the Municipal Council was authorised to give effect to the resolutions of the Council and to perform all its executive duties. The words " not being less than one month " in the proviso to section 78 implied the necessity for one clear month 's notice excluding the first and last day of the month, but the use of the words " reasonable period " before the words " not being less than one month " showed that the time given must be reasonable. In view of the facts of the case the period allowed must be regarded as reasonable and to have complied with the provision which is directory in its later part. Commissioner of Income tax vs Ekbal and Co. [1945] 13 I.T.R. 154 and Thompson vs Stimpson, , distinguished. Municipal Council, Cuddapah vs The Madras and Southern Mahratta Railway Ltd. Mad. 779, The Borough Municipality of Amalner vs The Pratap Spinning, Weaving and Manufacturing Co. Ltd., Amalner, I.L.R. and Kalu Karim vs Municipality of Broach BOM. 764, referred to. 610 The definition of " profession " as given in section 81 includes business.

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.

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]

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.

The appellant company was carrying on business in Bombay as commission agents. In the course of assessment proceedings for the year 1954 55, the Income tax Officer noticed from the ssee 's boo s of account that the assessee had business connections with certain nonresident parties and found that the transactions disclosed that through the assessee those non resident parties were receiving income, profits and gains. He considered that section 43 of the Indian Income tax Act, 1922, was applicable to the assessee and issued on March 27, 1957, a notice under section 34 of the Act for assessment of the assessee as an agent of the said non resident parties. The assessee pleaded, inter alia, that the proceedings intiated by the Income tax Officer under section 34 were barred since the notice issued by him was after the expiry of one year from the end of the assessment year 1954 55, but the Income tax Officer rejected the contention relying on the amendment made to the proviso to section 34(l)(b)(iii) by the Finance Act, 1956, under which the period of one year was changed to two years. The amendment was given retrospective operation upto April 1, 1956, but since the power to issue a notice under the unamended Act had come to an end on March 31, 1956, the question was whether the Income tax Officer could issue a notice of assessment to a person as an agent of a non resident party under the amended provision when the period prescribed for such a notice had before the amended Act came into force expired. HELD:The proceedings initiated by the Income tax Officer by the notice dated March 27, 1957, were barred; the authority of the Incometax Officer under the Indian Income tax Act before it was amended by the Finance Act of 1956 having come to an end, the amending provision would not entitle him to commence a proceeding even though at the date when he issued the notice it was within the period provided by the amendment. Notwithstanding the fact that there was no determinable point of time between the expiry of the time provided under the old Act and the commencement of the Amendment Act, in the absence of an express provision or clear implication, the legislature could not be said to have intended to attribute to the Amending provision a greater retros pectivity than was expressly mentioned.

The appellant Manganese ore (India) Ltd. (a commercial venture where the Government of India, Government of Maharashtra and Government of Madhya Pradesh hold shares in the ratio of 17 per cent each) entered into four types of "contracts of sale" with buyers in India and outside India for selling the manganese ores extracted from the mineral mines leased out to it and situated li in the States of Madhya Pradesh and Maharashtra. They were (a) category I are the contracts where the appellant directly sent the ores to two foreign companies on f.o.b. terms; (b) category II represents contracts which were entered into by the appellant with tho Mineral and Metals Trading Corporation of India Ltd., under which the appellant despatched manganese ore of varying percentage to the M.M.T.C., f.o.b. Bombay and the M.M.T.C. in turn exported the goods to foreign buyers; (c) category III relates to the sales to M/s. Ram Bahadur Thakur & Co., Bombay and other buyers who in their turn sold the goods to M.M.T.C. for export; and (d) category IV relates to the sales in favour of the buyers within the territories of India, but outside the State. According to section 3(a) ant 9 of the , the State of Madhya Pradesh was competent to levy tax on the sales in the course of inter state trade or commerce. Under section 5(1) of the , sales occasioning export or in the course of export are exempt from the purview of the Act. In respect of categories II to IV, the Sales Tax Authorities levied tax under the Central Act, holding that they were in the course of inter State trade or commerce and imposed a penalty of Rs. 1,000/ under the Madhya Pradesh General Sales Tax Act for belated filing of returns. The writ petition filed by the assessee in the Madhya Pradesh High Court failed. Dismissing the appeal by special leave and quashing the penalty imposed, the Court. ^ HELD: As no export was involved so far as the buyers in India are concerned, section 5(1) of the has no application at all. This 100 point is no longer "res integra" in view of the Constitution Bench division of this Court in Md. Serajuddin and others vs State of Orissa, Where the sale Y/as not directly and substantively connected with export, and where between the seller and ultimate buyers intermediaries are involved, such a sale would not occasion any export and would not fall within the purview of section 5(1) of the . [102 G, 103 C D] Md. Serajuddin & others vs State of Orissa, , applied. (2) The doctrine of "Stare Decisis" is a very valuable principle of precedent which cannot be departed from unless there are extraordinary or special reasons to do so, and more so to reconsider a recent constitutional decision. [103 G] (3) Before a sale can be said to take place in the course of inter state trade or commerce, the following conditions must be satisfied: (1) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another. (ii) that in pursuance of the said contract the goods in fact moved from one State to another. and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move. If these conditions are satisfied, then by virtue of section 9 of the Act, it is the State from which the goods move which will be competent to levy the tax under the provisions of the Act. [104 D F] Balabhgas Hulsachand and others vs Stare of Orissa, ; relied on. (4) So far as section 3(a) of the is concerned, there is no distinction between unascertained and future goods and goods which are already in existence, at he time when the sale takes place these goods have come into actual physical existence. [108 Bl Balabhgas Hulsachand and others vs State of Orissa, ; applied. (5) In the absence of any provision for penalty under the itself it is not open to the Sales Tax Authorities to press into the service the provisions of the State Sales Tax. [108 G] (6) In the instant case, a careful perusal of the agreements would clearly show that what the buyers wanted and what was actually sold to them was manganese are and after all the goods were stocked together, the required percentage under the contracts of sale automatically come into existence. The word "oriental mixture" is merely a technical terminology or just another name for what is known in the commercial world as manganese ore. therefore, It is clear that it was manganese ore and manganese ore alone which was sought to be sold by the appellant to various buyers in India. The mere fact that certain specific contracts have been mentioned does not alter the character and quality of the goods that are actually supplied by the appellant to its various purchasers. In these circumstances, therefore, the theory of the ore supplied by the appellant being only one constituent and not the entire goods sold is illusory. [105 D F, 107 B D] Central Provinces Manganese ore Co., Ltd. vs The State of Maharashtra, S.T. Ref. 17 20/1964 decided on 7 4 1969 by Bombay High Court, Commissioner of Sales Tax, Eastern Division Nagpur vs Hussenali Adamji and company and another, 10 S.T.C. 297, (Distinguished).

The appellant company made a claim under section 5 of the Income tax (Double Taxation Relief) (Indian States) Rules, 1939, for refund of the income tax paid by it in an Indian State. The claim was rejected by the Income tax Officer as time barred. The Commissioner of Income tax and the Central Board of Revenue refused to interfere and the appellant sought no further legal remedy against their orders. Subsequently on certain tax demands being made by the Income tax Officer, the appellant made representation that the amounts in respect of which application had earlier been made under r. 5 should be set off against the demand as provided by section 49E of the Indian Income tax Act, 1922. The Income tax authorities having rejected this claim also, the appellant went to the High Court under article 226 of the Constitution. The High Court held that the expression found to be due" in section 49E clearly meant that there must be, prior to the claim of set off, an adjudication whereunder an amount is found due by way of refund to the person claiming set off. Since there was no such adjudication in the appellant 's favour, the writ petition was dismissed. However a certificate of fitness under article 133(1) (c) was granted to the appellant. HELD : (i) It is not necessary that there should be a prior adjudication before a claim can be allowed under section 49E. There is nothing to debar the Income tax Officer from determining the question whether a refund is due or not when an application is made to him under section 49E. The words "is found" do not necessarily lead to the conclusion that there must be a prior adjudication. [419 D E] (ii) The set off under section 49E must however be "in lieu of payment ' which expression connotes that payment is outstanding i.e. there is a subsisting obligation on the Income tax Officer to pay. If a claim to refund is barred by a final order, it cannot be said that there is a subsisting obligation to make the payment. [419 F G] Stubbs vs Director of Public Prosecutions , relied on. (iii) In the present case the orders of the Commissioner and the Central Board of Revenue rejecting the appellant 's claim under r. 5 of the Indian State Rules had become final. They were not challenged even in the petition under article 226. There was thus no subsisting obligation on the part of the Income tax Officer to make payment to the appellant, and the claim of the appellant under section 49E must therefore, fail. [419 G H]

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.

Appeal No. 341 of 1960. Appeal from the judgment and order dated March 3,1960, of the Madras High Court, in W. P. No. 1051 of 1959. N. C. Chatterjee, B. R. L. Iyengar and D. Gupta, for the appellants. 589 section Mohan Kumaramangalam, M. K. Ramamurthy, R. K. Garg and T. section Venkataraman, for the respondent and the intervener. April, 28. The Judgment of Gajendragadkar, Sarkar and Das Gupta, JJ., was delivered by Gajendragadkar, J. Wanchoo and Ayyangar, JJ., delivered separate Judgments. GAJENDRAGADKAR, J. On a writ petition filed by the respondent K. Rangachari in the Madras High Court under article 226 of the Constitution a writ of mandamus has been issued by the said High Court restraining the appellants, the General Manager, Southern Railway, and the Personnel Officer (Reservation), Southern Railway, from giving effect to the directions of the Railway Board ordering reservation of selection posts in Class III of the railway service in favour of the members of the Scheduled Castes and Scheduled Tribes and in particular the reservation of selection posts among the Court Inspectors in Class III one of which is held by the respondent. After the writ was thus issued the appellant applied for and obtained a certificate from the said High Court under article 132(1) of the Constitution as it involved a substantial question of law, namely, the scope of article 16(4) of the Constitution. It is with this certificate that the appeal has been brought to this court, and the. only question which it raises for our decision is about the scope and effect of article 16(4). This question is of considerable public importance though the dispute raised by it lies within a very narrow compass. In the railway services there are four grades of Court Inspectors included in Class III, (1) Court Inspectors on Rs. 200 300, (2) Court Inspectors on Rs. 260 350, (3) Chief Court Inspectors on Rs. 300400, and (4) Chief Court Inspectors on Rs. 360 500. It appears that Inspectors of the first category are recruited partly directly and partly by selection from other categories of railway services. To the remaining three grades appointments are made by promotion and they are classified as selection posts. Selection to 75 590 these grades is made by a committee of officers constituted for the purpose. In respect of non selection posts seniority in service is the qualification but in regard to selection posts seniority is only one of the qualifications for promotion to such posts; suitability to promotion is considered on other relevant grounds .as well. The respondent was initially recruited to the grade of Rs. 200 300 and was confirmed in that, grade on November 21, 1956. Between May 23, 1958, and August 22, 1958 as well as between December 8, 1958 and December 31, 1958, he was promoted to officiate in the grade of Rs. 260 350. He got a chance of another similar promotion to officiate on April 8, 1959. These promotions were in the nature of ad hoc promo tions and were consequently of temporary duration. Later, on June 16, 1959, he was interviewed by the selection committee and his promotion to the said higher grade was regularised and an order was passed in that behalf on June 30, 1959. By this order lie was allowed to continue to officiate in the said grade. Since then he has been officiating in that grade. On April 27, 1959, and on June 12, 1959, the two impugned circulars were issued by the Railway Board and addressed to the General Managers. As a result of the said circulars the selection committee decided to consider the case of Hiriyanna for promotion to the grade of Rs. 260 350, Hiriyanna being a member of the Scheduled Castes. The record shows that at the time when the respondent was interviewed and selected he was placed as Number One by the selection committee and one Partliasarathy was placed as Number Two. On the said occasion Hiriyanna was not selected and put in the panel. The selection committee desired to examine the case of Hiriyania in order to decide whether he was suitable for promotion to higher grade in the light of the two directives issued by the Railway Board and so a meeting of the selection committee was called on November 18, 1959. The respondent thought that the proceedings of the said proposed meeting may result prejudicially to his interest and so on November 16, 1959, he filed the 591 present Writ Petition No. 1051 of 1959. In this petition he applied for a writ in the nature of mandamus and also prayed for an interim injunction restraining the holding of the meeting of the selection committee proposed to be held on November 18, 1959. An interim injunction as prayed for by the respondent was issued by the High Court and in consequence the proposed meeting has not been held. According to the respondent the two directives issued by the appellants under the two impugned circulars were ultra vires, illegal, inoperative and unconstitutional in that they were not justified by article 16(4). He alleged that a reading of articles 16, 335, 338 and 339 would show that the Constitution draws a clear distinction between Scheduled Castes or Tribes on the one hand and backward classes on the other and so it was urged by him that the impugned circulars were illegal. The petition further urged that the safeguard provided by article 16(4) applied only to reservation Of posts at the stage of appointment and not for reservation of posts for promotion after appointment and so the circulars were outside the provisions of article 16(4) and as such contravened article 16(1). The petition expressed the apprehension that if the circulars are implemented the respondent would be reverted and that would cause great loss both financially and in status to him. It is on these allegations that the respondent prayed for the issue of a writ in the nature of mandamus directing the appellants to forbear from implementing the two impugned circulars. These pleas were denied by the appellants. It was alleged by them that the expression "backward class" appearing in article 16(4) would include not only the Scheduled Castes and Scheduled Tribes but all backward communities who could not stand on their own legs. Therefore the reservations made by the impugned circulars were fully covered by article 16(4). The appellants ' case was that the safeguards provided by article 16(4) would extend not only to initial appointment but also to promotions made by selection and that clearly brought the impugned circulars within the 592 protection of article 16(4). The appellants categorically denied that the respondent would suffer any loss or because persons who had already been promoted on the basis of earlier regular selections were not intended to be reverted as a consequence of the implementation of the impugned circulars. According to the appellants the petition filed by the respondent was permature and on the merits no case had been made out for the issue of a writ of mandamus. At this stage it would be material to set out the relevant portions of the impugned circulars. The circular issued by the Railway Board on April 27, 1959, contained, inter alia, the following directions. "There are different grades of Class III posts. Some of these posts are 'non selection ' posts, promotion to which is made on 'seniority cum suitability ' basis, while, in the case of others which are 'Selection ' posts, promotion is made by a positive act of selection. There will be no quota for Scheduled Castes and Scheduled Tribes candidates in respect of promotion to 'non selection ' posts. For promotion to 'Selection ' posts, however, there will be the prescribed quota of reservation. The field of consideration in the case of Scheduled Castes and Scheduled Tribes candidates should be four times the number of posts reserved without any condition of qualifying period of service in their case, subject to the condition that consideration should not normally extend to such staff beyond two grades immediately below the grade for which selection is held. " There is one more direction given by the said circular which must be read. The decision of the Railway Board providing reservation for Scheduled Castes and Scheduled Tribes in promotion vacancies as laid down above comes into effect from January 4, 1957. It will, therefore, be necessary to calculate the number of posts that should have been made available to the Scheduled Castes and Scheduled Tribes during 1957 and 1958 and these should be carried forward to be filled in 1959. Thus it would be noticed that the effect of this circular was to prescribe a quota of reservation for selection posts and to give effect to this reservation retrospectively from January 4, 593 1957. In a sense it is this retrospective operation of the circular which appears to be the main cause of the present dispute. On June 12,1959, another circular was issued giving guidance and directions as to how the earlier circular should be implemented. This circular directed, inter alia, by paragraphs 2(ii) and 2(iii) as follows: "2(ii). The Special Rosters in force for section C. & section T. in direct recruitment categories are to be followed to work out the number of posts to be reserved for section C. & section T. in promotions made in Selection Grades and for promotion from Class IV to Class 111. 2(iii). As the Board 's orders have retrospective effect from 4th January, 1957, it is necessary that the promotions made in each selection grade on your Division/Office from 4th January, 1957, are reviewed and the number of posts due to section C. & section T. worked out applying the Roster referred to in item (ii) above. " It appears certain doubts were raised in regard to the manner in which the reservation circulars had to be implemented and so on September 11, 1959, the Railway Board issued a letter clarifying the doubts raised. One of the points thus clarified was whether the instructions issued in the Board 's letter contemplated reversion of staff already promoted to selection posts after January 4, 1957, to accommodate section Cs. and section Ts. (which stand for Scheduled Castes and Scheduled Tribes) according to percentage basis. The clarification issued was that the said orders did not contemplate such reversion. It was, however, desired that the shortfalls should be made good against the existing as well as the future vacancies. It is by virtue of this clarification that the respondent was assured by the appellants during the proceedings before the High Court that he need not entertain any apprehension of reversion as a result of the implementation of the impugned circulars. We would now briefly summarise the findings and conclusions of the High Court on the points raised before it by the contentions of the parties in the 595 whether article 16(1) and (2) refer to promotion or whether they are confined to the initial appointment to any post in civil service. In the appeal before us the s, appellants and the respondent both conceded that cases of promotion fell within article 16(1) and (2) though they differed as to whether they were included in article 16(4). It would be immediately noticed that the respondent 's petition postulates the inclusion of promotion in article 16(1) and (2) for it is on that assumption that he challenges the validity of the impugned circulars. Similarly, the appellants ' defence postulates that article 16(1) and (2) as well as article 16(4) refer to cases of promotion for it is on the basis that article 16(4) includes promotion that they seek to support the validity of the impugned circulars. When this appeal was argued before the Constitution Bench on the first occasion it became clear that neither party was interested in contending that the guarantee afforded by article 16(1) and (2) is confined only to initial appointment and does not extend to promotion, and so notice was ordered to be issued to the Attorney General. In response to the notice the Attorney General has appeared and is represented by Mr. Sen. He has also taken the same stand as the appellants have done and so in the result nobody before us is interested in challenging the inclusion of promotion within article 16(1) and (2). However, we would briefly indicate our reasons for accepting the concession made by the parties that promotion is included in article 16(1) and (2). Article 16(1) reads thus: "There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State." In deciding the scope and ambit of the fundamental right of equality of opportunity guaranteed by this Article it is necessary to bear in mind that in construing the relevant Article a technical or pedantic approach must be avoided. We must have regard to the nature of the fundamental right guaranteed and we must seek to ascertain the intention of the Constitution by construing the material words in a broad 596 and general way. If the words used in the Article are wide in their import they must be liberally construed in all their amplitude. Thus construed it would be clear that matters relating to employment cannot be confined only to the. initial matters prior to the act of employment. The narrow construction would confine the application of article 16(1) to the initial employment and nothing else; but that clearly, is only one of the matters relating to employment. The other matters relating to employment would inevitably be the provision as to the salary and periodical increments therein, terms as to leave, as to gratuity, as to pension and as to the age of superannuation. These are all matters relating to employment and they are, and must be, deemed to be included in the expression "matters relating to employment" in article 16(1). Similarly, appointment to any office which means appointment to an office like that of the Attorney General or Comptroller and Auditor General must mean not only the initial appointment to such an office but all the terms and conditions of service pertaining to the said office. What article 16(1) guarantees is equality of opportunity to all citizens in respect of all the matters relating to employment illustrated by us as well as to an appointment to any office as explained by us. This equality of opportunity need not be confused with absolute equality as such. What is guaranteed is the equality of opportunity and nothing more. Article 16(1) or (2) does not prohibit the prescription of reasonable rules for selection to any employment or appointment to any office. Any provision as to the qualifications for the employment or the appointment to office reasonably fixed and applicable to all citizens would certainly be consistent with the doctrine of the equality of opportunity; but in regard to employment, like other terms and conditions associated with and incidental to it, the promotion to a selection post is also included in the matters relating to employment, and even in regard to such a promotion to a selection post all that article 16(1) guarantees is equality of opportunity to all citizens who enter service. 597 If the narrow construction of the expression "matters relating to employment" is accepted it would make the fundamental right guaranteed by article 16(1), illusory. In that case it would be open to the State ' to comply with the formal requirements of article 16(1) by affording equality of opportunity to all citizens in the matter of initial employment and then to defeated its very aim and object by introducing discriminatory provisions in respect of employees soon after their employment. Would it, for instance, be open to the State to prescribe different scales of salary for the same or similar posts, different terms of leave or superannuation for the same or similar post? On the narrow construction of article 16(1) even if such a dis criminatory course is adopted by the State in respect of its employees that would not be violative of the equality of opportunity guaranteed by article 16(1). Such a result could not obviously have been intended by the Constitution. In this connection it may be relevant to remember that article 16(1) and (2) really give effect to the equality before law guaranteed by article 14 and to the prohibition of discrimination guaranteed by article 15(1). The three provisions form part of the same constitutional code of guarantees and supplement each other. If that be so, there would be no difficulty in holding that the matters relating to employment must include all matters in relation to employment both prior, and subsequent, to the employment which are incidental to the employment and form part of the terms and conditions of such employment. Article 16(2) provides that no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State. This sub Article emphatically brings out in a negative form what is guaranteed affirmatively by article 16(1). Discrimination is a double edged weapon; it would operate in favour of some persons and against others; and article 16(2) prohibits discrimination and thus assures the effective enforcement of the fundamental right of equality of 76 598 opportunity guaranteed by article 16(1). The words "in respect of any employment" used in article 16(2) must, therefore, include all matters relating to employment as specified in article 16(1). Therefore, we are satisfied that Mr. Sen is right when on behalf of the Attorney General he conceded that promotion to selection Posts 'is included both under article 16(1) and (2). Broadly stated the Bombay and the Patna High Courts sup , port the concession made by Mr. Sen (Vide: Pandurang Kashinath More vs The Union of India(1); Sukh nandan vs State (2) ) whereas the Allahabad High Court is against it (vide: Moinuddin vs State of Uttar Pradesh (3) ). In this connection we ought to add that Civil Appeal No. 579 of 1960 (4) in which the Union of India challenged the correctness of the Bombay decision was set down for hearing along with this appeal, and in the judgment which we are pronouncing in the said appeal today we are accepting the appellants ' contention that the question about the invasion of the fundamental right guaranteed by article 16(1) was not properly raised by the respondent in his plaint in that case and had in fact not been proved; accordingly we are holding that 'the High Court was in error in proceeding to deal with the dispute on the basis that violation of article 16(1) had been admitted by the Union. In the result we are allowing the said appeal and setting aside the decision of the High Court on this narrow ground. Article 16(3) provides for one exception to the provisions of article 16(1) and (2) in that it authorises Parliament to make any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment. We are not concerned with this provision in the present appeal. (1) I.L.R. (2) Pat. (3) A.I.R. 1960 All. 484. (4) Union of India vs Pandurang Kashinath More. 599 That takes us to article 16(4). It reads thus: "Nothing in this article shall prevent the State, from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State." In construing article 16(4) the respondent is no doubt entitled to contend that this sub Article in substance provides for an exception to the fundamental rights guaranteed by article 16(1) and (2) and as such it must be strictly construed. On the other hand, the appellants may well urge that in construing its provisions the Court should not lose sight of the fact that the Constitution has, if we may say so wisely, showed very great solicitude for the advancement of socially and educationally backward classes of citizens. Article 15(4) which provides, inter alia, for an exception to the prohibition of discrimination on grounds specified in article 15(1) lays down that nothing contained in the said Article shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes. Similarly, article 335 requires that the claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State. For historical reasons which are well known the advancement of socially and educationally backward classes has been treated by the Constitution as a matter of paramount importance and that may have to be borne in mind in construing article 16(4). On one point in relation to the construction of article 16(4) the parties are in agreement. It is common ground that article 16(4) does not cover the entire field covered by article 16(1) and (2). Some of the matters relating to employment in respect of which equality of opportunity has been guaranteed by article 16(1) and (2) do not fall within the mischief of non obstantive 600 clause in article 16(4). For instance, it is not denied by the appellants that the conditions of service relating 'to employment such as salary, increment, gratuity, y pension and the age of superannuation there can be no exception even in regard to the backward classes of citizens. In other words, these matters relating to employment are absolutely protected by the doctrine of equality of opportunity and they do not form the subject matter of article 16(4). That is why we have just observed that part of the ground covered by article 16(1) and (2) is admittedly outside the scope of article 16(4). The point in dispute is: Is promotion to a selection post which is included in article 16(1) and (2) covered by article 16(4) or is it not? It is on, this point that there is a sharp controversy between the parties. Before construing article 16(4) it would be convenient to deal with the question as to whether posts specified by it are posts inside the services or outside them. As we have already seen the High Court has taken the view that the posts in the context must necessarily mean posts outside the services and that in fact is the sole basis of the decision of the High Court against the appellants. The High Court has held that the legislative history of the words "appointments" and "Posts" justifies the conclusion that "posts" are ex cadre posts. Is that really so? In our opinion, the answer to this question must be in the negative. The argument that legislative history about the use of the relevant words is decisively in favour of excluding service posts from the purview of article 16(4) ignores the fact that there can be no legislative history for the provisions of article 16(4) which have found a place in the Constitution for the first time. Besides, it is not correct to assume that even the legislative history shows that "posts" always and inevitably meant posts outside services though it may be conceded that in the majority of corresponding constitutional provisions they do refer to ex service posts. Let us look at the relevant provisions of the Constitution itself. Article 309 empowers the appropriate Legislature to regulate the recruitment and conditions of service of persons appointed to public services and 601 posts in connection with the affairs of the Union or of any State. In the context "posts" means posts outside services. Similarly article 310(1) refers to every person 'who is a member of a defence service or of a civil service of the Union or of an all India service or holds any post connected with defence or any civil post under the Union. The word "post" in the context means an ex cadre post. Likewise the expression "civil post" in article 311(1) means a civil post outside the services. Article 335 to which we have referred uses the word "posts" in the same sense. But, when we go to article 336 the word "posts" in the context means posts in the services therein enumerated. The position disclosed by the corresponding provisions of the Constitution Act of 1935 is substantially the same. Sections 240 and 241 for instance use the word "posts" in the sense of ex service posts; whereas section 246 refers to civil posts in the sense of posts inside the services. In our opinion, it would, therefore, be unreasonable to treat the word "posts" as a term of art and to clothe it inexorably with the meaning of excadre posts. It is the context in which the word "posts" is used which must determine its denotation. What does the context of article 16(4) indicate? That is the next question which we must consider. Article 16(4) clearly shows that the power conferred by it can be exercised in cases where the State is of the opinion that any backward class of citizens is not adequately represented in the services under it. In other words, the opinion formed by the State that the representation available to the backward class of citizens in any of the services is inadequate is a condition precedent for the exercise of the power conferred by article 16(4), and so the power to make reservation as contemplated by article 16(4) can be exercised only to make the inadequate representation in the services adequate. If that be so, both "appointments" and "posts" to which the operative part of article 16(4) refers and in respect of which the power to make reservation has been conferred on the State must necessarily be appointments and posts in the ser vice. It would be illogical and unreasonable to 602 assume that for making the representation adequate in the services under the State a power should 'be given to the State to reserve posts outside the cadre of services. If the word "posts" means excadre posts reservation of such posts cannot possibly cure the imbalance which according to the State is disclosed in the representation in services under it. Therefore, in our opinion, the key clause of article 16(4) which prescribes a condition precedent for invoking the power conferred by it itself unambiguously indicates that the word "posts" cannot mean ex cadre posts in the context. In fairness to Mr. Kumaramangalam, who appeared for the respondent, we ought to add that he did not resist the contention of Mr. Chatterjee, for the appellants, that the context requires that "Posts" should be deemed to be posts inside services and not outside them. Therefore, the main, if not the sole, reason given by the High Court in support of its conclusion does not appear to us to be well founded, and so article 16(4) must be construed on the basis that both "appointments" and "posts" to which its operative clause refers are appointments and posts in the services under the State. Incidentally, we may repeat what we have already pointed out that the tenor of the judgment under appeal shows that if the High Court had construed the word "posts" as posts inside the services it would not have issued the writ in favour of the respondent. Having in substance conceded that "posts" does not mean posts outside services Mr. Kumaramangalam presented a very plausible argument in support of his case that the impugned circulars fall outside article 16(4). He contends that the key clause on which Mr. Chatterjee relies in construing the word "posts" as meaning posts in the services itself shows that direct promotion to selection posts by reservation is not permissible under article 16(4). His argument is that if it is discovered that any backward class of citizens is not adequately represented in the services under the State the State may no doubt seek to introduce the balance by giving adequate representation to the backward class by making reservations for initial 603 appointments. It may decide the proportion of the said reservation in order to introduce the balance and then give effect to it by making adequate number of appointments by reservation at the initial stage. If ' this process by itself appears to the State to be slow and tardy it may even reserve selection posts but this reservation can be given effect to again by promoting( suitable backward candidates to the said posts after they fall vacant and making a proportionately larger number of appointments at the initial stage. In any case reservation must work from the bottom and reservation cannot be permitted to allow direct appointment to selection posts as the impugned circulars seek to do. It may be conceded that reservation of appointments or posts maybe made in the manner suggested by Mr. Kumaramangalam. It may also be assumed that giving retrospective effect to reservations may well cause heart burning or dissatisfaction amongst the general class of employees and in that sense it would be an act of wisdom not to give effect to reservation retrospectively. But, with the propriety or the wisdom of the policy underlying the circulars We are not directly concerned. Even if it be assumed that it would be open to the State to adopt the method suggested by Mr. Kumaramangalam to give effect to the power of reservation in order to make the representation of the backward classes adequate in its services does it follow that it is the only method permissible under article 16(4)? We are inclined to hold that the answer to this question cannot be in favour of the respondent. If it is conceded that selection posts can be reserved it is difficult to see how it would be open to the respondent to contend that these reserved selection posts must be filled only prospectively and not retrospectively. The concession that selection posts can be reserved on which the argument is based itself provides the answer to the argument that if the said posts can be reserved the reserved posts can be filled either prospectively or retrospectively. In adopting the latter course there can be no violation of the constitutional provision contained in article 16(4). 604 The condition precedent for the exercise of the powers conferred by article 16(4) is that the state ought to be satisfied that any backward class of citizens is not adequately represented in its services. This condition precedent may refer either to the numerical inadequacy of representation in the services or even to the qualitative inadequacy of representation. The advancement of the socially and educationally backward classes requires not only that they should have adequate representation in the lowest rung of services but that they should aspire to secure adequate representation in selection posts in the services as well. In the context the expression 'adequately represented ' imports considerations of "size" as well as "values", numbers as well as the nature of appointments held and so it involves not merely the numerical test but also the qualitative one. It is thus by the operation of the numerical and a qualitative test that the adequacy or otherwise of the representation of backward classes in any service has to be judged; and if that be so, it would not be reasonable to hold that the inadequacy of representation can and must be cured only by reserving a proportionately higher percentage of appointments at the initial stage. In a given case the state may well take the view that a certain percentage of selection posts should also be reserved, for reservation of such posts may make the representation of backward classes in the services adequate, the adequacy of such representation being considered qualitatively. If it is conceded that "posts" in the context refer to posts in the services and that selection posts may be reserved but should be filled only in the manner suggested by the respondent then we see no reason for holding that the reservation of selection posts cannot be implemented by promoting suitable members of backward class of citizens to such posts as the circulars intend to do. We must in this connection consider an alternative argument that the word "posts" must refer not to 605 selection posts but to posts filled by initial appointments. On this argument reservation of appointments means reservation of certain percentage in the initial appointments and reservation of posts means reservation of initial posts which may be adopted in order to expedite and make more effective the reservation of appointments themselves. On this construction the use of the word "posts" appears to be wholly redundant. In our opinion, having regard to the fact that we are construing the relevant expression "reservation of appointments" in a constitutional provision it would be unreasonable to assume that the reservation of appointments would not include both the methods of reservation, namely, reservation of appointments by fixing a certain percentage in that behalf as well as reservation of certain initial posts in order to make the reservation of appointments more effective. That being so, this alternative argument which confines the word "posts" to initial posts seems to us to be entirely unreasonable. On the other hand, under the construction by which the word "posts" includes selection posts the use of the word "posts" is not superfluous but serves a very important purpose. It shows that reservation can be made not only in regard to appointments which are initial appointments but also in regard to selection posts which may fall to be filled by employees after their employment. This construction has the merit of interpreting the words "appointMents" and "posts" in their broad and liberal sense and giving effect to the policy which is obviously the basis of the provisions of article 16(4). Therefore, we are disposed to take the view that the power of reservation which is conferred on the State under article 16(4) can be exercised by the State in a proper case not only by providing for reservation of appointments but also by providing for reservation of selection posts. This construction, in our opinion, would serve to give effect to the intention of the Constitution makers to make adequate safeguard for the advancement of backward classes and to secure for their adequate representation in the services. Our 77 06 conclusion, therefore, is that the High Court was in error in holding that the impugned circulars do not all within article 16(4). It is true that in providing for the reservation of appointments or posts under article 16(4) the State has to take into consideration the claims of the members of the backward classes consistently with the maintenance of the efficiency of administration. It must not be forgotten that the efficiency of administration is of such paramount importance that it would be unwise and impermissible to make any reservation at the cost of efficiency of administration. That undoubtedly is the effect of article 335. Reservation of appointments or posts may theoretically and conceivably mean some impairment of efficiency; but the risk involved in sacrificing efficiency of administration must always be borne in mind when any State sets about making a provision for reservation of appointments or posts. It is also true that the reservation which can be made under article 16(4) is intended merely to give adequate representation to backward communities. It cannot be used for creating monopolies or for unduly or illegitimately disturbing the legitimate interests of other employees. In exercising the powers under article 16(4) the problem of adequate representation of the backward class of citizens must be fairly and objectively considered and an attempt must always be made to strike a reasonable balance between the claims of backward classes and the claims of other employees as well as the important consideration of the efficiency of administration; but, in the present case, as we have already seen ' the challenge to the validity of the impugned circulars is based on the assumption that the said circulars are outside article 16(4) because the posts referred to in the said Article are posts outside the cadre of services and in any case, do not include selection posts. Since, in our opinion, this assumption is not well founded we must hold that the impugned circulars are not unconstitutional. In the result the decision of the High Court under appeal is reversed and the respondent 's application 607 for a writ is dismissed. There would be no order as to costs. WANCHOO, J. I have read the judgment just delivered by my learned brother Gajendragadkar J., and I agree with him as to the scope of article 16(1) of the Constitution. I also agree with him that the scheduled castes and the scheduled tribes are included in the words "backward class of citizens" in article 16(4) and that the word "Posts" in that Article refers to posts in the services and not to posts outside the services. I regret however that I have not been able to persuade myself that article 16(4) permits reservation even in grades within a particular service in case the service has various grades in its cadre, and proceed to give my reasons for the same. Before I construe the words of article 16(4), I may state that I am not unmindful of the fact that article 16(4) is a constitutional provision and that constitutional provisions are not to be interpreted in any narrow or pedantic sense. At the same time it cannot be forgotten that article 16(4) is in the nature of an exception or a proviso to article 16(1), which is a fundamental right providing equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. This aspect of article 16(4) in my opinion inevitably requires that the proviso or the exception should not be interpreted so liberally as to destroy the fundamental right itself to which it is a proviso or exception. The construction therefore of article 16(4) cannot ignore this aspect of the matter. I now read article 16(4): "Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State. " Before I turn to the actual words used in the Article I must refer to what I consider is implicit in that Article. The Article provides for reservation of 608 appointments or posts and it seems tome obvious that it is implicit in the Article that the reservation of appointments or posts cannot go to the length of reserving all appointments or posts or even to the length of reserving a majority of them. The reason why I say that all appointments or posts cannot be reserved under article 16(4) (though that would be the result if the widest possible interpretation is given to the words used in the Article) is that if all appointments or posts could be reserved under article 16(4) it would mean complete destruction of the fundamental right guaranteed under article 16(1). It could not be the intention of the Constitution makers that the proviso or exception in article 16(4) should be so used as to destroy completely the fundamental right enshrined in article 16(1). Nor do I think that it is permissible under article 16(4) to reserve a majority of appointments or posts, for that again, in my opinion, though it may not completely destroy the fundamental right guaranteed under article 16(1) will certainly make it practically illusory. Again it could not be the intention of the Constitution makers that article 16(4) should be so interpreted as to make the fundamental right guaranteed under article 16(1) illusory. I may in this connection refer to article 335, which occurs in Part XVI dealing with Special Provisions relating to certain Classes, which reinforces what I have said above. That Article provides that "the claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State." Now the scheduled tribes and the scheduled castes are included in the words "backward class of citizens" used in article 16(4). Therefore in considering the claims of, at any rate, a part of, those included in article 16(4) (and I presume the same will apply to the whole) the maintenance of efficiency of administration must be kept in mind, for the reservation provided in article 16(4) is to meet the claims of the members of the 609 scheduled castes and the scheduled tribes. Reservation, therefore, of all appointments or posts or even a majority of them is certain to result in the impairment of efficiency of administration and therefore what I consider as implicit in article 16(4) is borne out also by the provision in article 335. It is in this background that the interpretation of article 16(4) falls to be considered. Turning now to the words in article 16(4), it appears to me that the key words in that Article are "not adequately represented in the services under the State." Obviously, reservation can be made under this Article only if the State comes to the conclusion that any backward class of citizens is not adequately represented in the services under it. If, for example, the State is of opinion that backward classes are adequately represented in the services it can make no reservation under article 16(4). What then is the meaning of these key words in this Article? What these words require is that reservation may be made in order to make the representation of any backward class of citizens adequate in the services. Does the word "adequate" imply only numerical representation in the services or does it imply something more than that? The three meanings of the word "adequate" given in the Shorter Oxford English Dictionary are (i) equal in magnitude and extent; (ii) commensurate in fitness, sufficient, suitable; and (iii) fully representing (logic). It seems to me that it is the second meaning (namely, sufficient) which properly applies to the words "adequately represented" as used in this Article. "Sufficient" has two meanings: (i) Sufficing, adequate, esp. in amount or number to the need, (ii) enough, adequate quantity. Therefore, when article 16(4) says that reservation may be made in order that any backward class of citizens may be adequately represented in the services it means that reservation may be made in order to make the number of any backward class sufficient in the services under the State. These words do not in my opinion convey any idea of quality and can only mean sufficient quantitative representation in the services under the State. If 610 the intention of the Constitution makers was that there may also be reservation in various grades in a particular service where there are grades in the ser vice, I should have expected different words being used in article 16(4) to convey that meaning. These key words used in this Article further convey the idea of representation in the services as a whole, for there are no words which suggest that the service should be broken up in case there are grades in it for the purposes of adequate representation. The conclusion therefore at which I arrive is that these key words convey the idea of adequate numerical representation for any backward class of citizens in a particular service as a whole and it is for this purpose alone that reservation can be made of appointments or posts in the services. This brings me to the question as to bow the reservation is to be made. article 16(4) tells us that it may be made either by reserving appointments to the services or reserving posts in the services. Appointments in my opinion clearly mean the initial appointments to a service, for a person is appointed only once in a service and thereafter there is no further appointment. Therefore, when the Article speaks of reservation of appointments it means reservation of a per centage of initial appointments to the service. Posts refer to the total number of posts in the service and when reservation is by reference to posts it means reservation of a certain percentage of posts out of the total number of posts in the service. The reason why these two methods are mentioned in this Article is also to my mind plain. The method of reservation of appointments would mean that the goal of adequate representation may be reached in a long time. Therefore, in order that the goal. may be reached in a comparatively shorter period of time, the Article also provides for the method of reservation of posts. This will be clear from an example which I may give. Suppose there are 1,000 posts in a particular service and the backward classes have no representation at all in that service. The State considers it necessary that they should have adequate representation in that 611 service. Suppose also that the annual appointments to be made to the service in order to keep it at full strength is thirty. Now the State if it chooses the method of reservation of appointments will reserve a percentage of appointments each year for backward classes. Now suppose that percentage is fixed at ten per century. In order therefore to reach the ten per centum of the total number of posts in the service by the method of reservation of appointments, the period taken would be roughly 34 years. This period may be considered too long and therefore the State may decide to adopt the other way, i.e., the reserva tion of posts; and suppose it is decided to reserve ten per centum of the posts, i.e., 100 in all. It will then be open to the State having reserved 100 posts in this particular service for backward classes to say that till these 100 posts are filled up by backward classes all appointments will go to them provided the minimum qualifications that may be prescribed are fulfilled. Suppose further that it is possible to get annually the requisite number of qualified members of backward classes equal to the annual appointments, the representation of the backward classes will be made adequate in about four years. Once the representation is adequate there will be no power left for making further reservation. Thus by the method of reserva tion of appointments the representation is made adequate in a long period of time while by the method of reserving posts the representation is made adequate in a much shorter period. That seems to be the reason why the Article speaks of reservation of appointments as well as of posts. It is however said that this construction of article 16(4) makes the use of the word "posts" therein superfluous, and that the same result of making the representation adequate quickly could have been achieved if the word "appointments" only had been used therein. I am of opinion that this is not so and the use of the word "appointments" only in article 16(4) would not have made it possible for the State to make the representation of backward classes adequate in a short space of time. In the example I have given the 612 representation of backward classes was made adequate in four years by the method of reservation of posts; it would however not have been possible to make the representation adequate in this hypothetical case in such a short time if the Article only provided for reservation of appointments. I have already said that it is implicit in the Article that reservation cannot be of all appointments or even of a majority of them, for that would completely destroy the fundamental right enshrined in article 16(1) to which article 16(4) is in the nature of a proviso or an exception or at any rate make it practically illusory. Therefore, it would not be open to the State to reserve all or even a majority of the appointments for backward classes, if the word "appointments" only had been used in article 16(4). Even if a larger percentage than ten per centum were reserved for backward classes in the matter of appointments in the hypothetical case given by me it would not be possible to reach the total of 100 posts for the backward classes in the service in less than twice or thrice the time taken by the method of reservation of posts, for the State could not reserve all or even the majority of appointments in any particular year, in view of what is implicit in article 16(4), if the word " a appointments" only had been there. It seems to me therefore that the use of the word "posts" in that Article was with a purpose, namely, that by the method of reservation of posts the inadequate representation may be made adequate within a short space of time and the objection that could be raised to the reservation of all appointments, if only the word "appointments" had been used in the Article, would no longer be available. It cannot therefore be said that on the interpretation I have placed on article 16(4) the use of the word "posts" therein becomes superfluous. I have already said that if the intention was not only to make reservation in the service as a whole whether by the method of reserving appointments or by the method of reserving posts but also to include reservation in various grades in which a service may be divided, the words of article 16(4) would have been different. I may in this connection refer to article 335 613 again, which lays down that the claims of the scheduled castes and the scheduled tribes (which are part of backward classes of citizens) shall be considered So,. , consistently with the maintenance of efficiency of administration. It seems to me that reservation of posts in various grades in the same service is bound to result, for obvious reasons, in deterioration in the efficiency of administration; and reading article 335 along with article 16(4) which to my mind is permissible on the principle of harmonious construction (see Pandit M. section M. Sharma vs Shri Sri Krishna Sinha (1)), it could not be the intention of the Constitution makers that reservation in article 16(4), for at any rate a part of those comprised therein, should result in the impairment of the efficiency of administration. It also seems to me equally obvious that what applies to a part of those comprised in the words "any backward class of citizens" also applies to the whole. Therefore, in the absence of clear words in article 16(4) which would compel one to hold that reservation was meant to apply not only to the service taken as a whole but also to various grades in which the service might be divided, I feel that an interpretation should not be given which would result in the impairment of efficiency of administration, which is jealously safeguarded even when considering the claims of the scheduled castes and the scheduled tribes. I am therefore of opinion that giving the words used in article 16(4) as liberal an interpretation as is possible without destroying or making illusory the fundamental right guaranteed in article 16(1) to which article 16(4) is in the nature of an exception or a proviso, article 16(4) can only mean that the State has the power thereunder to reserve numerically a certain percentage of appointments or posts in the manner I have indicated above and it has no power to split the service into various grades which might exist in it and make reservation in each grade because of the use of the word "posts" therein. I would therefore dismiss the appeal but for different reasons. (1) , 859 60 78 614 AYYANGAR, J. I regret that I cannot share the view of my learned brethren expressed by Gajendragadkar, J. that the appeal should be allowed and I agree with Wanchoo, J. that the appeal should be dismissed and the order of the High Court maintained. The facts of the case have been set out in great detail in the judgments already delivered and it is unnecessary to repeat them. Mr. Chatterji when he opened the appeal appeared to claim that the scope and content of article 16(1) and of sub article (4) thereof were identical and that if article 16(1) guaranteed by the use of the wide expression "matters relating to employment", "equality of opportunity" in relation to promotions also, article 16(4) should be construed to have the same width. But this argument however he abandoned at a later stage. The point therefore does not call for any consideration and the judgments now delivered proceed on the basis that the scope of the limitation on the equality of opportunity which is provided in article 16(4) is not co extensive with the freedom guaranteed by article 16(1). The only question therefore is in what respect is article 16(4) narrower than article 16(1). In considering this the rule of construction should be borne in mind that a restriction on a guaranteed freedom should be narrowly construed so as to afford sufficient scope for the freedom guaranteed. The judgment of the learned Judge now under appeal proceeds on the basis that the expression "Posts" in article 16(4) was a reference to what are termed in service parlance 'ex cadre posts ' and not posts in the service. Mr. Chatterji 's submission was that the learned Judge had no basis for importing the nomenclature and the classifications to be found in Part XIV into Part III dealing with fundamental rights. In particular, Mr. Chatterji quarrelled with the statement by the learned Judge that the expression appointments and posts ' occurring in article 16(4) were "virtually terms of art which had to be interpreted and understood in the light of the legislative history of the constitutional enactments that 615 preceded the Constitution, and in consonance with the scheme that underlies the provisions of the Constitution, which have reference to the civil services ' and civil servants in this country." Mr. Chatterji ' further pointed out that the learned Judge went wrong in observing that "The expressions appointments and posts in article 16(4) have really to be read as appointments to services and appointments to posts" on the ground that the words used in article 16 '4) were merely "appointments and posts" and not "appointments to services" etc. , the latter occurring only in Part XIV. It was,, however, common ground that if the learned Judge was right in considering that "appointments" in article 16(4) meant "appointments to services," the notification now impugned should be held to be unconstitutional. Mr. Chatterji did not dispute that when the expressions 'appointments to services and appointments to posts ' occurred in Ch. XIV vide for instance in articles 309, 311, etc. , being phrases borrowed from statutory provisions of the Government of India Act, 1935, the expression 'appointment to a post ' designated an 'ex cadre post '. The submission, however, of learned Counsel was that there was no justification for importing the phraseology employed in Part XIV in article 16(4), notwithstanding that article 16 dealt with equality of opportunity for employment in the services of the State and sub article (4) was concerned with the reservation of appointments in Services under the State. His submission was that article 16(4) had no legislative precedent in the previous constitutional enactments to justify the importation of service rules and service jargon as an aid to its construction. My learned Brothers have acceded to this submission of Mr. Chatterji. With great respect to them I consider that the view of the learned Judge of the High Court is correct. In the first place, the Article being one concerning the right to be employed in the Services of the State, one has necessarily to turn on the relevant provisions in relation to the Services to discover the precise import of the expressions used in relation to the Services. Besides, we are not left in 616 doubt as to the inter connection between article 16 and Part XIV dealing with Services, because article 335 forms, as it were, the link between Part XIV and the provisions for reservation in favour of the backward communities in article 16(4) Betting out as it does the principles that should guide the State in the matter of reservation in the Services which could obviously be only a reference to that provided for by article 16(4). article 335 runs: "The claims of the members of the Scheduled Castes and Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State. " In this Article, at any rate, it cannot be contended, and I did not understand Mr. Chatterji to contend, that 'Posts ' had any reference to 'posts in the services. ' If it were so then in my judgment it would follow that the phraseology employed in this Article which deals with the same subject as that dealt with by article 16(4) throws light on and explains the meaning of the expression 'posts ' in article 16(4). It is only necessary to add that article 320(4) which runs: "Nothing in clause (3) shall require a Public Service Commission to be consulted as respects the manner in which any provision referred to in clause (4) of article 16 may be made or as respects the manner in which effect may be given to the provisions of article 335." to which learned Counsel for the respondent drew our attention indicates, if other indication were necessary., that articles 16(4) and 335 have to be read together and not as if the 'posts ' referred to in article 335 indicated a different idea or connoted a different concept from the same word used in article 16(4). Even if the above view were wrong and the expression 'Posts ' were intended to designate not 'ex cadre posts ' but 'posts in the service, ' I am unable to hold that the appellant derives any advantage. As my learned Brother Wanchoo, J. has pointed out, the crucial words in article 16(4), and which form as it were 617 the key to its interpretation, from which the power of the State to make the reservation stems, are that a class of citizens "is not adequately represented in the Services of the State." The action permitted to be taken to redress this inadequacy is by reservation of appointments and posts. If by the expression 'posts ' are meant 'posts in the service. itself ' I feel unable to attribute to the expression 'posts ' any special significance beyond an appointment to the service. Every appointment in a service must be to "a post" in a service, because there cannot be an appointment in the air but can only be to a "post" in a service. In that sense, in my view, the expression 'post ' would be really redundant unless, of course, as I have said earlier, it meant not posts in a service but ex cadre posts. There is also one other aspect to which I might advert. In some of the top grades there are single posts in the Service. If at any point of time the incumbent is not a member of the backward class, it would certainly be a case of inadequate representation as regards that post which would mean that such posts which are single may be reserved for all time to be held by members of the backward classes, because if at any moment such a person ceases to hold the post there would be inadequate representation in regard to that post. I have drawn attention to this because it pointedly demonstrates that the correct view is that when "inadequacy of representation" is referred to in article 16(4) as justifying a reservation, the only rational and reasonable construction of the words are that it refers to a quantitative deficiency in the representation of the backward classes in the service taken as a whole and not to an inadequate representation at each grade of service or in respect of each post in the service. Besides, even on the footing that "posts" mean posts in the Services, article 16(4) properly construed in the light of article 335 of the Constitution whose inter. action has been discussed in great detail by Wanchoo, J. in the judgment just now pronounced with which entirely agree, contemplates and permits 618 reservation only in respect of appointments to Services at the initial stage and not at each stage even after the appointment has taken place. There is one other matter also which I consider relevant in this context. Under article 16(4) the State is enabled to make provision for the reservation of appointments if in their opinion certain backward classes of citizens are not adequately represented in the Service. The Article therefore contemplates action in relation to and having effect in the future when once the State forms the opinion about the inadequacy of the Service. If an inadequacy exists today, to give retrospective effect to the reservation, as the impugned notification has done, would be to redress an inadequate representation which took place in the past by an order issued today. In my judgment that is not contemplated by the power conferred to reserve which can only mean for the future. As this point however has not been argued I do not desire to rest my judgment on it, but have mentioned it to draw attention to another feature of the notification which deserves consideration. I would therefore dismiss the appeal with costs. By COURT: In accordance with the opinion of the majority the appeal is allowed; the decision of the High Court under appeal is reversed and the respondent 's application for a writ is dismissed. There will be no order as to costs.

This appeal was directed against an order of the Madras High Court issuing a writ of mandamus at the instance of the respondent restraining the appellants from giving effect to two circulars issued by the Railway Board reserving selection posts in Class III of the Railway service in favour of the members of the Scheduled Castes and Scheduled Tribes with retrospective operation. It was urged on behalf of the respondent that the Constitution made a clear distinction between backward classes on the one hand and Scheduled Castes and Scheduled Tribes on the other, and that article 16(4) applied only to reservation of posts at the stage of appointment and not to posts for promotions after appointment and, therefore, the circulars which fell 587 outside the scope of article i6(4) and contravened article i6(1). This was denied by the appellant who pleaded the contrary. The first circular, inter alia, prescribed a quota of reservation for( selection posts and gave retrospective effect to it and the second ' gave guidance and directions as to how the first should be implemented. A subsequent clarification issued by the Board stated that no reversion of staff already promoted to selection posts was contemplated. The High Court held that the expression "backward classes" in article 16(4) included members of the Scheduled Castes and Scheduled Tribes, but that the word ,appointments ' did not denote promotion and the word 'posts ' meant posts outside the civil services and thus the impugned circulars were not covered by article i6(4) and were ultra vires. Held, (per Gajendragadkar, Sarkar, and Das Gupta, JJ.), that the impugned circulars were well within the ambit of article 16(4) Of the Constitution and the appeal must succeed. Articles 16(i) and 16(2) of the Constitution are intended to give effect to article 14 and article 15(1) Of the Constitution and these Articles form parts of the same constitutional code of guarantees and supplement each other. Article 16(i) should, therefore, be construed in a broad and general, and not pedantic and technical way. So construed, "matters relating to employment" cannot mean merely matters prior to the act of appointment nor can 'appointment to any office ' mean merely the initial appointment but must include all matters relating to employment, whether prior or subsequent to the employment, that are either incidental to such employment or form part of its terms and conditions and also include promotion to a selection post. Although Art.16(4), which in substance is an exception to articles 16(1) and 16(2) and should, therefore, be strictly construed, the court cannot in construing it overlook the extreme solicitude shown by the Constitution for the advancement of socially and educationally backward classes of citizens. The scope of article 16(4), though not as extensive as that of article 16(1) and (2), and some of the matters relating to employment such as salary, increment, gratuity, pension and the age of superannuation, must fall outside its non obstante clause, there can be no doubt that it must include appointments and posts in the services. To put a narrower construction on the word 'posts ' would be to defeat the object and the underlying policy ' Article 16(4), therefore, authorises the state to provide for the reservation of appointments as well as selection posts. It is not correct to say that the legislative history of the word 'posts ' shows that it has invariably been used to mean posts outside the services, Neither the relevant provisions of the Constitution nor those of the Constitution Act of 1935 justify such a conclusion. It is the context in which that word is used that must determine its meaning. 588 But in exercising its powers under the Article it should be the duty of the State to harmonise the claims of the backward classes and those of the other employees consistently with the maintenance of an efficient administration as contemplated by article 335 of the Constitution. Per Wanchoo, J. Article 16(4) which is in the nature of an exception or proviso to article 16(1) cannot be allowed to nullify equality of opportunity guaranteed to all citizens by that Article. Article 16(4) implies, as borne out by article 335, that the reservation of appointments or posts for backward classes cannot cover all or even a majority of appointments and posts and the words "not adequately represented", which provide the key to the interpretation of article 16(4), do not convey any idea of quality but mean sufficiency of numerical representation in a particular service, taken not by its grades, but as a whole. Appointments must, therefore, mean initial appointments, and reservation of appointments, the reservation of a percentage of initial appointments. Posts refer to the total number of posts in the service and reservation of posts means reservation of a certain percentage of posts out of total posts in the service. Per Ayyangar, J. Article 16(4), concerned as it is with the right to State employment, has to be read and construed in the light of other provisions relating to services contained in Part XIV of the Constitution and, particularly, article 335. So construed, the word "post" in that Article must mean posts not in the services but posts outside the services. Assuming that was not so, and the word 'posts ' meant posts in the services, the inadequacy of representation sought to be redressed by article 16(4) means quantitative deficiency of representation in a particular service as a whole and not in its grades taken separately, nor in respect of each single post in the service. Read in the light of article 335, article 16(4) can only refer to appointments to the services at the initial stage and not at different stages after the appointment has taken place. Article 16(4) contemplates prospective reservation of appointments and posts and does not authorise retrospective reservation.

The Mysore Administrative Service (Recruitment) Rules, 1957 classified class I posts into two categories: senior scale posts and the junior. scale posts. Two thirds of the junior class I post were filled by promotion from Class II ' ' Officers and the balance of one third by direct recruitment by the Public Services Commission. The Mysore Administrative Service (Cadre) Rules, 1958 fixed the cadre strength at 12 senior scale posts and 1 35 junior scale posts, all of which were permanent. By the Mysore Recruitment of Gazetted Probationers Rules, 1959 the quota for direct recruitment to the Mysore Administrative Service was increased from one third to two thirds for a period of five years consequence of which the quota for promotees had been reduced to one third. Rule 17(b) of the 1957 Recruitment Rules empowered the Government to fill up posts temporarily by promotion against vacancies for direct recruits but such promotees were liable to be reverted after the appointment of direct recruits. In exercise of this power, the eight appellants along with 51 other were promoted to officiate as junior Class I officers in the 59 vacancies (39 for promotees and 20 for direct recruits). In 1962, the Government appointed direct recruits to 20 of the junior Class I posts but to avoid any hardship to the officiating promotees and to avoid audit objections, the Government sanctioned 20 temporary posts to accommodate the probationer for the two year period of their training. At the end of two years, and on completion of probation, in 1964 the Government terminated the probation of the direct recruits, as a result of which they became entitled, under Rule 9 of the Government Service Probation Rules. to be confirmed as full members of the service. They were accordingly confirmed in the 20 substantive vacancies exist in within their quota. The Government, however, did not renew the temporary vacancies after the direct recruits had been confirmed in the permanent vacancies. In January, 1972, a Gradation List was published in which the direct recruits (respondents) were shown as senior to the appellants. The numbers of the respondents in the list were 214 to 236 whereas those of the appellants were 273 to 280. The appellants challenged the seniority of the respondents in writ petitions on the ground mainly that the respondents were recruited only to the 20 temporary posts created and that the appellants and 51 others were appointed to 59 permanent vacancies. The High Court dismissed the writ petitions. Dismissing the appeal to this Court, ^ HELD: The contention of the appellant that the respondents were recruited to temporary vacancies is wrong. Respondents (direct recruits ) were entitled to the vacancies within their quota which had not been filled up and they were senior to the appellants. [821D; 825F] (1) The principles generally followed in working out the quota rule are, (i) Where rules prescribe quota between direct recruits and promotees confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre. (ii) confirmed persons are senior to those who are officiating; (iii) as between person appointed in officiating capacity. seniority is to be counted on the length of continuous service: (iv) direct recruitment is possible only by competitive examination which is the Prescribed procedure under the rules In promotional vacancies the Promotion is either 4 L1127SCI/75 816 by selection or on the principle of seniority cum merit. A promotion could be made in respect of a temporary post or for a specified period, but direct recruitment has generally to be made only in respect of a clear permanent vacancy, either existing or anticipated to raise at or about the period of probation is expected lo be completed; (v) if promotions are made to vacancies in excess of the promotional quota, the promotions may, not be totally illegal but would be irregular. the promotees cannot claim any right to hold promotional posts unless the vacancies fall within their quota. If the promotees occupy any vacancies which are within the quota of direct recruits, when the direct recruitment takes place, the direct recruits will occupy the vacancies within their quota. Promotees who are occupying the vacancies within the quota of direct recruits will either be reverted or they will be absorbed in the vacancies within their quota. in the facts and circumstance of the case and (vi) as long as the quota rule remains neither promotees can be allotted to any of ' the substantive vacancies of the quota of direct recruits nor direct recruits can be allotted to promotional vacancies. and (vii) quotas which are fixed are unalterable according to exigencies of the situation. They can only be altered by fresh determination of quotas under the relevant rules. One group cannot claim the quota fixed for the other group either on the ground that the quotas are not filled up or that because there had been a number in excess of the quota the same should be absorbed depriving the other group of quota. [822H, 823A C; 824 C&G] Bishan Sarup Gupta vs Union of India ; ; section Jaisinghani vs Union of India [1967] 2 S.C.R. 703; A.K. Subraman vs Union of India and Bachan Singh & Anr. vs Union of India & ors. [ ; referred to. (2) The cadre, in the present case, consisted only of permanent posts through out the period. After the rules came into force the promotees were in excess of ' the quota but when in 1962 direct recruitment was made there were 20 direct recruitment vacancies in the quota which were not filled up. The promotees, however, being 2 in excess were not entitled to confirmation against the vacancies within the quota of the direct recruits. The promotees were promoted on officiating basis. On the completion of the period of training of the 20 direct recruits there was no renewal of the temporary posts and, therefore. the temporary posts which were created for the direct recruits during their period of probation could not be taken into account ill working out the quota rule and for adjustment of seniority. In fact, they were created due to certain exigencies and were outside the cadre. [821 D G] (3) The promotees had not been deprived of their appointment and they had not been subjected to any reversion. The implementation of the quota. rule has resulted in the adjustment of seniority consistent with the quota. The confirmations had been issued having regard to the permanent strength of the cadre and the quota. [821H; 822A] (4) It is impossible to hold that the direct recruits were temporary employees outside the permanent cadre of the service. Rule 9 of the Mysore Government Servant 's Probation Rules excludes temporary posts from the cadre. It also provides for confirmation of a probationer as full member of the service in any substantive vacancy in the permanent cadre of such class.[822C D] Bishan Sarup Gupta vs Union of India A.T.R. G. R. Luthra Additional District Judge Delhi vs Lt. Governor Delhi & Ors. ; and A. K. Subman vs Union of India , referred to. (5) There was no quota rule for the period between I November. 1956 and 1 December., 1957. During the period from 2 September, 1957 and 10 September, 1959 (the dates on which the 1957 and 1959 Rules came into force) many persons were promoted from Class II. Since two thirds of the vacancies during this period were promotional vacancies, persons promoted to those vacancies could not be disturbed. However, those promotees who were in excess of the two third vacancies would be pushed down to the vacancies in the subsequent 817 period Again, during the same period direct recruits equal in number to those one third vacancies should be placed next after the promotees placed in the first set of two thirds vacancies. If the direct recruits were in excess of the quota they would be shifted to the subsequent period. [823G H: 824A] (b) During the period II September, 1959, to 26 October, 1964, (direct recruitment vacancies became two third and the promotional vacancies one third, as a result of which the excess promotees during the previous period would be first absorbed in the promotional vacancies and subsequent promotees would hereafter be absorbed. The resulting position was that direct recruitment vacancies between 11 September 1959 and 26 October, 1964, the date of confirmation of the respondents (direct recruits) could not be occupied by the promotees. The fact that direct recruits were confirmed would not, therefore, rob them of their quota which remained unfilled from 2 December, 1957 onwards. The Government, therefore, rightly confirmed the direct recruits and the appellate by adjustment of vacancies within their respective quotas and determined their seniority in accordance with Rule 2(b) of the Seniority Rules. [824 B.D.]

The appellant and the fourth respondent along with others were applicants for a stage carriage permit. The Regional Transport Authority after hearing the applicants granted the permit to the appellant. On appeal by the fourth respondent the Central Road Traffic Board set aside the order of the Regional Transport Authority and granted the permit to the fourth respondent. The appellant moved the State Government in revision but to no effect. He thereafter moved the High Court under article 226 of the Constitution for a writ of certiorari quashing the orders of the Central Road Traffic Board and the State Government. The single judge who heard the matter quashed 228 the said orders and directed the State Transport Appellate Tribunal, which was constituted in place of the Central Road Traffic Board, to dispose of the appeal according to law. On a Letters Patent appeal by the fourth respondent, the Appellate Bench of the High Court set aside the order of the single judge and restored the order of the Central Road Traffic Board. Hence this appeal by special leave. The point for determination in the appeal was whether the order granting the permit to the appellant made by the Regional Transport Authority on the basis of an order issued by the State Government under section 43A of the , as amended by the Motor Vehicles (Madras Amendment) Act, 1948, could be set aside on the basis of another order imposing new restrictions issued thereunder while the appeal was pending before the Central Road Traffic Board and thus involved the question as to whether an order or direction issued by the State Government under section 43A of the Act had the force of law, so as to create a vested right in the appellant. Held (per jafer Imam and Subba Rao, jj.), that section 43A of the , as amended by the Motor Vehicles (Madras Amendment) Act, 1948, properly construed, must be given a restricted meaning and the jurisdiction it conferred on the State Government must be confined to administrative functions. An order or direction made thereunder by the State Government, therefore, could not have the status of law regulating rights of parties and must partake of the character of an administrative order. C. section section Motor Service, Tenkasi vs The State of Madras, I.L.R. and Gopalakrishnan Motor Transport Co., Ltd. vs Secretary, Regional Transport Authority, Krishna District, Vijayawada, , approved. Consequently, in the instant case, the appellant could not be said to have acquired a vested right that was defeated by a new law enforced pending the appeal and the order of the Central Road Traffic Board could not be set aside merely on the ground that it had decided the appeal on the basis of an order issued subsequent to the grant of the permit if such order was otherwise in public interest. Per Sarkar, J. It could hardly be said that the rule that a court hearing an appeal from a decision should not ordinarily take into consideration a law passed subsequent to that decision had application where a quasi judicial tribunal heard an appeal from another such tribunal. Consequently, in the instant case, it could not be said that there was an error of law apparent on the face of the record so as to attract a writ of certiorari and the appeal must fail on that ground. No applicant for a permit under the could have a substantive right to the permit vested in him and 229 the granting or refusal of a permit by the Regional Transport Authority could not operate as res judicata. It was unnecessary for the purpose of the present case to decide what kind of orders could be issued by the State Government under section 43A of the Act, for whatever its nature, administrative or otherwise, if an order under that section entitled a person to its observance, and there was hardly any doubt as to that, it would be a law a mistake of which would justify the issue of a writ of certiorari at his instance. The Mayor of Rochester vs The Queen, (1858) EL. & E.L. ; , referred to. Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam, ; , distinguished.

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 respondent, a constable, convicted under section 10(n) of the but released on probation under section 4 of the , was dismissed from service. He chal lenged his dismissal before the High Court which ordered his reinstatement holding that there was no disqualification for him to continue in service, for section 12 of the has the effect of removing the dis qualification attaching to his conviction. Hence this appeal by the Union of India. Allowing the appeal and setting aside the order of the High Court, this Court. HELD: 1. Section 12 of the only directs that the offender 'shall not suffer dis qualification, if any, attaching to a conviction of an offence under such law '. Such law in the context is the other law providing for disqualification on account of conviction e.g. if a law provides for disqualification of a person for being appointed in any office or for seeking election to any authority or body in view of his conviction, that disqualification by virtue of section 12 stands re moved. But that is not the same thing to state that the person who has been dismissed from service in view of his conviction is entitled to reinstatement upon getting the benefit of probation of good conduct. Section 12 does not preclude the department from taking action for misconduct leading to the offence or to his conviction theron 761 as per law. It was not intended to exonerate the person from departmental punishment. [766B C; 765E] R. Kumaraswami Aiyer vs The Commissioner, Municipal Council Tiruvannarnalai and Anr., ; Embaru (P) vs Chairman Madras Port Trust, Mad; A. Satyanarayana Murthy vs Zonal Manager L.I.C., AIR 1969 A.P. 371; Prern Kumar vs Union of India & Ors., [1971] Lab. & Ind. Cases 823; Om Prakash vs The Director Postal Services & Ors., and Director of Postal Services & Anr. vs Daya Nand, , approved. The Divl. Personnel Officer Southern Railway & Anr. T.R. Challappan, , followed. In criminal trial the conviction is one thing and sentence is another. The departmental punishment for miscon duct is yet a third one. The Court while invoking the provi sions of section 3 or 4 of the Act does not deal with the conviction; it only deals with the sentence which the of fender has to undergo. Instead of sentencing the offender, the Court releases him on probation of good conduct. The conviction, however, remains untouched and the stigma of conviction is not obliterated. In the departmental proceed ings the delinquent could be dismissed or removed or reduced in rank on the ground of conduct which has led to his con viction on a criminal charge. Therefore the question of respondent 's restatement into service does not arise. Howev er, the penalty of dismissal from service is altered into removal from service. [765C D, F; 766E] Tulsi Ram Patel vs Union of India, [1985] Suppl. 2 SCR 131 and Trikha Ram vs V.K. Seth & Anr., , followed.

In connection with the execution of a World Bank Project on an emergency basis, which was required to be completed within a short time, the Public Works Department of the State needed a number of mechanical overseers. Since at that time there was acute shortage of qualified overseers the Department had appointed, as overseers on provisional basis against the sanctioned posts, certain persons who were working in the department as sub overseers even though they had only appeared in the diploma examination in engineering but had not yet passed it. In the meantime, the respondents (petitioners before the High Court) were selected by a Selection Committee constituted in accordance with he procedure laid down in Bihar Public Works Department Code. After they passed the diploma examination the Chief Engineer had in 1964 appointed the appellants (contesting respondents before the High Court) as temporary overseers against the sanctioned posts from the date of publication of results of the diploma examination. In 1973, a gradation list was prepared and some of the appellants were subsequently promoted to higher posts. The respondents in a writ petition filed in the High Court had impugned the order of the Chief Engineer appointing the appellants reproductively as overseers on the ground that while they were appointed after following the procedure prescribed under the rules, the appellants at the time of their appointment as overseers were neither qualified to be appointed as overseers nor were they selected by a Selection Committee constituted under the rules and that in any event the appellants could not be appointed with retrospective effect. Secondly, though the appellants shown as seniors to the respondents by the Chief Engineer 's orders of 1964, the appellants were in fact junior to them and that their later promotion was improper. The High Court held that the Public Works Department Code in accordances with which the respondents were recruited directly contained merely departmental instructions and had not acquitted statutory force and that, therefore, the appointment of the appellants could not be held to be invalid on the ground that the department had no power to make retrospective appointments. It however held that the revised gradation list, showing the appellants above the respondents, on the basis of the 1964 orders was bad in law. Consequently, the High Court quashed that part of the two orders which had fixed the date of publication of the result of diploma examination as the commencement of length of service of temporary overseers. 599 In appeal to this Court is was contended on behalf of the appellants that since the executive power of the State is co extensive with its legislative power, in the absence of a statutory rule framed under Article 309 of the Constitution, it was open to the executive, in exercise of its executive power under article 162 of the Constitution, to make appointment to meet the exigencies of a situation. Dismissing the appeal, ^ HELD: The impugned order of 1964 which purported to appoint the sub overseers as temporary overseers from the date of publication of their result of diploma examination are clearly violative of Articles 14 and 16 of the Constitution inasmuch as the respondents had already been appointed as overhears by a Selection Committee constituted under the rules contained in the public Works Department Code. The 1964 order making the temporary appointments conferred national seniority on the appellants for the period they are actually working as sub overseers in the lower scales outside the cadre of overseers. The impugned orders may not have resulted in reduction of rank but yet they did affect the seniority of the respondents which eventually might result in reducing their chances for promotion. [613 D F] There is no gain saying the fact that the executive power of the State is co extensive with the legislative power and that it is not necessary that there should be a law in existence before the executive is enabled to function and the power of the executive is limited merely to the carrying out of the laws. There is nothing in terms of Article 309 which abridges the powers of the executive to act under Article 162 of the Constitution without a law but yet if there is a statutory rule or an Act on a matter the exercise of its executive power under article 162, ignore or act contrary to that Rule or Act. [609 B C] B.N. Nagarajan & Ors. vs State of Mysore & Ors. ; Ram Jawaya Kapur vs State of Punjab ; Rajendra Narain Singh & Ors. vs State of Bihar & Ors. ; ; S.B. Patwardhan 's case ; and R.N. Nanjundappa vs T. Thimmiah & Anr.[1972] 2 SCR 799, referred to.

By section 68 D(2) of the , "The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in the matter, it they so desire, approve or modify the scheme". The appellant 's objections to the draft scheme in question were heard by the Legal Remembrance, appointed by the State Government to hear such objections, under r. 7(6) of the Rajasthan State Transport Services (Development) Rules, 1960, framed under section 68 1 of the Act. The appellant applied to the said Officer for permission to give evidence in order that he could show that the entire scheme ought to be rejected. His applications were rejected by the Officer holding that the Rules did not provide for recording of evidence and that according to a decision of the Rajasthan High Court, dated November 9, 1960, section 68 D(2) of the Act did not empower him to cancel the draft scheme in its entirety. He, therefore, heard the arguments addressed on behalf of the appellant and approved the scheme. After moving unsuccessfully the Rajasthan High Court, the appellant appealed to this Court by special leave, Held, that the Officer was in error on both the points. Section 68 D(2) of the Act clearly implies that the authority which has to approve or modify the scheme, has also the power, if it thinks proper, to disapprove the scheme altogether. The words " may approve" in the section, properly construed, must also include "may not approve". The use of the word "shall" in r. 7(6) of the Rules instead of the word "may", which is otherwise similar in its terms to section 68 D(2) of the Act,.can make no difference. In hearing objections under section 68 D(2) of the Act, the State Government or its Officers act as a quasi judicial tribunal and regard being to the nature of the objections and the purpose of the hearing thereunder, there can be no doubt that production of evidence, both oral and documentary, is clearly contemplated by the section. 979 Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation, [1959] Supp. 1 S.C.R. 319, referred to. Bat that does not mean that the parties can produce any amount of evidence merely to prolong the proceeding. It is for the State Government or the Officer to decide whether the evidence sought to be adduced is necessary and relevant to the enquiry and, if so, they will have all the powers that a court has of controlling the giving and recording of such evidence. Where a draft scheme is disapproved under section 68 D(2) and thus stands rejected, any fresh scheme that may have to be framed, must be framed according to the procedure prescribed by Ch. IVA of the Act.

The appellant who had agricultural income from his Zamindari was assessed to income tax for the four assessment years, 1944 45, to 1947 48. The income tax authorities did not include in his assessable income, interest received by him on arrears of rent, in view of a decision of the Patna High Court, but subsequently this view of law was reversed by the Privy Council. On August 8, 1948, the Income tax Officer issued notices under section 34of the Indian Income tax Act, 1922, for assessing the escaped income. Before the notices were issued the Income tax Officer had not put the matter before the Commissioner for his approval as the section then did not require it and the assessments were completed on those notices. In the meantime, certain amendments were made to the Indian Income tax Act by Act 48 of 1948, which received the assent of the Governor General on September 8, 1948. The Amending Act substituted a new section in place of section 34, which among other changes, added a proviso to the effect that "the Income tax Officer shall not issue a notice. unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons that it is a fit case for the issue of such notice", and also made it retrospective by providing that the new section "shall be deemed to have come into force on the 30th day of March, 1948". The question was whether the notices issued by the Income tax Officer on August 8, 1948, without the approval of the Commissioner, were rendered void by reason of the operation of the amended section 34. The Commissioner claimed that section 6 of the , saved the assessments as well as the notices. Held, that section 6 of the , was in applicable as the Amending Act of 1948 indicated a different intention within the meaning of that section, inasmuch as the amended section 34 of the Indian Income tax Act, 1922, provided that it shall be deemed to have come into force on March 30, 1948. Lemm vs Mitchell, ; , distinguished, 761 Held, further, that the notices issued by the Income tax Officer on August 8, 1948, and the assessments based on them were invalid. Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd., ; , applied.

Appeal No. 92 of 1961. Appeal by special leave from the judgment and decree dated January 9, 1958, of the Andhra Pradesh High Court in Appeal No. 211 of 1949. K. R. Choudhry, for the appellant. T. V. R. Tatachari, for respondents Nos. 2, 3 and 24 to 27. R. Thiagarajan and P. Ram Reddy, for respondents Nos. 4 to 7 and 17. April 27. The Judgment of the Court was delivered by J. GAJENDRAGADKAR, J. If the appellate decree passed by the High Court makes a variation in the decision of the trial Court under appeal in favour of a party who intends to prefer an appeal against the said appellate decree, can the said decree be said to affirm the decision of the trial court or not under article 133(1) of the Constitution? That is the short question Which arises for our decision in the present appeal. The appellant Tirumalachetti Rajaram filed a suit in forma pauperis in the Court of the Subordinate Judge, Chittoor, for his half share in the properties which once belonged to the joint family consisting of himself and his father and to this suit he impleaded his father and several alienees from him. His case was that the alienations effected by his father as well as the sales held in execution proceedings against his father were not binding on him and so his share in the properties covered by the said alienations was not affected by them. It is on this basis that he claimed his half share in all the said properties. The trial court rejected his contention that the alienations did not bind him, upheld all the alienations and so dismissed his suit. On appeal the High Court of Madras reversed the trial court 's decree in respect of alienations which covered items 2, 10 and 14 in Schedule A as well as item 5 in Schedule B. It held that the alienations in respect of these item,% did not bind the appellant 's share and so a preliminary decree for partition was passed in his favour in respect of the said 455 items. The rest of the decree passed by the trial court was confirmed. The appellant then applied to the High Court for a certificate under article 133(1) of the Constitution. This application was rejected on the ground that the decree sought to be appealed from was one of affirmance and there was no substantial question of law raised by the proposed appeal. In coming to this conclusion the High Court followed an earlier Full Bench decision in Chittam Subba Rao vs Vela Mankanni Chilamayya (1). The appellant then applied for and obtained special leave from this Court, and on his behalf it is urged that the view taken by the Madras High Court in the case of Chittam Subba Rao (1) proceeds on a misconstruction of the relevant clause in article 133(1). That is how the short question which falls to be considered in the present appeal relates to the construction of the said relevant clause in article 133(1). It is common ground that the test of valuation prescribed by article 133(1)(a) is satisfied in this case. Article 133(1) which corresponds to section 110 of the Code of Civil Procedure reads thus: "133(1). An appeal shall lie to the Supreme Court from any judgment, decree or final order in a, civil proceeding of a High Court in the territory of India if the High Court certifies (a) that the amount or value of the subject matter of the dispute in the court of first instance and still in dispute on appeal was and is not less than twenty thousand rupees or such other sum as may be specified in that behalf by Parliament by law; or (b) that the judgment, decree or final order involves directly or indirectly some claim or question respecting property of the like amount or value; or (c) that the case is a fit one for appeal to the Supreme Court; and, where the judgment, decree or final order appealed from affirms the decision of the court immediately below in any case other than a case referred to in sub clause (c), if the High Court further certifies that the appeal involves some substantial question of law." (i) I.L.R.[1953] Mad. i. 456 In the present case we are concerned with the clause "where the judgment, decree or final order appealed from affirms the decision of the court immediately below in any case other than a case referred to in sub. clause (c)". It is common ground that if the appellate a decree of the High Court makes a variation in the decision of the trial court against the intending appellant the appellate decree is not a decree of affirmance but variation, and this position is not affected even if the variation in question is to a very small extent and may be of very minor significance. The decisions of the High Courts, however, show a sharp conflict in regard to the question as to the character of the appellate decree where it makes a variation in favour of the intending appellant. Broadly stated the majority of the High Courts have taken the view that an appellate decree which makes a variation in favour of the intending appellant is a decree of affirmance and it is only the Punjab High Court and the majority decision of the Patna High Court which have taken a contrary view. The decisions of different High Courts bearing on this point show that the learned Judges did not always try so much to construe the terms of the relevant constitutional provision as to reconcile their earlier decisions which disclosed a different approach and a tendency to reach different conclusions. Indeed, on occasions some judgments have expressed the hope that the sharp conflict of judicial opinion resulting from the difference in approach adopted in dealing with the problem can be effectively resolved only when this Court considers the matter and makes its authoritative pronouncement. Thus it would be clear that though this important question lies within a narrow compass it is not free from difficulty. In dealing with this question we think the best course to adopt would be to consider the problem of construction without reference to the previous decisions on the point, and in construing the relevant clause it is obviously necessary to bear in mind that the clause under discussion deals with the constitutional right of the litigant to make an appeal to this Court; and so it would be inappropriate to adopt a 457 technical or pedantic approach in interpreting the material words used in the relevant clause. Reading the clause as a whole and giving the material words their plain grammatical meaning it seems prima facie to show that the test of affirmance prescribed by the clause can best be satisfied if we take the appellate decree in its entirety and enquire whether the said decree affirms the decision of the trial court considered, in its entirety. It is a matter of comparing the appellate decree with the decision of the trial court under appeal. If the appellate decree affirms the decree of the trial court it is a decree of affirmance; if there is a variation made by the appellate decree in the decision of the trial court the appellate decree is not a decree of affirmance and this position would not be affected whether the variation is made in favour of the intending appellant or against him and whether the variation made is minor or major. It is, however, urged that the words "judgment, decree or final order appealed from" denote that part of the judgment, decree or final order in appeal which is intended to be challenged in the proposed appeal to this Court. In other words, the word "decree" it is suggested, refers to the part of the decree under appeal. On this construction a decree has to be split up into different parts and the words "appealed from" have to be treated as words of limitation. The argument in a slightly different form has also been pressed before us. It is suggested that in cases where different causes of action and different claims and reliefs have been combined different decrees are in fact passed though in form there may be one paper on which one decree is drawn; and so it is argued that the decree appealed from must mean the decree under appeal dealing with the subject matter or matter in dispute proposed to be brought to this Court by the intending appellant. For one thing this argument may not be available where there is only one cause of action, and it is quite clear that the word "decree" must have one meaning applicable to all cases. Besides, in our opinion, this construction on which the argument is based is far too technical and artificial and cannot be 458 regarded as reasonable. Normally, in each suit there is one decree, and so it would be inconsistent with the scheme of the Code to divide the decree into several parts by reference to its relation to different claims or subject matters or to treat one single decree as consisting in fact of several decrees. The normal, natural and reasonable construction to place on the first part of the relevant clause is to hold that it refers not merely to that part of the decree which is sought to be challenged in the appeal but the entire decree from which the appeal arises or the decree giving rise to the appeal. On this construction the clause "appealed from" is not a clause of limitation. It is merely a descriptive clause and it describes the decree as one from which the appeal arises. If that be so, in deter mining the character of the decree it would be necessary to take the decree as a whole and enquire whether it is a decree of affirmance or not. In support of the argument that there can be more decrees than one in a suit which combines different causes of action and different claims made against different defendants in respect of different subject matters Mr. Tatachari, for the respondent, has relied on the decision of the Calcutta High Court in Dhirendra Nath Sarkar vs Nischintapore Company (1). In that case the Court was dealing with a decree which was made in favour of the plaintiffs for the recovery of arrears of rent in respect of three tenancies held by three different tenants and the question raised was one of limitation under article 182, cl. (5) of the Limitation Act (IX of 1908). The court held that although the decree was passed in one suit and was set out on one sheet of paper the position was precisely the same as if the plaintiffs had brought three distinct suits against the defendants and had obtained three different decrees. It appears that the decree holder 's claim for execution was in time in respect of one of the tenants but not in respect of the two others; but he urged that since the decree was one it was not open to the two other tenants to plead limitation by splitting up the decree into three different decrees and by seeking to 459 invoke the provisions of article 182, cl. (5) severally as against each one of the said decrees. This argument was rejected and it was held that under explanation (1) to article 182 the decree holder 's application for execution was barred by limitation in respect of the said two tenancies. It would thus be clear that the discussion about the character of the decree and the conclusion that though in form there was one decree in fact and law the decrees were three are based on the provisions of explanation (1) and so must be confined to the said explanation. Explanation (1) provides that where the decree or order has been passed severally in favour of more persons than one distinguishing portions of the subject matter as payable or deliverable to each, the application mentioned in cl. (5) of article 182 shall take effect in favour only of such of the said persons or their representatives as it may be made by. But where the decree or order has been passed jointly in favour of more persons than one, such application, if made by any one or more of them, or by his or their representative, shall take effect in favour of them all. The facts in the case of Dhirendra Nath Sarkar (1) were converse of the case contemplated by the first part of explanation (1), and so the principle laid down by the said part of explanation (1) was applied and it was held that in respect of the two tenancies the decree holder 's application for execution was barred by article 182, cl. It would be idle to contend that considerations which are relevant and material under explanation (1) are of such a general application as to support the plea that in a suit where different causes of action are included and different reliefs are claimed against different individuals several decrees are passed and not one. There are cases in which more than one decree can be and are passed under the Code of Civil Procedure, for instance cases where preliminary decrees are passed, but the normal rule is one decree is passed in one suit and so we are not prepared to accede to the argument that the first part of the relevant clause of article 133(1) should be read on the basis that every decree passed in a suit should be held to be a (1) ; 22 C.W.N. 192. 460 composite decree made up of several decrees in respect of several claims or reliefs and that the decree appealed from is only that particular decree which is proposed to be brought in appeal to this Court. The next question to consider is: what is the denotation of the word "decision" used in the said clause. The argument for the respondent is that the word "decision" does not mean the whole of the decision but the decision on that part of the controversy between the parties which is brought to this Court in appeal. In support of the argument that the decision does not mean the entire decision of the trial court reliance is placed on the provisions of O. 20, rr. 4 and 5. Rule 4 of O. 20 deals with the judgments of Small Cause Courts and judgments of other Courts, and it provides that the judgments falling under the first clause need not contain more than the points for determination and decision thereon, whereas the judgments falling under the latter class should contain a concise statement of the case, the points for determination, the decision thereon and the reasons for such decision. There is no doubt that the decision in the context means the decision on the points for determination. That of course is the meaning of the word "decision", but whether or not the word "decision" means the decision on one point or the decision of the whole suit comprising of all the points in dispute between the parties must inevitably depend upon the context, and the context is plainly inconsistent with the argument that the decision should mean the decision on a specific point. If the word "decree" in the first part of the relevant clause means not a part of the decree but the whole of the decree then it would be reasonable to hold that the word "decision" must likewise mean the entire decision of the trial court and not a part of it. Then it is urged that O. 41, r. 33 seems to contemplate that there can be an appeal against a part only of the decree and so the word "decree" in the first part of the relevant clause may well mean a part of the decree under appeal. It is true that under the interpretation clause in section 2 the word "decree" means, 461 inter alia, the formal expression of an adjudication, which conclusively determines the rights of parties with regard to all or any of the matters in controversy in suit, and it is also true that a party aggrieved by a decree may appeal only against a part of it and is not bound to file an appeal against the whole of the decree; but we do not see how this can assist the respondent in contending that the word "decree" must,, mean a part of the decree when the context clearly speaks to the contrary. Therefore, we are inclined to hold that both "the decree" and "the decision" referred to in the clause mean the decree and the decision respectively taken as a whole and not in part. The question as to the meaning of the word "decision" in the corresponding provision of the Code of 1882 (section 596) was considered by the Privy Council in Rajah Tasadduq Rasul Khan vs Manik Chand (1). The question which arose for the decision of the Privy Council was whether the appellate decree in that case was one of affirmance or not. Tile appellate decree had confirmed the trial court 's decision though on different grounds, and so it was urged that the appellate decree was not one of affirmance. In rejecting this argument the Privy Council stated that "the natural, obvious and prima facie meaning of the word "decision" is decision of the suit by the Court, and that meaning should be given to it in the section" (section 596). The Privy Council examined the definition of the word "judgment" in the Code of 1882 and came to the conclusion that the word "decision" meant the decision of the suit by the trial court and not the grounds stated in support of the said decision; in the result it was held that the appellate decree which confirmed the decision of the trial court though on different grounds was in law a decree of affirmance. It would thus be seen that this decision undoubtedly supports the conclusion that the word "decision" in article 133(1) should mean not a part of the decision or the grounds given for it but the decision of the suit as a whole; and if that be so, the clause could be harmoniously construed to mean that in determining the character of the appellate decree we have to look at the appellate decree as (1) [1902] L.R. 30 I.A. 35. 162 a whole, compare it with the decision of the trial court as a whole and decide whether the appellate decree is one of affirmance or not. In this enquiry the nature of the variation made whether it is in favour of the intending appellant or otherwise would not be relevant. It is then argued that this construction is inconsistent with the provision made by article 133(1)(a) in regard to the value of the subject matter of the dispute. There is no doubt that in applying the test of the value of the subject matter of the dispute what we have to consider is the dispute in the Court of First Instance and the dispute on appeal. In other words, the value of the subject matter has to be determined by reference to the subject matter which is actually the subject matter of the proposed appeal to this Court. The argument is that if for determining the value of the subject matter it is necessary to consider only that part of the decree and subject matter which are actually proposed to be brought to this Court in appeal, in interpreting the word 'decree" in the relevant clause a similar approach should be adopted and only that part of the decree should be considered which is proposed to be brought to this Court in appeal. We do not see the materiality of this consideration nor even its relevance. The test prescribed by article 133(1)(a) is an independent additional test and its effect has to be judged by interpreting the words used by the relevant clause. If the said clause refers to the amount of the value of the subject matter still in dispute on appeal quite plainly we must take into account only the subject matter in dispute in appeal and nothing more. The words used in this connection are clear and unambiguous but they cannot reasonably control the meaning of the word "decree" in the relevant clause which provides for an additional and an independent condition. Therefore, in our opinion, the argument based on the construction of article 133(1)(a) is not well founded. The same comment falls to be made in regard to the other argument based on the provision which requires the High Court further to certify that the 463 appeal involves some substantial question of law. It is urged that this requirement has to be satisfied by reference to that portion of the decree which is proposed to be brought to this Court under appeal and that would suggest that even the test of affirmance should be applied by reference to the part of the decree under appeal and not by reference to the whole of the appellate decree. Here again, the words used are that the appeal involves some substantial question of law which must necessarily mean the appeal as it is proposed to be brought and that must refer only to the decree brought under appeal. Therefore, even this argument does not afford material assistance in construing the relevant clause with which we are concerned. There is yet another argument which must be examined, It is contended that the adoption of the literal construction of the relevant clause relating to affirmance would lead to anamolous and unreasonable consequences. It is pointed out that if the decision of the trial court is wholly confirmed the intending appellant would not be entitled to come to this Court as a matter of right unless there is a substantial question of law. On the literal construction, however, he would be entitled to come to this Court even if there is a very minor and slight modification in the decision of the trial court and that too in his favour. Prima facie it may no doubt seem somewhat unreasonable that even a slight modification made in the decision should give the intending appellant the right to come to this Court; but, on the other hand, even this position cannot be regarded as unreasonable because it would really be found to be consistent with the principle underlying the doctrine of affirmance. What is the basic idea underlying the relevant provision? If two courts which have judged the dispute between the parties and applied their independent minds to it agree in their conclusions the appellate decision is one of affirmance and unless there is a substantial question of law no further right to appeal should lie. That is the basis of the provision. When, however, a variation is made by the appellate court it tends to 464 show that the two courts have not entirely agreed and so it is not a case of affirmance. The extent of the difference does not matter so much as the fact that there is a difference in the result, and go in prescribing the doctrine of affirmance the Constitution makers may well have intended that the said doctrine should be confined only to cases where there is a complete affirmance and not to cases of partial affirmance. We do not think that the consequence of the view we are inclined to take can be reasonably charac terised as opposed to common sense. Besides, if on a fair and reasonable construction the words used in the relevant clause lead to the conclusion which we are inclined to draw it would be unreasonable to limit the scope of the said words on hypothetical considerations of unreasonable consequences. As we have already observed we are dealing with a constitutional right conferred on litigants, and, unless the limitation contended for by the respondent can be said to flow reasonably from the words used in the relevant clause, it would not be open to us to adopt that limited construction merely on such hypothetical considerations. Then it is urged that the majority of the High Courts in India have taken the same view which the Madras High Court has taken in the present case and so we should be slow to interfere with the majority decision. In support of this conclusion the principle of stare decisis is pressed into service. We are not impressed by this argument. It is perfectly true that in construing the clause we would carefully have to bear in mind the views expressed by the majority of our High Courts, but as we have already indicated there is a sharp conflict of opinion on this point and it can be stated generally that in almost all the High. Courts different views have been expressed at one time or the other. Besides, it would be singularly inappropriate to invoke the doctrine of stare decisis in a case of this kind where High Courts have differed and the matter has been brought to this Court for resolving the said difference of opinion. In such a case it is open to us, and indeed it is our duty, to construe the relevant clause and decide which of the two 465 conflicting views should hereafter prevail. Therefore the argument based on the practice prevailing in the majority of the High Courts in this country is not of much assistance. At this stage we may deal with another argument urged by Mr. Rama Reddy who appeared for some of the respondents. He contends that in construing the relevant clause we may have regard to the fact that, the Constitution intended to restrict the right of the ' appellant to come to this Court and not to widen it. In support of this argument be relies on the fact that the value of the subject matter prescribed by article 133(1)(a) is now made Rs. 20,000 whereas formerly it was Rs. 10,000, and he also relies on the provisions of article 133(3) under which no appeal shall lie to the Supreme Court from the judgment, decree or final order of one judge of a High Court. In our opinion, there is no substance in this contention. It is well known that in raising the amount of the value of the subject matter article 133 (1) (a) has merely partially recognised the fall in the price of the rupee and so it cannot be read as showing the intention to restrict the appellant 's right in any manner. In regard to the provisions of article 133(3) there is no material change made by the Constitution since the position under section III of the Code of 1908 as well as section 597 of the Code of 1882 was substantially the same. We would accordingly hold that in determining the question as to whether the appellate decree passed by the High Court affirmed the decision of the trial court the appellate decree must be considered as a whole in relation to the decision of the trial court similarly considered as a whole. That is the proper approach in applying the test of affirmance. If there is a variation made in the appellate decree in the decision of the trial court it is not a decree of affirmance and this is not affected either by the extent of the variation made or by the fact that the variation is made in favour of the intending appellant and not against him. In this connection it would be interesting to refer to three decisions which afford judicial background for 466 the controversy that has been agitated in the several High Courts for so many years past. In Raja Sree Nath Roy Bahadur vs The Secretary of State for India in Council (1) a Full Bench of the Calcutta High Court had occasion to consider the effect of the relevant provisions of section 596 of the Code of 1882. In a land acquisition case the applicant had claimed a sum of Rs. 77,000 odd as the value of his land. The Collector had assessed the value at Rs. 28,287. On a reference the judge upheld the Collector 's award. The applicant then moved the High Court by appeal and in his appeal he valued his claim at Rs. 49,000. The High Court partially allowed the appeal and granted him an additional sum of Rs. 7,000. The applicant then applied for leave to appeal to the Privy Council and urged that the decree passed by the High Court on appeal was not a decree of affirmance and since the test of the value of the subject matter was satisfied be was entitled to go to the Privy Council. This application was rejected by the High Court. "The appellant desires", observed Maclean, C. J., "to appeal only against the decision of this Court so far as it affirmed the decision of the court below, nothing else. This seems to be, in substance, as far as the subject of the appeal goes, a decree of affirmance". The learned Chief Justice also added that whilst the decree of the High Court modified in the petitioner 's favour the original decree, as regards the subject matter of the proposed appeal to His Majesty in Council it most certainly affirmed the decree of the first court. This judgment was pronounced in 1904; and the construction which it put on the relevant clause of section 596 is in conformity with the views for which the respondents contend in the present appeal. The same point was raised before the Privy Council in Annapurnabai vs Ruprao (2). In that case the plaintiff who claimed to have been adopted by the senior widow of Shanker Rao sued the junior widow of Shanker Rao (defendant 1) as well as the person who claimed to have been adopted by her (defendant 2) for possession of half the property of Shanker Rao. (1) (2) (1924) L.R. 51 I.A. 319. 467 Both the defendants denied the plaintiff 's adoption land set up the adoption of defendant 2. The trial court held that the plaintiff 's adoption had been proved and that the alleged adoption of defendant 2 had not been proved. It, however, found that the plaintiff was bound to provide maintenance for defendant I at the rate of Rs. 800 per annum. Defendant I had in that behalf claimed Rs., 3,000 per annum for( her maintenance out of the estate. Upon appeal by the defendants to the Court of the Judicial Commissioner the trial court 's decree was modified by increasing the maintenance from Rs. 800 to Rs. 1,200 per annum. In other respects the decree was affirmed. The defendants then applied to the Court of the Judicial Commissioner for leave to appeal to the Privy Council. Their argument that they were entitled to appeal to the Privy Council was rejected on the ground that the appellate decree was one of affirmance, and that a small change made by it in favour of the defendants did not affect that position. It was this decision which was challenged before the Privy Council. Lord Dunedin, who delivered a very short judgment on behalf of the Board, stated that in the opinion of their Lordships the contention of the petitioners ' coun sel as to the effect of section 110 of the Code of Civil Proce dure is correct, and the petitioners had a right of appeal. In other words, this decision clearly shows that though the trial court 's decision had been varied to some extent in favour of the intending appellants it was held that the appellate decree was not one of affirmance and so the intending appellants were entitled to obtain leave to appeal to the Privy Council. It does appear that the appellants in that case confined their appeal only to the amount of maintenance having regard to the concurrent findings made by the courts below in respect of other matters; and so the special leave granted to them was limited to the question of the said maintenance allowance. That, however, had nothing to do with the decision of the Privy Council as to the character of the appellate decree. The appellants did not want to agitate the other points and asked for permission to limit their appeal only to 468 the question of their maintenance; that is about all. Thus it is clear that the decision of the Privy Council in that case construed the relevant provisions of section 110 literally and held that if the appellate decree makes any variation in the decision of the trial court may be in favour of the intending appellant it is not a decree of affirmance and the intending appellant was entitled to go to the Privy Council in appeal. It is true that the judgment does not purport to discuss the question of construction but the conclusion has been emphatically recorded and there can be no doubt that conclusion proceeds on the literal construction of section 110 of the Code. This judgment was pronounced in 1924. Three years later the same question arose before the Calcutta High Court in Narendra Lal Das Chaudhury vs Gopendra Lal Das Chaudhury (1). In that case the intending appellant had brought a suit for partition of the joint family property valued at Rs. 10,00,000. A preliminary decree was passed against which an appeal was brought to the High Court. It appeared that the first question which the plaintiff appellant raised was that the preliminary decree had given him a smaller share in the property than what he was entitled to get. This contention was upheld by the High Court and in consequence his share was increased. In that respect the High Court reversed the finding of the trial Court. On other points raised by the plaintiff appellant the High Court confirmed the judgment of the trial court. It was against this appellate decision that an application was made for leave to go to the Privy Council; and it was urged that as a result of the decision of the Privy Council in Annapurnabai 's case (2) the appellant was entitled to obtain leave; and that squarely raised the question about the effect of the decision in Annapurnabai 's case (2). Chief Justice Rankin took the view that the only effect of the said decision was to reverse the conclusion of the Calcutta High Court in Raja Sree Nath Roy 's case (3) and nothing more. "It appears to me", observed the learned Chief (1) A.I.R. 1927 Cal. 543. (2) (1924) L.R. 51 I.A. 319. (3) 469 Justice, "that the case of Annapurnabai (1) is not in itself a sufficient authority to justify this Court in abandoning the principle which it has with other High Courts acted upon; that is to say, I do not think that it shows that it is an erroneous view that we have to look to the substance and see what is the subject matter of the appeal to His Majesty in Council". The learned Judge then proceeded to express his doubt as, to whether "in the end even that principle would be found to be in accordance with the construction to be put upon section 110", but he added, "this Court and other High Courts have for many years acted upon that principle and I am not prepared to accept the case of Annapurnabai a,; going further than this that where there is a dispute as to the amount of decree or as to the amount of damages the reasoning of Raja Sree Nath Roy 's case (2) is not a correct application of that principle". "We may take it", said the learned Chief Justice, "that where the amount is a question in dispute the fact that the courts differ and that the higher court differs in favour of the applicant does not mean that the decision is one of affirmance, but I am not, in a case of this kind, prepared to say that because on a totally different point, namely, a point about the share, the applicant has succeeded and succeeded altogether so that he has no further grievance in that matter, he can without showing a substantial question of law have a right to litigate upon other points upon which both the courts have been in agreement". It is the interpretation thus put by Chief Justice Rankin on the decision in the case of Annapurnabai (1) that subsequently became the starting point of elaborate discussion in which legal subtlety was pressed into service and distinction was made between action arising on a single cause of action and giving rise to a single claim and actions in which different causes of actions were combined against different persons and different reliefs were claimed. As we have just indicated, the learned Chief Justice undoubtedly entertained a doubt as to the correctness of the test of substance which was then applied by some of the High (1) (1924) L.R. 51 I.A. 319 (2) 60 417O Courts in interpreting the provisions of section 110 of the Code. One feels tempted to observe with respect that if the learned Chief Justice had examined the question of construction afresh without reference to the prevailing practice or the decisions already pronounced by Indian High Courts he might have adopted the literal construction of section 110 and in that event perhaps all controversies that subsequently arose may have 'been avoided. It now remains to indicate very briefly the position taken by different High Courts in this controversy. In Chittam Subba Rao vs Vela Mankanni Chelamayya (1) a Full Bench of the Madras High Court was constituted to deal with this point because reported decisions of the said Court showed a difference of approach and a conflict of opinion. Rajamannar, C.J., who delivered the judgment of the Full Bench, carefully examined the previous decisions of the Court and evolved three principles to govern the decision of the point. These principles have been stated in the judgment thus (i) If the judgment or decree of the High Court varies the decision of the lower court in respect of a matter in controversy in the proposed appeal to the Privy Council, then there is a right of appeal not only to the person against whom the variation has been made, but even to the party in whose favour the variation has been made. But it is necessary that the matter in respect of which there has been a variation should be the subject matter of the proposed appeal to the Privy Council. (ii) A matter in controversy cannot be split up or analysed or dissected into component parts or arbitrary divisions. The true test will be to determine the nature of the dispute or controversy. (iii) If the matter in respect of which there has been a variation is not the subject matter of the proposed appeal, then such variation would not confer a right of appeal as regards matters unconnected with the matter in respect of which there has been a variation. Ex hypothesi, this will be the case when the variation has been completely in favour of the applicant. (1) I.L.R. [1953] mad. 1. 471 Having evolved these principles the learned Chief justice observed that every one of the decisions cited before the Court can be justified by an application of the principles thus set up. It is evident from the judgment that the task which the Full Bench attempted to achieve was one of reconciling the different expressions of opinion found in the reported decisions of the Court. In doing so more attention has naturally been paid to the said decisions and the reasons on which they were based than to the words used in article 133 itself. In regard to the said Article the lear ned Chief Justice has observed that courts cannot add to the language actually employed and thus give an unwarranted extension to the scope of the statutory provision. "At the same time, I do not think", observed the learned Chief Justice, "that the letter of the statutory provisions should compel a Court to an unreasonable construction if it is possible to take a reasonable view by taking the letter of the provision along with its substance". Assuming that this principle can be legitimately invoked in construing a con stitutional right of making an appeal it must be borne in mind that hypothetical considerations about unreasonable consequences would not justify the imposition of a strained meaning on the relevant words used in the Article. If in discussing the problem we first begin with the enquiry as to what would be reasonable, and having reached a conclusion in that behalf on a priori consideration if we seek to import that conclusion on the words used in article 133 that would not be a proper approach to adopt. The proper approach to adopt would be to take the material words as they occur in article 133 and construe them fairly and reasonably. We have already indicated our conclusion on a fair and reasonable construction of the clause. The Madras decision no doubt attempted to find principles on which its previous decisions could be explained and has in fact evolved three such principles. Even if these principles are assumed to be logical and consistent with each other and even if they are assumed to explain the earlier decisions of the Court it does not follow that the said principles can 472 be legitimately assimilated within the scope of the Article because it seems to us that unless words are added in the Article and the meaning of the words used is unduly strained it would be difficult to justify the said principles as flowing from the said Article. This Madras view has been applied by the Andhra High Court in V. Lakshminarayana Sastry vs V. Sitaramma Sastry (1). The majority 'judgment of the Allahabad High Court in Rani Fateh Kunwar vs Raja Durbijai Singh( ') which in fact preceded the Madras decision has adopted substantially the same approach and has come to the same conclusion. Mr. Justice Bhargava, who agreed with the majority decision, has, however, placed his conclusions on grounds similar to those which we have adopted. To the same effect are the decisions of the Assam, Bombay, Mysore and Nagpur High Courts (vide: G. C. Bardoloi vs Collector of Kamrup (3), Kapurji Magniram vs Pannaji Debichand (4), Govind Dhondu Kulkarni vs Vishnu Keshav Kulkarni(5) Kanakarathnammal vs V. section Loganatha Mudaliar(6) Ramchandra vs Ganpati (7). The Calcutta High Court has generally adopted the view taken by vs Rankin, C. J., but as its decision in Probodh Chandra Roy vs Hara Hari Roy (8), shows the practice in the Calcutta High Court appears to be to treat the point as one of doubt and as Chief Justice Chakravarti has observed "where there is a doubt I would resolve it by deciding in favour of the applicant and granting him leave". On the other hand, the Full Bench decision of the Punjab High Court in Union of India vs Kanahaya Lal Sham Lal (9) and the majority decision of the Patna High Court in Kanak Sunder vs Ram Lakhan have taken the view which we have adopted. Before we part with this appeal we would like to make it clear that if an appellate decree confirms the decision of the trial court but merely makes a variation in regard to the order as to costs such a variation (1) A.I.R. 1959 Andh. (2) I.L.R. [1952] 2 All. (3) A.I.R. 1952 Ass. (4) 31 B.L.R. 619, S.C.; A.I.R. 1929 Bom. (5) I.L.R. (6) A.I.R. 1959 MYS. (7) I.L.R. (8) A.I.R. 1954 Cal. (9) I.L.R. [1957] Punj. (10) I.L.R, [1956] 35 Pat. 499. 473 would not affect the character of the decree which would in law amount to a decree of affirmance, whether the variation as to costs is made in favour of one party or the other. The position with regard to interest, however, is different; for instance, in regard to a claim for interest before the date of the decree which is a part of the dispute between the parties if the appellate court makes a variation in respect of the award, of interest that would affect the character of the appellate decree. Unlike the order of costs which is entirely in the discretion of the Court under section 35 of the Code of Civil Procedure an order as to interest which the Court can make under section 34 of the Code forms part of a dispute between the parties, and in that sense if a variation is made in regard to it is an integral part of the decision or the decree. In this connection it may also be necessary to make it clear that if the appeal court makes a variation in the decision of the trial court either because a concession has been made in that behalf or the variation has been obtained by parties by consent or a part of the subject matter covered by the decree has been withdrawn such variation cannot affect the character of the appellate decree. The principle of affirmance on which the provision rests postulates either affirmance or variation by the appeal court as an act of adjudication and that necessarily means the decision. of the appeal court on the merits. The result is the appeal must be allowed, the order passed by the High Court by which the appellant 's application for certificate has been refused must be set aside and the matter sent back to the High Court for disposal in accordance with law. Parties to bear their own hearing costs but the respondent to pay the cost of court fees which the appellant would have had to pay if he had not been allowed to appeal as a pauper. Appeal allowed.

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 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 Industrial Tribunal, Ahmedabad, on a dispute referred to it under section 10(2) of the took up for consideration four demands for basic wages and adjustment, dearness allowance, gratuity and retrospectivity of the demands of the workmen. The Tribunal gave its award on 30th of November 1971 which was published on 20th January, 1972 in the Maharashtra Government Gazette. The appellant company, feeling aggrieved by the award, filed in the Supreme Court a petition for special leave to appeal under Article 136 of the Constitution. Pursuant to a notice, the respondent workmen put in appearance and filed a counter affidavit. After some arguments the appellant Company at its request was permitted to withdraw the leave petition as per the order of the Court dated 21st of August, 1972 which reads: "Upon hearing counsel the Court allowed the special leave petition to be withdrawn". Four days thereafter the company filed a petition under Article 226 of the Constitution before the High Court challenging the award. The petition was virtually based on the same facts and grounds as were taken in the special leave petition before the Supreme Court. The learned single Judge who heard the petition determined the circumstances on the basis of the respective affidavits filed by the parties in which the company unconditionally withdrew its special leave petition and in view of those circumstances equated the withdrawal of the leave petition with the dismissal of the same. Relying on Vasant Vithal Palse and Ors. vs The Indian Hume Pipe Co. Ltd. and Anr. , a decision of that court, the learned Judge dismissed the writ petition in limine. A Letters Patent Appeal against the said order of dismissal also met the same fate. However, a petition under Article 133 of the Constitution for a certificate of fitness to appeal to the Supreme Court was accepted by the said Division Bench and a certificate was granted and hence the appeal. Allowing the appeal, the Court ^ HELD: 1. Permission to withdraw a special leave petition cannot be equated with an order of dismissal. If a non speaking order of dismissal cannot operate as res judicata for entertaining a fresh writ petition on the same facts and grounds taken in the special leave petition, an order permitting the withdrawal of the writ petition for the same reason cannot so operate. [219B,222C D] 214 Workmen of Cochin Port Trust vs Board of Trustees of Cochin Port Trust and Anr., ; , followed. Punjab Beverages Pvt. Ltd. vs Suresh Chand and Anr. , ; ; Hoshnak Singh vs Union of India and Ors., ; ; Daryao and Ors. vs The State of U.P. and Ors., ; , discussed. Vasant Vithal Palse and Ors, v The Indian Hume Pipe Co. Ltd. and Anr. , ; Management of Western India Match Co. Ltd., Madras vs The Industrial Tribunul, Madras and Anr. A.I.R. 1958 Mad. 398, distinguished. The order of a court has to be read as it is. If the Supreme Court intended to dismiss the petition at the threshold. it could have said so explicitly. In the absence of any indication in the order itself, it will not be proper to enter into the arena of conjecture and to come to a conclusion on the basis of extraneous evidence that the Supreme Court intended to reject the leave petition. If the Order of the Supreme Court is read as it is there is not the slightest doubt that the Supreme Court had allowed the company to withdraw the leave petition, in the instant case. The approach of the High Court in having perused the affidavits filed by the parties to know the circumstances under which the leave petition was withdrawn is not correct. [217 C D]

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.

% The State of Andhra Pradesh in exercise of powers conferred under sub section (1) of section 9 of the Andhra Pradesh General Sales Tax Act, 1957, made an order on January 27, 1987, reducing the rate of tax on sale of Cement made to the manufacturing units of Cement products in the State. On the same date, the State of Andhra pradesh made another order in exercise of the powers conferred by sub section (5) of section 8 of the , reducing the tax leviable under the said Act in respect of sales of Cement in the course of the inter State trade or commerce. The State of Karnataka in exercise of the powers conferred by sub section (5) of section 8 of the , issued a notification on 28.10.1987, reducing the rate of tax payable under the said Act on the sale of Cement in the course of the inter State trade or commerce. The petitioners cement manufacturing concerns, their shareholders and their authorised stockists filed this writ petition, challenging the vires of section 8(5) of the (Central Act 74 of 1956) and the notifications referred to above as ultra vires the provisions contained in Part XIII of the Constitution providing that trade, commerce and inter course throughout the territory of India shall be free. According to the petitioners the three orders referred to above created trade barriers and directly impinged upon the freedom of trade, commerce and inter course provided for in Article 301 of the constitution. Since the vires of section 8(5) of the Central Act 74 of 1956 had been assailed, notice had been issued to the Union of India, Attorney General, and all the States but at the hearing of the writ petition, the 575 petitioners gave up the challenge against section 8(5) of the Central Act. In view of that, the writ petition was confined to the challenge against the two notification of the State of Andhra Pradesh and the lone notification of the State of Karnataka. The return to the rule nisi was made on behalf of the State of Andhra Pradesh. The State of Karnataka chose not to make any return to the rule nisi, but its counsel joined at the hearing and contended that the order made by the Karnataka State did not affect the provisions in Part XllI of the Constitution. The Attorney General confined his submission to the scope of Part III of the Constitution and the effect of the notifications on the scheme contained in that part. Allowing the writ petition, the Court, ^ HELD: The title for Part XIII. which contains the relevant Articles 30 l, 302, 303 and 304 is "Trade Commerce and inter course within the Territory of India. " The true purpose of the provisions contained in Part Xlll of the Constitution, as elucidated in the different decisions of the Constitution Benches of this Court, is that the restriction provided for in Article 301 can within the ambit be limited by law made by the Parliament and the State legislature. No power is vested in the executive authority to act in any manner affecting or hindering the very essence and thesis contained in the scheme of Part XIII of the Constitution. lt is equally clear that the declaration contained in Part XIIl of the Constitution is against the creation of economic barriers and or pockets which stand against the free now of trade, commerce and inter course. [580F; 587H; 588A B] Taxation is a deterrent against free flow. As a result of favourable or unfavourable treatment by way of taxation, the course of flow of trade gets regulated either adversely or favourably. If the scheme which Part XIII guarantees has to be preserved in national interest, it is necessary that the provisions in the Article must be strictly complied with. One has to recall the far sighted observations of Gajendragadkar. J. in Atiabari Tea Co. Ltd. vs The State of Assam & Ors., [1961] 1.S.C.R. 609 and the observations then made obviously apply to cases of the type now before the Court.[588C D] Under the first notification made under section 9(1) of the Andhra Pradesh General Sales Tax Act, the rate of tax was reduced to 4 percent in respect of the sales made by the indigenous cement manufacturers to manufacturers of Cement products. The Tamil Nadu producers had sales officers in Andhra Pradesh and in regard to their sale to such manufacturers of cement products, the benefit of the reduced rate of 576 taxation was not applicable. Two reasons were advanced by way of justification. One was that it was beneficial to the State revenue and secondly, that it protected the local manufacturers too. It could not be demonstrated to the Court how the reduction in the rate of sales tax was beneificial to the State revenue. The other justification was what the provisions of Part XIII of the Constitution did not permit. The reasonable restriction contemplated in Part XIII have to be backed by law and not by executive action, provided the same are within the limitations prescribed under the Scheme of Part XIII.[588D H] The second notification related to the inter State transactions. Variation of the rate of inter State sales tax does affect free trade and commerce and creates a local preference which is contrary to the scheme of Part XIII of the Constitution. The notification extended the benefit even to the unregistered dealers. Both the notifications of the Andhra Pradesh Government were bad and hit by the provisions of Part Xlll of the Constitution. They could not be sustained in law.[592D] In the case of the notification of the Karnataka State, as already said, no return had been made and no attempt had been made to place the facts and circumstances to justify the action. The notification suffered from the same vice as the second notification of the State of Andhra Pradesh suffered, and no distinction could be drawn. The notification of the Karnataka Government was also bad in law. [597E F] The writ petition succeeded and the two impugned notifications of the Andhra Pradesh Government and the impugned notification of the Karnataka Government were quashed. [592G] Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; The Automobile Transport (Rajasthan) Limited vs The State of Rajasthan & Ors., [1963] S.C.R. 491; State of Madras vs N.K. Nataraja Mudaliar., [1968] 3 S.C.R. 829; Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. vs The Assistant Commissioner of Sales Tax & Ors., [1974] 2 S.C.R. 879 and State of Tamil Nadu, etc. vs Sitalakshmi Mills, etc.; , , referred to.

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.

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 respondent field a suit against the appellant for recovery of possession of a building on the ground of wilful deflault in payment of rent which was Rs. 900 per ;month. The appellant denied the relationship of landlord and tenant, claiming himself as one of the "associates" or "co sharers" or "co owners" of the building. The Munsif decreed the suit; and the decree was affirmed in appeal by the first appellate court as also by the High Court. Hence the present appeal. During the pendency of the present appeal, cl. (ii) of section 30 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, which exempted from application of the Act premises the monthly rent in respect of which exceeded Rs. 400, and on the basis of which the suit giving rise to the present appeal emanated, was struck down in a judgment by this Court. ** The appellant contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, of the Act, 311 which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400, the decree of the civil court became null and void and of no effect. On behalf of the respondent it was submitted that the decree passed by the civil court was not a nullity for the Act did ;not bar the jurisdiction of the civil court but only prohibited execution of a decree of eviction otherwise than in accordance with the relevant statutory provision; and that such a decree was not void, but was merely under an eclipse, and would become executable as and when the bar is removed. Allowing the appeal, this Court, HELD; 1.1 Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prohibits jurisdiction of the civil court in respect of eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section and sections 14 to 16. The sole circumstance and the condition precedent to the exercise of jurisdiction by a civil court as stated in second proviso to section 10(1) is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller, on such denial or claim by the tenant, reaches a decision and duly records a finding that such denial or claim was bona fide and only when these conditions are satisfied jurisdiction of the civil court can be invoked to pass a decree for eviciton on any of the grounds mentioned in section 10 or sections 14 to 16. Except to this limited extend the jurisdiction of the civil court is completely barred and the same is vested in the tribunals set up under the Act. Any suit instituted by a landlord for eviction of a tenant from a building falling within the ambit of the Act,otherwise than as stipulated by the section is, therefor, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect. [317D E, G H; 318 D,G H] Sushil Kumar Mehta vs Gobind Ram Bohra, [1990] 1 SCC page 193, referred to. 1.2 The decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters. [318D E] Magiti Sasamal vs Pandab Bissoi,[1962] 3 SCR 673, referred to. 1.3 If the decision of the Controller is that tenant 's denial or 312 claim is not bona fide, the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide denied landlord 's title or claimed right of permanent tenancy.[318E F] 1.4 Although the Act contains no express bar of jurisdiction of the civil court, its provisions explicitly show that, subject to the extraordinary powers of the High Court, and this Court, such jurisdiction is statute for eviction of tenants "in execution or otherwise". The provision of the Act are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it, and their competence to administer the same remedy as the civil courts render in civil suits. Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it. [317A C] Dhulabhai &Ors. vs The State of Madhya Pradesh & Anr. , ; ; Secretary of State vs Mask & Co., [1939 40] IA 222 (PC, Raleigh Investment Co. Ltd. vs Governor General in Council, [1946] 47 IA 50 (PC and Barraclough vs Brown & Ors., , referred to. In the instant case, the procedure stipulated in the second proviso to section 10 had not been complied with. At the time of institution of the suite, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in cl. (ii) of section 30, but after leave to appeal was granted, the applicability of the Act was extended to the building by reason of the decision of this Court, declaring the invalidity of cl. (ii) of section 30 on account of its inconsistency with Article 14 of the Constitution. Whatever be the consequences of that declaration whether it has rendered the statutory provision null and void and of no effect, or, merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban in either event, the civil court acting without the aid of the exclusionary provision in cl. (ii) of section 30, during the period of invalidity,had become coram non judice and its proceedings resulting in the decree a nullity. [319A D] 313 Ratan Arya & Ors. vs State of Tamil Nadu & Anr. , ; , referred to. Kiran Singh & Ors. vs Chaman Paswan & Ors., ; relied on. V.B. Patankar & Ors.v. C.G. Sastry, ; , held inapplicable. Behram Khurshed Pesikaka vs State of Bombay, ; Saghir Ahmad vs State of U.P. and Ors. ; ; Bhikaji Narain Dhakras & Ors. vs The State of M.P. The State of A.P. & Anr., ; , referred to.

Appeal No. 104 of 1959. Appeal by special leave from the judgment and decree dated December 19, 1956, of the Patna High Court in Appeal from the Appellate Decree No. 632 of 1949. M. C. Setalvad, Attorney General of India and R. C. Prasad, for the appellants. section P. Varma, for respondent No. 1. N. section Bindra and D. Gupta, for Intervener. April 27. The Judgment of Sinha, C. J., Sarkar and Mudholkar, JJ., was delivered by Sarkar, J. The judgment of Das Gupta and Ayyangar, JJ., was delivered by Ayyangar, J. SARKAR, J. The parties to this litigation are all Hindus but it is not in dispute that the Mohammedan law of preemption is applicable to them by custom, nor that the appellants had a right of preemption. The only question is whether the first demand called talab i mowasibat which has to be made after the completion of the sale in order that the right may be enforced, was made before or after such completion. The making of the demand is not in dispute but the dispute is as to when the sale was completed. The appellants had their residential house contiguous to the house owned by certain persons whom we may call Pandeys. On January 31, 1946, the Pandeys executed a deed of sale in favour of the respondent purchaser in respect of their aforesaid house. The appellants claim a right of are emption on account of this sale. The consideration mentioned in the deed was Rs. 2,000. There was a subsisting mortgage on that house and the deed provided that out of the consideration a sum of Rs. 200 would be left with 476 the respondent purchaser for clearing off that mortgage. The deed also recited that the Pandeys had received Rs. 400 and "the remaining Rs 1,400 (Rupees fourteen hundred) in cash at the time of exchange of equivalents, (that is) at the time of (handing over) of the receipt of this deed. . . On receipt of the whole and entire amount of consideration money we have put the said claimant into possession and occupation of this vended property as absolute owner in place of us, the executants and our heirs and representatives. " The deed further stated, "this sale deed becomes operative from the date when we the executants affixed our signatures thereon. Whatever title, we, the executants and our heirs had. . . with respect to this vended property, has become extinct, inoperative and null and void and the same has now been transferred to and acquired by the claimant. " By the word "claimant", the respondent purchaser was referred to. The deed was presented at the registration office for registration by the Pandeys on the day it was executed and it was left with the Registrar in the Registration Office for the necessary entries and copies being made, a receipt being given to the Pandeys. On February 2, 1946, the appellants on coming to hear of the execution of the deed of sale made the talab imowasibat. On February 7, 1946, the receipt granted by the Registration Office to the Pandeys was made over by them to the respondent purchaser who there upon paid the balance of the price as stipulated in the deed. On February 9, 1946, the documents were copied in the Registrar 's books and thereupon the registration became complete as provided in B. 61 of the . The respondent purchaser thereafter received the deed of sale from the Registrar 's Office on February 13, 1946. The appellants filed their suit for preemption on September 9, 1946. The suit was decreed by the trial court and this decision was maintained by the first Appellate Court. The High Court, however, in second appeal set aside the decisions of the Courts below with the result that the suit stood dismissed and 477 the appellants have now come to this Court in further appeal. The Mohammedan law of preemption is stated in Mulla 's Principles of Mohammedan law in these terms: "The right of preemption arises only out of a valid, complete and bona fide sale. " This statement of the law is accepted by both the parties and there is no question that it is not correct. There is furthermore no dispute that the sale to the respondent purchaser was valid and bona fide. It is also agreed that one of the requisites before the right of pre emption can be exercised is the preliminary demand by the preemptor and that such demand must be made after the completion of the sale. The case has been argued before us on behalf of the appellants on the basis that the sale was governed by the . We will also proceed on that basis. Section 54 of the provides that sale of tangible immovable property of the value of rupees 100 and upwards, which the house with which we are concerned is, can be made only by a registered instrument. Section 3 of this Act defines " registered" as registered under the law for the time being in force regulating the registration of documents. This, in the present case, means the Regis tration Act of 1908. It is not in dispute that the registration under the is not complete till the document to be registered has been, copied out in the records of the Registration Office as provided in section 61 of that Act. It was therefore con. tended in the High Court that when a sale had to be made by a registered instrument it became complete only on the instrument of sale being copied in the books of the Registration Office. The High Court accepted this view and held that the sale in the pre sent case, therefore, became complete on the completion of the registration of the instrument of sale which was done on February 9, 1946 when the instrument was copied out in the books of the Registration Office. In this view of the matter, the High Court 61 478 came to the conclusion that the appellants were not entitled to enforce their right of preemption because they had not made the preliminary demand after the completion of the sale as the law required them to do, but before, that is, on February 2, 1946. In answer to this view of the High Court, the learned Attorney General appearing for the appellants says that the High Court overlooked section 47 of the the effect of which was to make a registered document operate from the time from which it would have commenced to operate if no registration thereof had been required and not from the time of its registration. His contention is that once a document is registered, as the deed of sale in this case was, it begins to operate from the time it would have otherwise operated and therefore, the position in this case is that the sale became operative and hence complete on January 31, 1946. The learned Attorney General further contends that the proper construction of the deed of sale was that it became operative from the day it was executed and that if it was not so, it was not a sale but could only be an agreement to sell in which latter case his clients, though this present suit might fail, would be entitled, if they so desired, to enforce their right of preemption when the sale was completed in pursuance of that agreement. As authority in support of his contention that in view of section 47 of the the sale in the present case must be deemed to have been completed on the day the instrument was executed, the learned Attorney General relied on Bindeshri vs Somnath Bhadry (1) and Gopal Ram vs Lachmi Misir (2). We do not think that the learned Attorney General 's contention is well founded. We will assume that the learned Attorney General 's construction of the instrument of sale that the property was intended to pass under it on the date of the instrument is correct. Section 47 of the does not, however, say when a sale would be deemed to be complete. It only permits a document when registered, to operate (1) A.I.R. (1916) All. 199. (2) A.I.R. (1926) All. 549. 479 from a certain date which may be earlier than the date when it was registered. The object of this section is to decide which of two or more registered instruments in respect of the same property is to have A effect. The section applies to a document only after it has been registered. It has nothing to do with the completion of the registration and therefore nothing to do with the completion of a sale, when the instrument is one of sale. A sale which is admittedly not completed until the registration of the instrument of sale is completed, cannot be said to have been completed earlier because by virtue of section 47 the instrument by which it is effected, after it has been registered, commences to operate from an earlier date. Therefore we do not think that the sale in this case can be said, in view of section 47, to have been completed on January 31, 1946. The view that we have taken of section 47 of the seems to have been taken in Tilakdhari Singh vs Gour Narain (1). We believe that the same view was expressed in Nareshchandra Datta vs Gireeshchandra Das (2) and Gobardhan Bar vs Guna Dhar Bar (3). With regard to the two cases on which the Attorney General has relied, it has to be observed that they were not concerned with a right of pre emption arising on a sale of property. Bindeshri Prasad 's case (4) was concerned with a suit for zar i chaharum. It does not appear from the report what that right was or when it arose. It is not possible therefore to derive much assistance from it. Gopal Ram 's case( ') was concerned with a right of pre emption arising on the grant of a lease and the question was whether the suit for the enforcement of such a right was barred by limitation. It appears that article 120 was applied to that suit and it was held that the cause of action for the excrcise of the right of pre emption arose as soon as the lease was executed and even before it was registered though before the actual registration the suit for pre emption could not have been maintained. (1) A.I.R (1921) Pat, 150. (2) Cal. 979 (3) I.L.R. (1940) II Cal. 270 (4) A.I.R. (1916) All. 199. (5) A.I.R. (1926) All 549. 480 This view was taken in reliance upon section 47 of the . We are not aware whether the law of pre emption applicable to the case required that there should be a completed lease before the right to pre empt could be enforced. If that law did so require, then we do not think that the case was rightly decided. It was said in that case that "When the law has given to a transaction a retrospective effect, it must have that effect. " We do not think that a transaction which when completed has a retros pective operation can be said for that reason to have been completed on the date from which it has that operation. In the view that we have taken, it is not necessary to discuss the question of the construction of the instrument of sale in this case, that is, to decide whether on its proper reading the transfer was intended to take immediate effect on its execution or later on after the balance of the purchase money had been paid. Nor do we think it necessary to pronounce on the other argument of the learned Attorney General that a transfer which does not convey the property immediately can only be an agreement to transfer. We think that for these reasons this appeal must be dismissed and we order accordingly. The appellants will pay the costs of this appeal. AYYANGAR, J. We regret that we are unable to agree to the order dismissing this appeal. The facts have been very fully set out in the judgment of Sarkar, J. and it is therefore unnecessary to repeat them. The following matters are beyond dispute: (1) that the law that is applicable to govern the right of the appellant before us is the law of pre emption as understood in Mohammedan law, (2) that according to the principles of Mohammedan law, the right of pre emption arises and the 2 talabs have to be performed immediately on the completion of a valid, and bona fide sale, and (3) that the two talabs which are required to be performed by a person claiming the right of pre emption have been performed by the appellant. There being further no dispute that a sale did take 481 place, the only point in controversy in the appeal is as to whether the talabs which were performed on February 2,1946 were performed by the appellant after the right of pre emption accrued to her, viz.,, after the sale in favour of the respondent was effected or were they premature. At one time there was a controversy as to whether it was the principle of the Muslim law that would determine the point of time when a sale should be taken to be complete (under which system crucial significance was attached to two of the ingredients of a sale, viz., payment of consideration and delivery of possession) or whether after the enactment of the it was to the statute and to the creteria laid down by it that one has to turn to determine when a sale should be held to have taken place. The former view found favour with the majority of the Full Bench of the Allahabad High Court in Begam vs Muhammad (1), Justice Banerjee dissenting from the majority. This controversy, however, is long past and it has now been decided by this Court in Radha Kishan vs Shri Dhar Ram Chandra (2) that the provisions of the supersede the principles of the. Mohammedan law as to sale and it was to the statute that one should look to find out whether, and if so when, a sale was complete in order to give rise to a right of pre emption. Turning now to the provisions of the , in the case of a sale of immovable property of the value of Rs. 100 or over (as in the case before us) section 54 of the Act enacts that it could be effected only by a registered instrument; sale itself being defined as "transfer of ownership in exchange for a price paid or promised or part paid and part promised". In other words, the essence of a transaction of sale consists in the transfer of ownership and this transfer has to be effected by "a registered instrument". The while prescribing the formalities of writing and Registration, does not itself determine the point of time when a sale becomes complete. "Registered" under the Transfer (1) I.L.R. 16 All. 344. (2) ; 482 of Property Act means: "registered under the law for the time being in force regulating the registration of documents" (section 3). When one turns to the , provision is made, inter alia for the time within which after its execution a document could be presented for registration, the persons who could so present, the office in which the document could validly be presented and registration effected and sub Part B of starting from section 58 deals with the procedure on admitting documents to registration. Section 60(1) enacts: "After such of the provisions of sections 34, 35, 58 and 59 as apply to any document presented for registration have been complied with, the registering officer shall endorse thereon a certificate containing the word registered ', together with the number and page of the book in which the document has been copied." and section 61 which follows makes provision for the copying of documents in Public registers from which the word "registration" is derived and enacts: "61. The endorsements and certificate referred to and mentioned in sections 59 and 60 shall thereupon be copied into the margin of the Register book, and the copy of the map or plan (if any) mentioned in section 21 shall be filed in Book No. 1. (2)The registration of the document shall thereupon be deemed complete, and the document shall then be returned to the person who presented the same for registration, or to such other person (if any) as he has nominated in writing in that behalf on the receipt mentioned in section 52. " Much reliance has been placed by learned Counsel for the respondent and, indeed, in the judgment of the High Court, on the words the "registration of the document shall thereupon be deemed complete" occurring in sub section (2) of section 61. But in the context of the fasciculus of sections in which it appears it is clear that it refers to the fact that the registering officer had completed his duty and had no more to do with the document presented to him, beyond returning the original to the party entitled to receive the same. In 483 our opinion, these words have nothing to do with the time from which the transaction covered by the registered document operates or with reference to the present context, when the sale evidenced by the deed, becomes complete. Specific provision is made for these in section 47 of the which reads: "A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. " The principles underlying sections 61(2) and 47 are not divergent. It is not as if, that any delay by the regis tering officer which might take place owing to the pressure of work in his office or for other reason, has any effect on the rights of parties, quod their property or the time from when the deed operates, or as regards the effectiveness of the transaction, or the priority of transactions inter se. It is not as if, documents executed on different dates, the parties intending them to operate at different times, have their intentions modified, if not nullified by the action or inaction of the registering officer, or any delay that might take place in his office. A contention that though the Muslim law of sale is superseded by the and the , but yet the provision contained in section 47 of the is inapplicable to determine when a sale effected by a registered instrument should be complete could not be sustained on any principle or logic, or of course on any rule of interpretation of statutes. In our opinion no distinction is possible to be drawn between a sale which is effective and one which is complete since they are merely different forms of expressing the same concept and for the same reason between the time from when a sale becomes effective and when it should be held to be complete. As under Muslim law the talabs have to be performed only immediately after the preemptor receives information of the sale, the view we take of the applicability of section 47 of the , introduces no element of hardship in the exercise of the option. We are, therefore, clearly of the opinion that the time when the sale becomes complete so as to 484 entitle the preemptor to perform the talabs should be determined by the application of the principle of intention laid down in section 47 of the Which is as much a part of the positive law governing the right of preemption as the provision of section 54 of the which, requires a registered instrument to effect a sale which gives rise to a right of preemption. If, therefore, B. 47 of the should apply to determine the time from which the registered document should have effect or, in other words, the time from which the sale should be held to be complete, the intention of the parties would be the crucial and only test. That has to be gathered by reference to the document itself read in the light of the surrounding circumstances, with however a proviso that if the document were clear and its terms explicit, no evidence to contradict them would be admissible. Paragraph 4 of this document of the sale deed exhibit 'A ' dated January 31, 1946 recites the consideration for the same. This was to consist of Rs. 2,000. Out of this, it states that the vendors had received Rs. 400 in cash at the time of the execution of the document, and that Rs. 200 had been left with the purchaser for payment to a previous possessory mortgagee. In regard to the balance of Rs. 1,400 the recital reads: "and received the remaining sum of Rs. 1,400 in cash at the time of exchange of equivalents, (that is) at the time of handing over of the receipt of this deed. In this manner we have received the entire amount of consideration money for this vended property from the claimant and brought the same to our possession and use. " It is, no doubt, true that the sum of Rs. 1,400 had not been received on January 31, 1946, the date of the execution of the document and that it was agreed that sum would be paid in exchange for the delivery of the receipt obtained from the Registrar in respect of the sale deed presented for registration. But the use of the past tense clearly indicates that the vendor agreed to the promise to pay the balance of Rs. 1,400 as the consideration for the execution of the 485 document on January 31, 1946, as tantamount to an actual payment. In other words, in terms of section 54 of the it was a transaction under which the property in the house was to be transferred in exchange for a price "part paid and part promised". Paragraph 4 and the recital there do not indicate any intention that the title to the property was to be conveyed only on the payment of Rs. 1,400 on the surrender of the registration receipt. If, however, there was any doubt as to what the intention of the parties was, it is made clear by the other stipulations and recitals which follow. Paragraph 5 opens with the words: "On receipt of the whole and entire amount of consideration money we have put the said claimant into possession and occupation of this vended property as absolute owner in place of us the executants and our heirs and representatives. " The reference to the receipt here is obviously based upon treating the entire consideration of Rs. 2,000 as having been received on the day of the execution of the document. In other words, part of the consideration was paid and part promised and the promise was treated as the consideration in respect of the balance unpaid. Besides and as if to reinforce their intention the deed goes on to state after the words of conveyance "I have executed the deed of absolute sale and jointly received Rs. 2,000 as per recitals in the body. " That the title of the vendee was not to be postponed to any date beyond the date of the execution of the document is made clear by the further words in para 5 "It is desired that the said claimant should enter into and remain in possession and occupation of the vended property as an absolute owner" which was to be from and after the date of the execution of the deed. Turning next to paragraph 6, there is an express stipulation as regards when the transfer should be deemed effective. It says: "This sale deed becomes operative from the date when we, the executants affixed our signatures thereon" a recital which is repeated and reinforced by paragraph 7 in which dealing 62 486 with the title of the vendors, it is stated that the said title with respect to the vended property "has become extinct, inoperative and null and void and the same has now been transferred to and acquired by the claimant". In the face of these recitals, covenants and stipulations which clearly express the intention of the parties that the deed should have effect from the date of its execution it seems to us that the argument that it could be postponed to a later date either the date when the registration was complete under the terms of section 61 of the Indian or to February 7, 1947 when on the registration receipt having been handed over to the vendee, the vendor received the balance of Rs. 1,400 is hardly tenable. If this were the true legal effect of the deed and if by virtue of the provisions of the read in conjunction with those of the Indian , the title to the property was transferred to the vendee immediately on the execution of the document on January 31, 1946 the performance of the two talabs by the appellant on February 2, 1946 would be in time, legal, proper and effective to clothe her with a right to demand a conveyance in her favour. It is only necessary to add that learned Counsel for the respondent did not contest the position that if on a proper construction of the sale deed exhibit 'A ' read in the light of its recitals and the relative statutory provisions there was a sale effective on January '31, 1946 the talabs performed by the appellant would not suffice to clothe her with the right which she claimed in the suit out of which this appeal arises. We would accordingly allow the appeal and decree her suit with costs throughout. By COURT. In accordance with the opinion of the majority, the appeal is dismissed with costs.

P executed a sale deed on January 31, 1946, in respect of a house in favour of D and presented it for registration on the same day. On coming to know of the execution of the sale deed, the appellant who had a right of preemption, made the talab i mowasibat on February 2, 1946. The deed was copied out in the Registrar 's books on February 9, 1946, and thereupon the registration became complete as provided in section 61 of the . The appellant filed a suit for preemption. D resisted the suit on the ground that the sale was completed on February 9, 1946, and the talab had been made prematurely. The appellant contended that in view Of section 47 a registered document operated from the time it would have otherwise operated and the sale was completed on the date of its execution. Held (per Sinha, C. J., Sarkar and Mudholkar, jj.) that the sale was completed only on February 9, 1946, when the registration was complete, that the talab was made prematurely and that the suit must fail. Section 47 merely permitted a document when registered to operate from a date which may be earlier than the date on which it was registered, it did not say when the sale would be deemed to be complete. A sale which was required to be registered was not completed until the registration of the deed was completed. Tilakdhari Singh vs Gour Narain, A.I.R. (1921) Pat. 150, Nareshchandra Datta vs Gireeshchandra Das, Cal. 979, and Gobardhan Bar vs Guna Dhar Bar, I.L.R. (1940) II Cal. 270, approved. Bindeshri vs Somnath Bhadry, A.I.R. (1916) All. 199 and Gopal Ram vs Lachmi Himir, A.I.R. (1926) All. 549, distin guished. Per Das Gupta and Ayyangar, jj. The sale was completed on the day of execution and the talab was made at the right time. Section 61 had nothing to do with the time when the sale evidenced by the registered deed became complete; it refers merely to the fact that the registering officer had completed his duty. Section 47 provided when a sale was deemed to be completed. There was no difference between the time when a sale 475 became effective and the time it could be held to be completed. Under section 47 the crucial test for determining the time from which the registered document was to have effect or be deemed to be completed was the intention of the parties. The sale deed shows that the parties intended that the deed should be effective from the date of execution.

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.

D executed a document in favour of M hypothecating an eight annas share in a village for the purpose of discharging a debt of Rs. 29,496 payable by him to Al. In respect of this property there was a pre existing think in favour of j for a period of 9 years, under which D took Rs. 2,205 as peshgi money without interest and the annual rent was fixed at RS. 2,205. The document provided that (i) interest at 1/2 per cent. per month was payable on the sum Of Rs. 29,496 ; (ii) (luring the subsistence of the thika M would receive the rent from j and appropriate Rs. 1,769 12 o towards interest and pay Rs. 435 4 o as rent to D ; (iii) after the expiry of the thika M would take physical possession of the land and appropriate the produce towards interest and Pay Rs. 435 4 o as rent to D; (iv) on the expiry of the thika M would repay the peshgi amount of Rs. 2,205 to j and this sum was added to principal amount due ; (v) on the expiry of 15 years, or after the extended period, D would repay the entire principal amount; (vi) and the property was given as security for the amount payable by D. The respondents who are successors of D instituted a suit for redemption on the basis that the transaction was a usufructuary mortgage, for rendition of accounts and for recovery of surplus profits. The appellant, successor of M, contended that the suit for redemption was not maintainable as the transaction was not a mortgage but a lease, and that even if it was a mortgage there was no statutory liability to render accounts as the document provided that the receipts were to be taken in lieu of interest and the case was governed by section 77, Transfer of Property Act : Held, that the transaction was a mortgage and not a lease. The guiding rule of construction is that the intention of the parties must be looked into and that once there is debt with security of land for its redemption the arrangement is a mortgage by whatever name it is called. Held, further, that there was a contract between the mort gagor and the mortgagee within the meaning Of section 77, Transfer of Property Act to the effect that the receipts from the mortgaged property be taken in lieu of interest and consequently the mortgagee was not liable to render accounts. The stipulation 1086 in the document for payment of Rs. 435 4 0 to the mortgagor was a personal obligation of the mortgagee and he had a right to take the entire receipts from the land in lieu of interest. Though the rate of interest is stated as per cent. per month it was mentioned to enable the parties to approximately fix the amount to be appropriated by the mortgagee from and out of the rent received from the thikadar. The mere fact of the mention of the rate of interest could not make section 77 inapplicable in view of the clearly expressed intention of the parties. Pandit Bachchu Lal vs Chaudhri Syed Mohammad Mah, (1033) , referred to.

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]

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.

A mortgage deed was executed by the respondent company and one of its directors in favour 'of the State of Kerala. It was provided inter alia by the terms of the deed that in consideration of the State granting a loan of a sum of Rs. 2.5 lakhs to the company, the latter would supply to the State 3,000 tons of ground ,nut cake within a specified period and make deliveries in accordance with instructions to be given by the State, and the account for this supply will be adjusted against the loan amount and the interest thereon. It was common ground however that the loan amount, though acknowledged in the mortgage deed as received by the company, was never in fact advanced by the State. The respondent company arranged for the supply of goods as agreed and sought the necessary instructions for delivery, but, these we 're never given. The company instituted a suit in March 1953 against the appellant State for damages for failure to, advance the loan amount and for breach of contract to purchase the groundnut cake. The trial court decreased the suit for Rs. 36,000 being damages for failure to advance the loan and for Rs. 1,23,000 as damages for breach of contract. An appeal to the High Court challenging the liability of the State to compensate the company for failure to take delivery of the goods was dismissed. It was contended on behalf of the State that the obligation to take delivery of the goods agreed to be purchased was contingent upon the Government 's advancing the loan amount, so long as the amount was not advanced by the State, the mortgage was not in law effective and the Company could not enforce the contract relating to ground nut cake a. reed to be purchased by the State. , HELD : Dismissing the appeal) A transaction of mortgage formally executed does not become void or ineffective merely because the mortgagee fails to advance the amount of money undertaken to be advanced by him. Under the terms of the mortgage deed liability of the State to purchase the groundnut cake. from the Company was not made conditional upon the State advancing the loan. By failing to advance the loan amount the State could not avoid liability to carry out the obligation to purchase the goods contracted to be purchased. Even if it be assumed that the indenture incorporated reciprocal promises, in the absence of any express provision to that effect the contract could not be terminated by the default of the State. Breach of contract by one party does not automatically terminate the obligation under the contract : the injured party has the option either to treat the contract as still in existence, or to regard himself as discharged. If he accepts the discharge of the contract by the other party, the contract is 557 at an end. If he does not accept the discharge, he may insist on performance. [560 C D; 561 D]. Tatia v Babaji, I.L.R. , Rashik Lal vs Ram Narain and Others, I.L.R. 34 All. 273, Dip Narain Singh V. Nageshar Prasad and Others, I.L.R. 52 All. 338, White and Carter (Councils) Ltd., vs Mc Gregor, ; referred to. There was no substance in the, contention, that the State was by its default liable to, compensate the Company only for loss arising out of its failure to advance the money, and not out of its 'failure to purchase the goods. The State 's undertakings to advance the loan and to take delivery of ground nut cake were two independent, though inter related transactions; and by committing a breach of its own obligation to advance the loan, the State did not absolve itself from liability for the breach arising from its refusal to take delivery of the goods offered [561 F H].

This appeal by special leave was confined solely to the question of entitlement of interest on the amount awarded by the Arbitrator for the requisition of the premises under the . Disposing of the appeal, the Court, HELD: The principles upon which the compensation on this aspect is payable are by now well settled. This Court reit erated the principles in Satinder Singh and Ors. vs Amrao Singh and Ors., ; at 694; National Insurance Co. Ltd. Calcutta vs Life Insurance Corporation of India [1963] Supp. 2 SCR 971 at 992 and Hirachand Kothari (dead) through Lrs. vs State of Rajasthan & Anr., [1985] Suppl.1 SCR 644 at 655. [1046F; 1048C] In the light of the aforesaid decisions, the Court was of the opinion that the appellants herein were entitled to the interest for the period from March 1975 to the 31st July, 1987, when the principal amount of compensation had been paid and/or when the premises in question had been de requisitioned and handed back to the owner, on the amount awarded. The Court was of the opinion that for the period from March 7, 1975 to February 28, 1985 being the date on which the judgment of the High Court was pronounced in this case, the appellants were entitled to the interest on the amount awarded at the rate of 6 per cent per annum, and for the period from August 8, 1985 to July 31, 1987 for that period only at the rate of 12 per cent per annum. The interest would be payable only on the balance amount which remained to be paid to the appellants i.e. the amount due minus what had been paid from the respective dates. The Court directed that the amount be paid by the respondents within three months from the date of this judgment, and that in case there was any difficulty in calculating the amount, the 1046 parties would be at liberty to apply to the High Court. [1048C H] Satinder Singh & Ors. vs Amrao Singh & Ors., ; ; National Insurance Co. Ltd. Calcutta vs Life Insurance Corporation of India, [1963] Supp. 2 S.C.R. 971 at 992; Hirachand Kothari (dead) through Lrs. vs State of Rajasthan & Ors., [1985] Supp. 1 S.C.R. 644 and Inglewood Pulp and Paper Co. Ltd. vs New Burnswick Electric Power Commission, A.I.R. 1928 Privy Council 287, referred tO.

The appellant filed a suit for recovery of certain properties from the respondents. The suit was decreed by the trial court The respondents appealed to the High Court, but pending the appeal, the appellant, in execution of the decree of the trial court, obtained possession of the suit properties and recovered the costs awarded. Only July 13, 1949, the High Court set aside the decree of the trial court, and on August 24, 1950, the appellate decree was amended by deleting the name of one of the decree holders from the decree. The respondents filed two applications one on February 11, 1953 for costs and the other on February 13, 1953 for restitution of the properties and costs paid, under section 144 of the Civil Procedure Code, 1908. The trial court ordered execution to proceed and on appeal the High Court confirmed the order. In the appeal to the Supreme Court, it was contended that: (i) the application for recovery of costs was barred by limitation under article 182 of the Limitation Act, 1908, as it was filed beyond 3 years from the date of the appellate decree and (ii) the application for restitution was not an application for execution and was therefore governed by article 181 of the Limitation Act; and as the period of limitation of 3 years under that article, starts from the date when the right to apply accrues the application for restitution was also barred by limitation. HELD (by Full Court): (i) The execution application for the recovery of costs was within time. [439 E; 455 H] By the amendment of August 24, 1950, the name of one of the decree holders was struck out from the decree and the result was, to that, extent, the rights of the parties were modified by the amended decree. it was therefore. a case where the decree has been amended within the meaning of article 132(4) of the Limitation Act, and the application for execution could be filed within 3 years from the date of the amendment. [455 G] (ii) (Per Subba Rao, Raghubar Dayal, Rajagopal Ayyangar and Mudholkar JJ.) : On a fair construction of the provisions of section 144 of the Code, an application for restitution must be held to be one for execution of a decree, and having been filed within 3 years from the date of the amended decree was within time. [455 B, H] Having regard to the history of the section, there is no reason why such an application should not be treated as one for execution of the appellate decree. The object of the section is to make the scope of restitution clear and unambiguous. It does not say that an application for restitution, which till the Code of 1908 was enacted was an application for execution, should be treated as an original petition. Whether an application is one for execution of a decree or in an original application depends upon the nature of the application and the relief asked for. When a party, who lost his property in execution of a decree, seeks to recover it back by 437 reason of the appellate decree in his favour, he is not initiating any original proceeding but is concerned only with the working out of the appellate decree in his favour. [450 E H; 451 A] it would be inconsistent to hold that an application for restitution would be an original petition, if the appellate decree did not give a direction for restitution, and that it would be an execution application if it did. Such an inconsistency could be avoided if a direction for restitution were implied in every appellate decree setting aside or modifying the decree of the lower court. [451 C E] The existence of section 47 in the Code would make section 144 redundant. The latter section was enacted to prescribe the procedure, define the powers of the court and expressly bar the maintainability of a suit in respect of a relief obtainable under it. [451 E, G] The fact that the section has been placed in the "Miscellaneous" part of the Code for convenience of arrangement, cannot affect the question if in reality the application for restitution is one for execution : at the most it is only one of the circumstances relevant to the enquiry and it is not decisive. [452 D E] Merely because, under section 144, the application has to be filed in "the court of first instance" and under section 38, a decree may be executed both by "the Court which passed if ' or by "the court to which it is sent for execution. " an application under section 144, does not ease to be one for execution. For under section 37, the expression "Court which passed a decree" includes the "Court of first instance", when the decree to be executed has been passed in the exercise of appellate jurisdiction. [452 E G] If an execution application to which section 47 applies does not cease to be an execution application by reason of the section being included in the definition of a "decree" under a. 2(2), an execution application under section 144 cannot likewise cease to be one for the reason that the said section is included in the definition of decree. The two sections were included only for the purpose of giving a right of appeal. [453 C D] To construe an application for restitution as not one for execution would lead to anomalies specially under sections 6, 7 And 15 of the Lemitation Act. The existence of anomalies may have no relevance when a provision of a statute is clear and unambiguous, but will certainly have a bearing when the section is ambiguous. Further, in a procedural matter pertaining to execution when a section yields to two conflicting constructions, the court should adopt a construction which maintains rather their disturbs the equilibrium in the field of execution. [453 H; 454 A, F] Per Sarkar J. (dissenting) : The application under section 144 is not one in execution and therefore would not be governed by article 182 of the Limitation Act but by article 181. Since, under article 181 time starts to Tun from the date the right to apply accrues and the period provided is three years, the application for restitution would be barred. [442 D F] Apart from the fact that the application is not described as one in execution the provision in the section for the making of an order for the purpose of effecting restitution would lead to the conclusion that it is this order that is to be executed for obtaining restitution; and therefore the earlier application resulting in such order, could not be one for execution. [440 D E] if the application under section 144 is one for execution, then the pro@ion in the section that no suit shall be instituted for the Purpose of obtaining restitution, and the inclusion of the determination of a question under section 144 within the definition of decree in section 2(2) would be unnecessary because of section 47. The latter ion which relates to questions arising in 438 execution bars a suit to obtain the same relief, and the determination of any question under that section is included within the definition of decree. [440 F H] Further, under a. 144, the application has to be made to "the Court of first instance" and not to a transferee court, whereas, under sections 38 and 39 and OXXI, r. 10, the holder of a decree desiring to execute it shall apply to the court to which the decree has been sent for execution. [441 A C] While the section 583 of the Code of 1882, expressly provided that restitution would be by way of execution, section 144 of the Code of 1908, deliberately omits reference to execution. This departure in the terminology used, would tend to the view that it was intended that the procedure under the new section would not be by way of execution. [441 F G] If the language of the section by itself clearly indicates that the procedure is not to be by way of execution, it would not be legitimate to interpret the section in a different way because of the deprivation of the benefits under sections 6, 7 and 15 of the Limitation Act. [442 B] It cannot be said that the right to apply for restitution accrued when the appellate decree was amended, for under section 9 of the Limitation Act, case began to run from the date of the appellate decree, when the right to apply first accrued. [442 H]

Nos. 232,233, 286, 309, 320, 351, 319, 350, 354 and 490 of 1951. Applications under article 32 of the Constitution for writs to enforce the fundamental rights of the petitioners. C. K. Daphtar (R. M. Hajarnavis, with him) for the petitioner in Petition No. 232. M. C. Setalvad (G. N. Joshi and B. M. Hajarnavis, with him) for the petitioner: in Petition No. 233. B. M. Hajarnavis for the petitioners in Petitions Nos. 286, 309 and 320. V. N. Swami for the petitioners in Petitions Nos., 350 and 351. N. section Bindra (B. section Narula with him) for the petitioners in Petitions Nos. '319, 354 and 490. T. L. Shivde, Advocate General of Madhya Pradesh, for the respondent in all the petitions, the State of Madhya Pradesh. December 22. The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J. These are petitions under article 32 of the Constitution of India for directions or orders or writs to enforce the fundaments rights, of the petitioners to property by prohibiting, the respondent, the State of Madhya Pradesh, from enforcing their alleged rights under the Madhya Pradesh Abolition of Proprietary Rights Act, 1950. The several petitioners entered into contracts and agreements with the previous proprietors of certain estates and mahals in the State under which it is said they acquired the rights to pluck, collect and carry away tendu leaves, to cultivate, culture and acquire lac and to cut and carry away teak and timber and miscellaneous special of trees called hardwood and 478 bamboos. The contracts and agreements are in 'writing some of them are registered. There is no dispute about their genuineness, and it has not been alleged that they are 'collusive or fraudulent transactions. Their dates and the several sums of money paid as consideration are set out in the petitions. The petitioners allege that they have spent large sums of money in the exercise of their rights, and his fact too is not controverted. Petitions Nos. 232, 233, 286, 309 and 320 of 1951 relate to tendu leaves which grow in shrub jungles and which are used in the manufacture of beedis or country made cigarettes, a very extensive and competitive business carried on by some of the petitioners involving an outlay of one to two lakhs of rupees in some cases. For instance, 406 contracts are involved in Petition No. 232 of 1951 ; the consideration paid comes to Rs. 1,65,385 and the expenses are alleged to be in the region of Rs. 1,90,000. In Petition No. 233 of 1951 there are 785 contracts; the purchase money is Rs. 1,10,605 and the outlay byway of 'expenses is said to be Rs. 50,000. Petition No. 319 of 1951 relates to the culture and cultivation of lac, and there are several lease deeds of different dates enuring for different periods; two of them go up to the years 1966 and 1967. Teak,, timber and hardwood form the subject matter of the rights involved in Petition No. 350 of 1951 and the registered lease deed is dated 8th October, 1949, and it is for a term of ten years. Petition No. 351 of 1952 involves tendu leaves and miscellaneous forest produce and timber. Petition No. 354 of 1951 relates to bamboo forests, and Petition No. 490 of 1951 to hardwood and bamboo. The contentions of the petitioners are mainly three in number. They say that the rights acquired by them under these contracts and agreements were got before the passing of the Madhya Pradesh Abolition 479 of Proprietary Rights Act, 1950, and that the legislation therefore does not affect them. It is urged next that they are not proprietors within the meaning of the Act and consequently the Act does not apply to them. Lastly, the question is raised that the Act itself is ultra vires, as many of its material provisions offend their fundamental rights guaranteed under the Constitution. The full title of the Act is the " Madhya Pradesh, Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 ", and it is Madhya Pradesh Act I of 1951. It came into force on 26th January, 1951. On the very next day, there was a notification under section 3 of the Act putting an end to all proprietary rights in estates, mahals and alienated villages and vesting the same in the State for the purposes of the State free of all encumbrances with effect from 31st March, 1952. The validity of the Act was questioned by the affected proprietors in Visheshwar Rao vs The State of Madhya Pradesh (1) before this Court, and the Act was held to be valid. The petitioners are concluded. We have to consider only the other two points raised on behalf of the petitioners. It is clear from the provisions in the impugned Act that only those rights of the proprietor vest in the State which the proprietor had on the specified date. Section 3 provides that on and from a date to be specified by a notification by the State Government, all proprietary rights in an estate or mahal vesting in a proprietor shall pass from him to and vest in the State. The consequences of vesting are given in section 4 of the Act, and it is provided that the vesting will take place, notwithstanding anything. contained in any contract, grant or document or in any other law for the time being in force and save as otherwise provided in this Act. But this again deals only with the rights existing on the date of the notification the section is not retrospective. (1) 480 Clause (a) speaks of all rights,title and interest vesting in the proprietor or any person having interest in such propreitory right through the proprietor. Clause (b) is to this effect "all grants and confirmation Of title of or to land in the property so vesting Or Of or, to any right or privilege in respect of such property orland revenue in respect thereof shall, whether liable to resumption or not, determine;" The right or privilege referred to is the right or privilege of the proprietor or any person having interest in the proprietary right through the proprietor. Clause (c) is quite clear on the subject; it runs thus: "all rents and cossesi in respect of any holding in the property so vesting for any period after the date of vesting and which. but for the vesting, would be payable to the proprietor shall vest in and be payable to the State Government. ." The words " after the date of vesting " are important. Sub section (3) of section 4 says Nothing contained in subsection (1) shall operate as a bar to the recovery by the outgoing proprietor of any sum which becomes due to him before the date of vesting by virtue of his proprietary rights and any such sum shall be recoverable by him by any process of law which but for this Act would be available to him. " If the outgoing proprietor is entitled to, recover any sums as quid pro quo for what he has parted with under the transfer, it can only be on the basis that the transfer is a good and valid transaction unaffected by the Act. Section 6 is very material, and it is in these terms ' (1) Except as provided in sub section (2), the transfer of any right in the property 'Which is liable 481 to vest in the state under this Act made by the proprietor at any time after the 16th March, 1950, shall,. as from the date of vesting, be void. (2) Where on the. application of the transferor or the transferee, the Deputy Commissioner is satisfied that any transfer of property referred to in subsection (1) was made by a proprietor in good faith and in the ordinary course of village management, he may declare that the transfer shall, not be void* after the date of vesting. " The date, 16th March, 1950, is probably the date when legislation on these lines was actively thought of, and sub section (1) hits at transfers made after this date. This means that transfers before that date are not to be regarded as void. Even in the case of transfers after the said date, sub section (2). provides that the Deputy Commissioner may declare that they .are not void after the date of vesting, provided they were made in good faith and in the ordinary course of management. , The scheme of the Act as can be gathered from the provisions referred to above makes it reasonably clear that whatever was done before 16th March, 1950, by the proprietors by way of transfer of rights is not to, be disturbed or affected, and that what vests in the State is what the proprietors had oil the vesting date. If the proprietor had any rights after the date of vesting which he could enforce against the transferee such as a lessee or a licensee, those rights would no doubt vest in the State. In all these petitions, the several contracts and, agreements were before the date of vesting, and many of them were prior even to the 16th March, 1950. The petitioners had taken possession of the subject matter of the contracts, namely, tendu leaves, lac palsadies, teak, timber and hardwood, bamboos and miscellaneous forest produce. Under the Indian Sale of Goods Act, "goods" include growing crops, grass and things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale 482 notwithstanding the definition of "immovable property " in section 3 (25) of the General Clauses Act of 1897. In Petition No. 232 of 1951 two sample agreements relating to tendu leaves are given as annexures A and B to the petitions. They may be quoted in extenso for a clear understanding of the nature of the right created. Exhibit A dated 16th November, 1950, is in these terms: " Receipt written in favour of Seth Chhotabhai Jethbai Patel Company shop Gondia, and written by Shri Madhavrao Gangadhar Rao Chitnavis shop Itan receipt is written that we are owners of forests of Tendu leaves of Monza Sawarla 0 12 0 Mauza Khatkheda 0 5 0 Mouza Nati Kheda 0 16 0 and Monza Welwa 0 16 0. We have given contract (Theka) of cutting Tendu leaves from these four villages for one year that is till the end of June for Rs. 2,500 out of this we had received Rs. 300 on 21st September, 1950, at Bhandara and the balance Rs. 2,200 was received from your Bhandara shop through Balubhai. Nothing remains to be paid to us. You have a right to coppice the trees. " The terms of Exhibit B dated 12th July, 1948, Emitting unnecessary portions are as follows: In the year 1948 A.D. theka patra is executed that in consideration of the amount received as detailed above I had given the full tendu leaves jungle for taking out tendu leaves for five years from 1949 A.D. to 1053 A.D. I have immediately given possession. Now you can take tendu leaves of the tendu leaves forests described above every year for five years till the end of June, 1953. You may coppice the plants and take leaves. At the end of June, 1953, you should return my jungle without damage or loss to me. After the end of the period it depends upon my will whether or not I give you the forests on theka (again). If any one obstructs you in coppicing or taking away leaves, I will be responsible for the damages. Hence I have executed 483 this theka pathi for five years for consideration after reading and understanding. I agree with it. Dated 12th July, 1948, by pen of Waman Sadeshic Amte Petition Writer Bhandara. " The contracts and agreements appear to be in essence and effect licenses granted to the transferees to cut, gather and carry away the produce in the shape of tendu leaves, or lac, or timber, or wood. A similar agreement came up for consideration by the Judicial Committee of the Privy Council in Mohanlal Hargovind of Jubbulpore vs Commissioner of Income tax, Central Provinces and Berar, Nagpur (1) in connection with a question arising out of the Income tax Act. Some of the observations contained in the judgment dealing with the nature of such an agreement are useful and may be quoted here : " The contracts grant no interest in land and no interest in the trees or plants themselves. They are simply and solely contracts giving to the grantees the right to pick and carry away leaves, which, of course, implies the right to appropriate them as their own property. The small right of cultivation given in the first of the two contracts is merely ancillary and is of no more significance than would be e.g., a right to spray a fruit tree en to the person who has bought the crop of apples. The contracts are short term contracts. The picking of the leaves under them has to start at once or practically at once and to proceed continuously. " There is nothing in the Act to affect the validity of the several contracts and agreements. The petitioner are neither proprietors within the meaning of the Act nor persons having any interest in the proprietary right through the proprietors. There is no provision in the Act which extinguishes their rights in favour of the State. 'What exactly is meant by a ,proprietary right " under the revenue laws has been (1).I.L.R. , 63 484 pointed out at page 217 of Volume I of Baden Powell 's Land Systems of British India, where he says: The first thing that will strike the student is the .use of the term ' proprietary right ' in these pages and in Indian Revenue Books generally. It does not occur in text books on English law or jurisprudence. I presume that the use of such a phrase is due to the ad feeling that we rarely acknowledge anything like a complete unfettered right vested in any one person. The interest in the soil has come to be virtually shared between two or even more grades, the cause of which we just now discussed. It is true that, in many cases, only one person is called ' landlord ' or ' actual proprietor ' but his right is limited; the rest of the right, so to speak, is in the hands of the other grades, even though they are called 'tenants ' or by some vague title such as ' tenure holders. ' In many cases, as we have seen, this division of right is accentuated by the use of terms like sub proprietor ' or proprietor. of his holding '. The 'proprietary right seems then a natural expression for the interest held by a landlord, when that interest is not the entire 'bundle of rights ' (which in the aggregate make up an absolute or complete estate) but only some of them, the re mainder being enjoyed by other persons. " The definitions given in the Act do not abrogate or vary this meaning. The respondent State cannot invoke in its aid section 3, sub clause (1) of the Act which speaks of the vestina of proprietary rights free of all encumbrances, because the rights of the petitioners either as buyers or lessees or licensees are not encumbrances as ordinarily understood. The last part of clause (a) of section 4 (1) indicates that mortgage debts and charges on the proprietary right are meant by encumbrances. In this view, it becomes unnecessary to consider the question as to when title in the property passes to the transferee. Section 4, sub section (3) of the Indian Sale of Goods Act which lays down that in the case of sale of future goods the contract amounts 485 only to an agreement to sell does not seem to be applicable to the contracts and agreements here, as the goods are not " future goods " as defined in subclause (6) of the Act which states that they mean goods to be manufactured or produced or acquired by the seller after the making of the contract of sale. Benjamin says in his treatise on Sale (8th Edition) at page 136: " Things not yet existing which may be sold (that is to say, a right to which may be immediately granted) are those which are said to have a potential existence, that is, things which are the natural produce, or expected increase of some thing already owned or possessed by the seller. A man may sell the crop of hay to be grown in his field, the wool to be clipped from his sheep at a future time, the milk that his cows will yield in the coming month, and similar things. Of such things there could be, according to the authorities, an immediate grant or assignment, whereas there could only be an agreement to sell where the subject of the contract is something to be afterwards acquired; as the wool of any sheep, or the milk of any cows, which the seller might buy within the year, or any goods to which he might obtain title within the next six months. " The goods covered by the present petitions are goods which have a potential existence, and according to the decisions discussed by the learned author, there can be a sale of a present right to the goods as soon as they come into existence. Whether title passes on the date of the contract itself or later is really dependent on the intention of the parties, and as already stated, in these petitions the stipulated consideration has passed from the transferees to the proprietors, and possession also has been taken. We hold that the respondent has no right to interfere with the rights of the several petitioners under the contracts and agreements in their favour set out in their petitions, and we hereby issue a writ prohibiting the State from interfering in any manner whatsoever with the enjoyment of those rights by the 486 petitioners. In cases where the periods under the contracts have expired, or where the proprietors have ill to recover anything from the transferees after he date of vesting, the State will be at perfect liberty to assert and enforce its rights standing in the shoes of the proprietors. The respondent will pay the petitioners their respective costs. Petition allowed. Agent for the petitioners in Petitions Nos. 232, 233, 286, 309 and 320 : Bajinder Narain. Agent for the petitioners in Petitions Nos. 360 and 351: M. section H. Sastri. Agent for the petitioners in Petitions Nos. 319, 354 and 490: Harbans Singh. Agent for the respondents in all petitions: G. H. Rajadhyaksha.

The Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act of 1950 put an end to all proprietary rights in estates, mahals and alienated villages situated in the State and vested them in the State for the purposes of the State, free from all encumbrances. The petitioners, who had entered into various contracts and agreements with the proprietors of the estates before the date on which the estates vested in the State under the Act (and,some of them even before the 16th March, 1950) under which they were entitled to pluck, collect and carry away tendu leaves, to cultivate, culture and acquire lac, and to out and carry away teak and timber and other species of trees, applied for writs under art 32 of the Constitution prohibiting the State from interfering with the rights they had, acquired under the contracts with the proprietors: Held, (i) On construction of the contracts in a question, that the contracts were in essence and effect licenses granted to the petitioners to cut, gather and carry away produce in the shape of tendu leaves, lac, timber, or wood and the petitioners were neither proprietors nor persons having any interest in the proprietary rights through the proprietors, within the meaning of the Act; (ii) The rights of the petitioners were not encumbrances within the meaning of the expression "free from encumbrances in section 3 . 1) of the Act and the petitioners were entitled to a writ against the State prohibiting the State from interfering with the rights of the petitioners under the contracts which they had entered into with the proprietors. Mohanlal Hargovind vs Commissioner of Income tax, C.P,& Berar (I.L.R. [19491 Nag. 892) referred to. Held also, that section 4 (3) of the Indian Sale of Goods Act which lays flown that in the case of sale of future goods the contract 477 amounts only to an agreement to sell did not apply to the contracts in the present case as "future goods" are defined in the Act as meaning goods to be manufactured or produced or acquired by the seller after making the contract of sale.

In Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allaha bad (1962) 2 SCR p.441, this Court held that the respond ent could not enforce his rights under the mortgage by the sale of the new Bhumidari rights created in favour of the mortgagor by section 18 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 and that the respondent could only enforce his rights against the appellant in the manner provided under section 6(h) of the Act read with section 73 of the Transfer of Property Act, and follow the compensation awarded to the intermediary. Despite this decision having been brought to the notice in the execution proceedings initiated by the respondent attachment of the trees in groves belonging to the appellant was ordered by the executing Court taking the view that there is a distinction between the trees and a grove and grove land. The Division Bench of the Allahabad High Court (Lucknow Bench) upheld the views of the Executing Court and dismissed the appeal Allowing the appeal by certificate, the Court, HELD: (1) The view that there is a distinction between trees and a grove and grove land and, therefore execution against trees in groves could be proceeded against cannot be accepted in the light of the definition of the intermediary grove under section 3(13) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, viz., "intermediary 's grove" means groveland held or occupied by intermediary as such. [34 D E, H] (2) Groves are only collection of trees in plots of land so as to preclude cultivation in them. The uncut trees are deemed to be parts of the land. The proposition is well settled under the general law, that trees, before they are cut. form parts of 'land '. And are inseparable part is always included in the whole. [34E F] (3) Section 18(1)(a) of the Act provide that an "inter mediary grove" bhumidary property. Rights in it are parts of bhumidari rights.

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.

The respondents who were licensees for the whole sale vend of denatured spirit in their writ petitions before the High Court contended that levy of fees on denatured spirit was not justified because (i) the State was not providing any service to the trade and (ii) since it is the Parliament which has the power to levy excise duty or tax on denatured spirit, the State was incompetent to levy the fees. Rejecting the contentions, the High Court held that the State had exclusive privilege to deal with any intoxicating liquor which included denatured spirit, that it had the right to vend liquor either in retail or wholesale and that therefore its power to levy fees cannot be questioned. In appeal to this Court it was contended on behalf of the licensees that (1) levy of vend fee on denatured spirit by the State was without legislative competence (2) with the enactment of Industrial (Development and Regulation) Act, 1951 the Union had taken under its control industries including fermentation of industrial alcohol and, therefore, it is only the Union which could levy the fees on denatured spirit or industrial alcohol. Allowing the State 's appeal, ^ HELD: The levy of vend fee is for parting with the exclusive right of the State with regard to intoxicating liquors and for conferring a right on the licensees to sell such liquors. A conspectus of the decisions of this Court establishes (i) that there is no fundamental right of a citizen to carry on trade or to do business in liquor because under its police power, the State can enforce public morality, prohibit trade in noxious or dangerous goods (ii) the State has power to enforce an absolute prohibition on manufacture or sale of intoxicating liquors pursuant to Article 47 of the Constitution and (iii) the history of excise laws in the country shows that the State has the exclusive right or privilege to manufacture or sell liquors. [549 F H] State of Bombay and Anr. vs F. N. Balsara [1951] S.C.R. 682 referred to. (iv) The terms "intoxicating liquor" is not confined to potable liquor alone but would include alliquors which contain alcohol. [537 G] Nashirwar vs State of Madhya Pradesh [1975] 2 S.C.R. 861; Har Shankar vs The Deputy Excise and Taxation Commissioner ; ; State of Bombay and Anr. vs F. N. Balsara & Ors. ; ; Bhola Prasad vs The King Emperor at p. 25 referred to. (v) The term "liquor" used in Abkari Acts not only covers alcoholic liquor which is generally used for beverage purposes and which produces intoxication but would also include liquids containing alcohols. [537 B C] 532 Cooverjee B. Bharucha vs The Excise Commissioner and Chief Commissioner, Ajmer & Anr. ; ; M/s. Guruswamy & Co. etc. vs State of Mysore & Ors. ; State of Orissa & Ors. vs Harinarayan Jaiswal & Ors. ; ; Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura and Ors. ; ; Har Shankar & Ors. vs The Dy. Excise & Taxation Commissioner & Ors. ; referred to. 2(a) The power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as Entry 33 in the Concurrent List enables a law to be made regarding production, supply and distribution of products of notified industries. The exclusive power of the State to provide for manufacture, distribution, sale and possession of intoxicating liquors is vested in the State. The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquors has been recognized as could be seen from the various State Acts regulating the manufacture, sale, etc. of intoxicating liquors. [544 C, A B] Ch. Tika Ramji and Ors. vs The State of Uttar Pradesh and Ors. ; ; Baijnath Kedai vs State of Bihar & Ors. ; distinguished. (b) The term "foreign liquor" cannot be given a restricted meaning because the word consumption cannot be confined to consumption of beverages only. When liquor is put to any use such as manufacture of other articles, the liquor is all the same consumed. The State is empowered to declare what shall be deemed to be country liquor or foreign liquor. "Foreign liquor" is defined as meaning all rectified, perfumed, medicated and denatured spirit wherever made. Therefore, the plea that the Excise Commissioner had no right to accept payment in consideration for the grant of licence for the exclusive privilege for selling in wholesale or retail, foreign liquor which includes denatured spirit cannot be accepted. [548 H, 549 A B] (c) The definition of "alcohol" includes both ordinary as well as specially denatured spirit. The specially denatured spirit for industrial purposes is different from denatured spirit only because of the difference in the quantity and quality of the denaturants. Specially denatured spirit and ordinary denatured spirit are classified according to their use and denaturants used. Therefore, the contention that specially denatured spirit for industrial purposes is different from the ordinary denatured spirit has no force. [551 B, 550 H 551 A]

The appellant (holder of an inam in Madhya Pradesh) served a notice an his tenant, the respondent, terminating to tenancy on the ground that he wanted the land for personal cultivation and filed a suit for ejectment. The trial court decreed the suit. During the pendency of the appeal in the District Court, article 32 of 1954 was enacted, and pursuant to its provisions the hearing of the appeal was stayed. After the Madhya Pradesh Land Revenue Code came into force in 1959, the District Court held that by virtue of section 185 of that Code the respondent acquired the rights, of an occupancy tenant and dismissed the suit. The High Court confirmed the judgment of the District Court. In appeal to this Court, it was contended that : (i) the rights of an occupancy tenant arise in favour of a personl under section 185(1) (i) (a) only if there was between him and the landlord a subsisting tenancy at the date when the Code came into force and since under the law in force before the commencement of the Code, the respondent had ceased to be a tenant because of the notice terminating the contract of tenancy the respondent was not invested with the rights of an occupany tenant; and (ii) bi virtue of sections 261 and 262(2), the operation of section 185 is expressly excluded when a person, against whom ejectment proceedings have been instituted prior to the commencement of the Code in enforcement of a right then acquired, claims the status of an occupancy tenant. HELD : (i) The respondent acquired the right of an occupancy tenant under the Code, because the expression "tenant" in section 185 (1) (ii) (a) includes a person whose tenancy was terminated before the commencement of the Code. The definition of the expression "tenant" in the Code postulates a subsisting tenancy, but the position of a tenant prior to the date on which the Code was brought into force is not dealt with in the definition. In the context in which the expression "tenant" occurs in section 185(1), that definition could not be intended to apply in deter ining the conditions which invest a holder of land with the status of an occupancy tenant at the commencement of, the Code. Therefore having regard to the object of the enactment the expression should be ascribed the meaning it 'has in Act 32 of 1954. Under sections 3 & 4 of that Act a person who was inducted into the land as a tenant and who continued 'to hold the land at the commencement of the Act was entitled to protection against eviction and continue as tenant, notwithstanding that under the law in force prior to the commencement of the Act. the contractual relationship of landlord and tenant was determined. [432 D; 432 14 433 C] 428 There is no reason to think that the Legislature sought to make a A distinction between tenants of Inam land in section 185 (1) (ii) (a) and ryotwari sub lessees of other lands in section 185(1)(ii)(b). Therefore, if the expression "ryotwari sub lessee ' in section 185(1)(ii)(b) includes a sub lessee whose tenaure was terminated before the commencement of the Code, a tenant of inam land, whose tenancy has been terminated would also be included in the protection, provided at some time prior to the date on which the Code was brought into force, he was in possession of the land as a tenant, and he continued to hold the land till the date of the commencement of the Code. [434 E H] (ii) The provisions of the Code appeal to tenants in proceedings for ejectment pending at the commencement of the Code. The proviso to section 261 protects a right which had been acquired under a law repeated by the Code and the right could be enforced as if the code had not been passed. But the right to evict a tenant was governed by the general law of landlord and tenant and was not acquired under any repealed law. The proviso had no operation and a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law enacted in the Code. Therefore, the tenant could not ' be evicted otherwise than in the manner and for reasons mentioned in a. 193 of the Code but, personal requirement for cultivation of land is not a ground on which a claim for ejectment could be maintained. [435 G436 A] Section 262(2) is only procedural it provides that a civil court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, Which, if it had been instituted after the Code was passed would have been tried by a revenue court; and in the disposal of such a suit, the civil court will be governed by the procedural law applicable there to prior to the commencement of the Code. It does not nullify the statutory conferment of occupancy right upon persons in the position of tenants against whom proceedings were taken at the date when the Code was brought into force. [436 B D]

A Jagirdar executed a deed on August 5, 1949 in favour of the appellant for the sale of logs of a specified girth to be obtained from cutting the trees in his forests. On February 19, 1951 the Forest Officer of the ' respondent State prevented the appellant and the Jagirdar from cutting the trees. On the coming into force of the Madhya Pradesh Act 1 of 1951, the, interest of the Jagirdar in his estate vested in the respondent State. The appellant instituted a suit in June 1954 against the respondent Stateand the Jagirdar for breach of contract and claimed compensation (i) for logs which were cut but which he could not remove; (ii) for logs which were cut but were stated to have 'been lost due to the negligence of the respondent; and (iii) logs from the standing timber which had not been cut or could not be cut by the appellant from the jagirdar 's villages. The ' respondent State contested the suit on the ground inter alia that the deed could not be enforced against it because of the vesting of the Jagir under the Act in the State and that the contract created a mere personal liability against the Jagirdar. The Trial Court granted the appellant a decree for compensation under all the heads claimed at a rate per log determined by the Court. The High Court in appeal disallowed the appellant 's claim, under items (ii) and (iii). In appeal to this Court by certificate it was contended on behalf of the appellant that the rate of compensation determined was inadequate; that the High Court erred in disallowing compensation four the logs which were cut *but were lost, and that it had wrongly disallowed the claim for value of logs of timber which the appellant was entitled to, but could not cut because of the restrictions imposed by the ' State. HELD: Dismissing the appeal, (i) On the evidence, the High Court had rightly disallowed the claim in respect of logs cut but which were stated to have been lost. (ii) Where a thing is attached to, or forms part of, land at the time of the contract and which is to be severed by the buyer, under section 18 of the the property in the thing passes in the absence of a contract to the contrary to the buyer on the severance of the thing from, the land. Again under section 21 of the Act, even if there be: a contract for the sale of specific goods, but the seller is obliged under the terms of the contract to do something to the goods for the purpose of putting them into, a deliverable state, the property passes only when the thing agreed to be done is done and the buyer is informed thereof. [453 D] In the present case the contract by its terms was for the sale of logs out of trees in the forest with a girth of two feet or more; but the timber had to be cut and had to be put in a deliverable state,. Before the trees. 446 were cut and the logs appropriated to the contract, the estate of the Jagirdar vested in the State of Madhya Pradesh. The, appellant 's claim to cut standing trees in the forests of the Jagir after they vested in the State was therefore rightly negatived. [456 F G] Badische Anilin Fabrik vs Hickson, at p. 421; KurseH vs Timber Operators and Contractors Ltd., ; Chhotabhai Jethabhai Patel & Company vs The State of Madhya Pradesh, ; ; Shrimati Shantabat vs State of Bombay & Ors. 11959] S.C.R. 265; Mahadeo vs The State of Bombay, [1959] Supp. (2) S.C.R. 339: .State of Madhya Pradesh vs Yakunuddin, [1963] S.C.R. 13; referred tO.

The appellant as the proprietor of Nada un Jagir sued to establish his title to chil (pine) trees standing on lands within the Jagir but belonging to the respondents, on the ground that the trees belonged to him as ala malik (superior landlords and not to the respondents who were only adna maliks (inferior landlords). The Jagir originally formed part of the territory belonging to the rulers of Kangra who were Sovereigns entitled to the chil trees. In 1827. 28 Maharaja Ranjit Singh conquered the territory and granted Nadaun as Jagir to Raja Jodhbir Chand who was the illegitimate son of Raja Sansar Chand, the last independent ruler of Kangra. In 1846 as a result of the first Sikh War the territory came under the dominion of the British,. who granted a Sanad in favour of Raja Jodhbir Chand in recognition of his services. After the second Sikh War, the British granted a fresh Sanad in respect of the Jagir of Nadaun in 1848. Subsequent to the grant, there were settlements in 1892 93 (O 'Brien 's Settlement), 1899 1900 (Anderson 's Settlement) and 1910 1915 (Settlement of Messrs Middleton and Shuttleworth), and there were some entries in the Wajib ul arz supporting the title of the Raja to the chil trees. The appellant who is a direct lineal descendant of Raja Jodhbir Chand claimed title to the trees, firstly, as the representative of the independent Kangra rulers, secondly, on the basis of the grant given by the British Government and, thirdly,on the strength of the entries in the Wajib ul arz. Held:(1) The Sovereign right of the independent Kangra rulers Lo chil trees passed by conquest to the Sikh rulers and subsequently to the British; Raja Jodhbir Chand was only a Jagirdar under the Sikhs and the British, and the appellant could not therefore lay claim to the chil trees on the basis of the Sovereign right of the in. dependent rulers. (2)The grant of 1848 on its true construction was primarily an assignment of land revenue and whatever other rights might have been included, the right to all chil trees on the proprietary and cultivated lands of the respondents was not within the grant. 890 It is well settled that the general rule is that grants made by the Sovereign are to be construed most favourably for the Sovereign; but if the intention is obvious, a fair and liberal interpretation must be given to the grant to enable it to take effect, and the operative part, if plainly expressed, must take effect notwithstanding qualifications in the recitals. In cases where the grant is for valuable consideration it is construed in favour of the grantee, for the honour of the Sovereign, and where two constructions are possible, one valid and the other void, that which is valid ought to be preferred, for, the honour of the Sovereign ought to be more regarded than the Sovereign 's profit. (3)Wajib ul arz or village administration paper is a record of existing rights not expressly provided for by law and of customs and usage regarding the rights and liabilities in the estate, and though under section 44 of the Punjab Land Revenue Act, 1887, it is presumed to be true, it is not to be used for the creation of new rights and liabilities. Entries in the wajib ul arz with regard to the right of the Raja in respect of chil trees standing on the cultivated and proprietary lands of the adna maliks, did not show any existing custom or usage, of the village, the right being a Sovereign right, and the appellant could not rely on the said entries as evidence of a grant or surrender or relinquishment of a Sovereign right by Government in his favour. The expressions "ala malik" and "adna malik" explained in the context of the Settlement reports relating to Nadaun Jagir. Venkata Narasimha Appa Bow Bahadur vs Rajah Narayya Appa Bow Bahadur ([1879] L.R. 7 I.A. 38), Dakas Khan vs Ghulam Kasim Khan (A.I.R. and Gurbakhsh Singh vs Mst. Partapo ([1921] I.L.R. , referred to.

In his election petition challenging the election of the respondent the appellant alleged that the respondent and three other defeated candidates committed various corrupt practices within the meaning of sub sections (1) to (7) of section 123 of the Representation of the People, Act, 1951. The respondent raised a preliminary objection that the petition was liable to be dismissed for noncompliance with the provisions of section 82 of the Act inasmuch as the defeated candidates against whom allegations of corrupt practice had been made had not been joined as parties to the petition. The High Court upheld the objection and dismissed the petition. In appeal to this Court it was contended that: (i) since the affidavit filed by the appellant in support of the election petition merely stated that the allegations contained in the relevant paragraphs were based on information received and had not stated what the sources of information were, that part of the petition in which the allegations of corrupt practices were made could not form the basis of a triable issued (ii) while section 82(a) was mandatory s.82(b) was directory and as such the petition could not be dismissed: (iii) s.82(b) was violative of article 14 of the Constitution. Dismissing the appeal. HELD : (i) The provision for setting out the sources of information in an affidavit was not a requisite prescribed under r. 94 A of the conduct of Election Rules, 1961. There was 'nothing in the affidavit in Form 25 under this rule which required the petitioner to state the source or source", of his information. When there were specific rules under the Act no other rules were applicable. If the petition and the affidavit conformed to the provisions of the Act and the rules made thereunder, it could not be said that because the source of information had not been given. the allegations made in the petition had to be ignored. [353E F] Smt. Sahodrobai Rai vs Ram Singh Aharwar & Ors. A.I.R. ; Amulva Chandra Rhaduri vs Satish Chandra Giri & Ors. A.I.R. 1932 Cal. 255 and Wasudeoraoji vs A. D. Mani A.I.R. 1951 Nag. 26, held inApplicable. (ii) Section 82(2) enioins that, apart from the returned candidate whose election was challenged, any other candidate against whom any allegations of corrupt practices were made should be joined as parties to the petition Section 86 read with s 82 makes both cls. (a) and (b) of s 82 mandatory and noncompliance with these requirements renders the petition to be dismissed. In view of these provisions it was incumbent upon the High Court where the allegation *as that the requirements of section g) were not complied with, to deter mine that issue as a preliminary issue. [353A D] Charan Lal Sohu vs Nandkishore Bhatt & Ors. C. A. No. 2411 of 1972 dated August 1, 1973, referred to. Mohan Singh vs Bhanwarlal & Ors. ; , held inapplicable. (iii)An election petition cannot be split up in such a manner as to maintain it in respect of allegations of corrupt practiced only against some persons and not against other persons who were required to be made necessary parties. 350 A person who was not a party and against whom corrupt practices had been proved at the trial, natural justice required that he should also be afforded an opportunity to contest that finding. Article 14 had no application because the object of section 82 was one and indivisible and a person coming to the court had to come with clean hands and not attempt to prevent a full and complete enquiry or thwart fair trial by picking and choosing the parties to the peti tion. [357C F]

Appeals Nos. 635 to 641 of 1957. Appeals from the judgment and decree dated September 8, 1954, of the Punjab High Court in Regular First Appeals Nos. 42, 43, 44, 45, 46, 47 and 48 of 1949. R. Gopalakrishnan, T. M. Sen and R. H. Dhebar, for the appellants. Darya Dutt Chawla, for the respondents. May 1. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. Civil Appeal No. 635 of 1957 is an appeal, by certificate, and raises the question regarding the effect of the abatement of the appeal, by the State of Punjab, against Labhu Ram, one of the respondents, on the State appeal against Nathu Ram, co respondent. Civil Appeals Nos. 636 to 641 of 1957 also raise the same question between the same parties. The facts leading to the appeal are that the Punjab Government acquired on lease certain parcels of land belonging to Labhu Rain and Nathu Ram, for different military purposes, under the Defence of India Act, 81 638 1939 (XXXV of 1939). Labhu Ram and Nathu Ram, brothers, refused to accept the compensation offered to them by the Collector and applied to the Punjab Government, through the Collector, under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, hereinafter called the Rules, as amended by the Notification of the Punjab Government No. 1444 HM44/19124, dated 10th March, 1944, and published in the Punjab Gazette, Part 1, dated 17th March, 1944 (Home Department). The State Government referred the matter to an arbitrator as required under r. 10, who, after enquiry, passed an award ordering the payment of an amount higher than what was offered by the Collector and also ordered the payment of certain amount on account of income tax which would be paid on the compensation received. The State Government appealed against the award to the High Court of Punjab. During the pendency of the appeal, Labhu Ram, one of the respondents, died. The High Court, holding that the appeal abated against Labhu Ram and that its effect was that the appeal against Nathu Ram also abated, dismissed the appeal. It also dismissed the cross objections. The State Government applied for a certificate of fitness of the case for appeal to this Court and the High Court granted it, as questions of great private and public importance were involved. It is not disputed that in view of 0. XXII, r. 4, Civil Procedure Code, hereinafter called the Code, the appeal abated against Labhu Ram, deceased, when no application for bringing on record his legal representatives had been made within the time limited by law. The Code does not provide for the abatement of the appeal against the other respondents. Courts have held that in certain circumstances, the appeals against the co respondents would also abate as a result of the abatement of the appeal against the deceased respondent. They have not been always agreed with respect to the result of the particular cir cumstances of a case and there has been, consequently, divergence of opinion in the application of the principle. It will serve no useful purpose to consider the cases. Suffice it to say that when 0. XXII, r. 4 does 639 not provide for the abatement of the appeals against the co respondents of the deceased respondent, there can be no question of abatement of the appeals against them. To say that the appeals against them abated in certain circumstances, is not a correct statement. Of course, the appeals against them cannot proceed in certain circumstances and have therefore to be dismissed. Such a result depends on the nature of the relief sought in the appeal. The same conclusion is to be drawn from the provisions of 0. 1, r. 9, of the Code which provides that no suit shall be defeated by reason of the misjoinder or non joiner of parties and the Court may, in every suit, deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. It follows, therefore, that if the Court can deal with the matter in controversy so far as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it. It is only when it is not possible for the Court to deal with such matters, that it will have to refuse to proceed further with the appeal and therefore dismiss it. The question whether a Court can deal with such matters or not, will depend on the facts of each case and therefore no exhaustive statement can be made about the circumstances when this is possible or is not possible. It may, however, be stated that ordinarily the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appellants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court. The test to determine this has been described in diverse forms. Courts will not proceed with an appeal (s) when the success of the appeal may lead to the Court 's coming to a decision which be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the Court 's passing a decree which will be contradictory to the decree which had become final with respect to 640 the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the Court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective, that is to say, it could not be successfully executed. There has been no divergence between the Courts about the Court 's proceeding with the appeal between the respondents other than the deceased respondent, when the decree in appeal was not a joint decree in favour of all the respondents. The abatement of the appeal against the deceased respondent, in such a case, would make the decree in his favour alone final, and this can, in no circumstances, have a repercussion, on the decision of the controversy between the appellant and the other decree holders or on the execution of the ultimate decree between them. The difficulty arises always when there is a joint decree. Here again, the consensus of opinion is that if the decree is joint and indivisible, the appeal against the other respondents also will not be proceeded with and will have to be dismissed as a result of the abatement of the appeal against the deceased respondent. Different views exist in the case of joint decrees in favour of respondents whose rights in the subject matter of the decree are specified. One view is that in such cases, the abatement of the appeal against the deceased respondent will have the result of making the decree affecting his specific interest to be final and that the decree against the other respondents can be suitably dealt with by the appellate Court. We do not consider this view correct. The specification of shares or of interest of the deceased respondent does not affect the nature of the decree and the capacity of the joint decree holder to execute the entire decree or to resist the attempt of the other party to interfere with the joint right decreed in his favour. The abatement of an appeal means not only that the decree between the appellant, and the deceased respondent has become final, but also, as a necessary corollary, 641 that the appellate Court cannot, in any way, modify that decree directly or indirectly. The reason is plain. It is that in the absence of the legal representatives of the deceased respondents, the appellate Court cannot determine anything between the appellant and the legal representatives which may affect the rights of the legal representatives under the decree. It is immaterial that the modification which the Court will do is one to which exception can or cannot be taken. It is therefore necessary to determine, on the facts of this case, whether the State appeal could proceed against Nathu Ram. The award of the arbitrator in each of these cases was a joint one, in favour of both the respondents Labhu Ram and Nathu Ram. To illustrate the form of the award, we may quote the award for the year 1945 46 in the proceedings leading to Civil Appeal No. 635 of 1957. It is: "On the basis of the report of section Lal Singh, Naib Tehsildar (Exhibit P. W. 9/1) and Sheikh Aziz Din, Tehsildar, Exhibit P. W. 9/2, the applicants are entitled to a sum of Rs. 4,140 on account of rent, plus Rs. 3,872 8 0 on account of Income tax etc., due to the inclusion of Rs. 6,193 8 0 in their total income, plus such sum as the petitioners have to pay to the Income tax Department on account of the inclusion of Rs. 4,140 in their income as awarded by this award." The result of the abatement of the appeal against Labhu Ram is therefore that his legal representatives are entitled to get compensation on the basis of this award, even if they are to be paid separately on calculating their rightful share in the land acquired, for which this compensation is decreed. Such calculation is foreign to the appeal between the State of Punjab and Nathu Ram, The decree in the appeal will have to determine not what Nathu Ram 's share in this compensation is, but what is the correct amount of compensation with respect to the land acquired for which this compensation has been awarded by the arbitrator. The subject matter for which the compensation is to be calculated is one and 642 the same. There cannot be different assessments of the amounts of compensation for the same parcel of land. The appeal before the High Court was an appeal against a decree jointly in favour of Labhu Ram and Nathu Ram. The appeal against Nathu Ram alone cannot be held to be properly constituted when the appeal against Labhu Ram bad abated. To get rid of the joint decree, it was essential for the appellant, the State of Punjab, to implead both the joint decree holders in the appeal. In the absence of one joint decree holder, the appeal is not properly framed. It follows the that State appeal against Nathu Ram alone cannot proceed. It is however contended for the State that according to the entries in the village records, Labhu Ram and Nathu Ram had equal shares in the land acquired and that therefore the appeal against Nathu Ram alone can deal with half the amount of the award. We do not agree. The mere record of specific shares in the revenue records is no guarantee of their correctness. The appellate Court will have to determine the share of Nathu Ram and necessarily the share of Labhu Ram in the absence of his legal representatives. This is not permissible in law. Further, the entire case of Labhu Ram and Nathu Ram, in their application to the Government for the appointment of an arbitrator, was that the land jointly belonged to them and had been acquired for military purposes, that a certain amount had been paid to them as compensation, that they received that amount under protest and that they were entitled to a larger amount mentioned in the application and also for the income tax they would have to pay on account of the compensation received being added to their income. Their claim was a joint claim based on the allegation that the land belonged to them jointly. The award and the joint decree are on this basis and the appellate Court cannot decide on the basis of the separate shares. The State objected before the arbitrator, and urges before us, that under the rules, the joint application of Labhu Ram and Nathu Ram should have been 643 treated as separate applications with respect to the correctness of the compensation payable to each of them respectively and that the arbitrator should have made separate awards with respect to such separate claims of Labhu Ram and Nathu Ram. The necessary corollary of such a contention for the State is that the abatement of the appeal against Labhu Ram will not make infructuous the appeal against Nathu Ram. The respondent urges that the Punjab Land Acquisition (Defence of India) Rules, do not contemplate separate applications by the persons interested in the compensation on account of the acquisition of a particular parcel of land. The arbitrator did not agree to deal with the claims of Labhu Ram and Nathu Ram separately. He, however, did not decide the question on the basis of the land belonging jointly to the two brothers as members of the joint Hindu family. He however held that the expression 'a person interested ' in r. 3, included all persons claiming an interest in the compensation to be paid on account of the acquisition of the land and that r. 18 permitted the joinder of applications for joint enquiry when each case rested on the same and similar basis and each of the applications included land included in a larger part of land acquired at one time. He also took into consideration that the separation of the applications of Labhu Ram and Nathu Ram would involve various difficulties in matters of income tax. He therefore used his discretion and ordered the application to be proceeded with jointly. In view of our opinion on the main point, we do not consider it necessary to interpret the rules and decide whether the joint application was maintainable or not. The fact remains that Labhu Ram and Nathu Ram made a joint claim and got a joint decree against the State for compensation. The frame of the appeal is to be with reference to the nature of the decree challenged. We therefore see no force in this appeal and dismiss it with costs. This order will govern the other 644 connected appeals, viz., Civil Appeals Nos. 636 to 641 of 1957. Appeal dismissed.

The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly. The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government. The Government appealed against the said award to the High Court. During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated. Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal. If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it. Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed. The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly. When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated. In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed.

The appellants who were displaced persons were allotted land which was entered as sailab land in the revenue records and they became the owners of these lands. After the coming into force of the Punjab Security of Land Tenures Act, 1953, the Revenue Authorities proceeded to determine the permissible area of the land of the appellants under section 2(3). They allowed 50 standard acres of land to each of the appellants and declared the balance as surplus land. The appellants claimed that the lands allotted to them as displaced persons fell in a portion of District Karnal which was sailab and adna sailab and according to the classification made under the Punjab Security of Land Tenures Rules, 1953 they did not carry any valuation. The Collector dismissed their application. The Commissioner dismissed their appeals holding that the Collector was right in treating the surplus area as an unirrigated areas and valuing the same at nine annas per standard acre. A single Judge accepting the contention of the appellant in his writ petition set aside the orders of the Revenue Court. The Financial Commissioner filed an appeal which was allowed by the Division Bench and the writ petition was dismissed. In the appeals to this Court it was contended on behalf of the appellants that (1) whereas sub section (5) of section 2 of the Act directed the Government to frame Rules after considering the quantity of the yield and quality of soil, in the Rules framed by the Government the main guide lines laid down by sub section(5) were not followed, and the classification made by the Rules under Annexure 'A ' was arbitrary without determining the quantity of the yield and quality of the soil, and (2) that even if the classification made in Annexure 'A ' was valid, the Revenue Courts as also the High Courts committed an error of law in misconstruing the classification and in arbitrarily placing the surplus area in the category of unirrigated land. 331 Dismissing the appeals, ^ HELD: 1(i) The view of the single Judge is not in consonance with the scheme and spirit of the Rules framed under the Act and is based on a wrong interpretation of the nature, extent and ambit of the classification made in Annexure 'A '. The classification is in accordance with provisions of sub section (5) of section 2 of the Act and is, therefore, constitutionally valid. [337 E F, G] (ii) The Land Resettlement Manual prepared in 1952 by Tarlok Singh shows that the classification has been made in a very scientific manner after taking into consideration all the relevant factors. The Punjab Settlement Manual (4th Edition) prepared by Sir James M. Douie though possessing unimpeachable authenticity was made long ago and since then there have been great changes resulting from various steps taken by the Government for improving the nature and character of the land and the irrigation facilities. Even so, the classification made by Sir James Douie has been adhered to broadly and basically by Tarlok Singh in his Manual which forms the pivotal foundation for the schedule containing Annexure 'A ' framed under the Rules. [335H 336 C] (iii) The classifications of land like barani, sailab, abi, nehri, chahi etc. are clearly mentioned in the Punjab Settlement Manual. The Rule Making Authority has not in any way either departed from the principles mentioned in sub section(5) of section 2 of the Act or violated the guidelines contained therein, nor could it be said that the classification made under the Rules has not been made according to the quantity of yield or the quality of the soil. [336 C, D E] (iv) If the dominant object of the act was to take over the surplus area according to the formula contained in various provisions of the Act particularly sub sections (3) and (5) of section 2, there is no material on the record to show that the Rules do not fulfil or carry out the object contained in the Act. [336 G] Jagir Singh and Ors. vs The State of Punjab and Ors., 44 (1965) Lahore Law Times 143, approved. 2.(i) There was no error in the classification made by the revenue authorities. So far as Karnal District was concerned, there was no sailab land at the time when the Rules were framed and the classification was made. Even if the land in question could be treated as sailab and equated with the land in Sonepat then the valuation would have been at 12 annas which could be more deterimental to the interest of the appellants. The Collector and the Commissioner have rightly treated the land as unirrigated which is the lowest category and whose valuation is given as nine annas per acre. [338C, B] (ii) The three categories given in clauses (a), (b) and (c) of Rule 2 do not cover the land of the appellants which is sailab or adna sailab and therefore, they cannot be given the benefit of any of these three sub clauses of the proviso. [339 A]

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]

FACTS challenge in this appeal is to the judgment of a division bench of the madhya pradesh high court dismissing the writ appeal filed by the appellant on the ground that it was not maintainable. the appeal was filed u/s.2(1) of the m.p.uchacha nyayalay (khand nyaypeth ko appeal) adhiniyam,2005. it was held that the order was passed in exercise of power of superintendence u/art.227 of the constitution of india,1950 (in short the 'constitution') against which the letters patent appeal is not maintainable. ARGUMENT learned counsel for the appellant submitted that the order of this court is very clear and the conclusions of the high court that merely limitation was waived is contrary to the clear terms of the earlier order of this court. additionally it is submitted that the prayer in the writ petition was to quash the order passed by the assistant commissioner,commercial tax. ISSUE whether to quash the order of assessment passed by the assistant commissioner,commercial tax levying purchase as well as entry tax. ANALYSIS the writ petition was styled u/art.227 of the constitution is of no consequence. it is the nature of the relief sought for and the controversy involved which determines the article which is applicable. a bare reading of the order shows that the direction was to consider the lpa on merits and time was granted to prefer the lpa within three weeks. the high court's order is unsustainable. the high court seems to have gone by the nomenclature gone by the nomenclature i.e.the discription given in the writ petition to be one u/art.227 of the constitution. the high court did not consider the nature of the controversy and the prayer involved in the writ petition. by art.226 the power of issuing prerogative writs possessed by the chartered high courts prior to the commencement of the constitution has been made wider and more extensive and conferred upon every high court. in umaji keshao meshram v. radhikabai [air 1986 sc 1272 1986 indlaw sc 651. it was noted as follows. u/art.226 an order,direction or writ is to issue to a person,authority or the state. in a proceeding under that article the person,authority or state against whom the direction,order or writ is sought is a necessary party. under article 227,however,what comes up before the high court is the order or judgment of a subordinate court or tribunal for the purpose of ascertaining whether in giving such judgment or order that subordinate court or tribunal has acted within its authority and according to law. the nature of the exercise of the power under article 226,however,remains the same as in the case of the power of issuing prerogative writs possessed by the chartered high courts. it was open to the respondent to invoke the jurisdiction of the high court both u/arts.226 and 227 of the constitution of india. once such a jurisdiction was invoked and when his writ petition was dismissed on merits,it cannot be said that the learned single judge had exercised his jurisdiction only u/art.226 of the constitution of india. this conclusion directly flows from the relevant averments made in the writ petition and the nature of jurisdiction invoked by the respondent as noted by the learned single judge in his judgment,as seen earlier. consequently,it could not be said that cl.15 of the letters patent was not attracted for preferring appeal against the judgment of the learned single judge. it is also necessary to note that the appellant being the respondent in letters patent appeal joined issues on merits and did not take up the contention that the letters patent appeal was not maintainable. for all these reasons,therefore,the primary objection to the maintainability of the letters patent appeal as canvassed by learned counsel for the appellant,has to be repelled. the high court was not justified in holding that the letters patent appeal was not maintainable. in addition,a bare reading of this court's earlier order shows that the impugned order is clearly erroneous. STATUTE s.2 of the m.p.uchacha nyayalay (khand nyaypeth ko appeal) adhiniyam,2005 reads as follows: "2(1. an appeal shall lie from a judgment or order passed by the one judge of the high court in exercise of original jurisdiction u/art.226 of the constitution of india,to a division bench comprising of two judges of the same high court. provided that no such appeal shall lie against an interlocutory order or against an order passed in exercise of supervisory jurisdiction u/art.227 of the constitution of india.

The appellant 's suit against the respondent for rendition of account and other reliefs was valued at Rs. 5,930/ for purposes of court fee and jurisdiction. The suit was decreed in part and the amount decreed was less. than the amount at which he stated his tentative valuation. He filed an appeal to the District Court stating the valuation for purposes of appeal at Rs. 4,880 '/ . The memorandum of appeal showed the valuation in the original suit and the court fee paid was the same amount as in the trial court. The District Court returned the memorandum of appeal for presentation to the proper court because, under section 39 '(1) of the Punjab Courts Act appeals above the value of Rs. 5,000/ had to filed before the High Court. The appeal was filed in the High Court the same day, but it was out of time. The appellant also filed a revision against the order of the District Court. His counsel placed reliance on r. 4 in Ch. 3 B of Vol. 1 of the Rules of the High Court which states that "in a suit for the amount found due after taking accounts it is not the tentative valuation of the plaintiff but the amount found to be due and decreed by the court that determines the forum of appeal. " The High .Court held that there was no ground for extending time under section 5 of the Limitation Act and dismissed the appeal and also the revision. In appeal to this Court, HELD: The High Court should have extended time under section 5 of the Limitation Act. [9 '4 A B] (i) The appellant did not have any underhand motive in filing the appeal before the District Court, the filing had to be attributed entirely to the advice of his counsel. [93 A B] There is no general proposition that mistake of counsel by itself is always a sufficient ground for condoning delay. It is always a question whether the mistake was bona fide or was merely a device to cover an ulterior purpose. [92 F G] In the present case the original valuation determined the court of lowest denomination before which the appeal from the suit had to go and that forum was the High Court. The counsel seems to have been misled by r. 4 in Ch. 3 B of Vol. 1 of the Rules and Orders of the High Court. This rule is applicable in a case where the amount decreed is larger than the amount for which the original suit was brought. It does not apply where the amount decreed is below the valuation in the original court. There is nothing in the case to show that the error committed by the counsel was tainted by any mala fide motive. [93 C F; 94 A]

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.

The Appellant, Nagar Panchayat, Una, a local body, was constituted under the Gujarat Panchayat Act, 1961, which came into force 'from April 1, 1963. Prior to this enactment, the Bombay Municipal Act, 190 1, as applied to Saurashtra, was in force in that region of the present State of Gujarat and under its provisions the Una Municipality was constituted. This Municipality was collecting octroi on commodities imported into the municipal limits of Una under the Saurashtra Terminal Tax and Octroi Ordinance 1949. Section 3 of that Ordinance empowered the State Government to impose the tax mentioned thereunder in the cities and towns specified or included later in Schedule 1. One of these taxes was a terminal tax on goods imported into or exported from the terminal, tax limits. Section 4 gave powers to the Government to make rules by notification for the purpose of carrying out the purposes of the Ordinance. Rule 4, which was framed in Gujarati language, provided that collection of octroi and terminal tax would be done through the "Sudhrai" of the area entered in the schedule to the Ordinance. After the Act of 1961 came, into force and the Nagar Panchayat replaced the Municipality, it continued to collect the actroi till 1967, when the respondent filed a petition under Article 226 challenging the competence of the Nagar Panchayat to collect the octroi. The High Court held that since in the Rules promulgated under the Ordinance in Gujarati the collecting Agency had been described as "Sudhrai" which means Municipality, the Nagar Panchayat was not competent to collect the octroi under the Ordinance as it did not fall within the meaning or definition of the term "Municipality". On appeal to this Court, HELD : Allowing the appeal : The High Court was in error in coming to the conclusion that the Nagar Panchayat was not entitled to carry on the work of collection of octroi under the Ordinance even though the Ordinance which imposed liability to pay remained in force. Section 307 of the Act leaves no room for doubt that wherever a Nagar Panchayat was constituted in Place of the municipality, the municipality disappeared and all its funds including the right to realise taxes etc. vested in the Nagar Panchayat. In other words it was the Nagar Panchayat which was to function as the local body in the area previously constituted as a municipality. Clause (k) of section 307 clearly saved all laws or rules which were applicable to the local area which formed a municipality and they were to continue to, apply and to remain in force in the area for which the Nagar Panchayat came to be constituted. There was no force in the contention that the Ordinance did not become applicable to the cities and towns specified in Schedule I which came to be constituted as Grams or Nagars under the Act. [410 C] 408 Even if in the rules framed under the Ordinance certain expression created a difficulty that could not defeat the right and the power conferred on the Nagar Panchayat by the Act of realising and collecting the octroi which was being done under the Ordinance as saved by clause (k) of section 307. [410 H]

For the assessment years 1961 62 and 1962 63, the respondent assessee had debited an amount of Rs.5,40,000 and an amount of Rs.2,76,000 to its profit and loss account of the relevant previous years respectively. The amounts were debited on the ground that they represented the assessee 's liability of the relevant years for the additional cane price payable to cane growers under the Sugarcane Price Control Order, 1955 and were shown in the balance sheet under the head "Current liabilities and provisions". However, in the subsequent accounting year ending September 1963, the assessee had credited its profits by the said amounts by reversing the entries, and had not made any such provision in the subsequent years. In assessment proceedings under the for the assessment year 1963 64, the Income tax Officer did not include both the aforesaid amounts in the capital computation of the assessee. The Appellate Assistant Commissioner affirmed the view taken by the Income tax Officer. But, on second appeal, the Appellate Tribunal held that the amount represented a "reserved" and should have been included in the capital computation of the assessee. The High Court also agreed with the Tribunal. Dismissing the appeal by the Revenue, ^ HELD: 1. The Rules made under the provide for computing the capital of a company for the purpose of super 215 profits tax. A perusal of Rule 1 of the Second Schedule will show that for the purposes of that rule the capital of a company includes the reserve created under some of the provisions of the Indian Income tax Act and its other reserves in so far as the amount credited to such other reserves has not been allowed in computing its profits for the purposes of the Income tax Act. [217D E] 2. In determining whether an item is a "provision" or a "reserve" the true nature and character of the sum so retained or appropriated must be determined and its mere description by the assessee in its Balance Sheet is not conclusive of its true nature. A provision is a charge against the profits, being made against anticipated losses and contingencies. A "reserve", on the contrary, is an appropriation of profits, the assets by which it is represented being retained to form part of the capital employed in the business. Unlike a "provision" which is a present charge against the profits, the assessee continues to enjoy a proprietor 's interest in the "reserve" [218C E] In the instant case, the evidence clearly disclosed that there was no liability at all on the assessee requiring it to set apart a sum as a charge against its profits and there was never any intention to make payments to the cane growers nor was payment ever made but, on the contrary, the assessee reversed the entries in a subsequent year in its books. It is apparent that the amount cannot be described as a "provision". It can only be described as a "reserve". It was part of the capital which fell for computation under Rule 1 of the Second Schedule. [218E F] Vazir Sultan Tobacco Co. Ltd. vs Commissioner of Income tax, A.P., ; and Metal Box Co. of India Ltd. vs Their Workmen, relied upon.

Appeal No. 371 of 1957. Appeal from the judgment and decree dated August 22, 1955, of the Bombay High Court in Appeal No. 49 of 1955. C. B. Agarwala, J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for the appellant. Ajit H. Mehta and I. N. Shroff, for the respondent,. 1961. May 1. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal arises from a suit filed by M/s. Binani Commercial Co. Ltd., on the Original Side of the Bombay High Court against the respondent Ramanlal Maganlal Mehta. In its suit the appellant sought to recover from the respondent a sum of Rs. 93,053 3 0 which represented the loss suffered by it in the transaction in question or in the alternative damages for Rs. 88,229 3 0 for breach of the contract in respect of the said transaction. The appellant is a Limited Company and it carries on business in Bombay as metal merchants, bankers and commission agents. The respondent also carries on business in Bombay under the name and style of M/s. Balasinor Export and Import Co., and also as M/s. Ramanlal and Sons. In January 1952 the appellant agreed to sell to the respondent 300 tons of Electrolytic Zinc at the rate of Rs. 171 per cwt. against delivery orders issued under the regulations of the Metal Traders Association, Ltd., for Posh Sudi 15 delivery (January 12, 1952). The respondent promised to pay for the said goods by January 21, 1952 and to take delivery thereafter. The respondent paid to. the appellant several sums aggregating Rs. 1,56,000 as a deposit for the price of the said goods. The appellant tendered the said goods to the respondent whereupon he arranged to take delivery of only 160 tons and made payments on account. The appellant then tendered the balance of 140 tons to the respondent but the respondent failed and neglected to take delivery of the said balance and to pay for it. As a 628 result of the respondent 's default in taking delivery the appellant had to sell the balance in the falling market at Rs. 81 per cwt., and that had resulted in the loss to the appellant. That in brief is the nature of the claim made by the appellant against the respondent. This claim was resisted by the respondent on several grounds. The principal ground urged by him, however, was that the transaction in suit for the sale of 300 tons of Electrolytic Zinc was in contravention of the provisions of Supply and Prices of Goods Act, 1950 (70 of 1950) and cl. (b) of the Government of India Notification No. 1(4) 32(17)50 issued on September 2, 1950. According to the respondent the said transaction was void and illegal and therefore the appellant 's claim was not maintainable in law. The respondent also raised other contentions on the merits without prejudice to his principal contention about the illegality of the contract. The suit was tried by Coyajee, J. on the Original Side of the Bombay High Court. The principal defence raised by the respondent was tried as a preliminary issue by the learned Judge. On this preliminary issue, the learned Judge held that the defence set out by the respondent was not good and not applicable to the facts and circumstances of the case. His conclusion, therefore, was that the contract was valid. The learned Judge, after delivering this interlocutory judgment, proceeded to try the issues on the merits, and having found in favour of the appellant on the said issues he directed that the matter be referred to the Commissioner for taking accounts to ascertain the damages suffered by the appellant in the light of the directions given in the Judgment. Against this decision the respondent preferred an appeal and the Division Bench of the Appeal Court allowed his appeal. Before the Court of Appeal only one point was argued and that was in regard to the validity of the contract. The Court of Appeal has held, reversing the conclusion of the trial Judge, that the defence raised by the respondent was good and that the contract in question was invalid. In the 629 result the Appeal Court has directed that the appellant 's suit should be dismissed with costs. The appellant then applied for and obtained a certificate from the said High Court and it is with that certificate that it has come to this Court by its present appeal; and the main contention raised by Mr. Agarwala on behalf of the appellant is that the view taken by the Division Bench in upholding the contention of the respondent against the validity of the contract is erroneous in law. It is, therefore, necessary at the outset to refer to the material provisions of the Supply and Prices of Goods Act 70 of 1950 (hereafter called the Act) and to examine very broadly its scheme and purpose. The Act has been passed in pursuance of a resolution under article 249 of the Constitution for the control of prices of certain goods and the supply and distribution thereof. Article 249 confers on Parliament the power to legislate in regard to a matter in a State List but the said power can be exercised only in national interest and after the Council of State passes a resolution in that behalf supported by at least two third of the members voting. There is no doubt that the Act has been passed in national interest because national interest undoubtedly required that the supply and prices of certain types of goods should be controlled by the Central Legislature. The prices in regard to those goods which are essential for national economy are apt to vary from place to place, and unless the supply of goods is rationally controlled the goods may be available in plenty in one place and may not be available in adequate measure in another. It is with a view to make the ' supply of controlled goods fairly available in the country at a reasonable price that the Act purports to impose the necessary restrictions to regulate the supply and sale of the said goods. Section 2 of the Act defines goods as meaning goods to which the Act applies. Section 3 provides, inter alia, that the Act applies to the goods specified in the Schedule and to such other goods that the Central Government may by a notified order specify in 80 630 that behalf. Section 4 deals with the fixing of maximum prices and maximum quantities which may be held or sold, while section 5 imposes restrictions on possession and sale by dealers and producers where maximum is fixed under section 4. Under section 6 is imposed a general limitation of quantity which may be possessed at any one time, and the proviso to sub section (1) makes it clear that it does not apply to the persons specified in cls. (a) and (b) of the proviso. A duty to declare possession of excess stocks is imposed by section 7, while section 8 imposes an obligation to sell goods as therein specified. Failure to comply with the requirements of the said section is made an offence under the Act. Under section 13 power is conferred on the Central Government to regulate production and distribution of goods, and section 16 confers power on the Central Government to authorise by general or special order any officer not below the rank of an inspector of police to effect search and seizure for the purpose of enforcing the provisions of this Act. It is thus clear that the sections of the Act have been so framed as to give effect to the object of the Act to regulate and control the supply and prices of goods which are brought within the purview of the Act in the interest of national economy. In the present appeal we are directly concerned with the notification issued under section 4(1)(c). It is, however, necessary to read section 4. Section 4 provides thus: "4. (1) The Central Government may, by noti fied order, fix in respect of any goods (a) the maximum price or rate which may be charged by a dealer or producer; (b) the maximum quantity which may at any one time be possessed by a dealer or producer; (c) the maximum quantity which may in one transaction be sold to any person. (2) Any such order may (a) fix maximum prices or rates and maximum quantities for the same description of goods differently in different localities or for different classes of dealers or producers; 631 (b) instead of specifying the maximum price or rate to be charged, direct that price or rate shall be computed in such manner and by reference to such matters as may be provided by the order. " Section 5 imposes restriction on possession and sale by dealers and producers in cases covered by section 4 and provides by sub section (1)(c) that no dealer or producer ,,hall sell or agree to sell or offer for sale to any person in any one transaction a quantity of any goods exceeding the maximum fixed under cl. (c) of sub section (1) of section 4. It would be recalled that the respondent 's contention is that the contract in suit is void because it contravenes the provisions of section 5(1)(c) in that it does not comply with the requirements of the notification issued under section 4(1)(c). Thus, for deciding the narrow controversy between the parties it would be necessary to determine the scope and effect of the provisions of section 4(1)(c) and the notification issued under it and the provisions of section 5(1)(c). Let us now read the notification. The notification provides: "(b) No such dealer or producer shall sell any non ferrous metals exceeding one ton unless he has obtained a declaration in writing from the buyer that the quantity proposed to be sold to him does not exceed his requirements for consumption for three months or in case the buyer is a dealer his require ments for normal trade for three months. " What does the notification provide? It provides that no dealer shall sell any nonferrous metals exceeding 1 ton unless the other requirement of the notification is satisfied. In other words, the notification imposes in the first instance a general ban on sale of non ferrous metals beyond 1 ton but this coiling is not absolute. Sale beyond 1 ton can be validly effected provided the dealer obtains a declaration in writing from the buyer that the quantity proposed to be sold to him does not exceed his requirement for consumption for three months. It also allows latitude to sell more than 1 ton in the case of a buyer who is a dealer. The effect of the notification, therefore, is that two kinds of ceilings are imposed and thereby two maxima are 632 fixed. Upto 1 ton sale can be effected without any declaration; beyond 1 ton sale can be effected either to a consumer or to a dealer provided the consumer or the dealer makes a declaration that the quantity sold to him does not exceed his requirements for three months. It is common ground that no declaration was given by the respondent to the appellant before the agreement to sell was made, and so the respondent contends that agreement to sell more than 1 ton of the non ferrous metal in question is violative of the requirements of the notification and as such it contravenes section 4(1)(c) read with the notification and attracts section 5(1)(c) of the Act. Mr. Agarwala contends that this notification does not fix the maximum quantity because according to him the requirement of the section can be satisfied by fixing an arithmetical quantity and that too in an immutable form. The argument is that the failure to comply with the provisions of the relevant sections of the Act is made penal, and so it is necessary to fix one maximum quantity in respect of a specified non ferrous metal, and since that has not been done by the notification it is invalid. We are not impressed by this argument. Having regard to the large number of goods intended to be covered by the Act and the variety of circumstances under which they would be required by different classes of persons or dealers it would be enti rely unrealistic to suggest that the maximum which is required to be fixed by section 4(1)(c) is the maximum determined in arithmetical term and fixed immutably in all cases. Besides, section 4(2)(a) itself indicates that different maxima can be prescribed by reference to different localities or different classes of dealers or producers. Therefore, the argument that in the absence of the fixation of any arithmetical quantity of the immutable maximum the notification is bad must be rejected. Then it is urged that the notification is invalid because it is inconsistent with the provisions of section 4(2) (a). It would be noticed that section 4(2)(a) enables the Central Government to fix maximum prices or rates and maximum quantities for the same description of goods 633 differently in different localities or for different classes of dealers or producers. It is urged that the maximum to be fixed under section 4(1)(c) must therefore be the maximum fixed by reference to different classes of dealers or producers, and since the impugned notification does not purport to do so it is inconsistent with section 4(2)(a) and therefore invalid. This contention is clearly misconceived. It is obvious that section 4(2)(a) cannot be read as a proviso and cannot be pressed into service for the purpose of controlling section 4(1)(c). Section 4(2)(a) is an enabling provision and it is intended merely to serve the purpose of showing that notwithstanding the provisions of section 4(1)(c) which refers to persons it may be open to the Central Government to prescribe the maximum either in the way of prices or rates or quantities by reference to different localities or different classes of dealers or producers. Section 4(1)(c) speaks of the fixation of maximum quantity which may in one transaction be sold to any person, and lest it be said that the maximum cannot be fixed in reference to classes of dealers or producers the Legislature has added the enabling provision as section 4(2)(a). Therefore to rely on section 4(2)(a) for the purpose of construing section 4(1)(c) appears to us to be wholly unreasonable. Now, if we look at section 4(1)(c), as we must, it is obvious that the notification is perfectly consistent with section 4(1)(c) inasmuch as it prescribes the maximum by reference to consumers as well as dealers. There is one more argument which has been very strongly pressed before us by Mr. Agarwala which still remains to be considered. He contends that though the notification may have prescribed a maximum quantity under section 4(1)(c) we cannot ignore the fact that as the notification is worded contravention of the requirements of the notification would not attract the provisions of section 5(1)(c) in the present case. The argument is this. The notification prescribes the maximum for sale at any one time, and sale in the context must mean actual sale. The notification therefore cannot refer to or cover cases of agreement to sell or offer to sell. In the present case the appellant no doubt agreed to sell to the respondent a quantity 634 contrary to the condition prescribed by the notification; but, at the stage of the agreement to sell the notification would not apply and so the agreement is perfectly valid. If by his failure to give the necessary declaration the respondent has made the performance of the contract illegal he cannot take advantage of his own default and stamp the whole of the transaction as illegal under section 5(1)(c). In our opinion this argument is based on a misconception of the effect of the provisions of section 4(1)(c) and section 5(1)(c) read together and of the notification issued under section 4(1)(c). The scheme of the two sections is plain. Under section 4(1)(c) the Central Government by a notified order is required to fix the maximum quantity which may be sold to any one person in one transaction, and that the impugned notification has done. Once the maximum is thus fixed by a notified order section 5 immediately comes into operation, and it provides that in regard to commodities the maximum quantity of which has been determined by a notified order under section 4(1)(c) there is a prohibition against agreement to sell, offer for sale, or sale in respect of the said commodities contrary to the requirements of the notification. In other words, once a notified order fixes the maximum in respect of the sale of any goods the agreement to sell the goods or the offer for the sale of such goods above the maximum specified in the notification for the purposes of sale is immediately hit, not by virtue of the notification as such but by the combined operation of the provisions of section 4(1)(c) and the notification issued under it and the provisions of section 5. Therefore, in our opinion, it is futile to suggest that because the notification refers only to sale and not to an agreement to sell section 5(1)(c) would not hit the present contract in suit. In this connection, weight to add that any argument based on the distinction between an agreement to sell and the actual sale as well as on the conduct of the respondent is really not open to the appellant at this stage. The judgment of the learned trial Judge as well as of the Appeal Court clearly show that the appellant 's learned Cousel Mr. Mistree expressly conceded before both the Courts that if under the relevant 635 clause of the notification it is held that a maximum has been validly prescribed then the respondent 's defence would be valid and the appellant would have no case on the point of law. In fact the Appeal Court has referred to this concession more than once in the course of its judgment and it has made it perfectly clear that on the appellant 's side it was expressly stated before the Court that if the point of law raise a by the appellant about the invalidity of the notification failed he would be out of Court. That is why we think that the point raised by Mr. Agarwala that the agreement to sell was valid in this case is really not open to him. It is true that in the trial Court the learned Judge has made certain observations that it appeared to be an implied term of the contract that the buyer would be ready and willing to give the declaration at the time of actual sale and it also appears that the learned Judge thought that it was not open to the respondent to take up the defence about the invalidity of the agreement to sell. It is difficult to see how these observations can be reconciled with the concession made by the appellant 's counsel even before the trial Court; but we have referred to these observations because it is on these observations that Mr. Agarwala wanted to build up an argument that the respondent is precluded from disputing the validity of the agreement to sell and so his default in giving a declaration should be taken into account in dealing with the point of law urged by him. In our opinion, apart from the fact that in view of the concession made by the appellant 's counsel this argument cannot be raised, we are satisfied that there is no substance in it. As we have just indicated the scheme of sections 4(1)(c) and 5 is clear and so any distinction between a sale and an agreement to sell is obviously invalid. That is why we have no doubt that Mr. Mistree was perfectly justified in making the concession that he did. In the result the appeal fails but there would be no order as to costs. Appeal dismissed.

The Supply and Prices of Goods Act, 1950, made provisions for the control of prices, supply and distribution of certain goods essential to the national economy. Section 4(1)(c) empowers the Central Government to fix the maximum quantity of such goods which may be sold to any person in one transaction. Sect ion 4(2)(a) provides that the maximum quantities may be fixed for the same goods differently in different localities or for different classes of dealers or producers. Section 5(1)(c) provides that no dealer or producer shall sell or agree to sell or offer for sale goods exceeding the maximum fixed under section 4. The Central Government issued a notification prohibiting dealers and producers from selling any non ferrous metal exceeding one ton except upon a declaration by the purchaser that the quantity did not exceed his requirements for three months. The appellant entered into an agreement to sell to the respondent 300 tons of zinc. The respondent did not take the entire quantity and the appellant filed a suit for damages for breach of contract. The respondent resisted the suit on the ground that the agreement was void as it offended section 5(1)(c) of the Act. The appellant contended that the notification was invalid as only an immutable arithmetical maximum could have been fixed for each non fer rous metal but the notification did not do so and also as it did not fix the maximum by reference to difference classes of dealers and producers according to section 4(2)(a). It was further contended that the notification applied only to a sale and not to an agreement to sell and as such the agreement did not off end section 52(1)(c). Held, that the notification was perfectly valid and that agreement was void as it offended section 5(1)(c) of the Act. Section 4(1)(c) did not require the fixing of an immutable arithmetical maximum as a large number of goods were intended to be covered by the Act which would be required by different classes of persons under a variety of circumstances. Section 4(2)(a) was merely an enabling provision and did not oblige the Government to fix the maximum differently for different classes of dealers and producers; section 4(z)(a) was not a proviso to section 4(1)(c). Once the maximum was fixed, then by the combined operation of section 4(1)(c) and section 5(1)(c) an agreement to sell or an offer to sell such goods in excess of the maximum was immediately hit, 627

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.

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.

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 was a mining company with its head office at Nagpur. The business of the head office was to look after the sale of coal extracted from the collieries. An employee of the company working in the head office made applications under section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, to the Assistant Commissioner of Labour, Nagpur. The company objected that by virtue of the notification under section 1(3) of the Act the mining industry had been exempted from the operation of the Act including section 16 and therefore the Assistant Labour Commissioner had no jurisdiction. The authorities under the Act as well as the High Court under articles 226 and 227, re jected the company 's contention. The High Court took the view that what was exempted by the third item in the notification was not the head office of a mine but the mine itself and consequently the employees of the head office were governed by the Act. The company appealed to the Supreme Court by special leave. HELD : The notification in question said that the Act would come into force on 21st November, 1947 "in all the industries except the following" and then went on to name four industries the third one being 'Mines '. After the word 'following ' the, word industries must be read and thus read the notification in effect said the Act would come into effect on the given date in all industries except the industries mentioned. Therefore it was not only mines but the mining industry itself that was exempted from the operation of the Act. [593 A B, D E] If the notification exempted the industry of mines or the mining industry it could not be said that it merely exempted that part of the said industry of mines or mining industry which consisted of raising coat at the colliery and did not include the head office thereof. As the High Court said, the head office was part of the integrated activity of the company. Therefore when the mining industry was exempted from the operation of the Act the exemption applied not only to that part of the industry which consisted of raising coal at the colliery but also to that part of it which consisted in the sale of coal and its supply to the customers and would thus include the head office also. [593 E G] M/s. Godavari Sugar Mills Ltd. vs D. K. Worlikar, A.I.R. and M/s. Serajuddin and Co. vs Their Workmen, [1962] 3. S.C.R. 934, distinguished. On the above view the Assistant Labour Commissioner had no jurisdiction under the Act to deal with the matter in question. [595 E]

The appellant company was ordered to be wound up by Court 's order dated 26.6.1967. The liquidator invited creditors to prove their debts or claims and to establish title, if any to determine priority under s.530(1)(a) of the . The Sales Tax Officer submitted a comprehensive claim of sales tax plus penalty and claimed priority. The liquidator rejected the claim for priority in its entirety but admitted a part of it payable as debt with other unsecured creditors. The Revenue appealed to the High Court contending that the liquidator erred in law in not granting priority to the claim to sales tax payable by the company for the period from 1.4.1957 to 31.12.1965 under the Bombay Sales Tax Act, and for period from 1.7.1957 to 31.12.1965 under the Central Sales Tax Act inasmuch as notice of demand was issued and assessment order was made in respect thereof within a period of 12 months before the relevant date. The Company Judge, interpreting section 530(1)(a) of the Act, held that tax becomes due when taxing event occurs and not when assessment orders passed; that even though the amount for which priority was claimed was the amount of tax arrears that became payable at the time of making assessment orders after giving credit for what was paid alongwith return, yet it was due for a period much prior to 12 months next before the relevant date, and rejected the appeal on that score, but allowed the claim to the extent of a small amount of penalty under the two Sales Tax Acts upto the relevant date. The Revenue filed an intra court appeal, which along with another referred matter was heard by a Division Bench. The Division Bench held that sales tax becomes due and payable when the tax has 528 been assessed and notice of demand for its payment is served. It allowed the claim of priority to the sales tax due under the two Acts, assessment orders in respect of which were passed within the period of 12 months immediately preceding 26.6.1967. The balance amount was directed to rank as ordinary debts since the relevant orders were passed after the date of winding up order. The claim of recovery of penalty was negatived, because the demand was held to be without application of mind as to whether there was reasonable cause for the official liquidator for not paying the amount. Aggrieved, the company filed the present appeal by certificate. Allowing the appeal, this Court, HELD: 1. Section 530(1)(a) of the provides that State has a priority over debts, liability and obligation of which was born within the time frame of 12 months next before the relevant date and as such due and becoming due and payable within those twelve months, ascertainable, if necessary, later if not already ascertained. Thus the legal philosophy which permeats the provision is that the debts due and payable, so as to claim priority must be appropriated to the period within 12 months next before the relevant date and their liability for payment must be founded during that period and no other.[536G H, 537 A B] 2.1 The words 'having become due and payable within the twelve months next before the relevant date ' occurring in clause (a) of section 530(1) of the need be understood to mean putting a restriction or cordoning off the amount for which priority is claimable and not in respect of each and every debt on account of taxes, rates and cesses, etc. which may be outstanding at that time and payable. And that such priority is in respect only of debts those of which became due and payable because the liability to those is rooted, founded and belonging to that period of twelve months prior to the relevant date and none other; both the conditions existing. [537C E] Airedale Garage Co. In re:Anglo South American vs The Company, [1832] Vol. , referred to. 2.2 Both Benches of the High Court gave to the provision a very wide and varied interpretation and that too on literality and gramaticals. The Single Judge was not right in taking the view that the word 'due ' in the first part of clause (a) of s.530(1) of the was to mean 'outstanding and payable at the relevant date ' and in the expression ' having become due ' in the later part of the clause meant that the 529 event which brought the debt into existence occurred and also it became payable so as to be enforced against the company within twelve months before the date of order of winding up. The Division Bench erred in holding that the only meaning that could be assigned to the word 'due ' occurring in the section was 'it must be presently due ' and the words 'due and payable ' meant that it must be presently payable. [536G, 531D E & 532F G] Sales Tax Officer, Petlad vs Rajratha Naranbhai Mills Co. Ltd. and Another, [1974] Vol. and Baroda Board & Paper Mills Ltd. (in liquidation) vs Income Tax Officer etc, [1976] Vol. 46 Company cases 25, overruled. The liquidator was directed to re examine the claim and to ascertain as to whether the liability to sales tax belonged to and was founded within the period of 12 months next before 26 June, 1967, and as such due and payable, but preserving the order of the Division Bench in relation to its view on penalties. [537E G]

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.

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

iminal Appeal No. 74 of 1961. Appeal by special leave from the judgment and order dated May 7, 1957, of the Allahabad High Court in Criminal Misc. No. 2006 of 1953. Veda Vyas, section K. Kapur and Ganpat Rai, for the appellant. G.C. Mathur and C. P. Lal, for the respondent. April 27. The Judgment of Gajendragadkar, Sarkar, Wanchoo and Ayyangar, JJ., was delivered by Sarkar, J. Das Gupta, J., delivered a separate Judgment. SARKAR, J. The only question that was argued in this appeal is substantially one of construction of section 99D of the Code of Criminal Procedure. The appellant was the author of two books in Hindi called Sikh Mat Khandan Part 1 and Bhoomika Nazam Sikh Mat Khandan which he had published in April 1953. On July 30, 1953, the Government of Uttar Pradesh, the respondent in this appeal, made an order under section 99A of that Code forfeiting these books which were thereupon seized and taken away. That order, so far as material, was in the following terms: "In exercise of its powers conferred by section 99A of the Code of Criminal Procedure. . the 489 Government is pleased to declare the books forfeited to Government on the ground that the said books contain matter, the publication of which is punishable under section 153 A and 295 A of the Indian Penal Code. " It is the validity of this order that is challenged in the present appeal. Section 99A under which the order was made, so far as relevant, is in these terms: "Where any newspaper, or book or any document appears to the State Government to contain any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious belief of that class, that is to say, any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code, the State Government may, by notification in the Official Gazette stating the grounds of its opinion, declare every copy of such book to be forfeited to Government Two things appear clearly from the terms of this section. The first thing is that an order under it can be made only when the Government forms a certain opinion. That opinion is that the document concerning which the order is proposed to be made, contains "any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Penal Code. " Section 124A deals with seditious matters, section 153A with matters prompting enmity between different classes of Indian citizens and section 295A with matters insulting the religion or religious beliefs of any class of such citizens. The other thing that appears from the section is that the Government has to state the grounds of its opinion. The order made in this case, no doubt, stated that in the Government 's opinion the books contained matters the publication of which was punishable under sections 153A and 295A of the Penal Code. It did not, however, state, as it should have, the grounds of that opinion. So it is 490 not known which communities were alienated from each other or whose religious beliefs had been wounded according to the Government, nor why the Government thought that such alienation or offence to religion had been caused. Now section 99B gives the person interested in the books, or documents forfeited, a right to apply to the High Court to set aside the order made under section 99A, and section 99D specifies the High Court 's duty on such an application being made to it. These two sections will have to be especially considered in this case and so they along with section 99C, are set out below. section 99B. Any person having any interest in any newspaper, book or other document, in respect of which an order of forfeiture has been made under section 99A, may, within two months from the date of such order, apply to the High Court to set aside such order on the ground that the issue of the newspaper, or the book or other document, in respect of which the order was made, did not contain any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A. section 99C. Every such application shall be heard and determined by a Special Bench of the High Court composed of three Judges. section 99D. (1) On receipt of the application, the Special Bench shall, if it is not satisfied that the issue of the newspaper, or the book or other document, in respect of which the application has been made, contained seditious or other matter of such a nature as is referred to in sub section (1) of section 99A, set aside the order of forfeiture. We think it fairly clear from these sections that the ground on which an application can be made under section 99B is the ground which, if established, would require the High Court to set aside the order under section 99D. The appellant bad moved the High Court. at Allahabad under section 99B to set aside the order of forfeiture of his books. It seems to have been contended in the High Court that the order of forfeiture should be set aside on the ground that the grounds of the 491 Government 's opinion had not been stated. With regard to this contention, the High Court observed, "The requirement to state the ground is mandatory. A mere citation of words of the section will not do. But as has been held by a Special Bench of this Court in Baijnath vs Emperor (A.I.R. 1925 All. 195), with which we respectfully agree, the High Court in view of the provisions of section 99D of the Code of Criminal 'Procedure is precluded from considering any other point than the question whether in fact the document comes within the mischief of the offence charged. " In this view of the matter the High Court refused to set aside the order on account of the omission to state the grounds of the opinion. The High Court then proceeded to examine the books for itself and found that their contents were "obnoxious and highly objectionable" and dismissed the application observing that the appellant had "entirely failed to show that the books did not contain matters which promoted feelings of enmity and hatred between different classes, or which did not (sic) insult or attempt to insult the religion or religious beliefs of the Sikhs". The present appeal arises out of this order of the High Court. The High Court was of the view that its duty under section 99D was only to see "whether in fact the document comes within the mischief of the offence charged". It thought that a document would be within the mischief of the offence charged if, in its own opinion, it contained matters the publication of which would be punishable under either section 124A, or section 153A or section 295A of the Penal Code as mentioned in the order of forfeiture, irrespective of the Government 's opinion on the matter. Otherwise, it seems to us, the High Court could not uphold the order for the reason that in its view the books offended the Sikhs and the Sikh religion in spite of the fact that there is nothing to show that the Government thought that the books had that effect. The same view appears to have been taken in certain other cases, namely, Premi Khem Raj vs Chief Secretary (1), N. Veerabrahmam vs State of Andhra Pradesh (2) and Baba Khalil Ahmed vs State of U.P. (3). (1) A.I.R. (1951) Raj. (2) A.I.R (1959) A.P. 572. (3) A.I.R. (1960) All. 715. 492 Apparently, it was thought in these cases that the words "if it is not satisfied that. . the book. . contained seditious or other matter of such a nature as is referred to in sub section (1) of section 99A" in section 99D meant, not so satisfied for any reason whatsoever irrespective of the reasons on which the Government formed its opinion about it. We are unable to accept this construction of section 99D. The question is what do the words "matter of such a nature as is referred to in sub section (1) of section 99A" appearing in section 99D mean? Do they mean any matter of that nature as the High Court thought? Or do they mean only those on which the order of forfeiture was based, that is, those which for the reasons stated by it, the Government thought were punishable under one or more of sections 124A, 153A and 295A of the Penal Code mentioned by it?. It seems to us that the latter is the correct view and follows inevitably if sections 99A, 99B and 99D are read together, as they must. Now section 99D is concerned with setting aside an order. That order is one made under section 99A. An order under that section can be made only when certain things have appeared to the Government and the Government has formed a certain opinion. The section further requires the Government to state the grounds of its opinion. It is this order, that is, the order based on the grounds stated, which the party affected has been given by section 99B the, right to move the High Court to set aside. It would follow that all that section 99B can require the party. to do is to show that order was improper. Whether that order was proper or not would, of course, depend onlyon the merits of the grounds on which it was based; whether another order to the same effect could have been made on other grounds is irrelevant, for that would not show the validity of the order actually made; that order would be bad if the grounds on which it is made do not support it. Two orders, though both saying that a pub lication contains matter which offends the same section of the Penal Code cannot be the same or an identical order if the reasons why they are considered so to 493 offend the section of the Penal Code concerned are different. Now section 99B says that a person affected by the order may move the High Court to set it aside on the ground that the book "did not contain any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A". The matter men tioned here must, for the reasons stated, refer only to such matter on which for the grounds stated by it, the Government 's opinion has been based. We proceed now to a. 99D. It is concerned with the same order of forfeiture. An order contemplated by section 99D is made on an application under section 99B. That order must therefore accept or reject the grounds on which the application under section 99B was made. These grounds, as we have seen, are confined to challenging the propriety of the grounds on which the Government 's opinion resulting in the order, was based. The words which we have earlier quoted from section 99B occur substantially in the same form in section 99D. The scope of the two sections is identical. The common words occurring in them must, therefore, have the same meaning in both. They must hence, in section 99D also mean such matters on which for the grounds stated by it the Government 's opinion was based. They cannot mean, as the High Court thought, any matter whatsoever, irrespective of the Government 's reasons for making the order, which in the High Court 's opinion would have justified it. This view of the matter also explains why section 99A requires the Government to state the grounds of its opinion. The reason was to enable the High Court to set aside the order of forfeiture if it was not satisfied of the propriety of those grounds. If it were not so, the grounds of the Government 's opinion would serve no purpose at all. This would specially be so as section 99G provides that an order of forfeiture cannot be called in question except in accordance with the provisions of section 99B. If the order could be upheld, as the High Court seems to have thought, on grounds other than those on which the Government based its opinion, there would have been no need to provide 63 494 that the grounds of the Government 's opinion should be stated; such grounds would then have been wholly irrelevant in judging the validity of the order. The acceptance of the interpretation put by the High Court would lead to a result which, in our view, would be wholly anomalous. The order of forfeiture with which section 99D is concerned is indisputably an order under section 99A. Now, an order under that section is essentially an order of the Government and of no one else. Take a case where the Government making the order states the grounds of its opinion on which the order is based. Suppose the Government says that the expression of view A in the book concerned offends the religious beliefs of community X. Now assume that in an application made to set it aside, the High Court was not satisfied that view A could offend community X but thought that another expression of view in the same book which we will call B, offended the religious beliefs of a different community, say community Y. If in such a case the High Court upheld the order, which, if the view of the Court below is right, it could do, there would really be an order of forfeiture made by the High Court and not by the Government, because the Government in stating the grounds of its opinion had not, since it did not say so, thought that view B could offend the religious beliefs of community Y. We think it impossible that the sections concerned contemplated such a result; the Code nowhere provides for an order of forfeiture being made by the High Court. We are, therefore, of opinion that under section 99D it is the duty of the High Court to set aside an order of forfeiture if it is not satisfied that the grounds on which the Government formed its opinion that the books contained matters the publication of which would be punishable under any one or more of sections 124A, 153A or 295A of the Penal Code could justify that opinion. It is not its duty to do more and to find for itself whether the book contained any such matter whatsoever. What then is to happen when the Government did not state the grounds of its opinion? In such a case 495 if the High Court upheld the order, it may be that it would have done so for reasons which the Government did not have in contemplation at all. If the High Court did that, it would really have made an order of forfeiture itself and not upheld such an order made by the Government. This, as already stated, the High Court has no power to do under section 99D. It seems clear to us, therefore, that in such a case the High Court must set aside the order under section 99D, for it cannot then be satisfied that the grounds given by the Government justified the order. You cannot be satisfied about a thing which you do not know. This is the view that was taken in Arun Ranjan Ghose vs State of West Bengal (1) and we are in complete agreement with it. The present is a case of this kind. We think that it was the duty of the High Court under section 99D to set aside the order of forfeiture made in this case. We accordingly allow the appeal and set aside the Government 's order of forfeiture dated July 30, 1953. The appellant will be entitled to a return of all books, documents and things seized under that order. DAS GUPTA, J. By a notification dated July 30, 1953 the Uttar Pradesh Government acting under section 99A of the Code of Criminal Procedure declared the books "Sikh Mat Khandan, Part 1" and "Bhoomika Nazam Sikh Mat Khandan" which had been published by the appellant Harnam Das in April 1953, forfeited to government on the ground that these books contained matters the publication of which was punishable under section 153A and 295A of the Indian Penal Code. The High Court held on an examination of the books that they clearly came within the mischief of section 153A and section 295A of the Indian Penal Code. Accordingly it held that the order of the State Government forfeiting the two books was eminently just and proper and in that view dismissed the application. One argument appears to have been raised that the order of forfeiture should be set aside as the notification by which the government made the declaration (1) 496 of forfeiture did not state the grounds of the government 's opinion as required by section 99A. The High Court rejected this argument being of opinion that in view of the provisions of section 99D of the Code of Criminal Procedure the High Court was "precluded from consideration of any other point than the question whether in fact the document comes within the mischief of the offence charged. " It is quite clear that the government notification did not state the grounds of the opinion formed by the government that these documents contained matters the publication of which was punishable under section 153A and section 295A of the Indian Penal Code. The question raised before us is whether the High Court was right in rejecting the argument that the order of forfeiture should be set aside on the ground that grounds of the government 's opinion were not stated in the government notification as required by section 99A. The view which prevailed with the learned judges in respect of this question was in accord with what had been held by the same High Court in an earlier case of Baijnath vs Emperor (1) and by the Rajasthan High Court in Premi Khem Raj vs Chief Secretary (2). The same view has later on been taken by the Andhra Pradesh High Court in N. Veerabrahmam vs State Of Andhra Pradesh (3) and by the Allahabad High Court in a later decision in Baba Khalil Ahmad vs State of U. P. (4). A contrary view appears to have been taken by the Calcutta High Court in Arun Ranjan Ghose vs The State of West Bengal (5). The material portion of section 99A is in these words: "Where any newspaper, or book. or any document. appears to the Government to contain any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious belief of that (1) A.I.R. (1925) All. 195. (2) A.I.R. (1951) Raj. (3) A.I.R. (1950) An. (4) A.I.R. (1960) All, 715. (5) 497 class, that is to say, any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code, the State Government may, by notification in the Official Gazette stating the grounds of its opinion, declare . every copy of such book. to be forfeited to the government. " It is clear therefore that before any government makes a declaration forfeiting a book under the provisions of this section it has first to be of opinion that the book does contain a matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code. Once it forms such an opinion the government has the power to declare the book forfeited. The section requires that this must be done by a notification in the official gazette and in that notification the government is required to state the grounds on which it formed the opinion. The legislature however did not make such an order made by the government immune from any attack. In section 99B it has provided the means by which the aggrieved person may obtain relief against the order if in fact the government was wrong in its opinion and the book did not contain a matter the publication of which is punishable under section 124A, or section 153A or section 295A of the Indian Penal Code. Section 99B runs thus: "Any person having any interest in any news paper, book or other document, in respect of which an order of forfeiture has been made under section 99A, may, within two months from the date of such order, apply to the High Court to set aside such order on the ground that the issue of the newspaper, or the book or other document, in respect of which the order 'wa s made, did not contain any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A." Section 99D provides that if after hearing the application the High Court is not satisfied that the issue of the document in question contains any seditious matter or any other matter referred to in section 99A, that is to say, any matter the publication of which is 498 punishable under section 124A or section 153A or section 295A of the Indian Penal Code the High Court shall set aside the order of forfeiture. The necessary result of the provision also is that if the High Court is satisfied that the book in question contains matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code, the High Court will refuse to set aside the order of forfeiture. It has to be noticed that section 99B in providing for relief to a person aggrieved by an order of forfeiture has limited the grounds on which relief can be applied for to one and one only, viz., that the issue of the newspaper, or the book or other document, in respect of which the order was made, does not contain any seditious matter or other matter of such a nature as is referred to in sub section (1) of section 99A. The appellant 's contention that the High Court should also examine the notification to find out whether the government had stated the grounds of its own opinion as required by section 99A and set aside the order of forfeiture if it finds that this requirement has note been fulfilled seeks to add an additional ground on which an application can be made under section 99B and relief can be given by the High Court under section 99D. The question is: Can that be done? It is well to recognise that just as a right of appeal is a creature of statute the right to apply for setting aside an order which is really in the nature of an appeal is equally a creature of statute and when the legislature creates such a right by a statute it may at its option make the right unlimited or may limit it in any manner it likes. It is settled law that no Court can add to or enlarge the grounds for appeal as laid down in the statute creating the appeal. The position is exactly the same when the statute creates a right to seek relief by way of application and no court can add to the grounds on which relief can be sought if the statute creating the right to obtain relief is limited to one or more specified grounds. It is interesting to remember in this connection the right to apply for review granted by O. 47 r. 1 of the Code of Civil Procedure. After specifying 499 some grounds on which a review can be applied for, the legislature added a further ground in the words "for any other sufficient reason". The proper interpretation of these words "for any other sufficient reason" has engaged the anxious consideration of the courts and in 1922 the Privy Council after a review of the numerous cases laid down, the rule that "for any other sufficient reason" means a reason sufficient on grounds at least analogous to those specified immediately previously. If the correct position had been that the court might add to the ground for a review whenever it thought fit, all the discussion as regards the interpretation of "for any other sufficient reason" would have been meaningless and unnecessary. Indeed the position in law that the courts cannot add to the grounds to which the legislature has limited the right of relief is so very clear and unassailable that the learned counsel for the appellant did not like to suggest that a ground can be added. To overcome this difficulty that the courts cannot add to the grounds of relief specified in section 99B and section 99D, an ingenious argument has been put forward that in order that the High Court can give proper relief on the very ground mentioned in section 99B and section 99D it is essential that the government 's order should state the grounds of its opinion. The steps of the argument may shortly be stated thus: The government has formed an opinion. The High Court has to see that opinion is correct. In order to do this the High Court must know what weighed with the government in coming to its opinion. Therefore, without the grounds of the Government 's opinion the High Court cannot be satisfied within the meaning of section 99D that the issue of the newspaper contained the matter complained of. The fallacy of this syllogistic process is in the un soundness of the premises that in order to determine whether the government 's opinion is correct or not the High Court must know what weighed with the government. When the application is heard by the High Court and it has to come to a conclusion whether it is or it is not satisfied that the issue of the newspaper, 500 or the book or other document does contain a matter mentioned in section 99A, the one and only way of coming to a conclusion appears to me to be to read the newspaper, or the book or other document. Arguments of counsel might be of assistance; if the government has stated its grounds for coming to its opinion, that would also help; but the ultimate responsibility of deciding whether or not to be satisfied that the issue of newspaper contains matters as mentioned in section 99A can only be discharged by the High Court by reading the document in question. It has been suggested that when section 99B and section 99D uses the words "any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A", they mean only those matters on which the Government based the order of forfeiture; so it is urged, unless the Government stated the ground of its opinion, it will be impossible for the Court to decide the question under section 99D. I confess I do not think it reasonably possible to conceive of a case, where an order under section 99A will not mention the particular matter referred to in section 99A. (1) The mention of the particular matter out of the several matters referred to in section 99A which in its opinion is contained in the document does not however involve the statement of reasons for forming the opinion. Suppose a Government states that in its opinion the document contains seditious matters. It does not cease to be a complete statement on this point merely because the reason for forming the opinion are not also stated. The formation of the opinion that one or more of the matter,% referred to in the section are contained in a document and the statement that such an opinion has been formed are quite distinct from the statement of the reasons for forming the opinion. It appears to me clear that where, as in the present case the Government order contains a statement of the particular matter or matters out of the several matters, referred to in section 99A, viz., any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or 501 which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious beliefs of that class, that is to say, any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code" which in its opinion the document contains, no difficulty can possibly arise from the fact that the Court has not got before it Government 's grounds for forming such opinion. But, asks the appellant, why was it necessary then for the legislature to require in section 99A that the Government should state the grounds of its opinion when notifying the order of forfeiture? The real reason, it is urged, was to enable the High Court to set aside the order of forfeiture if it was not satisfied of the propriety of those grounds, and necessarily also when no grounds were stated. If that were correct, it was reasonable to expect the legislature to make the necessary provision in a. 99B that an order could be challenged on the ground that the grounds of the opinion were not stated, and consequential provisions in section 99D. I can see no justification for reading into these sections section 99A and section 99D words which are not there, in an attempt to understand why section 99A contains such a requirement for statement of grounds of the opinion. There can be no doubt that this is a very salutary provision that Government should record the grounds of its opinion. Such a provision diminishes the risk of government making an arbitrary order of forfeiture. It was therefore a question of legislative policy for the legislature to require that the government should state its opinion. To say that there could have been no reason for including such a requirement in section 99A unless the legislature intended the High Court to interfere if grounds of the opinion were not stated, is, in my opinion, wholly unjustified. It seems clear to me that the duty cast by section 99D on the judges of the High Court is not to see whether in a particular case the grounds stated by 64 502 the government for forming its opinion are correct, but to see whether the opinion formed was correct. To perform this duty the one and the only way is to examine the document which in the Government 's opinion contains the matter complained of. The argument that the High Court is not in a position to perform this duty under section 99D satisfactorily in the absence of a statement by the government of the grounds of its opinion appears to me therefore wholly unsound. In this very case, the learned judges of the High Court of Allahabad felt no difficulty in coming to a conclusion on the question before them even though the government had not stated the grounds of its opinion. I fail to see any justification for imagining difficulties where there are none. I have therefore come to the conclusion that the High Court was right in rejecting the argument that the order of forfeiture should be set aside on the ground that the notification did not state government 's grounds for forming the opinion. The appeal should therefore be dismissed. By COURT In view of the opinion of the majority, this appeal will be allowed and the order of the High Court, set aside. The appellant will be entitled to the return of all the books, documents and other things seized from him under the order now set aside. He will also be entitled to the refund of expenses and costs that he had to pay under the order of the High Court.

The respondent passed an order under section 99A of the Code of Criminal Procedure forfeiting two books written by the appellant as in its opinion they contained matter the publication of which was punishable under section 153A and 295A of the Indian Penal Code. The order did not state the grounds on which the respondent had formed this opinion as was required by section 99A. The appellant applied to the High Court under section 99B of the Code to set aside the order. Section 99D of the Code provided that the High Court shall set aside the order of forfeiture if it was not satisfied that the book contained seditious or other matter of such a nature as was referred to in sub section (1) of section 99A. The High Court was of the view that it could not set aside the order under section 99D for the reason that the order did not set out the grounds on which the Government had formed its opinion and that its duty was only to see whether the books in fact came within the mischief of the offence charged. Upon examining the books for itself the High Court came to the conclusion that their contents were obnoxious and highly objectionable and dismissed the application. Held (Per Gajendragadkar, Sarkar, Wanchoo and Ayyangar, jj. Das Gupta, J. contra) that on the failure of the respondent to set out the grounds of its opinion as required by section 99A of the Code the High Court should have set aside the order under section 99D. It is the duty of the High Court under that section to set aside the order of forfeiture if it is not satisfied that the grounds on which the Government formed its opinion could justify that opinion. Where no grounds of its opinion are given at all the High Court must set aside the order for it cannot then be satisfied that the grounds given by the Government justified the order. Arun Ranjan Ghose vs State of West Benaal, (1955) 59 C.W.N. 495, approved. Premi Khem Rai vs Chief Secretary, A.I.R. (1951) Raj. II3, N. Veerabrahmam vs State of Andhra Pradesh, A.I.R. (1959) A. Pr. 572 and Baba Khalil Ahmed vs State of U. P., A.I.R. (1960) All. 715, disapproved. 488 Per Das Gupta, J. The High Court had no power to set aside the order on the ground of failure of the Government to set out the grounds of its opinion in the order. The duty cast on the High Court is not to see whether the grounds stated by the Government for forming its opinion are correct but to see whether the opinion formed is correct; this can only be done by examining the books. Section 99B has limited the grounds on which relief can be asked for to one and one only, viz., that the books do not contain any objectionable matter. It was not permissible for courts to add to that ground. Baijnath vs Emperor A.I.R. (1925) All. 195, Premi Khem Raj vs Chief Secretary, A.I.R. (1951) Raj. 113, N. Veerabrahmam vs State of Andhra Pradesh, A.I. R. 1959 A. Pr. 572 and Baba Khalil Ahmed vs State of U. P., A.I.R. (1960) All. 715, approved. Arun Ranjan Ghose vs The State of West Bengal, , disapproved.

The fact that the High Court, in a reference under section 374 of the Code of Criminal Procedure, has to appraise the evidence for itself and has to arrive at its own independent conclusion would not prevent this Court from interfering with the order of the High Court if the High Court reverses the judgment of the trial court on grounds which are manifestly fallacious and untenable. This Court in an appeal under article 136 of the Constitution does not normally reappraise the evidence and interfere with the assessment of that evidence by the High Court. Where, however, this Court finds that grave injustice has been done by the High Court in interfering with the decision of the trial court on grounds which are plainly untenable and the view taken by the High Court is clearly unreasonable on the evidence on record this Court would not stay its hand. There are, however, certain cardinal rules which have always to be kept in view in appeals against acquittal. Firstly, there is a presumption of innocence in favour of the accused which has to be kept in mind especially when the accused has been acquitted by the Court below , Secondly, if two views of the matter are possible a view favourable to the accused should be taken; thirdly, in case of acquittal by the trial judge the appellate court should take into account the fact that the trial judge had the advantage of looking at the demeanour of witnesses; and fourthly, the accused is entitled to the benefit of doubt. The doubt should, however, be reasonable and should be such as a rational thinking man will reasonably, honestly and conscientiously entertain and not the doubt of a timid mind which fights shy though unwittingly it may be or is afraid of the logical consequences, if that benefit was not, given. To put it differently, it is "not the doubt of a vacillating mind that has not the moral courage to decide but shelters itself in a vain and idle scepticism,,. [69H 70E] Himachal Pradesh Administration vs Shri Om Prakash, Cr. Appeal No. 67 of 1969 decided on December 7, 1971, referred to.

On a complaint being filed under section 120(b) read with ss.467 and 471 of the Indian Penal Code, the Metropolitan Magistrate summoned the appellant and thereafter rejected his objection about the maintainability of his prosecution for want of sanction under section 197 of the Criminal Procedure Code, holding that section 197 does not apply because the appel lant is an officer who is removable from his office by a competent authority and no sanction of the Government is necessary. This view was affirmed by the High Court. In the appeal to this Court, on behalf of the appellant it was contended: (i) that after the nationalisation of the Department of the appellant he will fall within the defini tion of public servant and, therefore, section 197 will be at tracted and (ii) that although the competent authority who can remove the appellant from service is not the Government, but it has been empowered under the regulations framed under the Act of Parliament with the approval and sanction of the Central Government and, therefore, the view taken by the Courts below is not correct. Dismissing the Appeal, HELD: It is clear that section 197 of the Criminal Procedure Code is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government. [219B] In the instant case, it is not disputed that the appellant is not 217 holding a post where he could not be removed from service except by or with the sanction of the Government. In this view of the matter even if it is held that appellant is a public servant still provisions of section 197 are not attracted at all. Therefore, the view taken by the Courts below could not be said to be erroneous. [219D]

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 appellants were charged with offences under section 143/402, 186 and 353, Indian Penal Code for having obstructed and assaulted two public servant in the discharge of their public duty of executing the decree of a Civil Court. They were acquitted by the trial Court, but on appeal, the High Court convicted them under section 353, acquitted them under sections 143/402 and held that the prosecution under section 186 was barred by a. 195, Criminal Procedure Code, which requires a complaint in writing by the public servant before a court could take cognizance of the offence. In appeal to this Court, it was contended that the prosecution under section 353, Indian Penal Code, was also barred by section 195 Criminal Procedure Code. HELD : Sections 186 and 353, Indian Penal Code, relate to two distinct offences and section 353 is not referred to in section 195 Cr. P.C. Section 195, Criminal Procedure Code, does not bar the trial of an accused person for a distinct offence disclosed by the same set of facts, but which is not within the ambit of that section, when there is no camouflage or evasion to circumvent the Section. Therefore the trial of the appellants for the distinct offence under section 353 was not barred though it was based practically on the same facts as for the prosecution under section 186, and the High Court was justified, on the evidence, in interfering with the order of acquittal passed by the trial Court in regard to that charge. [640 E, G; 641 E] Sanwat Singh vs State of Rajasthan ; and Agarwal and Kulkarni vs State of Maharashtra, ; , followed. Basir ul Huk V. State of West Bengal ; and Hori Ram Singh vs The Crown, , referred 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.

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.

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.

146 of 1958. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. Veda Vyasa, section K. Kapur and Ganpat Rai, for the petitioners. C. K. Daphtary, Solicitor General of India, R. Gopala krishnan and D. Gupta, for the respondents. May 2. The Judgment of the Court was delivered by SINHA, C. J. The petitioners have moved this sin Court under article 32 of the Constitution for a writ 646 or order in the nature of mandamus and/or prohibition and/or other suitable writ, order or direction to the respondents not to levy, charge or collect any sales tax on transactions of what the petitioners characterised as hire purchase agreements, a typical example of which is contained in Annexure 'A ' to the petition, to be hereinafter examined in detail. The first petitioner is a private limited company incorporated under the Companies Act, with its registered office at Janpath, New Delhi. The second petitioner is the Managing Director and shareholder of that company and is directly interested in the result of this application, because it is claimed that his rights and property are directly involved. The company has been carrying on in Delhi the business of financing the purchase of new as well as second hand motor cars and other kinds of motor vehicles. The system adopted by the Company for financing a purchase such as aforesaid is as follows. A person desiring to purchase a motor vehicle fixes a bargain with the owner and the petitioner Company would then advance the necessary finance on the terms and conditions appearing in a printed copy of the agreement, marked Annexure 'A ' to the petition. According to that agreement, the Company charges the 'Hirer ' an initial deposit by way of premium as a consideration for granting the lease of the vehicle, which deposit becomes the absolute property of the Company; the premium charged as aforesaid is a substantial amount, being usually 25% of the price in respect of new vehicles. The 'Hirer ' undertakes to pay instalments and when all the instalments are paid, the vehicle becomes the property of the 'Hirer ' at his option, on payment of rupee one to the Company, as a consideration for the option; until all the stipulated instalments have been paid and the option exercised as aforesaid, the vehicle remains the property of the Company as owners. The 'Hirer ' is delivered possession of the vehicle and he remains responsible to the Company for damage or destruction or loss. The 'Hirer ' has to pay interest at the rate of one per cent. per mensem on all sums overdue. Until the option of 647 purchase is exercised by the 'Hirer ', he is at liberty to return the vehicle and to put an end to tile Hiring Agreement, on certain terms. Thus, under the agreement, the 'Hirer ' has the use of the vehicle, which is entrusted to him as the property of the Company, and it is open to the 'Hirer ' to become the purchaser of the vehicle as aforesaid, but he is not bound to do so. The hire money received by the Company, it is contended, is not a part of the price of the goods sold and is thus not liable to be taxed as sale price. The Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941) was extended to the State of Delhi, which is now the Union Territory of Delhi. In pursuance of the provisions of that Act, the Sales Tax authorities started demanding and levying sales tax on all transactions of the nature aforesaid on the ground that the instalments paid by the hirers to the Company were sales price and, therefore, liable to Sales Tax. The Company challenged the right of the Sales Tax authorities to levy any such tax on the ground that the law was beyond the competence of the legislature. Ultimately, the Company moved the Punjab High Court (Circuit Bench at Delhi) under articles 226 and 227 of the Constitution. In the Writ Petition, which was registered as Civil Writ Application No. 289 D of 1954, the Company prayed for a writ in the nature of prohibition and/or mandamus restraining the respondent from realising or levying any sales tax under the provisions of the Bengal Act, extended to Delhi. There was also a prayer for a writ of certiorari quashing certain orders passed by the Sales Tax authorities in 1953 54. The said application was heard by a, Division Bench, which allowed the petition and issued a mandamus to the State to forbear from enforcing its notice for the realisation of the Sales Tax. It was held by the High Court that the State Legislature had not the power to enlarge the meaning of the words "Sale of Goods" by going beyond the meaning attached to it by the Sale of Goods Act. After tile judgment aforesaid of the High Court of Punjab, it is further alleged, a settlement was arrived at between the companies carrying on hire purchase 648 business in Delhi and the Commissioner of Sales Tax, who issued a circular, being Circular No. 10 of 1956, containing the following decisions of the Department: "(i) Companies which are exclusively engaged in the hire purchase business will not be treated as dealers and their certificate of registration will be cancelled. (ii) Companies which are partially engaged in the business of hire purchase will continue to be dealers as hitherto fore and their hire purchase transactions will be appropriately examined in the light of the judgment of the Punjab High Court, and will be liable to Sales Tax at one stage. (iii) As a result of (i) above, sales made to the above Companies by the dealers in vehicles would be liable to Sales Tax at the hands of the latter. (iv) In respect of vehicles, and machineries, etc., for which tax has been paid, at the time of purchases thereon from the market, no Sales Tax would be payable in respect of hire monies collected on them by the hire purchase companies or on their resale or rehire following repossession or on the exercise of the option of purchases by the hirer. (v) In respect of second hand vehicles purchased by the companies from private individuals for purposes of hire purchase, the companies will not be liable to any sales tax either at the time of purchase or in respect of subsequent transaction thereon. The Companies will be as other nonregistered dealers, in view of (i), their Registration Certificates in respect of Hire purchase business having been cancelled. (vi) The assessment which are already made will not be reopened except in the case of M/s. Installment Supply Co. Ltd. for which there are specified orders of the High Court. (vii) In their up to date assessment, the hire purchase Companies should take upon themselves the responsibility to pay tax which they have save by making tax free purchases either from dealers or from non registered dealers. The assessment will, however, be made accordingly as before in the normal way. " 649 Thereafter in the case of Mithan Lal vs State of Delhi (1) this Court examined the vires of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi, and came to the, conclusion that the law had been validly promulgated. According to that decision, the definition of 'sale ' could be legally extended so as to make it permissible to tax sale of goods involving the supply of materials in pursuance of building contracts. As a result of the decision aforesaid of this Court, a press note was issued by the Commissioner of Sales Tax, Delhi, to the effect that provision regarding levy of tax on hire purchase transactions was valid and that all hire purchase dealers as come within the purview of sections 4 and 7 of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi, are liable to pay sales tax and to get themselves registered under the Act; that all such hire purchase dealers as were formerly registered with the Sales Tax Department shall be deemed to be registered with effect from the first of April, 1958 for the purpose of the Act and that all hire purchase dealers who had not got themselves registered so far should immediately have themselves so registered in order to avoid being penalised for contravention of the provisions of the Act. In pursuance of the aforesaid circular of the Department, the petitioner company was also called upon to comply with the requirements of the Act. The Company made representation to the Commis sioner of Sales Tax that the Company and other such companies which deal in hire purchase were not liable to pay sales tax, but the Commissioner of Sales Tax refused to accept the Company 's contention and answered to the following effect: "1. The incidence of Sales Tax on such transactions is to be governed by the provisions of Sections 3 and 4 of the . If however, the vehicles are purchased by a Company having its place of business in Delhi from a dealer outside Delhi on payment of Sales Tax of that State and the vehicle is hire purchased to the party in that very State, neither Delhi Sales Tax (1) ; 650 nor Central Sales Tax will be leviable on the Delhi firm irrespective of the fact that the Hire purchase Agreement is entered into at Delhi. If, however, vehicle is purchased in State 'A ' but is hire purchased to a party in State 'B ', Central Sales Tax will be leviable in the State according to the rules in force in that State. The hire purchase transactions of secondhand vehicles, where the owner approaches the Hire Purchase Co. for finances against the vehicles, will be leviable to Sales Tax, because according to the Hire purchase Agreement the property in the vehicle vests in the Hire Purchase Co. and this property is to be transferred to the so called owner by virtue of the Hire purchase transactions. Secondhand vehicles purchased outside Delhi and hire purchased to the parties outside Delhi or hire purchase transactions conducted outside Delhi in which owner approaches the Hire purchase Co. for finance will be governed by the clarification given in 1 above. In the case of vehicles purchased by the Hire purchase Companies from the local registered dealers, they will not be required to pay any Sales Tax because all Hire purchase companies will be registered and will be entitled to make tax free purchases of such vehicles. It is, therefore, regretted that it is not possible to accede to the request made in this behalf. Sales Tax will be payable on total amounts charged by the Hire purchase Co. from the hirer and it is not possible to waive Sales Tax on the so called incidental charges. It is regretted that it is not possible to alter the date of liability of the Hire purchase Co. which has already been fixed with effect from 1st of April, 1958, in pursuance of the Supreme Court Judgment. It is true that the Press Note was issued in the month of June and so Hire purchase Companies have been making purchases of vehicles on payment of sales tax. The Hire purchase companies are advised to approach the dealers for 651 refund of the Sales Tax paid by them on such purchases. If, however, it is not possible for any Hire Purchase Co. to obtain refund of the Sales Tax so paid by them, the amounts so paid may be adjusted towards their liability on the hire purchase transactions. " On receipt of the answer of the Department, as set out in the previous paragraphs, the petitioners moved this Court under article 32 of the Constitution on the ground that the "threatened action of the respondents is illegal and unconstitutional as the petitioner company is not liable to pay sales tax on the transactions" described above. In support of the petition, the learned counsel for the petitioners has raised the following contentions: (1) that the transactions in respect of which the petitioners are sought to be taxed are not covered by the explanation to section 2(g) of the Bengal Finance (Sales Tax) Act, as extended to Delhi; (2) alternatively, that is to say, if it is held that the explanation covers the transactions of the nature aforesaid, then the explanation, extending the concept of 'sale ' is unconstitutional; (3) That in any case it is unconstitutional as it infringes article 14 of the Constitution in so far as the State of Delhi has been selected for hostile discrimination; (4) that the judgment of the Punjab High Court in Installment Supply Ltd., New Delhi vs State of Delhi (1) is final and conclusive as between the parties to that judgment; (5) that if it is held that the judgment of the Punjab High Court, referred to above, has been superseded by the judgment of this Court in Mithan Lal 's case (2), that judgment cannot be given retrospective operation; and (6) lastly, that the settlement between the Department and the Companies transacting business in "Hire purchase" is binding until the decision of this Court in Mithan Lal 's case (3), aforesaid. We shall examine these arguments in the order in which they have been stated. The most important question in this case is: What (1) A.I.R. 1956 Puaj. (2) [1959] S.C.R 445. 652 is the true nature and character of the transaction which is the subject matter of the present controversy? Do the terms and conditions of the agreement typified by Annexure 'A ' to the petition, as described above, constitute a mere agreement of hiring, as contended on behalf of the petitioners, or do they constitute a contract of hire purchase, within the meaning of explanation (1) to the definition of 'sale ' contained in the statute in question, as contended on behalf of the respondents? There is no doubt that the concept of 'sale ', as it appears from the following words of the definition, along with explanation (1), is rather extended. In the definition of the term 'sale ' for the purposes of the Act, the words are as follows: " 'Sale ' means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge. Explanation I. A transfer of goods on hire purchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale. " It is clear from the definition that it includes not only what may be compendiously described as a sale under the Sale of Goods Act, but also transactions, which, strictly speaking, are not sales, not even 'contracts of sale ' but only contain an element of sale, that is the option to purchase, and that is the reason why the explanation ends with the words "be deemed to be a sale", thereby indicating that a legal fiction has been introduced into the concept of sale ' as ordinarily understood. The explanation has included within its amplitude a mere transfer of goods without the transfer of title to the goods, if it is in the course of an agreement of the nature of "hire purchase", or other instalment system of payment. A contract of hiring, under the Common Law, is one of the species of a contract of bailment and has, during the last 60 70 653 years, undergone a series of refinements as a result of modern industrial and commercial developments. The term 'hire purchase ' has not been defined in the Act. We have, therefore, to construe the expression in its ordinary Common Law sense, which may best be expressed in terms of the Dictionary of English Law by Earl Jowitt at pages 913 914, which runs as follows: "Hire purchase a system whereby the owner of goods lets them on hire for periodic payments by the hirer upon an agreement that when a certain number of payments have been completed, the absolute property in the goods will pass to the hirer, but so that the hirer may return the goods at any time without any obligation to pay any balance of rent accruing after return; until the conditions have been fulfilled, the property remains in the owner. The instrument by which the hire purchase is effected does not ordinarily require registration as a bill of sale (Exp. Crawcour ; the hirer is 'reputed owner ' within the Bankruptcy Act, 1914 (Exp. Brooks ; but the hirer does not 'agree to buy ' within the Factors Act or the Sale of Goods Act, 1893, so as to be able to sell or pledge the goods as if he were a mercantile agent (Helby vs Matthews ; Brooks vs Bernstein (1909) 1 K.B. 98). Such agreements are to be distinguished from agreements such as in Lee vs Butler , which are in fact a sale, the price being paid in instalments with the condition that the property passes when all the instalments have been paid; here there is a binding agreement for the party to purchase, where in a true hire purchase agreement there is not. " In Halsbury 's Laws of England, Third Edition, Volume 19, paragraph 823, at pages 510 511, the nature of a hire purchase transaction is thus expressed: "The contract of hire purchase is one of the variations of the contract of bailment, but it is a modern development of commercial life, and the rules with regard to bailments, which were laid down before 83 654 any contract of hire purchase was contemplated, cannot be applied simpliciter, because such a contract has in it not only the element of bailment but also the element of sale. At common law the term 'hire purchase ' properly applies only to contracts of hire conferring an option to purchase, but it is often used to describe contracts which are in reality agreements to purchase chattels by instalments, subject to a condition that the property in them is not to pass until all instalments have been paid. The distinction between these two types of hire purchase contracts is, however, a most important one, because under the latter type of contract there is a binding obligation on the hirer to buy and the hirer can therefore pass a good title to a purchaser or pledge dealing with him in good faith and without notice of the rights of the true owner, whereas in the case of a contract which merely confers an option to purchase there is no binding obligation on the hirer to buy, and a purchaser or pledge can obtain no better title than the hirer had, except in the case of a sale in market overt, the contract not being an agreement to buy within the Factors Act, 1889, or the Sale of Goods Act, 1893." The observations quoted above are based mostly on two leading cases which have come to be regarded as the locus classics upon the subject, namely, Lee vs Butler (1) in which the transaction was described by Lord Esher, M.R., as "Hire and Purchase Agreements" and Helby vs Matthews (2) in which the House of Lords distinguished the former case on the ground that in that case there was a binding contract to buy and not merely an option to buy, without any obligation to buy. Both these cases were decided in terms of Factors Act of 1889 (52 & 53 Vict. c. 45, section 9). Both the kinds of agreements exemplified by the two leading cases aforesaid would now be included in the definition of 'hire purchase ' as contained in section 21 of the Hire Purchase Act, 1938 (1 & 2 Geo., 6, c. 53): " 'Hire purchase agreement ' means an agreement for the bailment of goods under which the bailer (1) (2) 655 may buy the goods or under which the property in the goods will or may pass to the bailee, and where by virtue of two or more agreements, none of which ' by itself constitutes a hire purchase agreement, there is a bailment of goods and either the bailee may buy the goods, or the property therein will or may pass to the bailee, the agreements shall be treated for the purposes of this Act as a single agreement made at the time when the last of the agreements was made. " It is clear that under the Law, as it now stands, which has now been crystallised into the section of the Hire Purchase Act, quoted above, the transaction partakes of the nature of a contract or bailment with an element of sale, as aforesaid, added to it. In such an agreement, the hirer may not be bound to purchase the thing hired; he may or may not be. But in either case, if there is an obligation to buy, or an option to buy, the goods delivered to the hirer by the owner on the terms that the hirer, on payment of a premium as also of a number of instalments, shall enjoy the use of the goods, which ultimately may become his property, the transaction amounts to one of hire purchase, even though the title to the goods has remained with the owner and shall not pass to the hirer until a certain event has happened, namely, that all the stipulated instalments have been paid, or that the hirer has exercised his option to finalise the purchase on payment of a sum, nominal or otherwise. But it has been contended on behalf of the petitioners that there is no binding agreement to purchase the goods and that title is retained by the owner not as a security for payment of the price but absolutely. According to third term of the agreement, on the hirer duly performing and observing the terms of the agreement, with particular reference to the payment of the monthly instalments, "the hiring shall come to an end and the vehicle shall, at the option of the hirer, become his absolute property; but until such payments as aforesaid have been made, the vehicle shall remain the property of the owners. The hirer shall also have the option of purchasing the vehicle at any 656 time during the currency of this Agreement, by paying in one lump sum the balance of all the hire hereinbefore mentioned and any other expenses incurred by the owners relating to the transaction. " It is clear, therefore, that in addition to the contract of hiring an option has been given to the hirer to purchase or not to purchase. The more serious question on this part of the petitioners ' contention is whether the non obstante clause in the explanation "notwithstanding that the seller retains a title to any goods as security for payment of the price" governs the main clause of the explanation. In our opinion, it does not. The non obstante clause has been added only to emphasise the categorical statement of the law contained in the main clause to the effect that a transfer of goods on hire purchase, etc., shall be deemed to be a sale ' even though there may be a stipulation to the effect that in spite of the transfer of goods to the hirer, the owner retains title to those goods until the happening of the ultimate event, namely, completion of title at the option of the hirer. There is, thus, no doubt that the agreement in question does contain not only a contract of bailment simpliciter but also an element of sale, which element has been seized upon by the legislature for the purpose of subjecting a transaction like that to the Sales Tax. This leads us to the second ground of attack raised by the petitioners, namely, that the explanation, if it has the effect of extending the concept of 'sale ' to what, in law, is not a real sale, but only an incipient or inchoate sale, then in so far as the law has extended the definition of sale ' it is unconstitutional. This contention has lost all its force, if ever it had any, in view of the decision of this Court in Mithan Lal 's case (1). But then it is argued that Mithan Lal 's case (1) requires reconsideration and that, in any view of the matter, this Court did not consider the further attack based on article 14 of the Constitution. It is true that in Mithan Lal 's case (1) the contention that the enactment in question had infringed article 14 of the (1) ; 657 Constitution had not been raised. This Court, therefore, had no occasion to pronounce on that aspect of the controversy We have, therefore, to consider the contention under head (3), namely, that though the Parliament may have had the power to tax something which was not strictly speaking a 'sale ', the law is open to the attack that it discriminates against traders in Delhi inasmuch as, it is further contended, such a law has not been made applicable to the whole of India. In our opinion, there is no substance in this contention because no proper foundation was laid in the pleadings for supporting such a contention. It has not been averred that other Part II States have not been similarly treated. On the other hand, it does appear that under the (LXXIV of 1956), the definition of 'Sale ' contains the extended definition, without the non obstante clause, discussed above. Section 2(g) of the , has the following definition: " 'Sale ' with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods. " It would, thus appear 'that hire purchase transactions have been included within the definition of sale ' for the purpose of Central Sales Tax, and this definition has become applicable throughout India, and it cannot, therefore, be said that the State of Delhi, and now the Union Territory of Delhi, has been selected for hostile discrimination. In our opinion, therefore, there is no substance in the contention that the extended definition of ',sale ' in the main statute infringes article 14 of the Constitution. Now, the remaining contentions raised on behalf of the petitioners may be disposed of by observing that what the Sales Tax Department does, or does not do, cannot change the law. The Department issued its 658 instructions to the Sales Tax Officers, in conformity with the law as laid down in the judgment of the Punjab High Court in Instalment Supply Ltd., New Delhi vs State of Delhi (1). This Court later laid down the law more authoritatively in Mithan Lal 's s case (2) and the Department was bound to take notice of what this Court had laid down. It cannot, therefore, be argued that the Department had, in any sense estopped itself by issuing those instructions, or that this Court, by laying down the law in Mithan Lal 's case (2) had laid down a new rule of law which has no application to pending proceedings for levy, assessment and realisation of sales tax, either in Delhi or elsewhere. There is another answer to the point of res judicata raised on behalf of the petitioners, relying upon the decision of the Punjab High Court in Instalment Supply Ltd., New Delhi vs State of Delhi (1). It is well settled that in matters of taxation there is no question of res judicata because each year 's assessment is final only for that year and does not govern later years, because it determines only the tax for a particular period. (See the decision in the House of Lords in Society of Medical Officers of Health vs Hope (Valuation Officer) (3) approving and following the decision of the Privy Council in Broken Hill Proprietary Company Limited vs Municipal Council of Broken Hill (4). As all the contentions raised on behalf of the petitioners fail, this petition is dismissed with costs. Petition dismissed. (1) A I.R. 1956 Punj I77.

Section 2(g) of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi State, provided as follows, " 'Sale ' means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge. Explanation I. A transfer of goods on hire purchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale. " The hire purchase agreement entered into by the petitioner company provided that after all the monthly instalments had been paid, "the hiring shall come to an end and the vehicle shall, at the option of the hirer, become his absolute property; but until such payments as aforesaid have been made, the vehicle shall remain the property of the owners. The hirer shall also have the option of purchasing the vehicle at any time during the currency of this agreement by paying in one lump sum the balance of all the hire hereinbefore mentioned and any other expenses incurred by the owners relating to the transaction. " The question for determination was whether the agreement was a transaction of mere hiring or one of hire purchase within the meaning of Explanation 1 to section 2(g) of the Act. 645 Held, that the language of Explanation 1 to section 2(g) of the Act was wide enough to include a mere transfer of goods without the transfer of the title thereto, if such transfer took place in the course of an agreement of hire purchase or any other instalment system of payment. As the Act did not define the term 'hire purchase ', it had to be construed in its ordinary Common Law sense, i.e., that it partook of the nature of a contract of bailment with an element of sale added to it. Lee vs Butler, [1893] z Q. B. 318 and Helby vs Matthews, , referred to. The non obstacle clause in Explanation 1 to section 2(g) of the Act did not govern the main clause of the said Explanation and its sole purpose was to emphasise the categorical statement of the law Contained therein. Since the agreement in the instant case contained not merely a contract of bailment simpliciter but also an element of sale, the transaction had rightly been subjected to sales tax. There could be no force in the contention that the Act in so far as it sought to extend the concept of sale to what in law was not a real sale, was unconstitutional. Mithan Lal vs State of Delhi, ; , referred to. Nor was there any substance in the contention that the extended definition of the word 'sale ' in the Act infringed article 14 of the Constitution. It is well settled that in matters of taxation there can be no question of res judicata. Society of Medical Officers of Health vs Hope (Valuation Officer), and Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill, [1925] A. C. 94, referred to. Installment Supply Ltd., New Delhi vs State of Delhi, A.I.R. 1956 Punj. 177, considered.

Section 4 Of the Ajmer Abolition of Intermediaries and Land Reforms Act, 955, provided for vesting of all estates held by intermediaries, as defined in the Act, in the State from a date to be notified, and the petitioners who were affected thereby filed petitions under article 32 Of the Constitution of India challenging the validity of the Act and, in particular sections 8 and 38 of the Act on the grounds that (1) entry 36 of List 11 of the 479 Seventh Schedule to the Constitution gave power to the State legislature to acquire property for purposes other than the purposes of the Union, while the property acquired under the Act vested in the President and therefore the Union after its acquisition, and the Act was really for the acquisition of property for the purposes of the Union and could not have been passed by the, Ajmer legislature, (2) section 8 provided for retrospective cancellation of leases granted at a time when the land owner had a right to dispose of his property as he liked under article 19(1)(f) of the Constitution and there was no restriction on such right, and (3) section 38 which fixed a maximum rent was an unreasonable.restriction on the right of the land owner to let his holding. It was also contended for some of the petitioners who were assignees of land revenue as also owners of land that, under the Act, an intermediary included a jagir and that as a jagirdar was merely an assignee of land revenue, only that assignment could be said to have been acquired under the Act. Held, (1) that the purposes for which the estates were acquired were purposes of the State of Ajmer and, consequently, the Act was within the competency of the Ajmer legislature as it fell within entry 36 of List II of the Seventh Schedule to the Constitution, and it was not necessary to consider where the property should vest after acquisition in deciding the ambit of the competence of the legislature under the entry ; (2) that the provisions in section 8 of the Act which gave power to the Collector to cancel leases which were found to have been made in anticipation of legislation for abolition of intermediaries and which were, consequently, a fraud upon the Act, subserve the purposes of the Act and would, therefore, be an integral part of the Act, though ancillary to its main object, and were protected under article 31 A(1)(a) of the Constitution ; (3)that the intention of the Act was that the intermediaries who were allotted lands should cultivate them personally and the object of section 38 was to discourage them from letting the land and becoming a new kind of intermediaries, and, consequently, the section being an ancillary provision necessary for the purposes of carrying out the objects of the Act, was protected under article 31 A(1)(a) of the Constitution; and (4)that in view of the origin of the title of the holders of these estates who were called jagirdars, a distinction could not be made between jagirdars as assignees of land revenue and the same persons as land owners, and therefore, the State could take over the entire interest in the estate under section 4 Of the Act.

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]

The appellants, motor transport operators, challenged the increase in surcharge of the fares and freights imposed by the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods) Amendment and Validation Act, 1961. They urged: (i) the Act was neither regulatory nor compensatory in nature and, it fell directly within the mischief of article 301 of the Constitution; (ii) the imposts exceeded the limits of permissible reasonableness, were not in the public interest and, therefore, violated articles 304(b) and 19(1)(g); and (iii) the Act violated article 14 (a) inasmuch as it had not been made applicable to the Telegana area although it was applicable to the Andhra area and (b) the vehicles on inter State routes on permits granted by other States had not been subjected to tax. HELD: (i) It was not the contention of the State that the impugned Act imposed a tax by way 'of a regulatory or compensatory measure. Therefore, it had to be been whether the restrictions imposed were reasonable and in the public interest within the meaning of article 304(b); these questions were open to examination by the court notwithstanding the fact that the sanction of the President was obtained in compliance with the Article. [55 E F] Mathurai Pillay vs State of Madras, , Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan vs State of Assam. ; and Atiabari Tea Co. Ltd. vs State of Assam, ; , referred to. (ii) There was no material which would justify the view that the tax which had been imposed exceeded the limit of permissible reasonableness or was not in the public interest. The argument that by raising the rate of tax the burden had been increased to such an extent that the business of the appellants had been virtually annihilated had no substance. The operators had been permitted to enhance the freights and if the freights could be enhanced, obviously, the burden would not fall on them. If the operators were not prepared to charge higher rates as a matter of policy or for the purpose of business competition that could not impinge on the reasonableness of the restrictions. This disposed of the challenge under article

The petitioner was an applicant in one of the writ petitions which had been filed in the Supreme Court challenging the validity of U. P. Road Transport Act, 1951. During the hearing of the writ petitions a leaflet printed in the Hindi language and intituled "Our Transport Department" purporting to be written by the petitioner was distributed in the Court premises. The leaflet contained a graphic account of the harassment and indignity said to have been meted out to the writer by the State officers and the then State Minister of Transport in connection with the cancellation and eventual restoration of his license in respect of a passenger bus. 87 678 The second paragraph at page 15 of that leaflet contains a passage of which the following is the English translation : " The public has full and firm faith in the Supreme Court, but sources that are in the know say that the Government acts with, partiality in the matter of appointment of those Hon 'ble Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against Government but this has so far not made any difference in the firmness and justice of the Hon 'ble Judges. " Held, (1) that the offending passage and the time and place of its distribution tended to hinder or obstruct the due administration of justice and was a contempt of Court. (2)It was not fair comment on the proceedings but an attempt to prejudice the Court against the State and to stir up public feeling on the very question then pending for decision. The manner in which the leaflets were distributed, the language used in them and the timing of their publication could only have had one object, namely, to try and influence the Judges in favour of the petitioner and the others who were in the same position as himself. This again was clear contempt of the Supreme Court. (3)It is not necessary that there should in fact be an actual interference with the course of administration of justice but it is enough if the offending publication is likely or if it tends in any way to interfere with the proper administration of law. Such insinuations as were implicit in the passage in question were derogatory to the dignity of the Court and were calculated to undermine the confidence of the people in the integrity of the Judges. Brahma Prakash Sharma and Others vs The State of Uttar Pradesh ([1953] S.C.R. 1 169) referred to.

After negotiations in 1953 with the concerned Department of the Government of India and the Reserve Bank, a Company, incorporated in U.K. advanced large sums by way of loans to its subsidiary in India, namely the assessee, for subscribing for shares in some Indian Companies. The correspondence showed that the U.K. Company had the right to acquire at any time the shares at par, in satisfaction of the loans. In 1961, the assessee transferred the shares when called upon by the U.K. Company to do so. The Income tax Officer applied section 52 of the Income tax Act, 1961, and assessed the assessee to capital gains tax, which was not in existence in 1953 but was Reintroduced in the Finance Bill of 1959. The Income tax Officer held that the object of the transfer was to avoid or reduce the assessee 's liability to capital gains tax. The Appellate Assistant Commissioner however, held that the assessee was not liable to capital gains tax, and the Appellate Tribunal, after an elaborate discussion of the correspondence, confirmed the order, holding that the transfer was not effected with that object. The Department applied to the Tribunal to refer the questions, (i) whether certain documents were not properly construed, (ii) whether the Tribunal ignored evidence on essential matters, (iii) whether the finding of the Tribunal was perverse, and (iv) whether section 52 was not applicable, as arising out the Tribunal 's order. The Tribunal rejected the application. The Department then moved the High Court and the High Court directed the Tribunal to state a case in relation to the four questions, but the High Court did not give any reasons for doing so. Allowing the appeal to this Court, HELD : The High Court can exercise its jurisdiction in the matter of reference, (a) when the point for determination is a pure question of law, such as, the construction of a statute or a document of title; (b) when the point for determination is a mixed question of law and fact (While the findings of the Tribunal on the facts are final, its decision as to the legal effect of the findings is a question of law. Where, however, the finding is one of fact, the fact that it is an inference from other basic facts will not alter its character as one of fact); and (c) when a finding on a question of fact is perverse. [147C E] The necessary ingredients of section 52 are : (i) there should be a direct or indirect connection between the person who acquires a capital asset and the assesee; (ii) the income tax officer should have reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee to capital gains; and (iii) if the first two conditions 139 are satisfied then the full value of consideration for the transfer may be taken to be the fair market value of the capital asset on the date of the transfer. The intention with which a particular transfer is made and the object which is to be achieved by such transfer are essentially questions of fact, the conclusion relating to which, are to be arrived at on a consideration of relevant material; that is, before the income tax officer can have any reason to believe that a transfer was effected with the object mentioned in the section facts, must exist showing that the object was to avoid or reduce the liability to capital gains. [141 H; 142 A D] In the present ease, the orders of the Tribunal show that there was no dispute as to the construction of any expression in any letter or document, that no relevant evidence was overlooked, that the inference was drawn from other facts and, that no question was raised on the construction of section 52. When the Tribunal found, as a fact, that before there was any proposal to reimpose the capital gains tax which had remained abolished for some time, the scheme between the assessee and the U.K. Company bad been fully evolved, the applicability of section 52 could not be attracted. The findings of the Tribunal that the object mentioned in the section could not be held to be established from the mere absence of a formal agreement between the assessee and the U.K. Company, is not perverse, but is supported by evidence and is eminently reasonable. in view of the clear, cogent and precise findings and conclusions of the Tribunal, the High Court, should at least have recorded a speaking order showing how the questions of law of the nature sought to be referred arose from the order of the Tribunal. [146 B D; 141 A C, F; 148 C.D] Shree Meenakshi Mills Ltd. vs C.I.T., Madras, , followed.

By an ex parte order made in the writ petition on 9 th September, 1988, the Court prohibited respondent No. 2, t he management of the Sri Rani Satiji 's Mandir, from performi ng Chunri ceremony within the temple and directed the enti re collection of money to be separately accounted for a nd deposited into a nationalised bank. In this miscellaneous petition, the management soug ht vacation of the ad interim order and lot a direction to t he authorities not to interfere in the matter of collection of money as also articles of gold and silver of deities. Disposing of the miscellaneous petition, the Court, Ordered: 1. The restraint imposed on holding the Chunri ceremo ny within the temple should continue without any variatio n. [68G H] 2.1 Pending disposal of the writ .petition, the temp le complex has to be maintained. Therefore, out of the inco me earned maintenance expenses must be met. [69A] 2.2 If out of the income of this institution any contr i bution was being made to sustain some social institutions of utility, the support should not die out. [69B C] 2.3 The respondent No. 2 is free to move the Distri ct Magistrate in regard to these two aspects and in case t he latter is satisfied that appropriate funds should be r e leased out of the deposits in the bank for 67 one or both of the above said purposes, he would be free to make an appropriate order in respect thereof.

The respondent company was incorporated in the former State of Travancore. The dispute was about the right of the respondent assessee company to carry forward the loss of the years 1946 under the provisions of the Travancore Act read with section 24 (2) of the Indian Income tax Act and the Taxation laws (Part B States)(Removal of Difficulties) Order, 1950, to the assessment year 1951 52 in the assessment of the company for its year of account. The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year, since it had lapsed after two years under section 32 of the Travancore Act and section 24 (2) was not applicable, in view of para 3 of the order. ^ Held, that the Taxation laws (Part B State) (Removal of Difficulties) Order, 1950, passed under section 12 of the Indian 606 Finance Act, 1950, was not intended to make a dividing line between those previous years to which the provisions of the earlier law would apply, and those previous years to which the provisions of the Income tax Act would apply. The rights were neither enlarged or curtailed by para 3 of the order. That paragraph said that the right was available in the same manner, to the same extent and upto the same year of assessment as laid down in the State law. The law to apply was thus the State law and the carry forward could only be for two years. Indore Malwa United Mills Ltd. vs Commissioner of Income tax, (1959) 35 I. T. R. 271, approved.

minal Appeal No. 220 of 1960. Appeal from the judgment, and order dated August 4, 1960, of the Punjab "High Court, in Criminal Revision No. 31 D of 1960. C. K. Daphtary, Solicitor General of India, R. H. Dhebar and D. Gupta, for the appellant. The respondent did not appear. May 3. The Judgment of K. Subba Rao and Raghubar Dayal, JJ., was delivered by Raghubar Dayal, J. J. R. Mudholkar, J., delivered a separate judgment. RAGHUBAR DAYAL, J. The only point for consideration in this appeal, by certificate granted by the High Court of Judicature at Punjab, is whether a police officer, who is neither a special police officer under the Suppression of Immoral Traffic in Women and Girls Act, 1956 (Act CIV of 1956), hereinafter called the Act, nor a police officer subordinate to a special police officer, can validly investigate the offences under the Act. Ram Singh, respondent, was suspected of having committed an offence under section 8 of the Act. Jet Ram, Sub Inspector, who had not been appointed a special police officer by the State Government, investigated the case and submitted the charge sheet to the Magistrate. The Magistrate quashed the charge sheet, holding that the special police officer alone was competent 696 to investigate the case and that Jet Ram could not have investigated it. On revision by the State, the High Court agreed with the view of the Magistrate and dismissed the revision. The High Court, however, granted a certificate under article 133(1)(c) of the Constitution and hence this appeal by the Delhi Administration. The learned Solicitor General, appearing for the Delhi Administration, has submitted that in the absence of any definite provision in the Act de barring the police to exercise its powers with respect to cognizable offences, the regular police can exercise those powers and that, consequently there is nothing wrong in the Sub Inspector of the regular police making an investigation in a case under the Act. He also submits that the special police officer is not competent to investigate offences, his powers being confined to what may come within the expression 'dealing with offences under the Act ', and which expression, accord ing to him, does not cover the power to investigate into offences. It is urged for the respondent that it is only the special police officer who is competent to investigate the offences under the Act. Before dealing with the merits of the question for determination, we may set out the object of the enactment and the relevant provisions thereof. The Act was enacted in pursuance of the International Convention signed at New York on the 9th day of May, 1950, for the suppression of immoral traffic in women and girls. Section 2 deals with definitions and, according to its clause (1), special police officer ' means a police officer appointed by or on behalf of the State Government to be in charge of police duties within a specified area for the purposes of the Act. Sections 3 to 9 create new offences and provide punishment for them. It is not necessary to detail the nature of the offences. Section 10 deals with release of convicted persons convicted for certain offences, on probation of good conduct, in the manner provided in sub section (1) of section 562 of the Code of Criminal Procedure, hereinafter called 697 the Code, or with admonition as provided in sub section (1A) of section 562 of the Code. Certain provisions of sections 562, 563 and 564 apply to such cases. The provisions of section 11 of the Act correspond to those of section 565 of the Code. Section 12 provides for taking security for good behaviour from habitual offenders at the time of passing sentence on them and thus correspond, in a way to the provisions of section 106 of the Code. The provisions of sections 112 to 126 of the Code apply to such a case. Sections 13, 14, 15 and 16 of the Act are as follows: "13. (1) There shall be for each area to be specified by the State Government in this behalf, a special police officer appointed by or on behalf of that Government for dealing with offences under this Act in that area. (2) The special police officer shall not be below the rank of (a) an Assistant Commissioner of Police in the presidency towns of Madras and Calcutta; (b) a Superintendent of Police in the presidency town of Bombay; and (c) a Deputy Superintendent of Police else where. (3) For the efficient discharge of his functions in relation to offences under this Act (a) the special police officer of an area shall be assisted by such number of subordinate police officers (including women police officers wherever practicable) as the State Government may think fit; and (b) the State Government may associate with the special police officer a non official advisory body consisting of not more than five leading social welfare workers of that area (including women social welfare workers wherever practicable) to advise him on questions of general importance regarding the working of this Act. Notwithstanding anything contained in the Code of Criminal Procedure ' 1898 (5 of 1898) any offence punishable under this Act shall be deemed to 698 be a cognizable offence within the meaning of that Code: Provided that, notwithstanding anything contained in that Code, (i) arrest without warrant may be made only by the special police officer or under his direction or guidance, or subject to his prior approval; (ii) when the special police officer requires any officer subordinate to him to arrest without warrant otherwise than in his presence any person for an offence under this Act, he shall give that subordinate officer an order in writing, specifying the person to be arrested and the offence for which the arrest is being made; and the latter officer before arresting the person shall inform him of the substance of the order and, on being required by such person, show him the order; (iii) any police officer not below the rank of inspector specially authorized by the special police officer may, if he has reason to believe that on account of delay involved in obtaining the order of the special police officer, any valuable evidence relating to any offence under this Act is likely to be destroyed or concealed, or the person who has committed or is suspected to have committed the offence is likely to escape, or if the name and address of such a person is unknown or there is reason to suspect that a false name or address has been given, arrest the person concerned without such order, but in such a case be shall report, as soon as may be, to the special police officer the arrest and the circumstances in which the arrest was made. (1) Notwithstanding anything contained in any other law for the time being in force, whenever the special police officer has reasonable grounds for believing that an offence punishable under this Act has been or is being committed in respect of a woman or girl living in any premises, and that search of the premises with warrant cannot be made without undue delay, such officer may, after recording the grounds of his belief, enter and search such premises without a warrant. (2) Before making a search under sub section (1), 699 the special police officer shall call upon two or more respectable inhabitants (at least one of whom shall be a woman) of the locality in which the place to be searched is situate, to attend and witness the search, and may issue any order in writing to them or any of them so to do. (3) Any person who, without reasonable cause, refuses or neglects to attend and witness a search under this section, when called upon to do so by an order in writing delivered or tendered to him, shall be deemed to have committed an offence under section 187 of the Indian Penal Code (45 of 1860). (4) The special police officer entering any premises under sub section (1) shall be entitled to remove therefrom any girl, if in his opinion she is under the age of twenty one years and is carrying on or is being made to carry on, or attempts are being made to make her carry on, prostitution. (5) The special police officer, after removing the girl under sub section (4) shall forthwith produce her before the appropriate magistrate. (6) The special police officer and other persons taking part in, or attending, and witnessing a search shall not be liable to any civil or criminal proceedings against them in respect of anything lawfully done in connection with, or for the purpose of, the search. (1) Where a magistrate has reason to believe from information received from the police or other. wise, that a girl apparently under the age of twenty. one years, is living, or is carrying on, or is being made to carry on prostitution, in a brothel, he may direct the special police officer to enter such brothel, and to remove therefrom such girl and produce her before him. (2) The special police officer after removing the girl shall forthwith produce her before the Magistrate issuing the order. " Section 17 provides for intermediate custody of girls removed under section 15 or rescued under section 16. Sections 18 to 21 provide for matters unconnected with offences. 700 Section 22 provides that no Court inferior to that of a Magistrate as defined in cl. (c) of section 2 shall try the offences mentioned in the section. The Magistrates mentioned in this clause are District Magistrates, Sub Divisional Magistrates, Presidency Magistrates or a Magistrate of the First Class specially empowered by the State Government by notification in the official gazette to exercise jurisdiction under the Act. It is clear from the various provisions that the Act is a complete Code with respect to what is to be done under it. It deals with the suppression of immoral traffic in women and girls, a matter which has to be tackled with consideration, intelligence and understanding of the problem. This is evident from the provisions of cl. (b) of sub section (3) of section 13 which provides for the association of a non official advisory body consisting of not more than five leading social welfare workers of that area (including women social welfare workers wherever practicable) with the special police officer in order to advise him on questions of general importance regarding the working of the Act. The Act creates new offences, provides for the forum before which they would be tried and the orders to be passed on conviction of the offenders. Necessary provisions of the Code of Criminal Procedure have been adopted fully or with modifications. The Act provides machinery to deal with the offences created and its necessary implication must be that new machinery is. to deal with those offences in accordance with the provisions of the special Act and, when there is no specific provision in such Act, in accordance with the general procedure and that no other machinery is to deal with those offences. It does not appear reasonable that the investigation of offences would have been left unprovided and was to be done by the regular police, in accordance with the regular procedure laid down under the Code. On the other hand, there are certain provisions which are such that the regular police cannot comply with them and thus they point to the conclusion that it is the special police officer alone who is to take any 701 action which the police has to take in connection with the offences under the Act. Section 14 makes offences under the Act cognizable, which, according to the Code means that persons accused of those offences can be arrested without a warrant, and section 157 of the Code specially mentions that the investigating officer, if necessary, is to take measures for the discovery and the arrest of the offender; and yet, the power to arrest without a warrant is not given to the regular police, but under the proviso to this section, is to be exercised by the special police officer or under his direction or guidance or subject to his prior approval. The provisions of proviso (iii) correspond to the provision of section 57 of the Code and others refer to special circumstances in which a police officer not below the rank of an inspector specially authorised by the special police officer can arrest without warrant. Section 15 provides for searches without warrant, by the special police officer. This section does not specifically state that the special police officer alone will,search without warrant, but it is clear from the provisions of this section that officers of the regular police force will not search without warrant and thus will not exercise the power given under section 165 of the Code. All the provisions of section 15 correspond to those of section 165 of the Code. Further, in view of sub section (2) of section 15, the special police officer is required to include at least one woman among the search witnesses. There is no such restriction in section 103 of the Code. If a regular police officer is to conduct search in pursuance of the powers conferred under section 165 of the Code, he is not bound to include a woman among the search witnesses. Further, sub sections (4) and (5) of section 15 authorise a special police officer to remove any girl found in the promises searched, if she be under twenty one years of age and is carrying on prostitution. Such a girl is to be pro duced before the appropriate Magistrate. The ordinary regular police officer conducting search under section 165 of the Code, will not be able to do anything with respect to such a girl found in the premises 89 702 searched by him. These provisions clearly indicate that the regular police officers are not to exercise any powers in connection with the offences and the other purposes of this Act. The entire police duties in connection with the purposes of the Act within a certain area have been put in the charge of a special police officer. There must be a definite purpose behind the provision of appointing a police officer in charge of the police duties within a specified area for the purpose of this Act. If the ordinary police can also perform the police duties for the purposes of the Act, there can be no special reason for making the provision for the appointment of a special police officer. The expression 'police duties ' will include all the functions of the police in connection with the purpose of the Act and in the special context of the Act they will include the detection, pre vention and investigation of offences and the other duties which have been specially imposed on them under the Act. According to section 13 of the Act, 'there shall be, for each area to be specified by the State Government, a special police officer appointed by or on behalf of that Government for dealing with offences under the Act in that area '. The expression 'dealing with offences ' is of wide import and will include any act which the police has to do in connection with the offences under the Act. In this connection, we have been referred to the provisions of section 5 of the Criminal Procedure Code, which reads: "All offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. (2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. " It is submitted that the expression 'dealt with ' must 703 mean something which is not included in investigation, inquiry or trial. This does not necessarily follow from the provisions of this section. The word ,otherwise ' points to the fact that the expression 'dealt with ' is all comprehensive, and that investigation, inquiry and trial were some aspects of 'dealing with ' the offences. Further, according to sub section (3) of section 13, the special police officer is to be assisted, for the efficient discharge of his functions in relation to offences under this Act, by a number of subordinate police officers and will be advised by a non official advisory body. The expression 'functions in relation to offences ' do include his functions connected with the investigation of the offences. There is no reason to exclude such functions from the functions contemplated by sub section The suggestion that the special police officer would be very heavily worked in case he had to perform all the ordinary duties of the police connected with the investigation of offences in addition to the duties conferred on him under the Act, does not go far in putting a different interpretation on the powers of the special police officer. He is to be assisted by his sub. ordinate police officers. They can investigate both under the implication of the provisions of section 13, as they are to assist the special police officer, and also on deputations by the special police officer, in view of section 157 of the Code. Section 5A of the Prevention of Corruption Act, 1947 (Act 11 of 1947) provides that notwithstanding anything contained in the Code of Criminal Procedure, no police officer below the rank of officers mentioned in clauses (a), (b) and (c) shall investigate any of the offences mentioned in that Section. The provision was made in a prohibitive form because the police officers below the ranks mentioned were not to exercise their power of investigation unless a Magistrate specially ordered them to investigate. The provision was not with respect to conferring any special powers on any particular officer. It was just to restrict the powers of certain officers with respect to investigating certain offences in certain circumstances. 704 The difference in the language of section 5A of the Prevention of Corruption Act from that of section 13 of the Act, is therefore of no help to the contention for the State. If the power of the special police officer to deal with the offences under the Act, and therefore to investigate into the offences, be not held exclusive, there can be then two investigations carried on by two different agencies, one by the special police officer and the other by the ordinary police. It is easy to imagine the difficulties which such duplication of proceedings can lead to. There is nothing in the Act to co ordinate the activities of the regular police with respect to cognizable offences under the Act and those of the special police officer. The special police officer is a police officer and is always of the rank higher than a Sub Inspector and therefore, in view of section 551 of the Code, can exercise the same powers throughout the local area to which he is appointed as may be exercised by the officer in charge of a police station within the limits of his station. We are therefore of opinion that the special police officer is competent to investigate and that he and his assistant police officers are the only persons competent to investigate offences under the Act and that police officers not specially appointed as special police officers cannot investigate the offences under the Act even though they are cognizable offences. The result is that this appeal by the Delhi Administration fails and is hereby dismissed. MUDHOLKAR, J. The point which arises for consideration in this appeal is whether a charge sheet presented by a station house officer alleging against the respondent certain offences under the Suppression of Immoral Traffic in Women and Girls Act, 1956 (Act No. CIV of 1956) (hereinafter called the Act) is bad because the investigation into those offences was carried out not by a special police officer appointed under the Act but by the station house officer. The respondent is alleged to be a pimp and said to 705 have committed offences under section 8 of the Act. Inves tigation into the offences was made by the officer incharge of the Kamla Market Police Station and a charge sheet was presented by him before a First Class Magistrate in Delhi. Similar charge sheets were put up against certain other persons. An objection was taken before the Magistrate in all these cases that the charge sheets were bad because the investigation into the various offences was not made by the special police officer referred to in the Act. This objection was upheld by the Magistrate and the charge sheets were rejected. An application for revision was preferred by the Delhi Administration before the High Court of Punjab. But that application was also rejected. Thereupon the Administration sought a certificate from the High Court under article 134(1)(c) of the Constitution which the High Court granted. That is how the present appeal came to be preferred before this Court. The High Court, following the decision in Kuppammal, In re (1) held that an offence under the Act must be investigated only by one of the officers mentioned in section 13 and that a charge sheet based upon the investigation made by any other police officer is bad and must be quashed. In my opinion the view taken by the Madras High Court and accepted by the Punjab High Court is untenable. The Act creates certain new offences, prescribes the placing of certain restrictions upon persons found guilty of those offences, provides for the appointment of a special police officer and for the constitution of an Advisory Board, confers certain special powers upon the special police officer, em. powers Magistrates to order the closure of brothels and eviction of the offenders from the premises occupied by them as well as for the removal of prostitutes from any place and also makes a provision for the establishment of protective homes as well as em. powers Magistrates to order detention of women and girls in such protective homes in certain circumstances. In addition it provides for the making of rules. (1) I.L.R. 706 According to my brother Raghubar Dayal, J., since the Act creates new offences and prescribes the procedure for dealing with them it is a complete code in itself Therefore, according to him, to that extent the provisions of the Act must prevail over those of the Code of Criminal Procedure, 1898. Further according to him, since the Act provides for the appointment of a special police officer for dealing with offences under this Act in the area within his jurisdiction, it is he and he alone who can investigate into an offence under the Act committed within that area. It would be convenient to refer to the provisions of section 5 of the Code of Criminal Procedure which runs thus: "(1) All offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. (2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offen ces. " Sub section (2) would prima facie apply to cases arising under the Suppression of Immoral Traffic in Women and Girls Act except to the extent that its provisions are abrogated or superseded by the aforesaid Act. While sub section (1) provides that only an offence under the Penal Code must be investigated in accordance with the provisions of the Code of Criminal Procedure, sub section (2) provides that offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the provisions of the Code subject to any enactment for the time being in force "regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. " What has to be ascertained, therefore, is whether in the Act in question there are any provisions which regulate the manner of carrying out an investigation of offences thereunder because 707 here we are concerned only with the limited question of the power of a station house officer to investigate into an offence under the Act. A bare perusal of the Act would show that there is no provision therein which confers upon the special police officer appointed thereunder the power to investigate into an offence made punishable by the Act. Such power is, however, sought to be deduced from the provisions of sub section (1) of section 13 which reads thus: "There shall be for each area to be specified by the State Government in this behalf a special police officer appointed by or on behalf of that Government for dealing with offences under this Act in that area. " It is said that the words underlined are wide enough to include the power to investigate into offences. These are general words and are undoubtedly of wide import. But they must be construed in the light of the other provisions of the Act. The Act confers certain specific powers and imposes certain specified duties on a special police officer. It is to these matters that the words "dealing with offences" must be confined. If it were the intention of the legislature to confer upon a special police officer the sole power to investigate into an offence under the Act it would have enacted a provision similar to section 5A in the Prevention of Corruption Act, 1947 (2 of 1947). This Act was before the Parliament when it enacted the Act in question and it would be reasonable to presume that if Parliament intended to confer similar power upon a special police officer appointed under this Act it would have used the same language for expressing its will as it did in section 5A of the Prevention of Corruption Act. Offences under the Act have been made cognizable by section 14 thereof. Therefore, prima facie section 156(1) of the Code of Criminal Procedure would apply and an officer in charge of a police station would have the power to investigate into such an offence. No doubt, by virtue of the provisions of sub section (2) of section 5 of the Code of Criminal Procedure, the provisions of section 156, Criminal Procedure Code would be subject to those provisions of the Act which bear on the question of 708 investigation into offences. Had Parliament desired that the provisions of section 156 of the Code of Criminal Procedure should not apply to offences under the Act it would, in view of the provisions of sub section (2) of section 5 of the Code of Criminal Procedure, have been careful enough to make express provisions in the Act regulating the manner of investigation of offences thereunder and specifying the officer entitled to make the investigation so as to exclude a police officer entitled under the Code of Criminal Procedure to investigate into offences. In my judgment it would not have left the matter to mere conjecture and rested content by using the expression "dealing with offences under this Act", which on its face is inadequate for excluding the operation of section 166, Code of Criminal Procedure. Investigation, inquiry and trial of offences are definite stages in the process of bringing a delinquent to book. Each stage is distinct from the other and the legislature has made it quite clear in section 5 of the Code of Criminal Procedure itself that they are important enough to be mentioned specifically. To make the point clearer it would be useful to compare the provisions of sub section (1) of section 13 of the Act with those of sub sections (1) and (2) of section 5 of the Code of Criminal Procedure. While in the former, Parliament has merely used the words "dealing with offences under the Act" in the latter the words used are "investigating, in quiring into, trying or otherwise dealing with such offences." No doubt the expression "dealing with offences" would, according to its ordinary connotation, include the stages of investigation, inquiry and trial. But the legislature has specifically referred to the aforesaid three stages because of their importance and apparently for obviating any doubt as to its intention. When Parliament had before it the Code of Criminal Procedure and in particular the provisions of section 5 and section 156 thereof it would have used in sub section (1) of section 13 of the Act language similar to that used by it in sub& (2) of section 5, Criminal Procedure Code if it were its intention to include in sub section (1) of section 13 matters like investigation, inquiry and trial or any of 709 them. It would, therefore, be legitimate to infer that when Parliament spoke in section 13(1) of a special police officer being empowered to deal with offences under the Act it did not intend to confer upon him the power to investigate into an offence under the Act. It was pointed out to us that a special police officer shall not be below the rank of an Assistant Commissioner of Police in the towns of Madras and Calcutta and a Superintendent of Police in. the Presidency Town of Bombay and a Deputy Superintendent of Police elsewhere and, therefore, such police officer would have the power to investigate into an offence. That, however, would be not by force of the provisions of sub section (1) of section 13 of the Act but by that of the provisions of section 551 of the Code of Criminal Procedure, which runs thus: "Police officers superior in rank to an officer incharge of a police station may exercise the same powers, throughout the local area to which they are appointed, as may be exercised by such officer within the limits of his station. " I would like to make it clear that it is not my view that a special police officer appointed under the Act cannot have the power to investigate into an offence under the Act but what I hold is that he does not derive such power from sub section (1) of section 13 of the Act. It is only under section 551 of the Code of Criminal Procedure that he may be able to exercise the power to investigate into an offence under the Act. It was said by reference to the definition of special police officer in section 2(1) of the Act that since such an officer is to be in charge of "police duties" within a specified area he would have the power to investigate into an offence. The expression "police duties" is not defined anywhere in the Act. But we were referred to section 23 of the Police Act in this connection. The relevant part of that section runs thus: "It shall be the duty of every police officer promptly to obey and execute all orders and warrants lawfully issued to him by any competent authority; to collect and communicate intelligence affecting the 90 710 public peace; to prevent the commission of offences and public nuisances; to detect and bring offenders to justice. . " The suggestion is that the words "to detect and bring offenders to justice" are comprehensive enough to include the power to investigate. It is sufficient to say that the duties enjoined upon police officers by section 23 are something quite apart from those which are enjoined upon them by the Code of Criminal Procedure. The investigation into an offence is a matter of some importance. Statements recorded therein have considerable value and can be used for contra. dieting witnesses questioned during investigation. It is for this reason that detailed provisions have been incorporated in the Code of Criminal Procedure dealing with this subject. It is only when an investigation is completed that a police officer is empowered to present a charge sheet. Neither the Police Act nor the Suppression of Immoral Traffic in Women and Girls Act contains any provision whatsoever with regard to the making of an investigation or presentation of a charge sheet. It would, therefore, not be appropriate to read in the words "deal with offences" the power to investigate into them and present a charge sheet. The High Court of Punjab as well as the High Court of Madras have held not only that section 13(1) of the Act confers power upon special police officer to investigate into an offence under the Act but that the power conferred is exclusive. I am unable to appreciate how even assuming that the words "deal with offences" 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 excluded. There is not a whisper in section 13(1) of the Act of the exclusion of the powers of an officer in charge of a police station. It is suggested that unless it is so held a confusion will result because the special police officer as well as the officer in charge of a police station will 711 each exercise his power to investigate into an offence under the Act. I do not think that there would be a danger of such simultaneous exercise of the power to investigate by two officers. The offence will have to be registered at the police station within the limits of the jurisdiction of which the offence has taken place. Thereafter it would be investigated into by the officer at whose instance it was registered. If that officer happens to be a station house officer the special police officer may take out the investigation from his hands or allow him to continue it. If the offence is registered at the instance of the special police officer, the station house officer would be bound to know of it from the station house records and would stay his hands. Upon this view, therefore, I would allow the appeal, set aside the judgment of the High Court and of the Magistrate and remit the case to the latter for being dealt with according to law. By COURT: In accordance with the opinion of the majority, this appeal is dismissed. Appeal dismissed.

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.

The appellant. was tried by the Sessions judge and acquitted of the charge of murder. On appeal the High Court convicted him and sentenced him to imprisonment for life. The appellant applied for and was granted a certificate under Art 134 (1) (c) of the Constitution for appeal to the Supreme Court on the ground that there was unusual delay in delivering the judgment of the High Court and that the judg ment failed to deal with certain questions of fact which were raised at the hearing of the appeal. Held, that the certificate granted by the High Court was not a proper certificate. The mere ground of delay in giving judgment did not fall within the words "fit one for appeal to the Supreme Court" in article 134 (1) (c). The points raised in the appeal before the High Court were questions of fact and the High Court was not justified in passing such questions on to the Supreme Court for further consideration thus converting the Supreme Court into a court of appeal on facts. Haripada Dev vs State of. West Bengal; , and Sidheswar Ganguly vs State of West Bengal, [1958] section C. R. 749, followed. Banaswmi Parshed vs Kashi Krishna Narain, (1900) L. R. 23 1. A I I and Radhakrishna Ayyar vs Swaminathna Ayyar, (1920) L. R. 48 I. A. 31, referred to.

A Committee consisting of two Judges of the High Court was constituted by Delhi Administration to enquire into certain incidents in January 1988, involving the lawyers and the police sequel to an alleged incident of a lawyer, being apprehended by the students of a College, and banded over to the police on the accusation of committing an offence within the campus of the said College and his subsequently being brought in handcuffs by the police for production before a Magistrate, 21 who ultimately discharged him with direction to the Commis sioner of Police to take action against the guilty police officials. In its interim report, the Committee observed that it had 10 examine the conduct of various police officers, and, in particular, among others, the petitioners and recommended the transfer of the petitioners from their posts. In pursuance of a notice issued by the Committee under Rule 5(2)(a) of the Rules, statements of cases on behalf of the High Court Bar Association and the Commissioner of Police together with the supporting affidavits were filed before the Committee. The Police were required to be ready for examination from May 16, 1988 onwards but the counter affidavit and the list of witnesses had not been filed till 17th May, 1988, on which date the Commissioner of Police submitted two applications praying for postponement of hearing and for calling upon the Bar Association to start their evidence first and to call upon the Commissioner of Police to adduce the evidence thereafter. Rejecting these applications, the Committee passed an order saying that since the Police had failed to file their counter affidavit or list of witnesses, the petitioners should be present in Court on May 19, 1988 for crossexamination. On the petitioners ' refusing to enter the witness box for taking oath for cross examination, the Committee decided to file complaints against the petitioners for an offence under section 178 of the Indian Penal Code and in pursuance of which complaints were filed against the petitioners in the Chief Metropolitan Magistrate 's Court under sub section (4) of section 5 of the Commissions of Enquiry Act, 1952 read with section 346 of the Code of Criminal Procedure, 1973. The petitioners challenged these orders in this Court by way of writ petitions and Special Leave Petitions. This Court passed an order on June 2, 1988 directing the Commit tee to reconsider the whole question relating to the order in which the witnesses had to be examined in the case. In pursuance of the aforesaid order, the Committee passed an order on 29th June, 1988 holding that the concept of burden of proof was not quite relevant in the proceedings before a Commission, under the Act, which had been given free hand to lay down its own procedure subject, of course, to the provisions of the Act and the rules made thereunder and that it would be difficult for the committee to lay down 22 the manner in which the witnesses were to be examined, foregoing its right to examine any witness at any stage, if his statement appeared to be relevant, that merely because there were allegations against a particular person he would not be said to be covered under section 8 B, which required a positive order from the Committee, and that when the Commit tee mentioned that it was to examine the conduct of various Police Officers and others, it did not have in view section 8 B of the Act. The Committee specifically held that the three other persons to whom notices had been issued under section 8 B would be examined at the end of the inquiry. On August 18, 1988 this Court quashed the orders of the Committee directing the filing of the complaints and the criminal proceedings against the petitioners before the Metropolitan Magistrate and held (a) that the Delhi Adminis tration had to examine first all its witnesses as required by Rule 5(5)(a) of the Rules framed under the Act; even those witnesses who may have filed affidavits already may first be examined in chief before they were cross examined, since it was stated that when the affidavits were filed the deponents did not know what the other parties who had also filed affidavits had stated in their affidavits; the ques tion whether a party had the right of cross examination or not shall be decided by the Committee in accordance with section 8 C of the Act; the direction to the Delhi Administration to examine its witnesses first did not apply to those witnesses who fell under section 8 B of the Act, who had to be examined at the end of the inquiry, as opined by the Committee itself; (b) that the petitioners were persons, who fell under section 8 B of the Act and had to be dealt with accordingly, and (c) that if the three persons to whom notices under section 8 B had been issued were to be examined, even according to the Committee, at the end of the inquiry there was no justifia ble reason to deny the same treatment to the petitioners who were in the same position as those three persons; the action of the Committee in asking them to be cross examined at the beginning of the inquiry was, therefore, discriminatory; mere non issue of notices to them under section 8 B ought not to make any difference if they otherwise satisfied the condi tions mentioned in section 8 B; the issue of such a notice was not contemplated under section 8 B of the Act; it was enough if at any stage the Commission considered it necessary to inquire into the conduct of any person and such person would thereafter be governed by section 8 B of the Act. Reasons for this order were to be given later. Giving reasons for the above order the Court, HELD: 1. Recourse to procedure under section 8 B of the Commis 23 sions of Enquiry Act, 1972 is not confined to any particular stage and if not earlier, at any rate, as soon as the Com mittee made the unequivocal declaration of its intention, in its interim report to examine the conduct of the two peti tioners it should have issued notice under section 8 B to the two petitioners, if it was of the view, for which view there is no justification, that issue of a formal notice under section 8 B was the sine qua non for attracting that Section. At all events, the Committee could not deny the petitioners the statutory protection of section 8 B by merely refraining from issuing a formal notice even though on its own declared intention, the section was clearly attracted. [42C E] State of Jammu and Kashmir vs Bakshi Ghulam Mohammad, [1966] Suppl. S.C.R. page 401 and State of Karnataka vs Union of India & Another, [1978] 2 S.C.R. page 1, relied on. 2.1 The use of the word 'or ' between clauses (a) and (b) of section 8 B of the Act makes it clear that section 8 B would be attracted if requirement of either clause (a) or clause (b) is fulfilled. Clause (a) of section 8 B applies when the conduct of any person is to be enquired into whereas clause (b) applies to a case where reputation of a person is likely to be prejudicially affected. [42B] 2.2 The fact that no formal notice had been issued under section 8 B would constitute no justification for not treating a person to be covered by that section if otherwise the ingre dients of the said section were made out. Having once stated in its interim report in unequivocal terms, that the conduct of these two petitioners among others was to be examined, it was not open to the Committee to still take the stand that section 8 B was not attracted in so far as they were concerned. [42B C] 2.3 Keeping in view the nature of the allegations made in the statements of case and the supporting affidavits filed on behalf of the various Bar Associations including the Delhi High Court Bar Association, requirement of even clause (b) of section 8 B was fulfilled inasmuch as if those allegations were proved they were likely to prejudicially affect the reputation of the two petitioners. In view of the specific term of reference which contemplated taking of "stringent action" against all those responsible, even the career of the petitioners as police officers was likely to be affected in case an adverse finding was recorded against them and the principle that the report of a Commission of Enquiry has no force proprio vigore does not, on a pragmatic approach to the consequences, seem to constitute sufficient safeguard so far as the petitioners are concerned. [43C E] 24 The reason for the importance attached with regard to the matter of safeguarding the reputation of a person being prejudicially affected in cl. (b) ors. 8 B of the Act is not far to seek. [43E F] Blackstone 's Commentary of the laws of England Vol I, IVth Edition, Corpus Juris Secundum Vol. 77 at page 268 and D.F. Marion vs Davis, 55 American Law Reports page 171 referred to. 3.1 Section 8 B inter alia contemplates an opportunity being given to the person governed by the said section to produce evidence in his defence whereas section 8 C inter alia gives him the right to cross examine the witnesses who depose against him. [45D] Not only that calling upon a person governed by section 8 B to produce evidence in his defence at the very inception of the inquiry is a contradiction in terms inasmuch as in this situation such a person would really be required to disprove statements prejudicial to him of such witnesses who are yet to be examined, it would also reduce the right of crossexam ination by such person to a mere formality for the obvious reason that by the time the witnesses who are to be crass examined are produced, the defence of such person which would normally constitute the basis for the line and object of cross examination would already be known to such witness es and they are likely to refashion their statements accord ingly. [45E F] 3.2 Perhaps in a case where there is no other witness to give information about the alleged incident about which the inquiry is being held and the only person or persons who could give such information is or are the person or persons who are likely to be adversely affected by the inquiry, it may be necessary to depart from the above view as a matter of necessity. But this is not one such case. There are admittedly any number of other persons who can give evidence about what happened on the relevant dates. [45G] Since the two petitioners clearly fell within the cate gory of persons contemplated by section 8 B of the Act and were consequently entitled to the same treatment as has been accorded by the Committee to the persons to whom notice has been issued by it under the said section, the Committee was not justified in calling upon the two petitioners to stand in the witness box for cross examination at the very initial stage of the enquiry. [54B D] 3.3 The apprehension that in case a person governed by section 8 B 25 was to be examined at the end and at that stage such person even at the risk of not producing his defence, for some reason, chooses not to appear as a witness, the Committee would be deprived of knowing the facts in the knowledge of such person and such a course would obviously hamper the enquiry is more imaginary than real inasmuch as the power of the Commission to call upon any person to appear as a wit ness under section 4 of the Act, which in terms is very wide and is not circumscribed by fetters of stage, would be available to the Commission and it would be entitled to call such person as a witness even at that stage. [46A C] 4.1 In view of the provisions contained in sections 4 to 6 of the Act, and the rules framed thereunder a person could not, on the belief that he was covered by section 8 B, avoid the consequence of sections 178 and 179, by claiming absolute immuni ty from binding himself by an oath or affirmation for an swering questions put to them. [51H; 52A] Mc Grain vs Daugherty, 71 L. ed. 580; Uphaus vs Wyman, ; ; Sinclair vs United States, ; ; Kastigar vs United States, ; and Brown vs Walker40 L.ed. 819, referred to. However, a valid justification put forth by the witness was sufficient ground to make him immune from prosecution. [52F] Watkins vs United States, ; ; Flaxer vs United States; , and Murphy vs Waterfront Commission of New York, ; referred to. In the instant case, the petitioners are not asserting that they could not be required at all to appear as a wit ness before the Committee and make statement on oath. It was submitted on their behalf that they did not either wish to delay the proceedings or to show disrespect to the Commit tee, but only wanted to protect their own interest by making the submission which they made before the Committee, as per legal advice given to them, namely that they being covered by section 8 B of the Act their defence would be put to serious jeopardy and will be prejudicially affected if they were required to appear in the witness box for crossexamination at the very inception of the inquiry even before statements of witnesses proving the accusations against the petitioners had been recorded which they were entitled to defend. [52B E] 4.2 On the view of the Committee that persons covered by 8 B were to be examined at the end of the enquiry, the fact that an affidavit of the petitioner was on record could hardly justify the petitioner being 26 called upon to enter the witness box at the very inception. [55C] Smt. Indira Gandhi and another vs Mr. J.C. Shah Commis sion of Inquiry, ILR 1980(1) Delhi 552 referred to. 4.3 Had the Committee not been labouring under the misapprehension that the petitioners were not covered by section 8 B, because no notices under that section had been issued to them, notwithstanding the fact that their conduct was to be examined on its own declared, intention, it would obvi ously not have required the petitioners to take oath for being cross examined at the stage at which it did so. The subsequent orders of the Committee directing complaints to be filed against the petitioners for an offence punishable under section 178 IPC and the act of filing such complaints were the consequences of the said misapprehension. [55F G] Since the petitioners were covered by section 8 B, the action of the Committee in compelling the petitioners to enter the witness box for being cross examined, when even according to it persons similarly situated were to do so at the end of the inquiry, was in itself discriminatory. There was, there fore, valid justification for the refusal by the petitioners to take oath for cross examination at the stage when they were required to do so. [55H; 56A B] Therefore, the Committee should not have, in the instant case, directed the filing of a complaint against either of the petitioners for an offence punishable under section 178 IPC. [56C] 5. Since the action of the Committee in holding that the petitioners were not covered by section 8 B of the Act and com pelling them to enter the witness box on the dates in ques tion was discriminatory and the orders directing complaint being filed against the petitioners were illegal, it is a case involving infringement of Articles 14 and 21 of the Constitution. In such a situation, the power of this Court to pass an appropriate order in exercise of its jurisdiction under Articles 32 and 142 of the Constitution cannot be seriously doubted, particularly having regard to the special facts and circumstances of this case. [56D El The orders directing filing of complaints being invalid, the consequential complaints and the proceedings thereon including the orders of the Magistrate issuing summons cannot survive. [56E F] 6. If the petitioners are compelled to face prosecution. in spite of 27 the finding that the orders directing complaint to be filed against them were illegal, it would cause prejudice to them. Therefore, this Court can interfere in the matter. [56G] 7. Apart from the directions contained in this Court 's order dated 18th August, 1988, it is not expedient to lay down any particular rigid procedure to be followed by the Committee with regard to sequence in which witnesses were to be examined by it. [41G H]

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, a Sub Inspector of police, was convicted under section 376 of I.P.C. for having committed rape on a young newly married girl of 19 or 20 years of age, by the Additional Sessions Judge, Nagpur. The respondent challenged his conviction in appeal to the High Court. The High Court set aside the order of conviction and sentence imposed by the trial court and acquitted him. The State feeling ag grieved came up in appeal by special leave. While allowing the appeal setting aside the order of the High Court and restoring that of the Trial Court, the Court, HELD: A prosecutrix of a sex offence cannot be put on par with an accomplice. She is in fact a victim of the crime. The Evidence Act nowhere says that her evidence cannot be accepted unless it is corroborated in material particulars. She is undoubtedly a competent witness under section 118 and her evidence must receive the same weight as is attached to an injured in cases of physical violence. The same degree of care and caution must attache in the evalua tion of her evidence as in the case of any injured complain ant or witness and no more. [123B C] What is more necessary is that the Court must be alive to and conscious of the fact that it is dealing with the evidence of a person who is interested in the outcome of charge levelled by her. Having regard to the increase in the number of sex violation cases in the recent past, particu larly cases of molestation and rape in custody, it is proper to remove the notion, if it persists, that the testimony of a woman who is a 116 victim of sexual violence must ordinarily be corroborated in material particulars except in the rarest of rare cases. [123C D; 124B C] Ours is a conservative society where it concerns sexual behaviour. Ours is not a permissive society as in some of the Western and European countries. Our standard of decency and morality in public life is not the same as in those countries. It is, however, unfortunate that respect for womanhood in our country is on the decline and cases of molestation and rape are steadily growing. An Indian Woman is now required to suffer indignities in different forms, from lewd remark to eve teasing, from molestation to rape. Decency and morality in public life can be promoted and protected only if we deal strictly with those who violate the social norms. The standard of proof to be expected by the Court in such cases must take into account the tact that such crimes are generally committed on the sly and very rarely direct evidence of a person other than the prosecu trix is available. [124D F] Courts must also realise that ordinarily a woman, more so a young girl, will not stake her reputation by leveling a false charge concerning her chastity. By our criminal laws vide powers are conferred on police officers investigating cognizable offences. The infrastructure of our criminal 'investigation system recognises and indeed protects the right of a woman to decent and dignified treatment at the hands of the investigating agency. [124F H] The purpose and setting, the person and his position, the misuse or abuse of office and the despair of the victim which led to her surrender are all relevant factors which must be present in the mind of the Court while evaluating the conduct evidence of the prosecutrix. A person in author ity, such as a police officer carries with him the awe of office which is bound to condition the behaviour of his victim [125C D] The Court must not be oblivious of the emotional turmoil and the psychological injury that a prosecutrix suffers on being molested or raped. She suffers a tremendous sense of shame and the fear of being shunned by society and her near relatives including her husband. Instead of treating her with compassion and understanding as one who is an injured victim of a crime, she is, more often than not, treated as a sinner and shunned. It must, therefore be realised that a woman who is subjected to sex violence would always be slow and hesitant about disclosing her plight. The Court must, therefore, evaluate her evidence in the above background. 117 Bharwada Bhognibhai Hirjibhai vs State of Gujarat, ; upon.

The appellant along with others was being tried for an offence under section 120B of the Indian Penal Code read with section 167 (81) of the , and section 5 of the Imports and Exports Control Act, 1947. Although he was at first released on bail by the Presidency Magistrate, the High Court, by an order dated March 6, 1967 in the exercise of its inherent powers cancelled the previous bail orders, as it found that the appellant was interfering and tampering with certain foreigners whom the prosecution intended to examine as witnesses. The High Court, however, reserved liberty to the appellant to move the court on or after June 26, 1967 far a fresh order of bail as it was contemplated that within the time so fixed, the prosecution would examine the foreign witnesses. In the appeal to this Court, the appellant challenged the order of the High Court on the ground that the inherent powers of the High Court were not conferred by any legislation or statute, and the deprivation of the personal liberty of the appellant by an order of the High Court in the exercise of its inherent powers was violative of Art, ' II of the Constitution HELD : The High Court 'has the inherent power to cancel bail granted to a person accused of a bailable offence. This jurisdiction should be invoked in exceptional cases only when the High Court is satisfied that the ends of justice will be defeated unless the accused is committed to custody. [928A B] The order of the High Court cancelling the bail and depriving the appellant of his personal liberty was according to procedure established by law was not violative of article 21. [931C] The existing powers and jurisdiction of the High Court, including its inherent powers, had been confirmed and continued by section 223 of the Government of India Act, 1935, and article 225 of the Constitution. When the Constitution or any enacted law has embraced and confirmed the inherent power and the jurisdiction of the High Court which previously existed, that power and jurisdiction has the sanction of an en acted 'law ' within the meaning of article 21. [929H; 93A B] Case law discussed. [On the facts the court noted that there had been unnecessary delay in the examination of the foreign witnesses and directed that the appellant should be released on bail on June 26, 1967.

The appellants who were charged with the offence of committing murder were acquitted by the Sessions Judge. But on appeal by the State, the High Court convicted and sentenced them. In their appeal under section 2(a) of the , this court, after a detailed analysis of the High Court 's judgment and the evidence led in the case summarily dismissed the appeal under section 384 of the Code of Criminal Procedure, 1973. After the pronouncement of the judgment but before it was signed, the attention of the court was drawn to the judgment in Sita Ram vs State of U.P. ; which, according to them, held that the Supreme Court had no power to summarily dismiss an appeal under section 384, Cr. P.C. in an appeal under section 2(a) of the 1970 Act. Dismissing the appeal. ^ HELD: The decision in Sita Ram vs State of U.P. is no authority regarding the power of the court to summarily dismiss an appeal under section 384 of the Criminal Procedure Code. In that case neither in the application for adducing additional grounds nor in the order of the Court directing the matter to be placed before the constitution bench was there any reference to the validity of section 384 nor was it pleaded that the section was ultra vires the Constitution. [356 E] Therefore the observation of the Court that it has "pondered over the issue in depth" would not be a precedent binding on the court. The decision is an authority for the proposition that rule 15(1)(c) of order XXI of the Supreme Court Rules should be read down as indicated in that decision. [356F]

On applications for permits made to it the Regional Transport Authority, applying the markinig system prescribed by the Government order issued under section 43A of the Motor Vehicles Act, granted the permit to the appellant. On appeal by the first respondent, the State Transport Appellate Tribunal recast the marks but in doing so did not allot any mark to the first respondent under the head of "residence or place of business" and thereby treating the appellant and the first respondent as equal, gave the appellant the further advantage of four marks under the head "viable unit". The first respondent challenged the order of the Appellate Tribunal before the High Court under article 226 on the ground that the Appellate Tribunal had failed to allot him any mark in respect of his admitted residential qualification and had thereby committed a breach of section 47 (1) (a) and (c) of the Motor Vehicles Act. This contention was accepted by the learned single judge of the High Court who quashed the order of the Appellate Tribunal and directed it to proceed according to law. On appeal the Division Bench confirmed the issue of the writ. On appeal by special leave by the appellant it was contended in this Court that the High Court has no jurisdiction to issue a writ of certiorari, as the error, if any, was one of fact and that the directions issued by the Government under section 43A of the Motor Vehicles Act being only administrative in character, order made in breach thereof did not give rise to an error of law which could be the subject matter of a writ. Held, that the question whether or not there was such an error apparent on the face of the record as to enable the High Court to interfere under article 226 of the Constitution was one to be determined in each case and no particular test can or need be laid down as a general rule. 810 Hari Vishnu Kamath vs Syed Ahmad Ishaque, [1955] 1 section C. R. 1104, Nagendra Nath Bora vs Commissioner of Hills Division and Appeals, Assam ; , Satya narayan vs Mallikarjun, [1960] 1 section C. R. 890, Shri Ambica Mills Co. vs section B. Bhatt, ; , Provincial Transport Service vs State Industrial Court [1963] 3 section C. R. 650, Batuk Vyas vs Surat Municipality, A. I. R. 1953 Bom. 133 and M/s. Raman & Raman Ltd. vs The State of Madras, [1959] Supp. 2 section C. R. 227, referred to. Held, further, that though the directions issued under section 43A of the Act were administrative, they were intended to facilitate an objective, judgment of the considerations laid down in section 47 of the Motor Vehicles Act and if applying the directions to a given case result in the breach of section 47, namely, ignoring a relevant consideration, it must give rise to a manifest error of law and furnish a ground for interference under article 226 of the Constitution. M/s. Raman & Baman Ltd. vs State of Madras [1959] Supp. 2 section C. R. 227, Abdulla Rowther vs State Transport Appellate Tribunal, Madras, A. 1. R. , Ayyasswani Gounder vs M/s. Soudambigai Motor Service C. A. No. 198 of 1962 decided on 17 9 62 and Sankara Ayyar vs Marayanaswami Naidu, C. A. No. 213 of 1960 decided on 10 10 60, distinguished.

129 of 1959. Petition under article 32 of the Constitution of India for the enforcement of fundamental rights. R. Ganapathy Iyer, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioners. N. section Bindra and R. H. Dhebar, for the respondents. section T. Desai, Trikamlal Patel and I. N. Shroff, for the Interveners. May 2. The Judgment of the Court was delivered by WANCHOO, J. This petition raises a question as to the constitutionality of the Bombay Agricultural Produce Markets Act, No. XXII of 1939 (hereinafter referred to as the Act) and the Rules framed thereunder. The petitioners are businessmen of Ahmedabad. Their case is that by a notification under the 661 Act the whole area within a radius of 12 miles of Ahmedabad city was declared to be a market area under section 4 of the Act for the purposes of the Act in respect of certain agricultural produce from June 1, 1948. At the same time a market yard and a market proper were established for dealing in the commodities mentioned above; and simultaneously a market committee was established under section 5 of the Act for the Ahmedabad market area by the name of "The Agricultural Produce Market Committee, Ahmedabad. " By later notifications certain other agricultural produce was declared to be regulated under the provisions of the Act in this market area. ID 1959 a locality known as the "Kalupur market" in the Telia Mill compound near the railway station Ahmedabad was declared to be a sub market yard for the purposes of the Act. The petitioners apparently were carrying on business in the Kalupur market and therefore after the declaration of that area as sub market yard, the market committee required the petitioners to take out licences under the Act without which they were not to be allowed to carry on business. The petitioners contend that the various provisions of the Act and the Rules and bye laws framed thereunder place un reasonable restrictions on their right to carry on trade in agricultural produce and thus infringe their fundamental right guaranteed under article 19 (1)(g) of the Constitution. In particular, the heavy fees payable to the market committee for taking out licences in order to trade in various markets impose a heavy burden on trade in the regulated commodities resulting in an unreasonable restriction on the right of the petitioners to carry on their trade. Further the declaration of the market area and the establishment of market yard and sub market yards has resulted in compelling producers of agricultural commodities to carry their produce for long distances, thus imposing an unreasonable restriction on their right to carry on trade. The petitioners thus assail the main provisions of the Act and some of the provisions of the Rules and the bye laws framed by the market committee, 84 662 which we shall specify at their proper place later. The petitioners also contend that the State of Bombay has never required the market committee to establish a market as required by section 5AA of the Act and no market has in law been established by the market committee and therefore the market committee has no power to issue licences and to exercise other powers conferred under the Act on market committees. They therefore pray that the Act and the Rules and the bye laws framed thereunder may be declared unconstitutional, ultra vires and void. In the alternative a direction should be issued to the respondents, in particular the market committee, not to enforce the provisions of the Act, the Rules and the bye laws against the petitioners so long as a market has not been established as required under the law. The petition has been opposed on behalf of the respondents, and their contention is that the Act, the Rules and the bye laws provide reasonable restrictions on the fundamental right to carry on trade under article 19(1)(g). It is further contended that a market has been established as required by law, and therefore the market committee in particular has the right to enforce all the provisions of the Act, the Rules and the bye laws and to insist upon the petitioners taking out licences as provided therein. Before we consider the attack made on the constitutionality of the Act, the Rules arid the bye laws framed thereunder, we should like to refer to the main provisions of the Act and the scheme of regulation provided in it. The Act deals with the regulation of purchase and sale of agricultural produce in the State of Bombay and establishment of markets for such produce. Section 2 of the Act is the definition section. Section 3 provides for the constitution of markets and market committees and gives power to the Commissioner by notification to declare his intention of regulating the purchase and sale of such agricultural produce and in such area as may be specified in the notification; and objections and suggestions are invited within a month of the publication of the notification. Thereafter the Commissioner after considering the objections and suggestions, if any, and 663 after holding such inquiry as may be necessary, declares the area under section 4(1) to be a market area for the, purposes of the Act. The consequence of the establishment of the market area is given in section 4(2) which lays down that after the market area is declared, no place in the said area shall, subject to the provisions of section 5A, be used for the, purchase or sale of any agricultural produce specified in the notification. After the declaration of the market area, the State Government is given the power under section 5 to establish a market committee for every market area. Thereafter under section 5AA it becomes the duty of the market committee to enforce the provisions of the Act, and also to establish a market therein, on being required to do so by the State Government, providing for such facilities as the State Government may from time to time direct, in connection with the purchase and sale of the agricultural produce with which the market committee is concerned. The Act however envisages that there may be a time lag between the declaration of a market area and the establishment of a market; therefore the proviso to section 4(2) lays down that pending the establishment of a market in a market area the Commissioner may grant a licence to any person to use any place in the said area for the purpose of purchase and sale of any such agricultural produce, and it is the duty of the market committee under section 5AA also to enforce the conditions of a licence granted under section 4(2). Further under section 5A, where a market has been established, the market committee is given the power to issue licences in accordance with the Rules to traders, commission agents, brokers, weighmen, measurers, surveyors, ware housemen and other persons to operate in the market; provided that no such licence shall be necessary in the case of a person to whom a licence has been granted under the proviso to section 4(2). The effect therefore of these provisions of the Act read with the definition section is this. A market area is first declared under section 4(1). In the market area, a market may be established. The Rules make it clear that the market may consist of what are called market proper and principal market yard and 664 sub market yards, if any. Under section 4A for each market area there shall be one principal market yard and one or more sub market yards as may be necessary and the Commissioner is given the power by notification to declare any enclosure, building or locality in any market area to be the principal market yard for that area and other enclosures, buildings or localities to be one or more sub market yards for the area. As we have already said, the Act envisages that there may be a time lag between the declaration of a market area and the establishment of a market, and that is why there is a provision for licences under the proviso to section 4(2) pending the establishment of a market in a market area. The establishment of a market, however, takes place only when the State Government requires the market committee under section 5AA to establish a market in the market area. There does not seem to be any provision in the Act or the Rules as to how the market committee shall proceed, on being required to do so by the State Government, to establish a market; but reading the provisions of section 4A and section 5AA together it appears that after the State Government has required the market committee to establish a market, it has to approach the Commissioner with its recommendation to declare localities as the principal market yard and the sub market yards, if any, and the Commissioner makes a notification in regard thereto, and thereafter the market is established. Till however such action is taken by the committee and the Commissioner notifies a principal market yard and sub market yards, if any, no market can in law be established; and other provisions of the Act which come into force after the establishment of a market cannot be enforced and the trade is till then regulated in the manner provided in the proviso to section 4(2). After the market is established, the market committee gets the power to issue licences under section 5A. Other provisions of the Act provide for the constitution of market committees and the establishment of a market committee fund and the ancillary powers of market committees with which however we are not directly concerned in the present case. It is 665 enough to refer to section 11 only in this connection, which provides that the market committee may subject to( the provisions of Rules and subject to such maxima as may be prescribed levy fees on the agricultural produce bought and sold by licencees in the market area. This section, it will be noticed, applies to the purchase and sale of agricultural produce in the market area and the power under it can be exercised by the committee as soon as the market area is declared, though no market might have been established under section 5AA. Till such time as the market is established the fees prescribed under section 11 would be levied on the licencees under the proviso to section 4(2). Then come sections creating offences for contravention of the various provisions of the Act, which it is unnecessary to consider. Section 26 gives power to the State Government to frame rules for the purposes of carrying out the provisions of the Act. Section 27 gives power to the market committee to frame bylaws with the previous sanction of the Director or any other officer specially empowered in this behalf by the State Government and subject to any rules framed by the State Government under section 26. Finally, section 29 provides that the State Government may by notification in the official gazette add to, amend or cancel any of the items of agricultural produce specified in the Schedule to the Act. These are the main provisions of the Act and the scheme which results in the declaration of a market area and the establishment of a market therein. The first contention on behalf of the petitioners is that sections 4, 4A, 5, 5A and 5AA which provide for the declaration of a market area and the establishment of a market are unconstitutional as they are unreasonable restrictions on the right to carry on trade in agricultural produce. We are of opinion that there is no force in this contention. This Court had occasion to consider a similar Act, namely, the Madras Commercial Crops Markets Act, No. XX of 1933, in M. C. V. section Arunachala Nadar etc. vs The State of Madras and others (1) and the regulation with respect to marketing (1) [1959] Supp 1 S.C.R. 92. 666 of commercial crops provided in that Act was upheld. The main provisions of the Madras Act with respect to the declaration of a market area (called notified area in that Act) and the establishment of markets are practically the same as under the Act. It is therefore idle for the petitioners to contend that the main provisions contained in sections 4, 4A, 5, 5A and 5AA of the Act are unconstitutional. Learned counsel for the petitioners, however, urges that there is a difference between the Madras Act and; the Act inasmuch as the Madras Act dealt with commercial crops whereas the Act makes it possible to bring every crop under its sweep. It is conceded that though it may be con stitutional to regulate the sale and purchase of commercial crops, regulation of all crops made possible under the Act would mean an unreasonable restriction on the fundamental right enshrined in article 19(1)(g). We are of opinion that there is no force in this contention. The Madras Act which dealt with commercial crops specified certain crops as commercial crops in the definition section and added that the words "commercial crop" used in that Act would include any other crop or product, notified by the State Government in the Fort St. George Gazette as a commercial crop for the purposes of that Act. In view of this inclusive definition of "commercial crop" in the Madras Act, it was open to the State Government under that Act to include any crop within the meaning of the words "commercial crop" which was regulated by that Act. The Act had a schedule when it originally passed in which certain crops were included. The State Government was however given the power to add to, or amend or cancel any of the items mentioned in the Schedule by section 29. It is true therefore that under the Act it is open to the State Government to bring any crop other than those specified originally in the Schedule within its regulatory provisions; but the fact that it is possible to bring any crop within the regulatory provisions of the Act by amendment of the Schedule would not necessarily make the Act an unreasonable restriction on the exercise of the fundamental right guaranteed under article 667 19(1)(g). As we have already pointed out, the definition of the words "commercial crop" in the Madras Act was also wide enough to bring any crop which the State Government considered fit to be included as a commercial crop for the purposes of that Act. There is thus in our opinion no difference in the ambit of the Madras Act and of the Act. Besides we see no reason why a crop which can be dealt with on a commercial scale should not be brought under the regulatory provisions of the Act. Section 4(2A) makes it clear that the Act does not apply to the purchase or sale of specified agricultural produce, if the producer of such produce is himself its seller and the purchaser is a person who purchases such produce for his own private use or if such agricultural produce is sold to such person by way of a retail sale. Thus it is clear from this exception that the provisions of the Act do not apply to retail sale and are confined to what may be called wholesale trade in the crops regulated thereunder. This would suggest that the Act also deals with commercial crops in the same way as the Madras Act, for the notion of wholesale trade implies that the crop dealt with therein is a commercial crop. There is thus no distinction so far as the main provisions are concerned between the Act and the Madras Act, and for the reasons that have been elaborately considered in Arunachala Nadar 's case (1) we are of opinion that sections 4, 4A, 5,5A and 5AA of the Act are constitutional and intra vires and do not impose un reasonable restrictions on the right to carry on trade in the agricultural produce regulated under the Act. The next attack is on section 29 of the Act, which provides that the State Government may by notification in the official gazette, add to, amend or cancel any of the items of agricultural produce specified in the Schedule. It is submitted that this gives a completely unregulated power to the State Government to include any crop within the Schedule without any guidance or control whatsoever. We are of opinion that this contention must also fail. It is true that section 29 itself does not provide for any criterion for determining which crop shall be put into the Schedule or which shall (1) [1959] Supp. 1 S.C.R. 92. 668 be taken out therefrom but the guidance is in our opinion writ large in the various provisions of the Act itself. As we have already pointed out, the scheme of the Act is to leave out of account retail sale altogether; it deals with what may be called wholesale trade and this in our opinion provides ample guidance to the State Government when it comes to decide whether a particular agricultural produce should be added to, or taken out of, the Schedule. The State Government will have to consider in each case whether the volume of trade in the produce is of such a nature as to give rise to wholesale trade. If it comes to this conclusion it may add that produce to the Schedule. On the other hand if it comes to the conclusion that the production of a particular produce included in the Schedule has fallen and can be no longer a subject matter of wholesale trade, it may take out that produce from the Schedule. We may in this connection refer to The Edward Mills Co. Ltd., Beawar vs The State of Ajmer and another (1). In that case, section 27 of the , which gave power to the appropriate Government to add to either part of the schedule any employment in respect of which it is of opinion that minimum wages shall be fixed by giving notification in a particular manner was held to be constitutional. It was observed in that case that the legislative policy was apparent on the face of the enactment (impugned there); it was to carry out effectively the purposes of the enactment that power had been given to the appropriate Government to decide with reference to local conditions whether it was desirable that minimum wages should be fixed in regard to a particular trade or industry which was not included in the list. The same considerations in our opinion apply to section 29 of the Act and the power is given to the State Government to add to, or amend, or cancel any of the items of the agricultural produce specified in the Schedule in accordance with the local conditions prevailing in different parts of the State in pursuance of the legislative policy which is apparent on the face of the Act. Therefore, in enacting section 29, (1) ; 669 the legislature had, not stripped itself of its essential powers or assigned to the administrative authority, anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and policy of the Act. We therefore reject the contention that section 29 of the Act gives uncontrolled power to the State Government and is therefore unconstitutional. The next attack is on section 11 of the Act and the rules framed in that connection. Section II gives power to the market committee subject to the provisions of the rules and subject to such maxima as may be prescribed to levy fees on the agricultural produce bought and sold by licencees in the market area. It is said that the fee provided by section 11 is in the nature of sales tax. Now there is no doubt that the market committee which is authorised to levy this fee renders services to the licencees, particularly when the market is established. Under the circumstances it cannot be held that the fee charged for services rendered by the market committee in connection with the enforcement of the various provisions of the Act and the provisions for various facilities in the various markets established by it, is in the nature of sales tax. It is true that the fee is calculated on the amount of produce bought and sold but that in our opinion is only a method of realising fees for the facilities provided by the committee. The attack on section 11 must therefore fail. Besides this however, it is also contended that rr. 53 and 54 which provide for levying of fees under section II are ultra vires, as they do not conform to section 11 of the Act. It will be noticed that section 11 provides for levy of fees to be fixed by the market committee, subject to such maxima as may be prescribed by the Rules and this fee is to be charged on the agricultural produce bought and sold. There are thus two restrictions on the power of the market committee under section 11; the first is that the fee fixed must be within the maxima prescribed by the Rules and naturally till such maxima are fixed it would not be possible for the market committee to levy fees, and the second restriction is that fees have to be charged not on the produce brought into but only on such produce as is 85 670 actually sold. Rule 53 provides that the market committee shall levy and collect fees on agricultural produce bought and sold in the market area at such rates as may be specified in the bye laws. The Rules nowhere prescribe the maxima within which the bylaws will prescribe fees. The first attack therefore on the Rules is that it will not be open to the market committee to prescribe any fee under section 11 till the State Government prescribes the maxima by the Rules, which it has not done so far. Further there is an attack on r. 54 which lays down that the fees on agricultural produce shall be payable as soon as it is brought into the principal market yard or sub market yard or market proper or market area as may be specified in the bye laws. The argument is that this rule allows fees to be charged on the produce brought into the market irrespective of whether it is actually bought and sold, and this is against section 11. As we read section 11, there is no doubt that the State Government is expected to specify the maxima within which the market committee shall fix fees and until such maximum is specified by the State Government in the Rules it would not be possible for the market committee to fix any fees under section 11. Further, there is no doubt that section 11 provides that fees shall be charged only on the amount of produce bought and sold and not on all the produce that may have been brought into the market but may have to be taken back as it is not sold. The reply of the respondents so far as r. 54 is concerned is that the rule only prescribes a convenient method of levying fees and that various bye laws provide for refund in case there is no sale of the produce brought into the market. The petitioners in their application have not specifically said that there is no provision for refund and in the circumstances all that we need say is that r. 54 will be valid if proper provision for refund is made in the bye laws with respect to the produce brought into the market on which fees have been charged but which has been taken back because it is not sold, for then it would only be a method of levying the fee permitted under section 11. In the connected petition Yograj 671 Shankersingh Parihar and another vs The State of Bombay and another (57 of 1957) which was heard along with this petition there was an attack on r. 53; but the attack was confined to the fee being analogous to a sales tax and there was no ground taken that the fee could not be levied under r. 53 because the maxima had not been specified in the Rules. However, it is not in dispute in this case that maximum has not been specified in any rule and r. 53 itself leaves it open to the market committee to prescribe such rates as may be specified in the bye laws. We have already said that it would not be possible for the market committee to prescribe any fees under section 11 through byelaws till the State Government prescribes the maximum under section 11. As no such maximum has been prescribed in the Rules, the contention that fees which are being charged under the bye laws for the purposes of section 11 are ultra vires of that section, must prevail. It has been urged on behalf of the respondents that the true construction of section 11 is that if maxima are prescribed by the Rules, fees will be fixed by the market committee within the maxima; but if no maxima are fixed under the Rules, it will still be open to the market committee to prescribe any fees it thinks proper under its power under section 11. We are not prepared to accept this interpretation of section 11, for it amounts to adding the words "if any" after the word "maxima" therein. Besides, the legislature was conferring power of taxation (using the word in its widest sense) by section 11 on the market committee. While doing so, the legislature apparently intended that the committee shall not have unlimited power to fix any fees it liked. It restricted that power within the maxima to be prescribed by the State Government in the Rules. Thus the power given to the committee was meant to be subject to the control of the State Government which would be in a position to view the situation as a whole and decide the maxima. At the same time, some flexibility was provided by leaving it to the committee to fix fees within the maxima. We may in this connection refer to various municipal Acts for example where also the power of taxation is subject to the control of the 672 different form. Section 11 also prescribes similar control by the State Government over this taxing power of the committee and this is obviously in the interest of the community as a whole. The State Government cannot practically abdicate that power as it seems to have done under r. 53 by leaving it to the committee to fix any rates it likes. We are therefore of opinion that unless the State Government fixes the maxima by rule it is not open to the committee to fix any fees at all and the construction urged on behalf of the respondents is not correct. The next attack is on r. 64 which provides that no person shall (a) enter a principal market yard or sub market yard in contravention of a direction given by a servant or a member of the market committee, or (b) disobey any of the directions of the market committee in regard to the places where carts laden with agricultural produce may stand or loads of agricultural produce may be exposed or in regard to the road by which or in regard to the times at which they may proceed. Any person contravening or disobeying any of the directions referred to in sub r. (1) shall, on conviction be punishable with fine. It is urged that this rule is ultra vires as it imposes an unreasonable restriction on the right to carry on trade. We are of opinion that there is no force in this contention because this rule is merely a method of enforcing the regulatory provisions with respect to market yards and sub market yards. The next attack is on r. 65 which provides that "no person shall do business as a trader or a general commission agent in agricultural produce in any market area except under a licence granted by the market committee under this rule. " The contention is that this rule goes beyond the provisions of section 5A which lays down that "where a market is established under section 5AA, the market committee may issue licences in accordance with the Rules to traders, commission agents. . So far as the grant of licence to traders before the establishment of a market is concerned, the provision is to be found in the proviso to 673 s.4(2) and the power to grant licences before the establishment of a market for trading in any market, area, is given to the Commissioner and not to the market committee. The power of the market committee to grant licences under section 5A arises only after a market is established and is confined to operation in the market. Rule 65 therefore in our opinion when it authorises the market committee to grant a licence for doing business in any market area goes beyond the power conferred on the market committee by section 5A and entrenches on the power of the Commissioner under the proviso to section 4(2). It must therefore be struck down as ultra vires of the provisions in section 5A read with the proviso to section 4(2). Rule 66 which is incidental would fall along with r. 65. The next attack is on r. 67. It gives power to the market committee to grant licences for doing business in the market area and prohibits doing of business without such licences. This rule is open to the same objection as r. 65, for the power of the market committee to grant licences is with respect to operation in the market and not in the market area, the latter power being in the Commissioner under the proviso to section 4(2) till the market is established. It seems to us that rr. 65 and 67 as they are framed show a confusion in the mind of the rule making authority. It would have been enough if the Rules had been confined to grant of licences for operation in the market, for under the law as soon as the market area is declared and a market is established, section 4(2) comes into force and no place in the said area can be used for the purchase and sale of any agricultural produce except as provided by section 5A. It seems to us therefore that the intention probably was to confine the issue of licences under rr. 65 and 67 to markets which the market committee has the power to do where a market is established under section 5A; but the two rule. , as drafted refer to the market area and not to the market and must therefore be held to be beyond the power granted to the market committee under section 5A. The last point that is urged is that no market has been established in law as required under section 5AA of the 674 Act. We have already said while dealing with the scheme of the Act that the scheme envisages that there may be a time lag between the declaration of a market area under section 4 and the establishment of a market. under section 5AA. We have also pointed out that a market can only be established by a market committee constituted under section 5, if it is required so to do by the State Government under section 5AA. Therefore, the requirement by the State Government is a condition precedent to the establishment of a market under section 5AA. No procedure has however been prescribed either under the Act or under the Rules as to what the market committee has to do after it has been required to establish a market. We presume, in view of the provisions of section 4A which gives power to the Commissioner to establish a market yard or sub market yards, that the market committee after it receives a direction from the State Government to establish a market will have to approach the Commissioner with its recommendation and ask him to notify the establishment of a principal market yard and sub market yards, if any. The contention of the petitioners is that no direction was issued by the State Government under section 5AA to the market committee for the establishment of a market and that in any case the committee took no steps after the receipt of any such direction for the establishment of a principal market yard and sub market yards, if any. It appears that the market area was declared for the first time in Ahmedabad from June 1, 1948, by notification dated April 15, 1948. This was followed by another notification by which the State Government established a market and a market proper under the Act as it stood before the amendment of 1954 by which the power to establish a principal market yard and sub market yards has now been given to the Commissioner. It seems however that no direction was issued as required by section 5 of the Act as it stood before the amendment (now section 5AA) requiring the market committee to establish a market. This matter had come to the notice of the Bombay High Court in Bapubhai 675 Ratanchand Shah vs The State of Bombay (1). Chagla, C. J., then pointed out as follows at p. 887: "Now, a very curious situation was disclosed to us by Mr. Joshi. No market has been established under section 5 of the Act and therefore section 5A has not come into operation. The result is this that the Market Committee cannot issue licences under section 5A to traders, commission agents, etc., to operate in the market. In the absence of a market being established under section 5 and the absence of licences being issued under section 5A, licences can only be issued by the State Government under the proviso to section 4A(2). But the rules show that licences have been issued by the Market Committee and not by the State Govern ment. It is difficult to understand how either the Government or the Market Committee came to the conclusion that the Market Committee was authorised to issue licences without section 5 and section 5A being brought into force. Mr. Joshi suggests that the Market Committee acts as a delegate of the State Government and the authority to issue licences has been delegated by the State Government. It is rather difficult to accept this contention. " Having said this, the learned Chief Justice went on to observe that as there was no such challenge in the petition itself, therefore whether the challenge could be sustained or not, it was not open to the petitioners before him to make that challenge. That observation was made with respect to another market area but the same, we understand, applies to the present case. It appears that after that observation of the Bombay High Court, the State Government on August 11, 1955, issued a notification (No. PMA 7055) dated August 1, 1955, directing the Agricultural Produce Market Committee Ahmedabad to establish a market in the market area for which the said committee had been established. But there is nothing in the affidavit of the respondents to show that after this direction was issued on August 11, 1955, the market committee took any steps to establish a market by making recommendations to the Commissioner to establish a principal (1) I.L.R. 676 market yard or sub market yards under section 4A of the Act. As a matter of fact, the principal market yard was already there from before this direction given in 1955 and has continued. Even in the case of the sub market yard established at Kalupur in 1959 there is nothing in the notification issued by the Commissioner on January 16, 1959, to show that he was doing so in pursuance of the desire of the market committee and on its recommendation. We should have thought that if the market committee had requested the Commissioner to establish a sub market yard and recommended Kalupur as the place for it, the notification should have shown that the Commissioner was acting at the desire of the market committee and on its recommendation. In any case, even if the notification did not show this, it was the duty of the respondents, when this question was specifically raised in para. 25 of the petition, to state when the State Government directed the market committee to establish the market and what steps the market committee took in that behalf after such direction. But in para. 24 of the counter affidavit filed on behalf of the respondents all that is stated is that "with reference to paragraph 25 of the petition, I crave leave to refer to section 5 A of the Act for ascertaining its contents, true meaning and legal effect. I deny all the allegations, contentions and submissions contained in paragraph 25 of the petition as are contrary to or inconsistent with what is stated herein as if they were specifically set out herein and traversed. " We must say that this is a most curious way of meeting the allegations made on behalf of the petitioners that no direction as required by section 5AA of the Act has been ever given to the market committee to establish a market and no steps were ever taken by the market committee in pursuance of such a direction to establish a market. The notification No. PMA 7055 which was produced before us during the course of arguments seems in the circumstances to have been an empty formality which was observed in view of the observations of the Bombay High Court in Bapubhai Ratanchand Shah 's case (1). It seems to us that the curious situation which (1) I.L.R. 677 the Bombay High Court noticed as far back as March, 1955 still continues with respect to the market in this( case and no proper steps have been taken in law even after the formal direction made by notification No. PMA 7055 in August, 1955 to establish a market. It is true that in fact the State Government before the amendment of 1954 and the Commissioner after that amendment have established a principal market and a sub market yard for this market area; but there is nothing to show in the case of the principal market yard that it was established at the instance of the market committee on a direction given by the State Government as required by section 5 of the Act as it was before the amendment of 1954 or that the sub market yard at Kalupur which was established in 1959 was so established at the instance of the market committee. In the circumstances the curious situation that was noticed with respect to another market area by Chagla, C. J., is there with respect to the Ahmedabad market area and the Ahmedabad market, with the result that the market committee cannot issue licences under section 5A of the Act and exercise such other powers as may be exercisable on the establishment of a market under the law. In the result therefore the petition must be allowed and the market committee forbidden to enforce any of the provisions of the Act, the rules and the bye laws with respect to the market until a market is properly established under section 5AA. No other point has been urged before us. In conclusion we hold that the challenge made by the petitioners to the constitutionality of the main provisions of the Act and of the provisions in r. 64 fails; but the challenge in respect of (i) the provisions in r. 53 on the ground that they are ultra vires section 11, there being no maximum fee prescribed by the State Government, and (ii) the provisions in rr. 65, 66 and 67 on the ground that they are ultra vires the provisions in section 5(a) read with the proviso in section 4(2) succeeds. As however we have held that the market in this case has not been properly established, the market 86 678 committee cannot enforce any of the provisions of the Act or the rules or the bye laws framed by it and cannot issue licences till the market is properly established in law. We therefore allow the petition partly and direct the respondents not to enforce any of the provisions of the Act, the rules and the bye laws against the petitioners with respect to the market till a market is properly established in law for this area under section 5AA and not to levy any fees under section 11 till the maximum is prescribed under the Rules. In the circumstances we order parties to bear their own costs. Petition allowed in part.

The Bombay Agricultural Produce Markets Act, 1939, was enacted by the Bombay Legislature to provide for the better regulation of buying and selling of agricultural produce in the State of Bombay and the establishment of markets for such produce. Under the provisions of the Act power was given to the commissioner by notification to declare certain areas as market areas as a result of which such areas could not thereafter be used for the purchase or sale of any agricultural produce specified in the notification, except under a licence. Markets were to be established and market committees constituted with power to grant licences for operation in the market. By section 11 a market committee may, subject to the provisions of the Rules and subject to such maxima as may be prescribed, levy fees on the agricultural produce bought and sold by licencees in the market area. Section 29 enabled the State Government by notification in tile official Gazette to add to, amend or cancel any of the items of agricultural produce specified in the Schedule to the Act. The petitioners challenged the validity of the Act and the rules framed thereunder, and in particular sections 4, 4A, 5, 5A, and 5AA which provided for the declaration of a market area and the establishment of a market, as unconstitutional on the ground that they placed unreasonable restrictions on their right to carry oil trade in agricultural produce and thus infringed their fundamental right guaranteed under article 19(1)(g) of the Constitution of India. They also attacked the validity of sections 11 and 29 and rr. 53, 64, 65, 66 and 67. Held: (1) that sections 4, 4A, 5, 5A and 5AA of the Act are constitutional and intra vires and do not impose unreasonable restrictions on the right to carry on trade in the agricultural produce regulated under the Act. M. C. V. section Arunachala Nadar vs The State of Madras, [1959] Supp. 1 S.C.R. 92, followed. 660 (2) that the fee provided by section 11 though calculated on the amount of produce bought and sold, is not in the nature of sales tax as it is only a levy charged for services rendered by the market committee in connection with the enforcement of the various provisions of the Act. Accordingly, section 11 is valid. (3) that r. 53 in so far as it enables the market committee to fix any rates as it liked of the fees to be collected on agricultural produce bought and sold in the market area, is not valid, because under section 11 unless the State Government fixes the maxima by rule it is not open to the committee to fix any fees at all. (4) that under section 29, the power given to the State Govern ment to add to, or amend, or cancel any of the items of the agricultural produce specified in the Schedule in accordance with the local conditions prevailing in different parts of the State is only in pursuance of the legislative policy which is apparent on the face of the Act, and, therefore, the section is intra vires. The Edwards Mills Co. Ltd., Beaway vs State of Ajmer and Another, ; , applied. (5) that r. 64 is merely a method of enforcing the regu latory provisions with respect to market yards and sub market yards and is valid. (6) that rr. 65, 66 and 67, in so far as they authorise the market committee to grant a licence for doing business in any market area, go beyond the power conferred on the market committee by section 5A, and are ultra vires.

In exorcise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu by a Notification No. II (2) H. O. 6060/76 dated 21 t November, 1976 exempted the Buildings owned, inter alia by all the co operative societies from all the provisions of the said Act. Since the protection available to the petitioners, who wore tenants in a building belonging to respondent No. 2, an Apex Society registered under the Tamil Nadu Co operative Societies Act, 1961 and covered by the said notification. had been withdrawn and since the petitioners were facing the imminent prospect of suffering eviction decrees against them, they filed the present writ petitions challenging the constitutional validity of the impugned notification on the ground that the same was violative of article 14 of the Constitution. The petitioners contended that treating the buildings owned by all the co operative societies in the State of Tamil Nadu as falling into one group while exercising the power under sec. 29 of the Act will have to be regarded as a rational classification based on an intelligible differentia but the differentia on which this classification was based had no excuse with the object of curbing the two evils of rack renting and unreasonable eviction for which the power to grant exemption had been conferred upon the State Government under sec. 29 of the Act and since the impugned notification did not satisfy be test of nexus the exemption granted to all such buildings could not be sustained and Will have to be regarded as discriminatory and violative of article 14. In other words Counsel urged that there was and is up warrant OF any presumption that co operative societies qua landlords will not indulge in rack renting or will not unreasonably evict tenants; in fact they would not be different from other private landlords so far as the two evils sought to be curbed by the Act are concerned and therefore Counsel urged that the exemption granted could not be said to be in conformity with the guidance afforded by the scheme and the previsions of the Act. 417 Dismissing the petitions, ^ HELD: It is true that under sec. 4 of the Tamil Nadu Co operative Societies Act the very object of every co operative society registered thereunder is the promotion of economic interests of its members and sec. 62 of the Act provides for payment of dividends on shares to its members as also for payment of bonus to its members and paid employees. But these aspects of a co operative society do not mean that it could be likened to any other body undertaking similar activities on commercial lines and to do so would be to miss the very basis on which the co operative movement was launched and propagated and has been making progress in the country during the last several decades. Indisputably, co operative societies which carry on their activities in various fields do so for the purpose of attaining the social and economic welfare of a large section of the people belonging to the middle class and the rural class by encouraging thrift, self help and mutual aid amongst them, especially by eliminating the middle man. But the object of promoting the economic interrupts of the members has to be achieved by following co operative principles where the profit motive will be restricted to a reasonable level unlike other commercial bodies where sky is the limit so far as their desire to earn profits is concerned. Sections 4 and 62 of the Act and Rule 46 of the Rules make it clear that in the matter of distribution of profits by way of payment of dividend to members and payment of bonus to members as well as paid employees restrictions have been placed by law and the same is maintained at a reasonable level and considerable portion of the net profits is apportioned and required to be carried to various kinds of funds, like co operative development fund, co operative education fund, reserve fund etc. In fact it is such statutory appropriations and restrictions on payment of dividends and bonus which differentiates co operative societies from other bodies undertaking similar activities on commercial lines and therefore, the buildings belonging to such co operative societies are substantially different from the buildings owned by private landlords. Further it has to be appreciated that these statutory provisions are applicable to all types of co operative societies specified in Rule 14 whatever be their nature or functions. The profit element being maintained at a reasonable level by provisions of law in all types of co operative societies there is every justification for the assumption that no co operative society will indulge in rack renting or unreasonable eviction. In this view of the matter if the State Government came to the conclusion that in the case of co operative societies there being no apprehension that they would indulge in either of these two evils exemption from the provisions of the Tamil Nadu Act No. 18 of 1960 should be granted in favour of buildings belonging to such co operative societies it will have to be regarded is a legitimate exercise of the power conferred on it under sec. 29 of the Act the same being in conformity with the guidance afforded by the preamble and provisions of the Act in that behalf. [422D 5; 424C G] Besides, on the factual side of the issue the facts and circumstances put forward by the State Government in its counter affidavit which have gone unchallenged clearly show that the differentia on the basis of which the classification was made had a clear nexus with the object with which the power to grant exemption has been conferred upon the State and therefore the impugned notification will have to be regarded as valid. [425E F] 418

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]

On October 11, 1973, the Central Government in exercise of power under cl. (3) of the Fertilizers (Control) order, 1957 promulgated under s.3 of the , issued a notification fixing the maximum retail selling price of certain fertilizer which dealers could charge from consumers leaving with the dealers a very low margin of profit. Some time later in order to compensate the manufactures for the higher cost of inputs, the Central Government issued another notification on June 1, 1974 fixing a very high retail selling price of the fertilizer to be charged by the dealers from the consumers. The dealers started charging the higher price fixed by notification dated June 1, 1974 at the lower rate thus earning fabulous profit. On June 14, 1974 the State of Uttar Pradesh issued a notification (Uttar Pradesh Fertilizer Price (Supplementary) Order, 1974) in exercise of power under rule 114 of the Defence of India Rules, 1971 promulgated under the Defence of India Act, 1971. This notification stated that the stocks of fertilizer acquired upto May 31,1974 by the dealers and which remained unsold with them should be sold only at the price fixed by the Central Government 's notification dated October 11, 1973 and not by notification of June 1,1974. The appellants (dealers) challenged before the High Court the legality and validity of the State Government 's notification dated June 14, 1974 on the grounds: (1) that the fertilizer in question having been declared an essential commodity under the , an Act specially enacted inter alia for regulating prices of essential commodities, its price could be regulated only under that Act and not under the Defence of India Rules: (2) that the notification being inconsistent with the Central Government 's notification dated dated June 1, 1974 was invalid : and (3) that the notification being discriminatory was violative of article 14 of the Constitution. The High Court upheld the 349 validity of the impugned notification and dismissed the writ petitions. Hence these appeals. Dismissing the appeals by majority. ^ HELD: (Per Murtaza Fazal Ali and Thakkar, JJ.) Both the , as also the Defence of India Rules of 1971, are Central legislations enacted by the Parliament. There is no constitutional or jurisprudential limitation on the competence of the Parliament to create two avenues or sources of power for the regulation of prices of articles. Since Parliament can constitutionally and validly enact two statutes creating two sources of power, and since, under both the statutes prices of fertilizers can be regulated, there is no illegality in acting under either or both.[357 D E] Under the DIR power has been conferred, inter alia, to regulate the price of any article. The expression `any article ' is wide enough in its amplitude to envelope `fertilizers '. The fact that `fertilizers ' have been declared as an essential commodity under the and its price can be regulated under the powers conferred by that Act, is altogether immaterial. [357 H; 358 A] The Centre and the State both cannot speak on the same channel and create disharmony. If both speak, the voice of the Centre will drown the voice of the State. The State has to remain `silent ' or it will be `silenced '. But the State has the right to `speak ' and can `speak ' (with unquestionable authority) where the Centre is `silent ', without introducing disharmony. If the Centre sits only on a portion of the Chair, the state can sit on the rest of the portion with arms thrown on the shoulders of each other. While the State cannot sit on the lap or on the shoulders of the Centre, both can certainly walk hand in hand, lending support to each other, in a friendly manner, towards the same destination. If the Centre. has built a wall, had has left a gap from which intruders can infiltrate, the state can fill the gap in the wall, and thus make its own contribution to the common cause. What is more, each in theory and principle. must be presumed to be conscious of the need for accord and need for accommodating each other in the interest of `NATIONAL HARMONY '. [360C F] A general statute applies to all persons and localities within its jurisdictional scope, prescribing the governing law upon the subject it encompasses, unless a special statute exists to treat a refinement of the subject with particularity or to prescribe a different law for a particular locality. Where, however, the later special or local statute is not irreconcilable with the general statute to the degree that both statutes cannot have a conterminous operation, the general statute will not be repealed, but the special or local statute will exist as an exception to its terms. [361 B C] sutherland 's Statutory Construction, 3rd Edition. Vol, 1. page 488, referred to One of the tests for ascertaining whether the inconsistency is an irreconcilable or intolerable one, is to pose this question: Can the State law be obeyed or 350 respected without flouting or violating the Central law in letter and spirit? If the answer is in the affirmative, the State law cannot be invalidated. Not at any rate when the State law merely `promotes ' the real object of both the laws, and is in the real sense `supplementary ' or complementary ' to the Central law. In the present case, the Central notification is altogether silent on the ramification regarding sales from out of existing stocks acquired by the dealers at lower rates. The impugned State notification, on the other hand, deals exclusively with this aspect. The State notification speaks on a refinement of the subject about which the Central notifications is blissfully. unaware and on which it is altogether silent. Both notifications can therefore safely be construed as supplementary and friendly rather than inconsistent or hostile. [360 B C] In the instant case, assuming that there is inconsistency between the Central Government 's notification and that of the State Government, it does not appear to be an irreconcilable or intolerable one, so as to invalidate the State Government 's notification. In the present case the test answers in favour of the validity of the impugned State notification. The Central notification is not violated if the dealers sell the fertilizers from out of the existing stocks acquired at the lower rates, for both the notifications fix the minimum selling price and the maximum selling price fixed under the State notification is not higher than that fixed under the Central notification. What is more, the state notification `promotes and serves ' the object and purpose of both the Centre and the State. `Promotes and serves ' in the sense, that the manifest object of fixing maximum ceiling price is to make available to the cultivators who grow the food for the NATION to obtain the inputs at reasonable prices and to protect them from exploitation so that the food production is not retarded. [362 A C] article 254(2) does not envision Presidential assent to `notifications ' issued under an Act (as distinguished from `laws made by legislature). [363 F] Kerala State Electricity Board vs Indian Aluminium Co. ; at p. 478, referred to. The impugned notification is not violative of article 14 of the Constitution since the very basis of the challenge on the score of hostile discrimination is found to be non existent.[364 D] (Per Vardarajan J. dissenting) It cannot be assumed that Parliament which had already legislated in the , a permanent measure, in respect of fertilizer intended to legislate once again and could have felt the need to legislate once again in the temporary Defence of India Act, 1971 in respect of the same article especially because what could be done under the Defence of India Act and the Rules which may be framed thereunder could as well be done with equal force under the and orders which may be passed thereunder. [377 B C] Section 3(2) of the lays down that the Central Government may, having regard to the local conditions of any area and other relevant circumstances, fix different prices or rates in respect of different areas 351 and for different classes of consumers. The State Government could have requested the Central Government to act under s.3(2) of the and fix a different price or rate for the sale by dealers in that State of fertilizer carried over from the stock held on 31.5.1974. Section 5(b) of the provides for delegation of powers and says that the Central Government may, by notified order, direct that the power to make or issue notifications under s.3 of that Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction be exercisable also by such State or such officer or authority subordinate to a State Government as may be specified in the direction. The Central Government has not issued any direction under section 5(b) of the delegating its power to issue notification under s.3 of that Act to the State Government or any officer or authority of that Government. The State Government has thus not resorted to the provisions contained in s.3(2) or s.5(b) of the , but the proceeded of fix the price of fertilizer on its own under the Defence of India Rules, 1971 which it cannot do under those Rules and the Defence of India Act, 1971 in respect of the essential commodity. [377 H; 378 A D] The Defence of India Act, 1971, which was a general and temporary Act, and the Rules framed thereunder cannot apply to fertilizer which is an essential commodity government by the and the Fertilizer (Control) Order, 1957 made under the provisions of that Act. Therefore the State Government cannot without delegation issue any notification under the Defence of India Act and Rules, 1971 in regard to the price of fertilizer, an essential commodity governed by the and the Fertilizer (Control) order, 1957. [378 H; 379 A B] There does not appear to be any provision in article 254(2) of the Constitution for placing any notification made by a State Government under the Defence of India Rules, 1971 for consideration by the President. [380 C] If the State Government 's impugned notification is assumed to be a law enacted by that State 's Legislature on Entry 26 of List II, since the Act of Parliament passed on Entry 33 of List III and the Fertilizer (Control) order, 1957 passed under that Act were already in force, the assent of the President had to be received in order that the State Government 's notification assumed to be a law enacted by the State 's Legislature may prevail in the State as required by Article 254(2) of the Constitution. There is nothing on record to show that the impugned notification of the State Government was placed before the President for his assent and that his assent has been received. Therefore, the State Government 's impugned notification even as a law cannot prevail over the earlier notification of the Central Government. [389 F G; 380 C] Zaverbhai Amaidas vs State of Bombay. [1955] 1 SCR 799, referred to. There is a clear conflict between the two notifications is respect of the same essential commodity, fertilizer, for under the Central Government 's notification dated 1.6.1974 the price at which a dealer can sell fertilizer of the concerned variety is Rs. 2000 per ton while under the State Government 's notification dated 14.6.1974 is only Rs. 1050 per ton though no doubt it is restricted to the stock carried over from 31.5.1974 which is immaterial in judging the power of the State Government to fix the price of an essential commodity by a notification 352 made under the Defence of India Rules, 1971 in respect of which the Central Government had already fixed the price under the Fertilizer (Control) order, 1957. Once the Central enactment and the Central Government 's notification govern the price of an essential commodity the State Government 's notification issued in exercise of the delegated authority under the Defence of India Act and the Rules framed thereunder cannot prevail. [380 F H] The two enactments have to be read in such a way that there is no conflict between them while giving effect to them in their respective fields. of operation. If the and the Fertilizer (Control) order, 1957 are considered to apply exclusively to fertilizer, an essential commodity, and the Defence of India Act, 1971 and the Defence of India Rules, 1971 are considered to apply to other commodities excluding essential commodities there would be no conflict whatsoever between the and the Defence of India Act and between the notification issued under Fertilizer (Control) order, 1957 and the Defence of India Rules, 1971. [381 A; 383 D E] The author of the two enactments, and Defence of India Act, 1971 is the same, namely, Parliament, and Parliament must be held to have not intended to contradict itself while dealing with distinct matters or situations under those enactments. If the State Governments are free to fix their own prices in notifications issued by them under the Defence of India Rules, 1971 when the Central Government 's notification fixing a single price for the whole country in respect of an essential commodity is in force that notification of the Central Government will become otiose. The question whether Parliament would have intended such a consequence. The answer can only be an emphatic No. [382 D E] Craies on Statute Law (seventh edition) at Page 222 and Maxwell on the Interpretation of Statutes, referred to. What has been done by the State Government under the impugned notification is utterly lacking in power and cannot be allowed to stand merely because it relates only to a comparatively small quantity of fertilizer carried over from the stock of 31.5.1974 and was intended to benefit and protect agricultural consumers and prevent dealers from making undue profits.[384 F]

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.

In exercise of the powers vested under the Essential Commodities Act, 1951, the State Government of Uttar Pradesh issued two orders, namely (1) the Uttar Pradesh Food Grains Dealers (Licensing and Restriction on Hoarding) Order, 1976 and (2) the Uttar Pradesh Food Grains (Procurement and Regulation of Trade) Order 1978. By its teleprinter message dated March 31, 1981 to all the Regional Food Controllers, the State Government issued certain further instructions for effective enforcement of the two Orders and in particular regulating the inter district and outside the State movement of wheat by traders on private account. By a Notification No. P XXIX Food 5 5(42)/80 dated April 21,1981, clause (4) of the 1978 Order, was amended providing that no wholesale dealer, commission agent, or a retailer shall have in stock wheat more than 250 quintals, 250 quintals and 20 quintals respectively, at any time, since it was of opinion that it was necessary or expedient so to do for securing the equitable distribution and availability of foodgrains at fair prices. Pursuant to the powers vested in them, the Senior Marketing Inspector and the Chief Marketing Inspector, Agra, intercepted and seized the trucks laden with wheat of the petitioners who are wholesale dealers of foodgrains from the Union Territory of Delhi and the States of Punjab and Haryana at the check post at Saiyan on the border between the States of Uttar Pradesh and Madhya Pradesh, and after bringing them back to the purchase point at Agra unloaded the wheat from the said trucks. While the petitioners moved an application for the release of the seized wheat before the Additional District Magistrate (Civil Supplies), Agra, the Marketing Inspectors not only lodged First Information 1138 Reports but obtained an interim order on May 23, 1981 for the sale of the seized wheat as it was subject to speedy and natural decay. The seized wheat had been purchased by the State Government on Government account at the procurement price and the sale proceeds were credited into the treasury. The petitioners challenged the teleprinter message dated March 31, 1981 and the Notification dated April 21, 1981 on the following grounds: (1) The Notification fixing the maximum limit of wheat permitted to be possessed by a wholesale dealer at 250 quintals, at a time, is an unreasonable restriction on the freedom of trader guaranteed under Article 19(1)(g) of the Constitution; (2) there is no distinction made between a wholesale dealer and a commission agent in as much as the maximum limit of wheat allowed to be possessed by them is the same, i.e., 250 quintals at a time and the fixation of such limit in the case of a wholesale dealer is arbitrary, irrational and irrelevant and thus violative of Article 14 of the Constitution; (3) the instructions conveyed by the State Government by its teleprinter message dated March 31, 1981, placing restrictions on movement of wheat by traders on private account from the State of U.P. to various other States and on inter district movement of wheat within the State, were violative of their fundamental rights under Article 19(1)(g) and Article 301 of the Constitution; (4) the seizure of the consignments of the wheat, while they were in transit in the course of inter State trade and commerce from the Union Territory of Delhi and the States of Punjab and Haryana to various destinations in the States of Maharashtra and Madhya Pradesh, was without "the authority of law" and in violation of Article 300A of the Constitution; (5) the restriction must be by "law" or by an "order" having the force of law and not by recourse to the executive authority of the State under Article 162 of the Constitution, that is, by an executive action. The teleprinter message of the State Government dated March 31, 1981 on the basis of which the seizures were effected in truth and substance, had no legal sanction and cannot be construed to be a notified order within the meaning of sub section (1) read with sub section (5) of section 3 of the Essential Commodities Act; it was nothing but an executive direction. No executive action which operates to the prejudice of the citizens can be taken without the authority of law. The seizures effected were not in compliance with the instructions contained in the teleprinter message and not for breach of the two control Orders and, therefore, it was nothing but a "colourable exercise" of power. The real purpose of the seizure was procurement of wheat in furtherance of the directives of the Central Government without any legal sanction, since the farmers were not willing to sell their wheat at the procurement price; and (6) under sub section 2(ii) of section 6A of the Act there being no control price for wheat, the wheat should have been sold by public auction by the Additional District Magistrate while passing an interim order. Dismissing the petitions, the Court ^ HELD: 1:1. The restriction imposed by the State Government on wholesale dealers of wheat is neither arbitrary nor is of an excessive nature beyond what is required in the national interest. To check speculative tendencies of the wholesale traders and others who manipulate the market by withholding stocks of a commodity and to obviate blackmarketing, the stock limit of wheat was fixed for wholesale dealers at 250 quintals at a time, as in the case of a commission agent, the underlying idea being that the wholesale dealers should be allowed to 1139 continue their trading activities within reasonable limits. The fixation of stock limit at 250 quintals implies that wholesale dealers can have at any time, in stock, a wagon load of wheat. The words "at any time" mean "at any given time", which means that a wholesale dealer should not have in stock more than 250 quintals at a time. But there is nothing to prevent a wholesale dealer from entering into a series of transaction during the course of the day. [1173 A E] 1:2. The State Government had adopted various measures in the interest of the general public for the control of production, supply and distribution of, and trade and commerce in, essential commodities. The Order fixing a stock limit introduces a system of checks and balances to achieve the object of the legislation, that is, to ensure equitable distribution and availability of essential commodities at fair prices. Looking to the prevailing conditions, the imposition of such restrictions satisfies the test of reasonableness. The fixation of such stock limit is not arbitrary or irrational having no nexus to the object sought to be achieved and is, therefore, intra vires of Article 14. The limitation imposed fixing a stock limit for a wholesale dealer at 250 quintals is also a reasonable restriction within the meaning of Article 19(6) of the Constitution. [1174 A D] 2:1. The teleprinter message No. PP 1061/XXIX.Food 5 dated 31st March, 1981 was in the nature of executive instruction of the State Government to the Regional Food Controllers of the various regions to be more vigilant and to secure due observance of the control orders. [1156 B, E F, 1163 C] 2:2. The instructions conveyed by the State Government by the impugned teleprinter message imposing the requirement for the making of an endorsement by the Deputy Marketing Officer or the Senior Marketing Officer or the physical verification of stocks of wheat during the course of transit, are not a 'restriction ' or an 'intrusion ' on the fundamental right to carry on trade or business guaranteed under Article 19(1)(g) or on the freedom of trade, commerce and intercourse under Article 301. These are nothing but regulatory measures to ensure that the excess stock of wheat held by a wholesale dealer, commission agent or a retailer is not transported to a place outside the State or from one district to another. Even if these requirements are considered to be a 'restriction ' on inter State or intra State trade, that is, across the State or from one part of the State to another, the limitation so imposed on the enjoyment of the right cannot be considered to be arbitrary or of an excessive nature and thus violative of Article 19(1)(g) or Article 301 of the Constitution. There being no ban on the export of wheat from the State of Uttar Pradesh to various other States or from one district to another within the State, subject to the making of an endorsement by the Deputy Marketing Officer or the Senior Marketing Officer concerned, the Petitioners who are wholesale dealers of foodgrains in the State of Uttar Pradesh are, therefore, free to carry on their business within the permissible limits, that is, they may carry on their trade or business or enter into inter State or intra State transactions of wheat subject to the stock limit of 250 quintals, at a time. [1174 D H, 1175 A B] 2:3. The teleprinter message dated March 31, 1981 was a direct sequel to the Centre 's directives contained in its earlier teleprinter message and intended or meant to achieve three main objectives, namely, (i) to provide price support in wheat to purchasers with a view to sustain, maintain and maximise the pro 1140 curement of wheat; (ii) to prevent hoarding and black marketing; and (iii) to provide for equitable distribution and availability of wheat at fair prices. The directions were obviously meant to subserve the object of the legislation and were in public interest. The State Government was committed to provide price support in wheat to producers and hence to maximise procurement of wheat, there is nothing unusual on the State Government issuing such executive instructions. [1156 E F, 1160 D E] 2:4. Even assuming that the impugned teleprinter message is not relatable to the control Orders, the State Government undoubtedly could, in exercise of the executive power of the State, introduce a system of verification on movement of wheat from the State of Uttar Pradesh to various other States at the check post on the border and place restrictions on inter district movement of wheat by traders on private account within the State. [1156 E F] Ram Jawaya Kapur vs State of Punjab and Naraindas Indurkhya vs State of Madhya Pradesh & Ors., ; , explained and followed. The State Legislature is competent to enact a law on the subject covered by Entry 33, List III, regulating trade and commerce in, and the production, and supply and distribution of "foodstuffs". The was enacted by Parliament in exercise of concurrent jurisdiction under Entry 73, List II, of the Seventh Schedule to the Constitution as amended by the Constitution (Third Amendment) Act, 1954. The exercise of such concurrent jurisdiction would not deprive the State Legislature of its jurisdiction thereunder. The executive power of the State which is coextensive with the legislative power is subject to the limitation contained in Article 162 which directs that in any matter with respect to which the legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union of authorities thereof. [1158 F H, 1159 A B] 3:2. The State in exercise of its executive powers is charged with the duty and the responsibility of carrying on the general administration of the State. So long as the State Government does not go against the provisions of the constitution of any law, the width and amplitude of its executive power cannot be circumscribed. If there is no enactment covering a particular aspect, certainly the Government can carry on the administrative directions or instructions, until the legislature makes a law in that behalf. Otherwise the administration would come to a standstill. [1157 B C] 3:3. The executive power of "search and seizure" is a necessary concomitant of a welfare State. It tends to promote the well being of the nation. Many questions arising in the field of search and seizure are factual in nature, involving varying degrees of difference among the infinitely diverse facts. It is a limitless area where not only every factual variation presents a new constitutional question, but it is a peculiar field in which the decisions of courts do not help in clarifying the law. The decisions in the field are of little precedental value, because the more the cases that are decided the more issues arise, through possible factual variation. [1159 B E] 1141 4:1. The quintessence of the Constitution is the rule of the law. The State or its executive officers cannot interfere with the rights of others unless they can point to some specific rule of law which authorises their acts. [1161 A] State of Madhya Pradesh vs Thakur Bharat Singh, ; , Satwant Singh Sawhney vs Dr. Ramarathnam, Assistant Passport Officer, Government of India, New Delhi & Ors., at 542; Smt. Indira Nehru Gandhi vs Shri Raj Narain, at 524, reiterated. The is a "law" within the meaning of Article 302 of the Constitution imposing reasonable restrictions on the right to carry on trade and commerce as guaranteed by Article 19(1)(g) and Article 301 of the Constitution. The object of the Act is to provide, in the interest of the general public for the control, production, supply and distribution of, and trade and commerce in, certain essential commodities. [1161 D E] 5. From the point of view either of Entry 54 List II or of Article 301 of the Constitution, the State Legislature is competent to set up the check posts and barriers on the State 's borders, designed and meant to prevent evasion of sales tax and other dues. Just as inter State trade and commerce must pay its way and be subject to taxation, persons engaged in inter state trade or commerce are equally subject to all regulatory measures. The check posts or barriers set up by the State Government under section 28 of the U.P. Sales Tax Act, 1948, which is legally accepted as valid and also considered not a restriction or impediment to the freedom of trade, commerce and intercourse granted under Article 301 of the Constitution, can certainly be utilised as a machinery for due observance of the laws, for example, for verification and control of movement of wheat by traders on private account from the State of Uttar Pradesh to various other States. B D] 6:1. The fundamental right to carry on trade or business guaranteed under Article 19(1)(g) or the freedom of inter State trade, commerce and intercourse under Article 301 of the Constitution, has its own limitations. The liberty of an individual to do as he pleases is not absolute. It must yield to the common good. Absolute or unrestricted individual rights do not and cannot exist in any modern State. There is no protection of the rights themselves unless there is a measure of control and regulation of the rights of each individual in the interests of all. Whenever such a conflict comes before the Court, it is its duty to harmonise the exercise of the competing rights. The Court must balance the individual 's rights of freedom of trade under Article 19(1)(g) and the freedom of inter State trade and commerce under Article 301 as against the national interest. Such a limitation is inherent in the exercise of those rights. [1164 E H] 6:2. Under Article 19(1)(g) of the Constitution, a citizen has the right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restrictions under clause (6). [1165 A] 6:3. The expression "reasonable restriction" signifies that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The test of reasonableness, wherever prescribed, should be applied to each individual 1142 statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable in all cases. The restriction which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1) (g) and the social control permitted by clause (6) of Article 19, it must be held to be wanting in that quality. [1165 B D] 6:4. Several steps taken, in the instant case, like prevention of movement of stock of wheat to various other States, movement of wheat from one district to another within the State only after the verification of the transaction and due endorsement by the Deputy Marketing Officer or the Senior Marketing Officer concerned and also the physical verification at the check post on the State 's borders etc. were designed to prevent a price rise in wheat in the State of Uttar Pradesh and to prevent outflow of wheat from the State to various other States and from one district to another district within the State. The whole object was to ensure that the wholesale dealers in foodgrains did not corner stocks of wheat for the purpose of speculation, and hence the steps taken were reasonable and in the interests of the general public. If, therefore, the seizure can be justified on the basis of any valid law, it cannot be held to be illegal. [1165 D H] 7:1. Article 301 imposes a limitation on all legislative power in order to secure that trade, commerce and intercourse throughout the territory of India shall be free. Although Article 301 guarantees that trade, commerce intercourse throughout the country shall be free, the right to carry on inter State trade and commerce may be subject to reasonable restrictions in the interests of the general public. [1165 A, 1166 A, C] 7:2. The word 'free ' in Article 301 does not mean freedom from laws or from regulations. Article 301 guarantees freedom of trade, commerce and intercourse throughout the country from any State barriers. The whole object was to bring about the economic unity of the country under a federal structure, so that the people may feel that they are members of one nation. One of the means to achieve this object is to guarantee to every citizen in addition to the freedom of movement and residence throughout the country, which is achieved by Article 19(1)(d) and (e) is the freedom of movement or passage of commodities from one part of the country to another. This freedom of trade, commerce and intercourse throughout the country without any "State barriers" is not confined to inter State trade but also including intra State trade as well. In other words, subject to the provisions of Part XIII, no restrictions can be imposed upon the flow of trade, commerce and intercourse, not only between the State and another, but between any two points within the territory of India whether any State border has to be crossed or not. [1166 D H] 7:3. The regulatory measure or measures imposing compensatory taxes do not come within the purview of the restrictions contemplated by Article 301. The regulatory measures should, however, be such as do not impede the freedom of trade, commerce and intercourse. [1166 H, 1167 A] 8:1. In view of the provisions of clause (3) of the 1976 Order read with clauses (4) & (6) of the 1978 Order, the validly seized excess stock of wheat lying with such dealer, that is, a wholesale dealer, commission agent or a retailer, in truth and substance, became their "unlicensed stock". Here, if really the Delhi traders had purchased the excess stock of wheat from wholesale dealers, com 1143 mission agents or retailers in the State of Uttar Pradesh, as is alleged, it is possible to contend that there was a contravention of the provisions of clause (4) of the 1978 Order. The question whether the seizure was for any contravention of any order issued under section 3 of the Act has to be determined by the Additional District Magistrates (Civil Supplies), Agra, on the evidence adduced by the parties before him. The facts being controverted, the petitioners have no right to relief under Article 32 of the Constitution. [1168 D H, 1169 A B] 8:2. Supreme Court can neither act on documents which are yet to be proved nor can they pronounce upon the genuineness of the transactions covered by them or record any finding on the basis of the documents when the facts are in dispute. [1169 E] 8:3. Normally, it is not the function of Supreme Court to investigate into facts in proceedings under Article 32 of the Constitution when they are controverted with a view to discerning the truth. The matter must, in a situation like this, be left to the fact finding body. For the establishment of their right to relief under Article 32, the petitioners must establish the necessary facts before the said Additional District Magistrate in the proceedings under section 6A of the . If they fail to get relief in such proceedings, their obvious remedy lies in a suit for damages for wrongful seizure. [1171 A C] 9:1. The State Government cannot while taking recourse to the executive power of the State under Article 162 of the Constitution deprive a person of his property. Such power can be exercised only by authority of law and not by a mere executive fiat or order. Article 162 being subject to other provisions of the Constitution, is necessarily subject to Article 300A. [1169 F G] Wazir Chand vs The State of Himachal Pradesh, ; ; Bishan Das and Others vs The State of Punjab and Others, ; , referred to. The word 'law ' in the context of Article 300A must mean an Act of Parliament or of a State Legislature, a rule, or a statutory order, having the force of law, that is positive or State made law. [1169 G H] 9:3. The effect of the Constitution (Fourth) Amendment Act, 1955, is that there can be no 'deprivation ' unless there is extinction of the right to property. Here, no doubt, the wheat had to be sold, as it was subject to speedy and natural decay, but the petitioners are entitled to the sale proceeds, if ultimately it is found by the Additional District Magistrate (Civil Supplies), Agra, that there was no contravention by them of an order issued under section 3 of the Act. It is true that the seizure was with intent to confiscate under section 6A of the Act, but that would not make the seizure illegal, if, ultimately, it is found that there was contravention of an order issued under section 3 of the Act. If the facts were not in controversy and if the petitioners were able to prove that there was wrongful seizure of wheat by the State Government of Uttar Pradesh at the check post of Saiyan on the border, while in transit, in the course of inter State trade and commerce from the Union Territory of Delhi, perhaps, they would be entitled to the return of the seized wheat, or, in the alternative, to the payment of price thereof. [1170 D H, 1171 A] 1144 9:4. The question that the seizures were in reality for procurement of wheat in furtherance of the directive of the Central Government, and not for breach of the two Control Orders and, therefore, were nothing but a 'colourable exercise of power ', is dependent on facts to be found on investigation. Further, the question that there being no control price for wheat, the wheat should have been sold by public auction, is again a question that must be raised before the Additional District Magistrate (Civil Supplies), Agra, in the proceedings pending before him under section 6A of the Act. [1171 C D]

The Respondent, the sole inamdar of village Chinnaven katapuram in the Parlakimidi Zamindari in the District of srikakulam filed a Writ Petition before the High Court chal lenging lnter alia the notification issued under section 3 (4) of the Madras Estates Land (Reduction of Rent) Act by which the rents in respect of ryoti lands included in his Estate were reduced. He also challenged the provisions of the Act. The High Court accepted the challenge to the notification on the ground that the net income from rents was reduced to less than 25% of the original income and that the reduction was so substantial as to amount to an unreasonable restriction on the respondent 's right to hold property under article 19 (1) (f ) of the Constitution. On appeal by a certificate. Held, that the provisions of the Act were valid as they laid down reasonable restrictions in the interest of ameliorating the conditions of tenants of ryoti land in 'Estates ' who were at a disadvantage compared to tenants of ryotwari lands. Held, further, that it is only in a theoretical case where a land holder would be virtually ' deprived of his income by the reduction of rents that it can be said that the reduction was unreasonable. By the reduction the income of the Respondent was brought on a par with that of the highest prevailing rents in ryotwari lands and so it cannot be said that the reduction of rents made by the notification was violative of the land holders ' rights under article 19 (f ). The method of comparing the rents prior to reduction with the rents after reduction for the purpose of deciding the unreasonableness of the restriction was not sound as not humane landholders but those who were charging unconscionable rents would benefit thereby.

In exercise of the powers under section 3 Of the Essential Com modities Act, 1955, and under cl. 5 of the Sugar (Control) Order, 1955, the Government of India issued a notification dated July 30, 1958, fixing the ex factory price per maund of sugar produced in Punjab, Uttar Pradesh and North Bihar. The petitioners challenged the legality of the notification on the grounds (1) that it was beyond the ambit of authority conferred on the Central Government under section 3 of the Essential Commodities Act, 955, and clause 5 Of the Sugar (Control) Order, 1955, and that, in any case, it was bad as it could not subserve the purposes of the Act ensuring equitable distribution of the commodity to the consumer at a fair price, (2) that the Act and the Order did not authorise the Central Government to fix ex factory prices, and,, in any case, the notification failed to fix prices for the ultimate consumer, (3) that it imposed an unreasonable restriction on the right to trade under article 10(1)(g), inasmuch as it fixed the price arbitrarily, and there was no reasonable safeguard against the abuse of power, and (4) that it was discriminatory because it fixed ex factory prices only for factories in Punjab, Uttar Pradesh and North Bihar and not for factories in other parts of India and there was no reasonable classification discernible on any intelligible differentia on the basis of which prices had been controlled in certain regions only. Held, (1) The notification dated July 30, 1958, is within the authority conferred on the Central Government by section 3 Of the , and cl. 5 of the Sugar (Control) Order,1955. (2) Section 3 of the Act which provides for control of price is very general in terms and authorises the Central Government to fix the ex factory price of sugar without fixing the wholesale or retail prices; and, since fair prices for the consumer are ensured by fixing the ex factory price, the notification in question subserves the purposes of the Act, and is valid. (3) Clause 5 of the Sugar (Control) Order, 1955, lays down the factors which have to be taken into consideration in fixing prices, and as the prices were fixed in accordance therewith, the 124 action taken by the Government in the interests of the general public could not be challenged on the ground that it was an unreasonable restriction on the right to carry on trade under article 19(1)(g) of the Constitution. (4) Though under the notification prices are fixed for fac tories only in Punjab, Uttar Pradesh and North Bihar, in effect, they are fixed for the whole of India, as the other States are deficit ; consequently, the notification brought about no discrimination between different regions.

Appeal No. 425 of 1957. Appeal from the judgment and order dated February 21, 1956, of the Patna High Court in Misc. Judicial Case No. 53 of 1955. B. K. P. Sinha and D. P. Singh, for the appellants. L. K. Jha and R. C. Prasad, for the respondent. May 3. The Judgment of the Court was delivered by 688 SUBBA RAO, J. This appeal by certificate raises the question of the construction of section 4(h) of the Bihar Land Reforms Act, 1950 (Act 30 of 1950) (hereinafter referred to as the Act), as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Bihar Act 16 of 1959) (hereinafter called the Amending Act). The facts giving rise to the appeal lie in a small compass. Plots NOW. 383 and 1033 are tanks in village Lakshmipur alias Tarauni in the District of Darbhanga. The respondent claims to have taken settlement of the said plots in the year 1943 from the landlords of Raghopur Estate of which the said plots formed a part. After the coming into force of the Act, the said Estate vested in the State of Bihar. Thereafter, one Sheonandan Jha and some other villagers of Lakshmipur filed a petition before the Collector alleging that the alleged settlement was not true, and that in fact the settlement was nominally effected only after January 1, 1946. The Additional Collector, Darbhanga, in exercise of the powers conferred on him under section 4(h) of the Act, held that the said settlement was actually made after January 1, 1946, and that it was only a paper transaction; having annulled the said settlement, the Additional Collector, by his order dated January 18, 1955, called upon the respondent to give up possession of the said plots by January 30, 1955. Aggrieved by the said order, the respondent filed a petition in the High Court of Judicature at Patna under article 226 of the Constitution for a rule in the nature of a writ of mandamus or any other appropriate writ cancelling the order of the Additional Collector dated January 18, 1955, and res training the appellants from interfering with his possession of the said two plots. That petition came to be decided by a division bench of the High Court; and the learned Judges by their order dated February 21, 1956, held that the Additional Collector had no jurisdiction to entertain and decide the question whether the settlement, which was prima facie shown to have been made before January 1, 1946, was actually made after that date. On the basis of that finding, the order of the Additional Collector was set aside. 689 The State of Bihar and the Additional Collector of Darbhanga have preferred the present appeal against the said order. Learned counsel for the State contends that section 4(h) of the Act has been amended with retrospective effect, that under the amended section the Collector has power to decide whether a transfer is made before 1946 or thereafter, and that, therefore, the order of the High Court can no longer be sustained. Learned counsel for the respondent, while conceding the retroactivity of the amendment, relies upon the second proviso added by the amendment to section 4(h) and contends that under the said proviso the order of the Collector cannot take effect nor possession taken thereunder, unless the said order has been confirmed by the State Government and that in the instant case there has not been any such confirmation. Further he questions the constitutional validity of the said section on the ground that it infringes the fundamental right of the respondent under articles 14, 19 and 31 of the Constitution and is not saved by article 31A thereof. The second contention of learned counsel for the respondent may be disposed of first. Under article 31A of the Constitution, 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. The question is whether section 4(h) of the Act is such a law as to be hit by article 31A of the Constitution. Section 4(h) of the Act confers power on a Collector, inter alia, to make inquiries in respect of any transfer of any land comprised in an estate and to cancel the same if he is satisfied that such transfer was made any time after January 1, 1946, with the object of defeating any provisions of the Act or causing loss to the State or obtaining compensation thereunder. It is said that the section ex proprio vigore does not provide for acquisition by the State of any estate or of 690 any rights therein or for the extinguishment or modification of any such rights and therefore, is not protected by article 31A of the Constitution This argument in effect disannexes section 4(h) of the Act from the setting in which it appears and seeks to test its validity independently of its interaction on the other provisions of the Act. Section 4(h) is an integral part of the Act, and taken out of the Act it can only operate in vacuum. Indeed, the object of the section is to offset the anticipatory attempts made by landlords to defeat the provisions of the Act. Suppose the Collector cancels a transfer of land by the owner of an estate under the said section; the said land automatically vests in the State, with the result that the rights of the transferor and the transferee therein are extinguished. The said result accrues on the basis that the said land continued to be a part of the estate at the time the Act came into force. That apart, the section is a part of the Act designed to extinguish or modify the rights in an estate, and the power conferred on a Collector to cancel a transfer of any land in an estate is only to prevent fraud and to achieve effectively the object of the Act. This question was directly raised and answered by this Court in Thakur Raghubir Singh vs State of Ajmer (1). There, the constitutional validity of the Ajmer Abolition of Intermediaries and Land Reforms Act, 1955 (Ajmer III of 1955) and section 8 thereof was attacked. Section 8 of the said Act conferred a power on the Collector to cancel a lease or contract, if he was satisfied that it was not made or entered into in the normal course of management, but in anticipation of legislation for the abolition of intermediaries. Repelling the said contention, Wanchoo, J., speaking for the Court, observed thus: "The provision is not an independent provision; it is merely ancillary in character enacted for carrying out the objects of the Act more effectively. Such cancellation would sub serve the purposes of the Act, and the provision for it therefore be an integral part of the Act, though ancillary to its main object, and would thus be protected under article 31A(1)(a) of the Constitution." (1) [1959] SUPP. 1 S.C.R. 478. 691 The same reasoning applies to section 4(h) of the Act, and for the same reasons we hold that section 4(h) of the Act is likewise protected by article 31A of the Constitution. The first question turns upon the interpretation of the relevant provisions of the Amending Act. To appreciate the argument it would be convenient to read the material provisions of the said Act. Section 3. Amendment of section 4 of Bihar Act XXX of 1950. In section 4 of the said Act, (iv) in clause (h) (a) the words, figures and commas "made at any time after the first day of January, 1946," shall be omitted and shall be deemed always to have been omitted; (b) after the words "if he is satisfied that such transfer was made," the words, figures and commas "at any time after the first day of January, 1946," shall be inserted and shall be deemed always to have been inserted; and (c) the words "and with the previous sanction of the State Government" shall be omitted; (v) to clause (h) as amended above, the following provisos shall be added, namely: "Provided that an appeal against an order of the Collector under this clause, if preferred within sixty days of such order, shall lie to the proscribed authority not below the rank of the Collector of a district who shall dispose of the same according to the prescribed procedure: Provided further that no order annulling a transfer shall take effect nor &hall possession be taken in perursuance of it unless such an order has been confirmed by the State Government." After the said amendment the relevant part of the section reads: The Collector shall have power to make inquiries in respect of any transfer including the settlement. . if he is satisfied that such transfer was made at any time after th e first day of January, 1946, with the object of defeating any provisions of this Act or causing loss to tile State or obtaining higher 692 compensation thereunder, the Collector may, after giving reasonable notice to the parties concerned to appear and be heard and with the previous sanction of the State Government annul such transfer, dispossess the person claiming under it and take possession of such property on such terms as may appear to the Collector to be fair and equitable. The main differences material to the present enquiry between the section as it was before. the amendment and thereafter are that under the unmended section it was a moot point whether the Collector had the power to set aside a transfer, whether it was effected before or after January 1, 1946; whereas under the amended section such a power is clearly and expressly conferred on him: while under the original section, the Collector had to take the previous sanction of the State Government before he made the order annulling a transfer and dispossessing the person claiming under it, under the amended section the order made by the Collector shall neither take effect nor can he take possession before his order is confirmed. The short question is whether the second proviso, added by the Amending Act, is retrospective in operation, that is, whether the order of the Collector made before the Amending Act, though made with the previous sanction of the State Government, would still require for its taking effect a subsequent confirmation by the State Government. Learned Counsel for the State contends that the amendments made by section 3(iv)(a) and (b) are retrospective, but the amendment made by section 3(v) of the Amending Act is prospective. This contention appears to be sound, both in letter as well as in spirit. The different phraseology used in cls. (a) and (b) of subs. (iv) of section 3 of the Amending Act in the matter of omissions supports it. While in cl. (a) the omission ,%hall be deemed always to have been omitted, in cl. (c) the words mentioned therein shall only be omitted indicating by contrast that the omission in the former is expressly made retrospective while in the latter it is necessarily prospective. , If that be the true con struction, the condition of previous sanctions would 693 continue to operate in respect of the Collector 's order made before the amendment came into force. If the proviso be given a retrospective operation, it directly comes into conflict with the result brought about by cl. (c) of sub section (iv) of section 3 of the Amending Act. An order with the previous sanction of the Government may have been passed and possession also taken by the Collector, yet a further confirmation by the Government should be sought for to revalidate it. This construction would not only attribute to the Legislature redundancy but would also enable a party to seek for restoration of the land taken possession of by the Collector on the basis of a technicality. Even in a case where possession has not been taken by the Collector, the said anomaly would persist, for two sanctions would be required. The alternative construction makes the working of the section smooth and avoids the introduction of the said incongruity and, therefore, we prefer to accept it, particularly when it is consistent with the plain meaning of the words used in the section. The result is that in respect of an order already made by the Collector before the Amending Act, the previous sanction obtained would suffice, and in respect of an order made after the Amending Act, a subsequent confirmation by the State Government is required. Even so, it is argued by learned counsel for the respondent that the High Court, presumably in view of its acceptance of the respondent 's preliminary point, did not consider the question whether the inquiry had been made by the Collector in strict compliance with the provisions of the section, and whether the previous sanction of the State Government was obtained before he made the said order. In the affidavit filed in support of the petition in the High Court there is no specific allegation that no such inquiry has been made or that no such sanction has been obtained. Nor did the counsel for the appellant raise the said question in the arguments before the High Court. In the circumstances we do not think that this Court is justified in allowing 88 694 the respondent to raise the said question for the first time before us. We, therefore, reject this plea. In the result we set aside the order of the High Court and allow the appeal. But, in the circumstances of this case, we direct the parties to bear their own costs here and in the High Court. Appeal allowed.

Section 4(h) of the Bihar Land Reforms Act, 1950, as amended by the Bihar Land Reforms (Amendment) Act, 1959, which empowers the Collector to annul anticipatory transfers of land designed to defeat the object of the Act, is protected by article 31A of the Constitution although it does not by itself provide for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights and its constitutional validity cannot be questioned under articles 14, 19 and 31 of the Constitution since the Act of which it is an integral part, is itself directed to that end and is protected by that Article. Thakur Raghubir Singh vs State of Ajmer, [1959] Supp. 1 S.C.R. 478, applied. On a true construction of section 3 of the Amending Act, the second proviso to section 4(h) cannot be retrospective in operation and therefore, in respect of an order of annulment made by the Collector before the Amending Act came into force the previous sanction obtained from the State Government would be sufficient, but subsequent confirmation by the State Government would be necessary in the case of an order made after the Amending Act came into force.

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.

In a suit filed against the respondents (defendants), for recovery of possession of the suit lands, the appellants (plaintiffs) alleged that the suit lands were the proprietor 's private lands and were in their actual cultivating possession from time immemorial. The trial court dismissed the suit. Eventually, the High Court held that the defendants or their ancestors had not acquired any ryoti interest with right of occupancy; nor were they tenure holders but were mere tenants at will; and that the suit was not maintainable because even a tenant at will could not be ejected without being given notice to quit. Thereupon the appellants gave notice to the defendants. In the meantime, by virtue of a notification issued under section 3 of the Bihar Land Reforms Act 1950, the estate had vested in the State by reason of which the plaintiff was not entitled to evict the defendants. On the question whether the plaintiff had a right to file a suit for possession after the vesting of the estate in the State, the trial court held that since the plaintiff had a right to take possession, the land could be deemed to be in his khas possession and, therefore, he would be entitled to evict the defendants notwithstanding the vesting of the estate in the State. In appeal the High Court dismissed the plaintiff 's suit on the ground that the right to take possession did not constitute khas possession within the meaning of section 6(1)(b) of the Act. In appeal to this Court it was contended on behalf of the appellant that khas possession within the meaning of section 6 comprehends the right to take possession and so the appellant was entitled to evict the respondents. Dismissing the appeal, ^ HELD: (a) A combined reading of the definition of khas possession under section 2(k) and sections 3, 4 and 6 of the Act shows that the land in possession of a tenant at will cannot be said to be in khas possession of the intermediary for the purpose of section 6. [19D] (b) A tenant at will is not holding possession on behalf of the landlord but he has a vestige of title to it and holds on his own behalf and can set up his possession against the landlord till the formality prescribed by law is undertaken 7 by the landlord and he is evicted by due process of law. If a notice of a certain duration is necessary expiring with a certain event such as the end of the agricultural year, till the end of the agricultural year the tenant, notwithstanding the fact that he is a tenant at will and under a notice to quit will be able to hold on to his possession and keep the landlord at bay. [17H] In the instant case, in the suit between the same parties to the present litigations, the High Court held that the defendants were tenants at will of agricultural land, that they were holding from year to year and that they could be evicted not only after termination of their tenancy by a notice to quit but such notice must expire with the agricultural year. The notice to be issued to the tenant at will has to be a notice terminating the tenancy which must expire with the end of the agricultural year. In Bihar the agricultural year expires in September. Therefore, once it is concluded inter parties that even a tenant at will of an agricultural land is entitled to notice in consonance with justice and reason the tenant at will cannot be thrown out at any period during the year but the notice must expire with the end of the agricultural year. Sudhir Kumar Majumdar & Ors. vs Dhirendra Nath Biswas & Anr., , not approved. (c) A tenanat at will is someone other than the landlord. When he cultivates land used for agriculture, the agricultural operations cannot be said to be cultivation of the landlord himself. When a tenant at will carries on agricultural operations, he does them on his own and merely pays rent to the landlord. The landlord does not pay the tenant at will for the agricultural operations nor for the stock employed by the tenant at will. Keeping in view the definition of 'khas possession ', cultivation of land by the tenant at will could not be said to be cultivation by the landlord, by himself or by his servants or by hired labourers. In such a situation the landlord cannot be said to be in 'khas possession ' of the land in possession of the tenant at will. [18A G] (d) The term 'possession ' used in section 6 is qualified by the adjective 'khas ' which means actual possession and is used in contra distinction to the word 'constructive ' possession. The term 'khas ' possession, is used in a statute for ushering agrarian reforms and, therefore, the purpose and object behind the legislation must inform the interpretative process. The interpretation must tilt in favour of the actual cultivator, the tiller of the soil. [20 B C] 2. When a notification under section 3 was issued the respondents tenant at will were under a notice to quit which was to expire on September 24, 1953. Therefore, till September 24, 1953 the respondents tenants at will were in actual and physical possession of the land and till that date could hold against the intermediary landlord. It may be that when the notice to quit dated January 5, 1953 was served the intermediary landlord might have the right to take possession but till September 24, 1953 when notice would expire, the respondents were in actual possession and till then they could thwart any attempt of intermediary landlord to take actual possession. Therefore, on the date of the vesting i.e. April 12, 1953 the intermediary was not in 'khas possession ' within the meaning of section 6(1) and when on that day his estate vested in the State thereafter he was not entitled to recover possession. After the vesting of the estate in the State, which event had occurred prior to the institution of the suit, he could not maintain an action for eviction as he had no more subsisting interest in the estate, his interest having vested in the State. 8 Surajnath Ahir & Ors. vs Prithinath Singh & Ors. ; Ram Ran Bijai Singh & Ors. vs Behari Singh alias Bagandha Singh ; Gurucharan Singh vs Kamla Singh & Ors. ; at 752 753; and Sonawati & Ors. vs Sri Ram & Anr. [1968] 1 SCR 617; referred to. The contention of the appellant that if his application under Order 41 rule 27 C.P.C. to lead additional evidence were allowed it would establish that the land was already settled with the intermediary by the State and that there fore it was no more open to the respondents to contend that the intermediary was not entitled to the settlement of the land in his favour has no force. The rejection of the application is justified because if the evidence was allowed to be admitted on record at this stage it might put the respondents at a disadvantage. If the plaintiff (appellant) had obtained some settlement of land on the basis of a decree of the trial Court or the first appellate Court which became interlocutory in view of the appeal preferred to the High Court and then to this Court, it is not open to the plaintiff to take any advantage of such settlement. [22C F] 4. If a contention which was available to a party had been abandoned in the High Court, it cannot be reagitated before this Court. Jayarama Reddy & Anr. vs Revenue Divisional Officer & Land Acquisition Officer, Kurnool ; referred to. If a court fixes time to do a certain thing, the Court always retains the power to extend the time.

The respondent, who was an occupant of agricultural land applied to the Collector, under section 65 of the Bombay Land Revenue Code, 1879, for permission to convert the land to non agricultural use. The Collector gave the permission in July 1960 on condition that the land shall be used exclusively for constructing residential houses. The Municipal Committee, which had objected to the grant of permission before the Collector, moved the Commissioner for exercising his powers under section 211 of the Code. The Commissioner, in October, 1961, passed an order in which, after reciting the objections of the Municipality and the arguments of counsel he boldly stated his conclusion that the land did not belong to the respondent and set aside the Collector 's order without giving any reasons. The Com missioner 's order was quashed by the High Court on the ground that the Commissioner had no authority to pass the order under section 211 of the Code. In appeal to this Court, HELD : The Commissioner 's order was rightly quashed. (a) Under section 65 of the Code, if the Collector does not inform an applicant of his decision on the application, within a period of 3 months, the permission applied for shall be deemed to have been granted Though no such period is prescribed by section 211, reading the two sections together it must be held that the Commissioner also must exercise his revisional powers within a reasonable time of the Collector 's order. What is reasonable would depend on the facts of the case. In the case when the permission is for building purposes, the Commissioner should exercise his power within a few months of the Collector 's order, because, after the grant of the permission the occupant is likely to spend money on building operations within a few months of the date of permission. Since the order of the Commissioner in the present case was passed more than a year after the Collector 's order, the order should be set aside. [343 E H] (b) The order should also be quashed on the ground that the Commissioner had not given any reasons for his conclusions. [343 H] (c) The Commissioner also erred in going into the question of title, because, when there was a serious dispute regarding title, he should have referred the parties to a competent court and not decide it himself. [344 D]

The appellant owned a cardamom plantation. For the assessment year 1957 58, he submitted a return under the Madras Plantations Agricultural Income tax Act, 1955. The Agricultural Income tax Officer did not accept the return, and 'added to the income the value of stocks of cardamom sold in the accounting year. The High Court in revision, confirmed the assessment made by the Department. In appeal to this Court, it was contended that: (1) the agricultural produce itself was income and became charged to tax under the Act when it was received and not when it was sold, used or consumed, and therefore, the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of account and ought to have brought to tax only that quantity and excluded the value of the rest of the produce received in earlier years, from taxation; and (2) from the fact that the appellant applied to compound the tax for the earlier years, it must be inferred that the produce which was sold by him in the year of account had already suffered tax in the earlier years. HELD : (1) Merely because the produce of the plantation was received in the earlier years, income derived from sale of that produce in the year of account was not exempt from tax under the Act in that year. [953 B] Section 3 of the Act read with the definition of "agricultural income" charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation. The expression "income" in its normal con notation does not mean mere production or receipt of a commodity which may be converted into money. Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity. It is not necessary, however, for income to accrue that there must be a sale of a commodity : consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income. [952 G H; 953 A B] Dooars Tea Co. Ltd. vs Commissioner of Agricultural Income tax, West Bengal; , , referred to. (2) It had to be proved by evidence that the crop sold related to the years in respect of which the assessee had applied to compound the tax, but there was no such evidence. [954 F]

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 who were displaced persons were allotted land which was entered as sailab land in the revenue records and they became the owners of these lands. After the coming into force of the Punjab Security of Land Tenures Act, 1953, the Revenue Authorities proceeded to determine the permissible area of the land of the appellants under section 2(3). They allowed 50 standard acres of land to each of the appellants and declared the balance as surplus land. The appellants claimed that the lands allotted to them as displaced persons fell in a portion of District Karnal which was sailab and adna sailab and according to the classification made under the Punjab Security of Land Tenures Rules, 1953 they did not carry any valuation. The Collector dismissed their application. The Commissioner dismissed their appeals holding that the Collector was right in treating the surplus area as an unirrigated areas and valuing the same at nine annas per standard acre. A single Judge accepting the contention of the appellant in his writ petition set aside the orders of the Revenue Court. The Financial Commissioner filed an appeal which was allowed by the Division Bench and the writ petition was dismissed. In the appeals to this Court it was contended on behalf of the appellants that (1) whereas sub section (5) of section 2 of the Act directed the Government to frame Rules after considering the quantity of the yield and quality of soil, in the Rules framed by the Government the main guide lines laid down by sub section(5) were not followed, and the classification made by the Rules under Annexure 'A ' was arbitrary without determining the quantity of the yield and quality of the soil, and (2) that even if the classification made in Annexure 'A ' was valid, the Revenue Courts as also the High Courts committed an error of law in misconstruing the classification and in arbitrarily placing the surplus area in the category of unirrigated land. 331 Dismissing the appeals, ^ HELD: 1(i) The view of the single Judge is not in consonance with the scheme and spirit of the Rules framed under the Act and is based on a wrong interpretation of the nature, extent and ambit of the classification made in Annexure 'A '. The classification is in accordance with provisions of sub section (5) of section 2 of the Act and is, therefore, constitutionally valid. [337 E F, G] (ii) The Land Resettlement Manual prepared in 1952 by Tarlok Singh shows that the classification has been made in a very scientific manner after taking into consideration all the relevant factors. The Punjab Settlement Manual (4th Edition) prepared by Sir James M. Douie though possessing unimpeachable authenticity was made long ago and since then there have been great changes resulting from various steps taken by the Government for improving the nature and character of the land and the irrigation facilities. Even so, the classification made by Sir James Douie has been adhered to broadly and basically by Tarlok Singh in his Manual which forms the pivotal foundation for the schedule containing Annexure 'A ' framed under the Rules. [335H 336 C] (iii) The classifications of land like barani, sailab, abi, nehri, chahi etc. are clearly mentioned in the Punjab Settlement Manual. The Rule Making Authority has not in any way either departed from the principles mentioned in sub section(5) of section 2 of the Act or violated the guidelines contained therein, nor could it be said that the classification made under the Rules has not been made according to the quantity of yield or the quality of the soil. [336 C, D E] (iv) If the dominant object of the act was to take over the surplus area according to the formula contained in various provisions of the Act particularly sub sections (3) and (5) of section 2, there is no material on the record to show that the Rules do not fulfil or carry out the object contained in the Act. [336 G] Jagir Singh and Ors. vs The State of Punjab and Ors., 44 (1965) Lahore Law Times 143, approved. 2.(i) There was no error in the classification made by the revenue authorities. So far as Karnal District was concerned, there was no sailab land at the time when the Rules were framed and the classification was made. Even if the land in question could be treated as sailab and equated with the land in Sonepat then the valuation would have been at 12 annas which could be more deterimental to the interest of the appellants. The Collector and the Commissioner have rightly treated the land as unirrigated which is the lowest category and whose valuation is given as nine annas per acre. [338C, B] (ii) The three categories given in clauses (a), (b) and (c) of Rule 2 do not cover the land of the appellants which is sailab or adna sailab and therefore, they cannot be given the benefit of any of these three sub clauses of the proviso. [339 A]

The respondent, by a registered lease deed, let to the appellant for a period of five years the backyard of a residential house in Madras. The backyard consisted of vacant land. According to the lease deed the appellant was allowed inter alia to boil and dry paddy on the said land and he was also allowed to erect a temporary shed for keeping the paddy on condition that while vacating the land he would dismantle the same. The deed also specifically provided that the appellant "should not erect any kind of permanent super structure on the said vacant site so as to entitle him to claim in future the value thereof." In continuation of his stipulation the appellant erected permanent super structures on the land. On the expiry of the lease of the appellant refused to vacate the land. The respondent thereupon filed a suit for his eviction. The appellant claimed protection under the Madras City Tenants ' Protection Act, 1921, Within the prescribed time he flied an application under section 9 of the Act asking for an order that the respondent be directed to sell the land for a price to be fixed by the court. The trial court decreed the respondent 's suit. The first appellate court reversed the decree of the trial court but the High Court restored it. In appeal by special leave to this Court the questions that fell for determination were: (i) Is the tenant of a vacant site in the backyard of a residential house a tenant of land within the purview of section 2(2) of the Madras City Tenants ' Protection Act, 1921 ? (ii) Having regard to the proviso to section 12 is such a tenant entitled to the protection of sections 3 and 9 of the Act in a case when he has erected buildings on the land in contravention of an express stipulated in a registered deed ? HELD: (i) If the respondent had let the residential building together with its appurtenant land the tenancy would not be a tenancy of land within the meaning of the Act. But the respondent did not let the building with land appurtenant thereto. He retained the building and let the land separately. The letting was of land and nothing else. The appellant was not a tenant of a building as defined in section 2(1) either before or after its amendment by Madras Act XIII of 1960. He was a tenant of land as defined in section 2(2). [162 A C] (ii) (a) Under section 3 a tenant on ejectment is entitled to he paid as compensation the value of any building erected by him. A tenant entitled to compensation under section 3 and against whom a suit for ejectment has been instituted is entitled to purchase the whole or part of the land by invoking the procedure under section 9. The effect of the main part of section 12 is that nothing in any contract made by a tenant takes away or limits his rights under sections 3 and 9. The proviso to 159 however, saves stipulations as to erections of buildings made by a tenant in a registered writing. [162 D E] (b) A stipulation as to the erection of buildings made orally or in an unregistered writing is not protected by the proviso and a tenant erecting a building in breach of the covenant is entitled to the benefits of as. 3 and 9. [162 E F] R.V. Naidu vs Naraindas, [1966] 1 S.C.R. 110 and Naraindas vs Naidu, referred to. (c) A stipulation for giving vacant land after demolition of the building which the tenant has been authorised to construct thereon is not one as to the erection of buildings within the proviso to section 12. Therefore in the present case the stipulation that the appellant could erect a temporary shed on condition that while vacating the land he would dismantle the same was not protected by the proviso to section 12. [164 C D] Vajrapani Naidu vs New Theatre Carnatic Talkies, ; , relied on. Vajrapuri vs New Theatres Carnatic Talkies, , 477 8, referred to. (d) But in the present case the lease deed also contained an express stipulation that the appellant would not erect permanent structures of any kind so as to entitle him to claim the future value thereof. This stipulation was clearly one as to the erection of buildings. [164 E] In contravention of the stipulation as to the erection of buildings in the registered deed the appellant erected permanent structures on the land after the date of the lease. The effect of the proviso to section 12 is that nothing in the Act affects the stipulation. Sections 3 and 9 are subject to and controlled by section 12. The stipulation overrides the tenant 's right under section 3. If the tenant erects a permanent structure in contravention of the stipulation he is not entitled to any compensation under section 3. As he is not entitled to any compensation under section 3 he cannot claim the benefit of section 9. The High Court rightly held that the appellant was not entitled to the benefit of section 9. [164 C 165 B]

Appeals Nos. 646 and 647 of 1960. Appeals by special leave from the judgments and orders dated January 28, 1958, of the Andhra Pradesh High Court in Writ Appeals Nos. 149 and 150 of 1957. 537 A. V. Viswanatha Sastri and T. Satyanarayana, for the appellants. A. Ranganatham Chetty, section V. P. Venkatappayya Sastri and T. M. Sen, for the respondent. April 28. The Judgment of the Court was A delivered by AYYANGAR, J. These two appeals are by special leave of this Court and arise out of orders of the High Court of Andhra Pradesh dismissing two writ petitions filed before it by the respective appellants in the two appeals. On January 14, 1953, the Government of Madras issued a notification reading, to quote only the material words, "in exercise of the powers conferred by section 1(4) of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 (Madras Act XXVI of 1948), read with section 2 of the Madras Scheduled Areas Estates (Abolition and Conversion into Ryotwari) Regulation, 1951: "The Governor of Madras hereby appoints the 4th of February 1953, as the date on which the provisions of the said Act shall come into force in the Estates in the Scheduled Areas of the West Godavari District which are specified in the schedule below: " and the schedule set out inter alia: "1. Agency Area of Gangole 'A ' Estate, consisting of 2 3. Agency Area of Gangole 'C ' Estate, consisting of. " It is the legality of this notification that is impugned by the two appellants who are the proprietors respectively of Gangole 'A ' and Gangole 'C ' estates. The two writ petitions by the appellants which were numbered respectively 28 and 29 of 1953 were dismissed by the learned Single Judge of the Andhra High Court and appeals under the Letters Patent filed against this common judgment were also dismissed by the learned Judges of that Court. An application for the grant of a certificate was also dismissed but this 538 Court having granted special leave to the appellants, the ' matter is now before us. The Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, to which we shall refer as the Abolition Act, was a piece of legislation of the State enacted to effect reform in land tenures and landholding by the elimination of intermediaries. In line with similar legislation in the rest of the country, the interests of intermediaries of three categories the estates of Zamindars, of undertenure holders and of Inamdars were enabled to be vested in Government on the publication of a notification to that effect, compensation being provided for such taking over. The entire legal difficulties in the case of the Gangole 'A ' and IC ' estates which were admittedly Zamindaris arise out of the fact that a small portion of each of them is situated in what is known as the Godavari Agency tract. This Agency area was originally included as part of the Scheduled District of the Madras Presidency under the Scheduled Districts Act XIV of 1874. When the Godavari Agency was governed by the Scheduled Districts Act, 1874, the Madras Legislature enacted the Madras Estates Land Act (Act 1 of 1908), which was in force from July 1, 1908. This enactment regulated the rights of, inter alia, the proprietors of zamindari estates and the ryots and tenants who cultivated the lands included in the estates. Though, some argument was raised in the High Court, disputing the operation of the Estates Land Act to the Godavari Agency tracts, it has not been repeated before us. That Act on its terms applied to the entire Presidency of Madras and in view of a catena of decisions of the Madras High Court starting from the judgment of Muthuswami Iyer, J. in Chakrapani vs Varahalamma (1), on the construction of section 4 of the Scheduled Districts Act XIV of 1874, the contention was hardly tenable and was therefore properly abandoned. The position therefore was that the entirety of the lands and villages forming Gangole 'A ' and IC ' were governed by the Madras Estates Land Act, 1908, (1) Mad. 539 and were "estates" within the meaning of that enactment. In this situation the Government of India Act, 1935, came into force on April 1, 1937. Under its provisions the Godavari Agency was included in the territory classified as "partially excluded areas" under section 91 of the Act. The laws applicable to the "partially excluded areas" and their administration was governed by section 92 which enacted: "92(1) The executive authority of a Province extends to excluded and partially excluded areas therein, but, notwithstanding anything in this Act, no Act of the Federal Legislature or of the Provincial Legislature, shall apply to an excluded area or a partially excluded area, unless the Governor by public notification so directs; and the Governor in giving such direction with respect to any Act may direct that the Act shall in its application to the area, or to any specified part thereof, have effect subject to such exceptions or modifications as he thinks fit. (2) The Governor may make regulations for the peace and good government of any area in a Province which is for the time being an excluded area, or a partially excluded area, and any regulations so made may repeal or amend any Act of the Federal Legislature or of the Provincial Legislature, or any existing Indian law, which is for the time being applicable to the area in question. Regulations made under this sub section shall be submitted forthwith to the Governor General and until assented to by him in his discretion shall have no effect, and the provisions of this Part of this Act with respect to the power of His Majesty to disallow Acts shall apply in relation to any such regulations assented to by the Governor General as they apply in relation to Acts of a Provincial Legislature assented to by him. (3) The Governor shall, as respects any area in a Province which is for the time being an excluded area, exercise his functions in his discretion. " We shall be pointing out a little later, the interconnection between the Estates Land Act, 1908 and 540 the Abolition Act, but for the present narrative it is sufficient to state that when the Abolition Act was enacted in 1948, it could not of its own force, apply to the 'partially excluded areas ' and no action as contemplated by section 92 of the Government of India Act, 1935, was taken to render that Act applicable to that area. The result was that only a part of Gangole 'A ' and 'C ' were within the operation of the Abolition Act, while there were portions of each of the estates which were outside its purview and operation. This legal situation was however not noticed and under the wrong impression that the Abolition Act was in operation in the Godavari Agency also, the Government of Madras issued on August 15, 1950, a notification under section 1(4) of the Abolition Act by which, among other estates, the entirety of Gangole estate 'A ' and Gangole estate 'C ' were purported to be taken over, and specifying September 7, 1950, as the date on which the vesting was to take place. Before the latter date, however, the error was noticed and in consequence another notification was issued on the 5th of September by which the villages and hamlets lying in the "partially excluded areas" of Gangole estate 'A ' and Gangole estate IC ' were excluded from the scope of the notification dated August 15,1950. Thereafter the question of the extension of the Abolition Act to the "partially excluded areas" was taken on hand. By that date, it would be seen, the Consti tution had come into force and the law applicable to areas like the Godavari Agency was provided for by article 244 read with the Sch. V to the Constitution. article 244(1) enacted: "The provisions of the Fifth Schedule shall apply to the administration and control of the Scheduled Areas and Scheduled Tribes in any State other than the State of Assam. " As regards the law applicable to the Scheduled Areas, the relevant provision is that contained in paragraph 5 of that Schedule of which the material portions are: "5. Law applicable to Scheduled Areas (1) Notwithstanding anything in this Constitution, the Governor may by public notification 541 direct that any particular Act of Parliament or of the Legislature of the State shall riot apply to a Scheduled Area or any part thereof in the State or shall apply to a Scheduled Area or any part thereof in the State subject to such exceptions and modifications as he may specify in the notification and any direction given under this sub paragraph may be given so as to have retrospective effect. (2) The Governor may make regulations for the peace and good government of any area in a State which is for the time being a Scheduled Area. (3) In making any such regulation as is referred to in subparagraph (2) of this paragraph, the Governor may repeal or amend any Act of Parliament or of the Legislature of the State or any existing law which is for the time being applicable to the area in question. " In exercise of the power under paragraph 5(2) of the Fifth Schedule, Madras Regulation IV of 1951 was passed on September 8, 1951. The territorial extent of its operation extended to certain areas specified in the Schedule, which included the areas in the Godavari district in which the two Gangole estates were situate and by its operative provisions the Abolition Act together with the amendments effected to it, were made applicable to these areas with retrospective effect from April 19, 1949. The Abolition Act having thus been extended to that part of the Gangole 'A ' and Gangole 'C ' estates which lay within "the Scheduled area" the Government of Madras issued the impugned notification vesting those portions of the estate to which the Act was extended by Regulation IV of 1951. As stated earlier, it is the validity of this last notification and the vesting effected thereunder of those portions of Gangole 'A ' and Gangole 'C ' which lay within the Scheduled area that is alone challenged in the appeals before us. The notification was impugned on several grounds, all of which were rejected by the High Court. Several 69 542 of them have been put forward before us, though not all of them with equal emphasis. Before however adverting to them it might be convenient to set out the relevant statutory provisions which bear upon the points urged. The long title of the Abolition Act states: "Whereas it is expedient to provide for the repeal of the Permanent Settlement, the acquisition of the rights of landholders not permanently settled and certain other estates in the Province of Madras ". . It is hereby enacted as follows:" Section 1(3) defining the extent of its application runs: "It applies to all estates as defined in section 3, clause (2), of the Madras Estates Land Act, 1908, except inam villages which became estates by virtue of the Madras Estates Land (Third Amendment) Act, 1936. " Section 2 which is the definition section provides by sub section (1): "(1) All expressions defined in the Estates Land Act shall have the same respective meanings as in that Act with the modifications, if any, made by this Act." and sub section (3) provides: "(3) 'estate ' means a zamindari or an under tenure or an inam estate." and sub section (4) of this section defines 'Estates Land Act ' to mean "the Madras Estates Land Act, 1908. " Having regard to these provisions it is necessary to refer to the terms of the Estates Land Act to which one is directed by section 1(2) of the Abolition Act. Section 3 (2) of the Estates Land Act defines "an estate" as meaning: "3 (2)(a) any permanently settled estate or temporarily settled zamindari, (b) any portion of such permanently settled estate or temporarily settled zamindari which is separately registered in the office of the Collector; (c) (d) (e) 543 We shall now proceed to deal with the several points raised, though except one all the others do not merit any serious consideration and have been properly rejected by the High Court. The first point urged was that the Polavaram zamindari the parent estate from which the Gangole estate was, by successive sub divisions, separated was not "a permanently settled estate" because the ' Madras Permanent Settlement Regulation XXV of 1802 was excluded from its application to Scheduled districts by the Laws Local Extent Act, 1874. In our opinion, the High Court has rightly rejected this contention, because even if the Madras Permanent Settlement Regulation did not apply, there could be no dispute that the Polavaram zamindari was "a permanently settled estate", because its peishcush was fixed and from the kabuliyat which was executed by the proprietor it is clear that it conforms to the pattern of the sanads and kabuliyats issued under the Madras Permanent Settlement Regulation. Though before the High Court it was urged that on the issue of the notification on August 15, 1950, under section 1(4) of the Abolition Act the power of the State Government was exhausted and that they were thereafter incompetent to issue any further notification under the same Act, this contention which entirely lacks substance was not seriously urged. It was next contended that Regulation IV of 1951 was invalid as having outstepped the limits of the legislation permitted by paragraphs 5(1) and (2) of the Fifth Schedule to the Constitution. It was said that if the Governor desired to enact a law with retrospective effect it must be a law fashioned by himself, but that if he applied to the Scheduled areas a law already in force in the State, he could not do so with retrospective effect. Reduced to simple terms, the contention merely amounts to this that the Governor should have repeated in this Regulation the terms of the Abolition Act but that if he referred merely to the title of the Act he could not give retrospective effect to its provisions over the area to which it was being applied. It is obvious that this contention was correctly negatived by the High Court. 544 We shall now proceed to deal with the only point put forward by Mr. Viswanatha Sastri which, we have said, merits serious consideration, though it must be said that it was not presented in the same form before the learned Judges of the High Court of Andhra Pradesh. The, argument was as follows: The Madras Estates Land Act of 1908, admittedly applied to the entire estate of Gangole including that portion of the estate which was in the Scheduled area which, in the phraseology employed by the Government of India Act, was "a partially excluded area. " Gangole 'A ', Gangole 'B 'and Gangole 'C ' had been subdivided and had been separately registered. Each one of them was therefore a unit each one was itself "an estate" within section 3(2)(b) of the Estates Land Act, 1908, being "a portion of a permanently settled estate . . . . which is separately registered in the office of the Collector. " The Abolition Act contemplates the taking over of "estates" as a unit and not in parts. The entire scheme of the Abolition Act is based upon this principle which would be upset if it were held that the Government in issuing notifications under section 1(4) of the Abolition Act could take over portions merely of such units. When a notification is issued under section 1(4) its legal consequences are set out in section 3 which reads: "With effect on and from the notified date and save as otherwise expressly provided in this Act (the saving does not cover anything material for the present purpose) (a) (b) the entire estate (including all communal lands; porambokes; other non ryoti lands; ) shall stand transferred to the Government and vest in them, free of all encumbrances. ." The provisions of the Act determining the amount of compensation are related to the sum payable in respect of the entirety of the estate, for sections 24 and 25 enact: "24. The compensation payable in respect of an estate shall be determined in accordance with the following provisions. " 545 "25. The compensation shall be determined for the estate as a whole, and not separately for each of the interests therein. " The mode of computation of the compensation amount for which provision is made in sections 27 to 30 all proceed on the basis that it is the entire estate that is taken over and not a portion merely of the estate. All these, taken together, would point to the scheme of the Act contemplating the entire estate being taken over. On that scheme he urged that it would not be possible to work out the compensation payable for separate portions of an estate, for instance for one village out of the several which might be comprised in an estate, The claims by the proprietor against the Government for compensation, as well as the determination of disputes inter se between claimants to the compensation amount, he pointed out, all proceed on the basis that the entire estate as a unit was taken over by notification under section 1(4). On these premises Mr. Viswanatha Sastri submitted that what the Government had done in the present case was to deal with the two estates of Gangole 'A ' and Gangole 'C ' each of which was a unit, as if each one of them were really two estates one that which lay in the Agency tract, and the other outside that area and had issued notifications in respect of these units piece meat which was not contemplated and therefore not permitted under the Abolition Act. He further pointed out that if the original notification dated August 15, 1950, stood without the "denotification" effected by the notification dated September 5, 1950, there might be a valid vesting by reason of the retrospective operation of Regulation IV of 1951. Similarly if the impugned notification of 1953, had. included not merely that portion of the estate of Gangole 'A ' and Gangole 'C ' which were within the Scheduled areas but the entirety of the two estates, that notification would not have been open to chal lenge. But the point urged was that it was only by the combined operation of (1) the notification dated August 15, 1956, as modified by that dated September 5, 1950, and (2) the notification dated January 14, 546 1953, that the entirety of the two "estates" was taken over and that this rendered the second notification invalid because it had taken over only a portion of the estate. Learned Counsel, no doubt, conceded that the taking over of those portions of Gangole 'A ' and Gangole 'C ' which were within the operation of the Abolition Act before its extension to the Scheduled areas not having been challenged, he would not be entitled to any relief in respect of the portion of the estate covered by the first notification, but his argument was that would not preclude him from disputing the validity of the last notification vesting those portions of the two estates which were within the Scheduled areas in the State. We shall now proceed to consider the tenability of these submissions. We might premise the discussion by observing that learned Counsel is right in his submission that the Abolition Act does not contemplate or make provision for the taking over of particular portions only of estates and that if the State Government having power to take over the entirety of an estate chose, however, to exclude certain portions of it from the operation of a vesting notification and took over only defined portions of an estate, this could be open to serious challenge on the ground that it was not contemplated by the scheme of the enactment. But the acceptance of this principle does not, in our opinion, compel us to answer the question pro. pounded by the learned Counsel for the appellants in his favour. To start with, it might be pointed out that it looks somewhat anomalous that learned Counsel who strongly urges that the scheme of the Act contemplates the taking over only of the entirety of an estate and not of a portion thereof, should resist a taking over which, if effective, would result in the entire estate vesting in the Government and the compensation being determined according to the rules laid down by the Act, whereas it is the invalidation of the impugned notification that would result in a partial or piece meal taking over, to the disadvantage of the proprietors to which learned Counsel very properly drew our attention. 547 As already pointed out learned Counsel 's submission was that not merely the notification dated January 14, 1953, but also the earlier one dated August 15, 1950 (as modified by the one dated September 5, 1950) was invalid as providing for vesting of parts only of an "estate" and not of it as a unit. It would also follow that if the first notification dated August 15, 1950, was valid, the impugned notification which by its operation effected the vesting of the entirety of the estate in the State could not be open to challenge as violating the principle invoked by learned Counsel. We are necessarily therefore driven to consider the validity of the first notification dated August 15, 1950, in dealing with the validity of the impugned notification of January 14, 1953. In considering this matter it is necessary to recall some of the provisions of the Abolition Act. Section 2(3) defines "an estate" as meaning, inter alia, a "zamindari estate". No doubt, as stated already, where the Abolition Act operates over the whole of "a zamindari estate", it does not contemplate the Government taking over a portion only of such "estate". But in saying this it should not be assumed that if in respect of a single estate two notifications were issued, say on the same date which together vested the entirety of the "estate" in the State under section 3, either notification or both together would be invalid or ineffective. The reason for this must obviously be that the intention of the Government was to take over the entire estate though it was being given effect to by the issue of two notifications. That would not obviously be the same thing as the Government having the liberty to pick and choose certain of the villages or certain portions of an estate leaving out others. If the Abolition Act as enacted does not 'extend to the entirety of an "estate" as defined in the Estates Land Act but only to a portion thereof, the question would be whether that portion of "the estate" which is within the operation of the Act is "an estate" within the meaning of the Act or not. On this matter there are two views possible: (1) that having regard to the Abolition Act referring to and as it were incorporating the provisions of the 548 Madras Estates Land Act, the "estates" to which the Abolition Act could apply are only those which being "Estates" within the Estates Land Act, are also wholly within the operation of the Abolition Act. In other words, even if a few acres of an "estate" as defined in the Estates Land Act were outside the operation of the Abolition Act, it would not be an "estate" which could be taken over. (2) The other view attributing a crucial value to the policy and purpose underlying the legislation, viz., a reform of land tenures and landholding by the elimination of intermediaries to treat any land held on the tenures specified and within the territorial operation of the Act as falling within the category of "estates" liable to be taken over and vested in Government. We consider that the latter view is to be preferred as being in accord with the intention of the law and as subserving its purposes. In this connection it cannot be overlooked that the entire argument of learned Counsel is built up on the definitions of an "estate" in section 2 of the Abolition Act (read with section 1(3) of that Act), and that the definitions contained there could be applied on the terms of the opening words of that section only "unless there is anything repugnant in the subject or context. " The position could possibly be better explained in these terms: Assume that Regulation IV of 1951 was not enacted. Could the State Government take over that portion of the "estate" which was within the operation of the Abolition Act or does the definition of "an estate" and the reference section 1(3) to section 3(2) of the Madras Estates Land Act of 1908 preclude the State from taking over that portion because the Act does not extend to the entirety of the "estate"? It appears to us that this question is capable of being answered only in one way, viz., that the definition of "an estate" in the Abolition Act must be limited to that portion of an "estate" which is within the operation of the Act. Any other construction would mean that if that Act did not apply to a few square yards in an estate, it ceases to be an "estate" governed by the Act, which, in our opinion, would be plainly contrary to the intention of the enactment as 547 As already pointed out learned Counsel 's submission was that not merely the notification dated January 14, 1953, but also the earlier one dated August 15, 1950 (as modified by the one dated September 5, 1950) was invalid as providing for vesting of parts only of an "estate" and not of it as a unit. It would also follow that if the first notification dated August 15, 1950, was valid, the impugned notification which by its operation effected the vesting of the entirety of the estate in the State could not be open to challenge as violating the principle invoked by learned Counsel. We are necessarily therefore driven to consider the validity of the first notification dated August 15, 1950, in dealing with the validity of the impugned notification of January 14, 1953. In considering this matter it is necessary to recall some of the provisions of the Abolition Act. Section 2(3) defines "an estate" as meaning, inter alia, a "zamindari estate". No doubt, as stated already, where the Abolition Act operates over the whole of "a zamindari estate", it does not contemplate the Government taking over a portion only of such "estate". But in saying this it should not be assumed that if in respect of a single estate two notifications were issued, say on the same date which together vested the entirety of the "estate" in the State under section 3, either notification or both together would be invalid or ineffective. The reason for this must obviously be that the intention of the Government was to take over the entire estate though it was being given effect to by the issue of two notifications. That would not obviously be the same thing as the Government having the liberty to pick and choose certain of the villages or certain portions of an estate leaving out others. If the Abolition Act as enacted does not extend to the entirety of an "estate" as defined in the Estates Land Act but only to a portion thereof, the question would be whether that portion of "the estate" which is within the operation of the Act is "an estate" within the meaning of the Act or not. On this matter there are two views possible: (1) that having regard to the Abolition Act referring to and as it were incorporating the provisions of the 548 Madras Estates Land Act, the "estates" to which the Abolition Act could apply are only those which being "Estates" within the Estates Land Act, are also wholly within the operation of the Abolition Act. In other words, even if a few acres of an "estate" as defined in the Estates Land Act were outside the operation of the Abolition Act, it would not be an "estate" which could be taken over. (2) The other view attributing a crucial value to the policy and purpose underlying the legislation, viz., a reform of land tenures and landholding by the elimination of intermediaries to treat any land held on the tenures specified and within the territorial operation of the Act as falling within the category of "estates" liable to be taken over and vested in Government. We consider that the latter view is to be preferred as being in accord with the intention of the law and as subserving its purposes. In this connection it cannot be overlooked that the entire argument of learned Counsel is built up on the definitions of an "estate" in section 2 of the Abolition Act (read with section 1(3) of that Act), and that the definitions contained there could be applied on the terms of the opening words of that section only " unless there is anything repugnant in the subject or context. " The position could possibly be better explained in these terms: Assume that Regulation IV of 1951 was not enacted. Could the State Government take over that portion of the "estate" which was within the operation of the Abolition Act or does the definition of "an estate" and the reference section 1(3) to section 3(2) of the Madras Estates Land Act of 1908 preclude the State from taking over that portion because the Act does not extend to the entirety of the "estate"? It appears to us that this question is capable of being answered only in one way, viz., that the definition of "an estate" in the Abolition Act must be limited to that portion of an "estate" which is within the operation of the Act. Any other construction would mean that if that Act did not apply to a few square yards in an estate, it ceases to be an "estate" governed by the Act, which, in our opinion, would be plainly contrary to the intention of the enactment as 549 gathered from its preamble and operative provisions. Let us suppose that instead of the problem created by a portion of the estate being in a Scheduled area and therefore though within the State outside the normal legislative power of the State Legislature, a permanently settled estate had by reason of say the State 's Reorganisation, fell both within the territory of the Madras and the Andhra States, with the result that the taking over under the Abolition Act could be operative only in regard to that portion within the State of Madras. Could it then be contended that the portion of the estate within the State of Madras did not fall within the definition of an estate and so could not be taken over by notification under section 1(4) of the Act. Indeed, the answer of the learned Counsel for the appellants to such a question was that it could be taken over but for the reason that in such a case the portions outside the State territory could not be an " estate" within the Madras Estates Land Act at all and that in consequence the inter relation between the unit constituting the estate under the Estates Land Act and the concept of an "estate" under the Abolition Act was not disrupted. But this, however, hardly suffices as a complete answer, for even after a portion of the "estate" becoming situated in a State other than Madras the State might still be governed by the "Madras Estates Land Act", though applied as the law of tile new State. What is relevant in the illustration is that along with the concept of the unit con stituting the "estate" being taken over, there is also underlying it, another principle, viz., that it is sufficient if the entirety of the estate over which the State Legislature has competence is taken over. In such a taking over the difficulty suggested by learned Counsel in working out the scheme of the Act, would not arise because the portion taken over will constitute the estate and the compensation for that unit will be worked out on the basis laid down in section 24 and those following. The other portions of the estate which are beyond the territorial operation of the enactment would continue to remain unaffected, so that the State 70 550 Government could not be in a position to take them over. We accordingly, consider that the first notification dated August 15, 1950, apart from its being binding and not open to challenge in these proceedings by the appellants, is valid and effective in law to vest the portion to which it related in the State Government. We then have Regulation IV of 1951 which brought the other portion of the estate to which the Abolition Act did not originally extend within the operation of that enactment. If, after this change in the law, the Government did not take over the rest of the estate, it would be open to the objection that the State Government had artificially split up the estate into two parts and had taken over or rather retained in its possession one part, and that notwithstanding that the Act posited the unit constituting an estate being taken over, had departed from that principle. The impugned notification therefore far from being invalid, was necessary to be issued in order to satisfy the very principle which learned Counsel for the appellants submits as the one underlying the scheme of the Abolition Act. We therefore hold that the challenge to the validity of the impugned notification dated January 14, 1953, should be repelled. We have thus reached the same conclusion as the learned Judges of the High Court, though by a different line of reasoning. The appeals fail and are dismissed with cost one set. Appeals dismissed.

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.

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.

Defendant No. 1 was the Sthanee of Kavalappara estate which was an impartible estate governed by Marumakkathayam law. The plaintiffs claimed maintenance based on a family custom entitling the members to maintenance out of the entire income of the Sthanam. Past maintenance was claimed as also future maintenance from the date of the suit. Defendant No. 1 denied that the plaintiffs had any right based on custom as claimed by them; according to him from older times two kalams of the Sthanam had been set apart for their maintenance. He claimed that the Privy Council in suit No. 46 of 1934 had declared him absolute owner of the Sthanam properties but despite that, out of generosity only he had been paying to the junior members of the Swaroopam Rs. 17.000/ annually. The trial court granted maintenance to the plaintiffs for the period claimed at the rate of Rs. 250/ per mensem for each of the plaintiffs. Defendant No. 1 appealed to the High Court and the plaintiffs filed cross objections as the rate of maintenance allowed to them was lower than they had claimed. The High Court partly allowed the appeal negativing the plaintiffs ' claim for arrears of maintenance, and dismissed the cross objections of the plaintiffs. Both the parties appealed to this Court. The questions that fell for consideration were: (i) whether the right to maintenance as claimed by the plaintiffs was based on custom; (ii) whether the High Court was right in disallowing the claim of the plaintiffs to arrears of maintenance; (iii) whether the rate of maintenance as ordered by the trial court and ' confirmed by the High Court was justified. HELD: (i) An alleged custom, in order to be valid, must be proved by testimony to have been obeyed from consciousness of its obligatory character. A mere convention between family members or an arrangement by mutual consent for peace and convenience cannot be recognised as custom. In order that a custom should acquire the character of law the custom must be accompanied by the intellectual element, the opinion necessitatis. the recognition that there is authority behind it. [45 B C; D E] Rarnrao vs Yeshwantrao, I.L.R. , applied. In the present case the evidence sufficiently proved a custom in Kavalappara estate by which the Sthanee was legally obliged to give maintenance to junior members of the family. It was possible that the practice of paying maintenance to junior members originated as an act of generosity of the previous Sthanee. But it had continued without interruption for such a length of time that it had acquired the character of a legal right. [42] Kochuni vs Kuttanunnt, A.I.R. 1948 (P.C.) 47, 52, explained. 37 (ii) Although it had been alleged by the plaintiffs that they had not been paid any maintenance, the High Court had ' found that maintenance had been given to the plaintiffs ' mother with whom the plaintiffs had been living. The High Court 's refusal to grant to the plaintiffs arrears of maintenance before the date of the, suit must, in the circumstances, be upheld. [46 C] (iii) The High Court in fixing the amount of maintenance for each of the plaintiffs at Rs. 250./ per month had taken into account all the relevant factors. It had further directed that it was open to the parties after two years to move the trial court for variation in the rate of maintenance fixed on the ground of altered circumstances of the Estate. There was no reason for interfering with the judgment of the High Court in this matter. [46. G]

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.

The appellant company in Civil Appeal No.642 of 1974 was doing the business as ship chandler. It imported the goods from foreign countries and after receipt of the goods, kept them in a bonded warehouse under the relevant provisions of the . The ware house was under dual control of the Customs Department and the importers like the appellant so that it could not be opened by one without the presence of the other. On receipt of order from the Captain of the Ship requiring ship stores, the appellant supplied the goods on board after observing certain formalities imposed by the , the rules and regulations made thereunder. For the Assessment year 1964 65 a question arose whether Rs.3,51,438.08 which was the taxable turnover, determined by the assessing authority, was subject to the tax under the Tamil Nadu General Sales Tax Act, 1959. The appellant objected to the assessment on such turnover on the ground that the goods relating to such turnover were imported from abroad, stored in the customs ware house and were not brought to the country across the customs frontiers. The Sales Tax Officer assessed the turnover and the Appellate Assistant Commissioner confirmed the assessment on the basis that sales were effected 237 within the State of Tamil Nadu. However, the Tribunal, in appeal by the appellant, held that the sales did not take place within the State of Tamil Nadu since the import of goods in question had not become complete and as the goods were sold to the foreign going vessels, the sales in question could not be deemed to be within the State of Madras. On revision, the High Court relying on the decision of the Supreme Court in the State of Madras vs Davar and Co., 24 STC 481, held that the sales took place in the State of Madras and assessment to tax was valid. The facts in all the other connected appeals, writ petitions and the special leave petitions being identical, a similar question of law also arose in them. In appeal to the Supreme Court by the appellant/petitioners, it was contended on their behalf: (i) that the property in the goods, did not pass in the territory of Tamil Nadu and the sales were therefore, in the course of export because goods were to be on board the ship and were exported outside the country and could not be consumed before they reached the high seas; (ii) that the sale of goods took place in the territorial water of India and not within the State of Tamil Nadu; (iii) that the legislative competence of the State of Tamil Nadu as regards levying of the sales tax was confined to the territories of the State as specified in item No. 7 of the First Schedule to the Constitution. That legislative competence did not extend to any territorial waters simply because these were abutting the land mass of the State of Tamil Nadu; (iv) that the Sovereignty over the limits of territorial waters extended and always extended to the entire territorial waters of India. The limits and extent of the said territorial waters had not been altered by any notification of the Central Government. The territorial waters extended to a distance of 12 nautical miles from the sea shore adjacent to the land mass of the State; and (v) that there was no definition at all of "Customs Frontiers" in the . The definition inserted in the Act in section 2(ab) by the Amending Act 103 of 1976 must be read as declaratory or explanatory and no questions of prospective operations would arise. On the other hand, it was argued on behalf of the respondent State that the appellant 's godowns and bonded ware houses were within the State of Tamil Nadu. When orders were received, the appellants/petitioners supplied the required quantity from the stock either in the godown or in the bonded ware houses and delivered these or set these apart in fulfilment of the orders placed by the concerned officer of the foreign bond ship and that at that time only appropriation was made towards the contract of sale and such appropriation took place within the State of Tamil Nadu. It was, therefore, on such ap 238 propriation that the sale took place; and (ii) that it was not correct to say that the transactions of sale were completed only when the masters of the vessels acknowledged delivery of the goods on board the vessels. Dismissing the Appeals and the Petitions, ^ Held: 1.1 The concept of export in Article 286(1)(b) of the Constitution postulates the existence of two termini as those between which the goods were intended to move or between which they were intended to be transported and not a mere movement of goods out of the country without any intention of their being landed in specie in some foreign port. Goods might be consumed within the meaning of the Explanation to Article 286(1) (a) either by destruction or by way of use depending on the nature of the goods. Therefore, the sales were not sales "in the course of export" within the meaning of Article 286(1) (b) and were not exempt under that Article but they fell within the Explanation to Article 286(1) (a). [247C D; G] 1.2 Mere movement of goods out of the country following a sale would not render the sale, one in the course of export within Article 286(1) (b) of the Constitution of India. Before a sale can be said to be a sale in the course of export, the existence of two termini between which the goods are intended to move or to be transported is necessary. [249F G] In the instant case the appropriation of goods took place in the State of Tamil Nadu when the goods were segregated in the bonded ware house to be delivered to the foreign going vessels. Therefore, under sub section (2), sub cl. (a) and (b) of section 4 of the , the sale of goods in question shall be deemed to have taken place inside the State because the contract of sale of ascertained goods was made within the territory of Tamil Nadu and furthermore in case of unascertained goods approrpriation had taken palce in that State in terms of cl. (b) of sub section (2) of section 4 of the . There is no question of sale taking place in course of export or import under section 5. From that point of view, the amendment introduced by Act 103 of 1976 by incorporating in cl. (ab) of section 2 of the does not affect the position. It was not a case of export as there was no destination for the goods to a foreign country. The sale was for the purpose of consumption on board the ship. It was not as if only on delivery on board, the vessel that the sale took place. The mere fact that shipping bill was prepared for sending it for custom formalities which were designed to effectively control smuggling activities could not 239 determine the nature of the transaction for the purpose of sales tax nor does the circumstances that delivery was to the captain on board the ship within the territorial waters make it a sale outside the State of Tamil Nadu.[252E H; 247A B] Burmah Shell Oil Storage and Distributing Co. of India Ltd., and Anr. vs Commercial Tax Officer & Ors., 11 STC 764; Deputy Commissioner of Commercial Taxes vs Caltex India Ltd., Madras, 13 STC 163; The State of Madras vs Davar & Co., 24 STC 481; Fairmacs Trading Co. vs The State of Tamil Nadu, 41 STC 157; Tata Iron and Steel Co. Ltd. Bombay vs S.R. Sarkar & Ors., 11 STC 655; and The State of Kerala & Ors. vs The Cochin Coal Co., Ltd., 12 STC 1 relied upon. Fairmacs Trading Co. vs The State of Tamil Nadu, 41 STC 157 and Fairmacs Trading Co. vs The State of Andhra Pradesh, 36 STC 260 approved. Customs barrier does not set a terminal limit to the territory of the State for sales tax purposes. Sale, therefore, beyond the customs barrier is still a sale within the State. The amendment introduced in s.2 by the Act 103 of 1976 does not affect the position because the custom station is within the State of Tamil Nadu. [253A B] 4. In the facts and circumstances of the case, it is not necessary to express any opinion on the arguments whether introduction of cl.(ab) of s.2 of the by Act 103 of 1976 is prospective or not. [253C D] Deputy Commissioner of Commercial Taxes vs Caltx India Ltd., Madras, 13 STC 163; Tata Iron and Steel Co. Ltd. Bombay vs S.R. Sarkar & Ors., 11 STC 655; Furby vs Hoey [1947] 1 All England Report 236; The Central Bank of India vs Their Workmen ; ; and Chanan Singh & Anr. vs Jai Kaur; , at 804 807 referred to. Kent Justices Ex Parte LYE & Ors., [1967] 1 All England Report 560 at 564 65 held inapplicable.

The appellant who was residing at House No. 546 situated at Dhantoli area at Nagpur was evicted from the said prem ises on the ground of bona fide requirement of its landlord. Therefore he became an "evicted person" within the meaning of section 2(2) of the Central Province and Berar Letting of House and Rent Control Order, 1949. Being a Government employee he applied to the House Allotment Officer that he may be allotted House No. 406/1 under clause 24A of the said Control Order simultaneously indicating that he was an "evicted person" also. The premises came to his occupation on the orders passed by the House Allotment Officer in 1960. The appellant retired from service on 1.5.1978. On 10.9.1979 one Vijay Mude, one of the respondents, moved an application before the House Allotment Officer for vacating the appel lant from the premises on the ground that he has retired. The said application under clause 25 of the Rent Control Order was contested by the appellant that it was not ap plicable as he was an "evicted person" under clause 2(2) of the Control Order. Having lust before all courts, the appel lant came by way of special leave. Allowing the appeal, the Court, HELD: 1.1 On the scheme of the different clauses it was only when a person was granted an allotment as a government servant, then and then only can clause 25 be invoked for his eviction. In other cases, the clause 13 will be relevant. The summary procedure of clause 25 could only be available in case of recovery of possession given to a person as a government servant on his retirement. Indeed the provisions are peculiar. Even if a government servant goes on earned leave or is transferred even then he becomes disentitled to remain in possession of the premises in question and would be liable to be evicted by virtue of clause 25 of the said Rent Control Order. Being drastic in nature, therefore, one who seeks allotee 's eviction has to establish that the allotment to the person whose eviction is sought was made in the capacity 403 contemplated under clause 25. Clauses 23, 24A and 25 of the Rent Control Order deal with three independent categories of persons and the summary procedure on proper construction of clause 25 was applicable only where allotment is given to a tenant as a tenant. Clause 25 would not operate, if a Gov ernment servant happened to be an evictee and an allotment is made in that capacity. In the instant case, on a con struction of the various documents and the evidence adduced in this appeal under these proceedings, it is clear that allotment was given to the appellant as an evictee who happened to be at the relevant time a government servant. Therefore, on his retirement from the government service, he did not cease to be an evictee and did not come within the mischief of clause 25 of the said Control Order. [408G 409 A 409H 410B] 1.2 Even if allotment is made to a person who is both an evictee as well as a government servant then if one of the grounds of the order namely, that he was a government serv ant ceases to exist on retirement, the other reason operates i.e. he was an evictee and still continues to be an evictee then the allotment would continue. In this case even if it be held that it cannot be conclusively determined that the order of allotment was made in favour of the appellant only on the ground that the appellant was an evictee but it was made also on the ground that the appellant was a government servant, and after his retirement the other ground namely the allottee still being an evictee remained valid it can be sustained. [410 C, F] State of Maharashtra & Anr. B.K. Takkamore & Ors., ; , applied.

Dismissing the appeal by special leave, the Court ^ HELD: (1) A bare reading of sections 68A to contained in Chapter IV A, which was added to the Act by Central Act 100 of 1956, makes it clear that they provide for nationalisation of road transport services. However, such nationalisation, in view of the provisions of section 68C, is not nationalisation for nationalisation 's sake but nationalisation with a view to the achievement of certain specified objects. Unless a scheme conforms to the two conditions referred to in section 68C, namely, (a) the S.T.U. is competent to prepare and publish a scheme under section 68C only after it has formed the opinion that it is necessary in the public interest that road transport services covered by the scheme should be run and operated by itself, whether to the exclusion, complete or partial, of other persons or otherwise; and (b) the necessity for the road transport services to be run and operated by the S.T.U. must flow, in its opinion, from the purpose of providing ar. efficient, adequate, economical and properly coordinated road transport service, it will fall outside the ambit of section 68C. [1012A, 1013H, 1014A C] Section 68D gives the right to certain persons, associations and authorities to file objections to a scheme published under section 68C within the specified period of thirty days of its publication and also lays down the procedure for the hearing and disposal of such objections by the State Government. The procedure provided in section 68D is designed to (a) enable parties affected by the scheme to point out flaws therein; (b) enable the State Government to find out which flaws, if any, the scheme suffers from, and (c) enable the State Government either to remedy the flaws by a suitable modification of the scheme or to rescind the scheme altogether. Under section 68(2), every objector or his representatives and the representatives of the S.T.U. have to be given an opportunity of being heard in the matter and it is only thereafter that the State Government has to exercise its power to approve or modify the scheme, which power includes the power not to approve the scheme at all and to drop it in its entirety. [1014D F] Malik Ram vs State of Rajasthan, ; at 981, followed. 1006 Section 68D does not specify the type of objections envisaged by it but then their purpose being to point out flaws in the scheme they must be confined to the matters covered by section 68C. If the opinion forming the basis of the scheme does not suffer from errors such as may render it abnoxious to the dictates of section 68C and on the other hand, conforms to the conditions laid down in that section, the scheme would be unobjectionable. Objections may thus be made to show: (a) that it is not necessary in the public interest for the concerned road transport services to be operated by the S.T.U.; (b) that it is not necessary in the public interest that such services be taken over by the S.T.U. to the complete exclusion (if such exclusion is envisaged by the scheme) of other persons and that their partial exclusion would suffice; (c) that it is not necessary in the public interest that such services shall be taken over by the S.T.U. even to the partial exclusion of others; (d) that the scheme is not calculated to provide an efficient road transport service; (e) that the scheme would not provide an adequate road transport service; (f) that the road transport service envisaged by the scheme would not be economical; or (g) that the road transport service provided for by the scheme would suffer from lack of proper coordination. [1014H, 1015A E] Objections falling outside these seven categories would not be admissible inasmuch as they would not have anything to do with any of the conditions which a scheme must satisfy in order to be covered by section 68C. [1015E F] 2. In order to find out if the scheme fulfils the requirements of section 68C a comparison of the attributes of the two services, such as quality, capacity, financial implications and coordination would certainly fall within the scope of the inquiry to be conducted by the State Government, although a comparison would not be permissible for the sole purpose of finding out whether the private operators should be given a preference over the State Transport Undertaking. If such a comparison as held to be permissible is ruled out, the result would be to shut out from the enquiry held by the State Government under section 68D most of the material relevant for determination of the validity of the scheme a result contemplated neither by section 68D nor by the decision of this Court in ; [1018A C] Objections calculated to show that a scheme does not provide a road transport service which can be considered efficient, adequate. economical o} properly coordinated would certainly lie; and the adjectives "efficient", "adequate", "economical" and "properly coordinated are not absolute but more or less comparative terms. [1017E F1]. Capital Multi Purpose Co operative Society, Bhopal and others vs The State of Madhya Pradesh and others; , , explained. Objections of a "personal" nature may be of two types. (i) those challenging the scheme on the ground that it harms an existing operator and, (ii) those which indicate the details of the services afforded by an existing operator for the purpose of showing that service envisaged by the scheme would in comparison not be efficient, adequate, etc. Objections of the second type would be admissible, while those of the first type, would be wholly irrelevant to the determination of the validity of the scheme in view of the postulates of section 68C and would, therefore, be inadmissible. [1018E G] Gullapalli Nageswara Rao and others vs Andhra Pradesh State Road Transport Corporation and Another, [1959] Suppl. 1 S.C.R. 319, distinguished. 1007 4. It is true that the State Government was acting in the discharge of its quasi judicial functions and it could devise its own procedure (in the absence of express provisions to the contrary) so that its functions could be effectively discharged. Further, when the statute gives the power to the State Government to afford to the objectors a reasonable opportunity of being heard and to take evidence, oral as well as documentary, in support of their objections, the power to send letters of request to witnesses to appear and give evidence or to produce documents is inherent in the situation and needs no statutory sanction, although the power to enforce their attendance or compel them to produce documents is lacking on account of absence of conferment thereof by a statute. [1021D F] Nehru Motor Transport Co operative Society Limited vs The State of Rajasthan, [1964] 1 S.C.R. 220, followed. Sub rule (5) of rule 5 of Uttar Pradesh State Transport Services (Development) Rules, 1958 serves a salutary purpose and, that is, that the inquiring authority may shut out all evidence which is sought to be brought on the record but which is either irrelevant or otherwise inadmissible. [1022G H, 1023A] 6. In the instant case, no right of the appellants can be said to be infringed when their applications for summoning witnesses and production of documents were rejected by the State Government and the rejection is not illegal. [1022E F] Capital Multi Purpose Co operative Society, Bhopal and Others vs The State of Madhya Pradesh and Others, ; ; applied.

These appeals arose out of suits for ejectment instituted in the Revenue Court by the respondent Zamindar against the appellants under section 180 of the U. P. Tenancy Act, 1939 (U. P. I7 Of 1939). His case was that the lands in suit were his sir lands and the appellants trespassed on the same on the basis of a wrong order of the Criminal Court. The case of the appellants was that they were admitted as hereditary tenants by the respondents. There was a previous proceeding under section I45 of the Code of Criminal Procedure between the parties and the Magistrate found possession with the appellants and directed that they should remain in possession till evicted by due process of law. The Revenue Court which tried the suits found that the lands were sir lands of the respondent and the appellants were not hereditary tenants and did not take possession with the consent of the respondent. The Additional Commissioner on appeal and the Board of Revenue on second appeal, agreed with these findings of the Revenue Court and dismissed the appeals. The Board negatived the plea of the appellants that the suits were not triable by the Revenue Court. Section 180 of the U. P. Tenancy Act, 1939, provides that a person taking or retaining possession of land without the consent of the person entitled to admit him into occupation and otherwise than in accordance with the provisions of law for the time being in force will be liable to enactment thereunder. In view of the finding of the courts below that the appellants had not taken possession with the consent of the respondent, the question was whether they did so by virtue Of section I45 of the Code of Criminal Procedure. Held, that the provisions of section I45 of the Code of Criminal Procedure authorised the Magistrate only to declare the actual possession of a party on a specified date and not to give possession or permit any party to take possession. He had no power under that section to decide questions of title or right to possession which a civil court alone could decide. The words " taking " and " retaining " were used by section 180 of the Act in an independent and exclusive sense. The former referred to taking of possession illegally and the latter to taking of possession legally but subsequent retaining of it illegally. Consequently, the appellants whose possession had been found 799 to be illegal from the very inception, could not be said to retain possession legally so as to be outside the scope of the section. It was also clear that possession in accordance with law, such as was contemplated by section 180 of the Act, meant possession with lawful title. The provisional Order of the Magistrate with regard to possession, irrespective of lawful rights of the parties, could not, therefore, enable the appellants to resist the suit under. section 180 of the Act. Dinomoni Chowdhrani vs Barojo Mohini Chowdhyani, (1901) L.R. 29 I.A. 24, referred to.

l Appeals Nos. 280 and 281 of 1960. Appeal from the judgment and order dated April 20, 1956, of the Madras High Court, in T. R. C. Nos. 101 and 102 of 1956. B. Ganapathy Iyer and G. Gopalakrishnan, for the appellant. M. M. Ismail and T. M. Sen, for the respondent. 572 D. V. Sastri and T. M. Sen, for Intervener No. 1. Naunit Lal, for Intervener No. 2. section M. Sikri, Advocate General, Punjab and D. Gupta, for Intervener No. 3. section M. Sikri, Advocate General, Punjab, N. section Bindra and D. Gupta, for Intervener No. 4. G. C. Kasliwal, Advocate General, Rajasthan, section K. Kapur and D. Gupta, for Intervener No. 5. 1961. April 28. The Judgment of the Court was delivered by section K. DAS, J. These are two appeals on certificates granted by the High Court of Madras and consolidated by its orders dated March 22, 1957. They are from the judgment and orders of the said High Court dated April 20, 1956 and July 30, 1956 in two Tax Revision Cases, by which the High Court dismissed two petitions filed by the appellants under section 12 B of the Madras General Sales Tax Act (Madras Act IX of 1939), hereinafter called the principal Act, in the fol lowing circumstances. Messrs. George Oakes (Private) Limited, appellants herein, are dealers in Ford motor cars, spare parts and accessories. For the two years 1951 52 and 1952 53 the appellants submitted their returns under the relevant provisions of the principal Act and claimed exemption from tax with regard to certain amount realised on transactions of sales which the appellants contended were inter State sales and hence exempt from tax under article 286 of the Constitution as it stood at the relevant time. The Deputy Commercial Tax Officer, Madras, not only rejected the claim of exemption, but added to the turnover certain amounts which the appellants had collected by way of tax. The amounts so added for 1951 52 were (a) Rs. 8,000 to the net turnover assessable at 3 pies per rupee, and (b) Rs. 4,30,000 to the turnover assessable at 9 pies per rupee. For 1952 53 the amounts so added were (a) Rs. 30,132 odd and (b) Rs. 2,92,257 odd res pectively. Aggrieved by the orders of the Deputy Commercial 573 Tax Officer, the appellants preferred two appeals to the Special Commercial Tax Officer, Appeals, Madras City. These appeals were dismissed. The matter was then taken to the Sales Tax Appellate Tribunal by means of two appeals. By this time the Madras Legislature had passed the Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954, being Madras Act No. XVII of 1954. This Act we shall refer to as the impugned Act in this judgment, because its constitutional validity is now the only question for decision in these appeals. The Tribunal negatived the claim of the appellants arising out of the contention that some of the sale transactions in the relevant years were in effect interState sales and therefore exempt from tax; the tribunal declined to go into the second question of the constitutional validity of the impugned Act. We may state here, though nothing now turns upon this, that the Tribunal held that when sales tax was included in the turnover, it was proper to tax the amounts so included at the minimum rate only, viz., 3 pies in the rupee under section 3(1) of the principal Act. Thereafter the appellants filed two revision petitions to the High Court under section 12 B of the principal Act. These were dismissed in limine. By the orders dated April 20, 1956 the High Court held that the contention as to some of the transactions being inter State sales was concluded by one of its earlier decisions, which came before us in Ashok Leyland Ltd. vs The State of Madras, Civil Appeal No. 446 of 1958. In that appeal we delivered judgment on March 28, 1961 and held that the Sales Tax Laws (Validation) Act, 1956 applied and it was unnecessary to consider the true nature of the transactions which the appellants contended were inter State sales. Learned Counsel for the appellants has conceded before us that decision governs the present appeals, and the first question no longer survives. As to the second question, the High Court by oversight did not deal with it in its orders dated April 20, 1956. When the matter was brought to the notice of 73 574 the High Court, it said in its orders dated July 30, 1956 that the second question was also concluded by its decision in Sri Sundararajan and Co., Ltd. vs The State of Madras( ') where the validity of the impugned Act was upheld. When we heard these appeals along with Ashok Leyland Ltd. vs The State of Madras, Civil Appeal No. 446 of 1958, we expressed the view that there was some divergence of opinion in the High Courts on the second question and the substantial point for consideration before us was whether the impugned Act was validly made under entry 54 of the State List in the Seventh Schedule to the Constitution: thus the question raised was one of legislative competence and affected all the States. The State of Madras was already a party respondent to these appeals. Accordingly, we directed the issue of notices to the Advocates General of all other States also. In pursuance of the said notices the Advocates General of Andhra Pradesh, Assam, West Bengal, Gujarat, Maharashtra, Punjab and Rajasthan have appeared before us. They have unanimously supported the State of Madras in its submission that the impugned Act is valid; some of them have added supplementary arguments in support of that submission. For convenience and brevity we shall refer in this judgment to the main arguments as representing two differing points of view; firstly, there is the argument on behalf of the appellants that the several provisions of the principal Act as also section 2 of the impugned Act make a distinction between the sale price of goods sold and the amount collected by way of tax and in view of that distinction made, What the impugned Act seeks to impose is a 'tax on Sales tax ' a subject which does not come within the ambit of entry 54 of List II which at the relevant time read as "Taxes on the sale or purchase of goods other than newspapers. " On the other side, the argument is that what the impugned Act seeks to do is to enlarge the scope of the definition of 'turnover ' so as to include the amount collected by way of tax in the turnover by a deeming (1) (1956) 7 S.T.C. 105. 575 provision, and this the State Legislature was competent to enact under entry 54 of the State List. These are the main arguments on two sides; but there are several subsidiary points in support of the main argument on each side, and it would be an over simplification to ignore these altogether. We shall, therefore, consider them also when dealing with the main argument on each side. We shall first refer to the relevant provisions of the principal Act and of the impugned Act, in so far as they bear on the points debated before us. Under section 3 of the principal Act which is the charging section, every dealer is liable to pay, subject to the provisions of the Act, for each year a tax on his total turnover for that year calculated at a particular percentage of such turnover. What is 'turnover ' is defined in section 2(i). The definition substantially states " 'turnover ' means the aggregate amount for which goods are either bought or sold by a dealer whether for cash or for deferred payment or other valuable consideration. . 'Sale ' is defined in section 2(h) and means (we are reading so much of the definition only as is material for our purpose) "every transfer of property in goods by one person to another in the course of trade or business for cash or deferred payment or other valuable consideration. " It is worthy of note here that the tax imposed by the principal Act is a tax on total turnover, and turnover means the aggregate amount for which goods are either bought or sold by a dealer. Therefore, one of the questions which fall for consideration is whether the State Legislature went beyond its legislative competence in enacting by the impugned Act that the amounts collected by the dealer by way of tax shall be deemed to have formed part of his turnover. This brings us to section 8B of the principal Act, which provides in sub section (1) that no person who is not a registered dealer shall collect any amount by way of tax; nor shall a registered dealer make any such collection except in accordance with such conditions and restrictions, if any, as may be prescribed; sub section (2) provides inter alia that every person who has collected or collects by way of tax any amounts shall pay 576 over the same to the State Government. Section 15 provides for penalties for a, contravention of some of the provisions of the principal Act including the provisions of section 8B. In The Deputy Commissioner of Commercial Taxes, Coimbatore Division vs M. Krighnaswami Mudaliar & Sons (1) the Madras High Court held that the amount collected by a registered dealer from the consumer by way of sales tax and paid over to Government should not be included in the turnover of the registered dealer as part of the sale price of the goods sold and it was not liable to be taxed again. This decision was given on January 7, 1954. In July 1954 was enacted the impugned Act sections 2 and 3 whereof need only be set out here. "section 2. Sales Tax Collections by dealers to be deemed part of turnover. In the case of sales made by a dealer before the 1st April 1954, amounts collected by him by way of tax under the Madras General Sales Tax Act, 1939 (Madras Act IX of 1939) (hereinafter referred to as the principal Act), shall be deemed to have formed part of his turnover. Validation of certain assessment and collections. (1) All assessments, and collections made, all orders passed, all actions taken by any officer in the exercise or purported exercise of jurisdiction or power conferred by the principal Act, and all judgments, decrees or orders pronounced by any Tribunal or Court in the exercise of its jurisdiction or powers with respect to matters in the principal Act, on the basis that amounts collected by a dealer by way of tax under the principal Act before the 1st April 1954, formed part of the turnover of the dealer are hereby declared to have been validly made, passed, taken or pronounced, as the case may be; and any finding recorded by any officer, Tribunal or Court to a contrary effect and any order, judgment or decree in so far as such order, judgment or decree embodied or is based on any such finding and does not relate merely to the costs of the proceeding which result in the judgment, decree or order shall be void and of no effect: (2) [1954] 5 S.T.C. 88. 577 Provided that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this Act had not been passed. (2) Nothing in sub section (1) shall be construed as authorising any officer, in assessing any dealer in s the exercise or purported exercise of jurisdiction or powers conferred by the principal Act, to include in the turnover of the dealer amounts collected by him after the 1st April 1954 by way of tax under the principal Act. " The validity of the impugned Act was then questioned in the Madras High Court and in Sri Sundararajan and Co., Ltd. vs The State of Madras (1) it was held that the impugned Act was valid. The High Court pointed out that the earlier decision in Krishnaswami Mudaliar 's case (2) was not that the State Legislature could not make the amounts collected by a registered dealer by way of tax under section 8B part of the assessable turnover, but that the principal Act as it stood at the relevant time did not make such amounts part of the assessable turnover. It held that in pith and substance the impugned Act validated the assessments already made before April 1, 1954 and that even where the registered dealer collected any amount by way of tax under the authority of section 8B, the payment by the purchaser was on the occasion of the sale by the dealer and vis a vis the latter it was in reality part of the price the purchaser paid the seller for purchasing the goods. The same view was also expressed by the Patna High Court in Ashoka Marketing Company Ltd. vs The State of Bihar (3) with regard to the Bihar Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1958. The question before us is whether the aforesaid view is correct. The relevant legislative entry, as we have said earlier, is entry 54 of List II "Taxes on the sale or purchase of goods other than newspapers. " A similar entry (No. 48) in List 11 of Schedule VII to the Government of India Act, 1935 read as "Taxes on the (1) [1956] 7 S.T.C. 105. (2) [1954] 5 S.T.C. 88. (3) [1959] 10 S.T.C. 110, 578 sale of goods." The true scope and effect of that entry was considered by this Court in the State of Madras vs Gannon Dunkerley and Co. (Madras) Ltd. (1) and on a review of several decisions bearing on the subject it held that the expression "sale of goods" was a term of well recognised legal import in the general law relating to sale of goods and in the, legislative practice relating to that topic and must be interpreted as having the same meaning as in the ; in other words, it was held that sales contemplated by entry 48 of the Government of India Act, 1935 were transactions in which title to the goods passed from the seller to the buyer, and in The Sales Tax Officer, Pilibhit vs Messrs. Budh Prakash Jai Prakash (2) it was held that a mere executory agreement was not a sale within the meaning of that entry. We think that the same meaning must be given to entry 54 of List 11 of the Seventh Schedule to the Constitution. The question before us is that giving that meaning to the entry, is the impugned Act a valid piece of legislation by a competent Legislature? Now, learned Counsel for the appellants has not raised before us the extreme contention that in no case could the State Legislature validly make a law which would include the amount collected by way of tax as part of the turnover of the dealer. He has submitted that it is unnecessary for him in this case to press into service any such wide proposition. His argument is that the principal Act by sections 8B and 15 and the impugned Act by section 2 thereof having made a distinction between what he calls the sale price and what is collected by way of tax by the dealer, the question of the validity of the impugned Act must be determined on the basis of that distinction and so determined, what the impugned Act does is to impose what learned Counsel calls "a tax on tax" and therefore not covered by the relevant legislative entry. His submission further is that what is collected by way of tax being distinct from sale price and therefore from turnover, it must be necessarily held that the amount collected by way of tax is not essentially (1) ; (2) ; 579 connected with the transaction of sale and therefore the imposition of "a tax on tax" has no necessary connexion with the transaction of sale as understood in the general law relating to sale of goods. We are unable to accept this argument as correct. First of all, we do not think that either the principal Act or the impugned Act proceeds,on any immutable distinction between sale price and tax such as learned Counsel for the appellants has suggested. The principal Act does not contain any separate definition of sale price. We have already referred to the definitions of 'sale ' and 'turnover '; those definitions do not show any such distinction. On the contrary, the expression 'turnover ' means the aggregate amount for which goods are bought or sold, whether for cash or for deferred payment or other valuable consideration, and when a sale attracts purchase tax and the tax is passed on to the consumer, what the buyer has to pay for the goods includes the tax as well and the aggregate amount so paid would fall within the definition of turnover. In Paprika Ltd. and Another vs Board of Trade (1) Lawrence, J. said "Whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands but it does not cease to be the price which the buyer has to pay even if the price is expressed as x plus purchase tax." The same view was again expressed in Love vs Norman Wright (Builders), Ltd. (2) when Goddard, L. J. said: "Where an article is taxed, whether by purchase tax, customs duty, or excise duty, the tax becomes part of the price which ordinarily the buyer will have to pay. The price of an ounce of tobacco is what it is because of the rate of tax, but on a sale there is only one consideration though made up of cost plus profit plus tax. So, if a seller offers goods for sale, it is for him to quote a price which includes the tax if he desires to pass it on to the buyer. If the buyer agrees to the price, it is not for him to consider how it is made up or whether the seller has included tax or not. " (1) (2) 580 We think that these observations are apposite even in the context of the provisions of the Acts we are considering now, and there is nothing in those provisions which would indicate that when the dealer Collects any amount by way of tax, that cannot be part of the sale price. So far as the purchaser is concerned, he pays for the goods what the seller demands, viz., 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 turnover. But, argues learned Counsel for the appellants, section 8 B of the principal Act and Turnover and Assessment Rules made under section 19 show that under the scheme of the principal Act a distinction is drawn between the amount collected by way of tax and the amount of purchase price. It is indeed true that in section 8 B the amount collected by way of tax is separa tely mentioned, and while sub section (1) thereof is merely enabling in the sense that a registered dealer may pass on the tax, sub section (2) imposes an obligation on the registered dealer to pay over the amount of tax collected by him to Government. The position under the Turnover and Assessment Rules is correctly summarised in the following extract from the judgment in Krishnaswamy Mudaliar 's case (1): "Rule 4 provides that the gross turnover of a dealer for the purposes of the rules is the amount for which goods are sold by the dealer. Provision is made in rule 5 for certain deductions, and the mode or manner in which the tax to be levied has to be arrived at. The object of these rules is to assess. , the net turnover on which the tax is to be levied under the charging section. It is therefore clear that under the charging section, tax is to be paid on the turnover which is assessed according to the rules. Rule 11 requires that every dealer should submit a return under rule 6 every year to the assessing authority in Form A in which he has to show the actual gross and net turnover for the preceding (1) [1954] 5 S.T.C. 88. 581 year and the amounts by way of tax or taxes actually collected during that year. In Form A columns 1 to 10 relate to the gross turnover and the deductions to be made from the gross turnover; column 10 requires the net turnover liable to tax to be shown. In column 11 the amount actually collected by way of tax or taxes under section 8 B has to be shown. " The question however still remains do the aforesaid provisions show such a distinction under the scheme of the two Acts that the amount collected by way of tax cannot be part of the turnover of the dealer and if the impugned Act makes it a part of the turnover by a deeming provision, it must be struck down as being outside the legislative competence of the State Legislature? It is necessary to emphasise here that no question of legislative competence arose in Krishnaswamy Mudaliar 's case( ') the decision being based on a construction of section 8 B and the Turnover and Assessment Rules only. We do not think that the distinction drawn in Krishnaswamy Mudaliar 's case( ') whether right or wrong on a question of construction only, is material to the question of legislative competence. In The Tata Iron & Steel Co., Ltd. vs The State of Bihar (2) this Court dealt with a provision in the Bihar Sales Tax Act, 1947 similar to section 8 B of the principal Act. Das, C. J., delivering the majority opinion said: "The circumstance that the 1947 Act, after the amendment, permitted the seller who was a registered dealer to collect the sales tax as a tax from the purchaser does not do away with the primary liability of the seller to pay the sales tax. This is further made clear by the fact that the registered dealer need not, if he so pleases or chooses, collect the tax from the purchaser and sometimes by reason of competition with other registered dealers he may find it profitable to sell his goods and to retain his old customers even at the sacrifice of the sales tax. This also makes it clear that the sales tax need not (1) [1954] 5 S.T.C. 88. (2) ; 74 582 be passed on to the purchasers and this fact does not alter the real nature of the tax which, by the express provisions of the law, is cast upon the seller. The buyer is under no liability to pay sales tax in addition to the agreed sale price unless the contract specifically provides otherwise. See Love, vs Norman Wright (Builders), Ltd. L. R. These observations show that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance from the point of view of legislative competence. The matter is not in any way different under the Turnover and Assessment Rules. It is true that in column 11 of Form A the amount collected by way of tax under section 8 B has to be shown; that does not, however, mean that an immutable distinction such as will go to the root of legislative competence has been drawn and must be always maintained. It appears to us that the true effect of section 8 B and the Turnover and Assessment Rules is that (a) a registered dealer is enabled to pass on the tax, (b) an unregistered dealer cannot do so, and (c) the amount collected by way of tax is to be shown separately, for it has to be paid over to Government. This does not mean that it is incompetent to the legislature enacting legislation pursuant to entry 54 in List 11 by suitable provision to make the tax paid by the purchaser to the dealer together with the sale price in consideration of the goods sold, a part of the turnover of the dealer; nor does it mean that in law the tax as imposed by Government is a tax on the buyer making the dealer a mere collecting agency so that the tax must always remain outside the sale price. There is another aspect from which the question may be considered. We shall assume that under the ,scheme of the principal Act a distinction is drawn between the amount collected by way tax and the sale price other than the tax. Is such a distinction continued and maintained by the impugned Act? Learned Counsel for the appellants has referred us to 583 section 2 of the impugned Act where the expression "collected by him by way of tax under the Madras General Sales Tax Act, 1939" occurs. It is argued that the aforesaid expression in the impugned Act has to be read with the provisions of the principal Act and so read, B. 2 maintains and continues the distinction made under the principal Act. Again, we are unable to agree. The expression "collected by him by way of tax etc." is merely descriptive of the "amounts" so collected; the essential and operative part of section 2 says that the amounts so collected shall be deemed to have formed part of the turnover of the dealer. Therefore, in express terms section 2 states that the tax shall be deemed to have formed part of the turnover and obliterates the distinction, if any, between 'tax ' and 'turnover ' for the limited period during which the impugned Act operates. To hold that the distinction is maintained and continued under the impugned Act is to go against the express terms of section 2. This aspect of the question was adverted to in The Government of Andhra vs East India Commercial Co. Ltd. (1) where the Andhra High Court had occasion to consider the question from a somewhat different point of view, namely, an amendment made by the Andhra Pradesh Legislature in the definition of the expression 'turnover ' in the principal Act. Section 2 of the amending Act substituted the following definition of 'turn over ': Turnover means the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods . including any sums charged by the dealer for anything done in respect of the goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description, name or object thereof. " Section 4 of the amending Act repeated sections 8 B and 8 C of the principal Act. Dealing with the effect of these amendments, the High Court of Andhra Pradesh said, (1) [1957] 8 S.T.C. 114. 584 "The ultimate economic incidence of the sales tax is on the consumer or the last purchaser and whatever he pays for the goods is paid only as price, that is to say, as consideration for the purchase. The statutory liability, however, for payment of sales tax is laid on the dealer on his total 'turnover ' whether or not he realises the tax from the purchasers. Generally speaking, the price charged by the dealer would be inclusive of sales tax, for, it is to his interest to pass the burden of the tax to the purchaser. So far as the dealer is concerned, the payment of a sum covering the tax made by a purebaser on the occasion of sale, is really part of the price which the purchasers pay for the goods. " Later, it referred with approval to the decision in Sri Sundararajan and Co., Ltd. vs The State of Madras (1). In this latter decision the validity of the impugned Act was questioned and dealing with section 2 of the impugned Act, the High Court said: "Section 2 only enacted that such amount shall be deemed ' to be part of the turnover and for a limited period. It may not be necessary to set out authorities for the well settled principle of what the effect is of the use of the expression 'deemed ' in a statute. Was the legislature competent to enact section 2 including the deeming provision, is the real question. If the validity of section 2 of the impugned Act is established there should be little difficulty in upholding the validity of section 3, which gave effect to the legal fiction enacted by section 2. Obviously, it is not the name the legislature accords to a payment by a purchaser to a seller, who is a dealer as defined by the Act, that determines the question of the legislative competence. No doubt section 8B called the payment as amount (collected) by way of tax. It is equally true that the statutory liability to pay the sales tax is laid on the dealer. What is taxable is not each transaction of sale but the total turnover of the dealer, computed in accordance with the provisions of the (1) (1956) 7 S.T.C. 105. 585 Act and the Rules. But it is well recognised that whatever be the form of the statutory provisions, the ultimate economic incidence of the tax is on the consumer, the purchaser. It was that well settled principle that was re stated in Bengal Immunity Co. Ltd. vs State, of Bihar (1). Even if the registered dealer collects the amount by way of tax under the authority of section 8B of the Act, the payment is by the purchaser on the occasion of the sale by the dealer. Vis a vis the dealer it is in reality part of the price the purchaser has to pay the seller for purchasing the goods. A tax on such a payment, in our opinion, is well within the ambit of Entry 54 of List 11, Schedule VII, read with Article 246(3) of the Constitution. " We are of the view that the aforesaid observations correctly give the true effect of section 2 of the impugned Act, and section 3 of the impugned Act is merely consequential. Mr. Sikri appearing on behalf of. the States of Maharashtra and Punjab has drawn our attention to certain American decisions which show that treating tax as part of the sale price in cases where the tax is passed on to the buyer, is well recognised and is not unknown to law (see Lash 's Products Company vs United States, 73 L. Edn. 251; Pure Oil Company vs State Of Alabama, 148 American Law Reports 260). We consider it unnecessary to examine these decisions, because the validity of the impugned Act must be determined on its own terms in the context of the provisions of the principal Act. Reading the impugned Act in the light of the provisions of the principal Act, it seems clear to us that the impugned Act cannot be held to be bad on the ground of legislative incompetence. Under the definition of turnover the aggregate amount for which goods are bought or sold is taxable. This aggregate amount includes the tax as part of the price paid by the buyer. The amount goes into the common till of the dealer till he pays the tax. It is money which he keeps using for his business till he pays it over to Government. Indeed, (1) 586 he may turn it over again and again till he finally hands it to Government. There is thus nothing anomalous in the law treating it as part of the amount on which tax must be paid by him. This conception of a turnover is not new. It is found in England and America and there is no reason to think that when the legislatures in India defined 'turnover ' to include tax also, they were striking out into something quite unknown and unheard of before. The only question which has been raised in these appeals is regarding the validity of the impugned Act. That question having been decided against the appellants, the appeals fail and are dismissed with costs. One hearing fee. Appeals dismissed.

Certain amounts collected by the appellants as sales tax were included in their turnover by the sales tax authorities. They contested the constitutional validity of the Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954, on the ground inter alia that the Sate Legislature went beyond its legislative competence under entry 54 of List If of the Constitution in enacting by the impugned Act that the amounts collected by the dealer by way of tax shall be deemed to have formed part of his turnover. Held, that entry 54 of List II of the Seventh Schedule of the Constitution is similar to entry 48 of List 11 of Sch. Vil of the Government of India Act, 1935 sales under which have been held to be transactions passing title to the Goods from the seller to the buyer and that a mere executory agreement was not a sale within the meaning of that entry. The same meaning must be given to entry 54. 571 State of Madras vs Gannon Dunkerly & Co., Ltd., ; and Sales Tax Officer vs M/s. Budh Prakash jai Prakash; , , referred to. Under sections 2(i) and 2(h) of the Madras General Sales Tax Act, 1939, the expression "turnover" means the aggregate amount for which goods are sold either for cash or deferred payment or other Valuable consideration, and when a sale attracts purchase tax which is passed on to the consumer what the buyer has to pay includes the tax and the aggregate amount to be paid would fall under the definition of turnover. When the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entitle considerations. Papreka Ltd. vs Board of Trade, , Love vs Norman Wright (Builders) Ltd., , followed. Asoka Marketing Co. Ltd. vs The State of Bihar, [1959] IO S.T.C. 110 and Tata Iron and Steel Co. vs The State of Bihar, ; , referred to. Although section 8B of the Madras General Sales Tax Act, 1939 and the Turnover and Assessment Rules separately mentioned the amounts collected as tax for the purpose of paying such amounts to the Government, no immutable distinction was drawn between the sale price and the tax nor was any such distinction maintained under section 2 of the impugned Act. Assuming that such a distinction did exist the Legislature was competent to enact under entry 54 in List II of the Constitution that the tax shall be deemed to have formed part of the turnover and obliterate the distinction for the limited period during which the impugned Act operated. The impugned Act was therefore valid. The Deputy Commissioner of Commercial Taxes vs M. Kyishna swami Mudaliar, [1954] 5 S.T.C. 88, held not applicable. Sri Sundararajan & Co. vs The State of Madras, [1956] 7 S.T.C. 105, approved. The Government of Andhya vs East India Commercial Co., Ltd., [1957] 8 S.T.C. 114 and Bengal Immunity Co., Ltd. vs State Of Bihar,[1955] 2 S.C.R. 603, referred to.

The petitioner, a merchant, carrying on business in "bullion and specie" and gold and silver ornaments was a registered 'dealer ' under the Orissa Sales Tax Act, 1947. The Government purporting to exercise its authority under section 6 of the said Act issued a notification on July 1, 1949 exempting certain articles from the operation of the charging section of that Act. Under the notification gold ornaments were ordered to be exempted from sales tax when the manufacturer selling them charges separately for the value of gold and the cost of manufacture. The petitioner filed his returns before the Sales tax Officer and claimed exemption of sales tax under the said notification. Up to June 1952, the claim for exemption was upheld. Subsequently, however, these assessments were reopened under section 12(7) of the Act and it was claimed that the deductions made on certain sale transactions of gold ornaments were not justified and the petitioner had escaped assessment. The petitioner pleaded that lie was entitled to exemption, because he belonged to the class of manufacturers to which the notification referred. The Sales tax Officer disallowed the petitioner 's contention. The petitioner then challenged the said decision by preferring appeals, but the said appeals were also dismissed. Pending these appeals, similar assessments made in respect of other dealers including the petitioner were challenged by writ petitions before the High Court. The High Court upheld the petitioner 's case and issued writs directing the Sales tax Officer to allow the petitioners ' claim for exemption. After this judgement was pronounced, the impugned Act was passed by the legislature on August 1, 1961 and was published on September 18, 1961, containing one operative provision in section 2. It provided that notwithstanding anything contained in any judgement, decree or order of any court, the word 'manufacturer ' occuring against item 33 in the schedule to the notification of the Government dated July 28, 1947 as amended by another notification of the 1st July, 1949 shall mean and shall always be deemed to have meant a person who by his own labour works up materials into suitable forms and a person who owns or runs a manufactory for the purpose of business with respect to the articles manufactured therein. The validity of this section was challenged in the present writ petition. 186 It was urged (i) that since the exemption was granted by the State Government by virtue of the Powers conferred on it by section 6, it was not open to the legislature to take away that exemption retrospectively; (ii) that the provision in section 2 of the impugned Act was discriminatory and as such contravened the equality before the law guaranteed by article 14 and (iii) that the retrospective operation of the impugned section should be struck down as unconstitutional, because it imposes an unreasonable restriction on the petitioner 's fundamental right under article 19 (1) (g) Held: (i) What the legislature had purported to do by section 2 of the impugned Act, was to make the intention of the notification clear. And, if the State Government was given the power either to grant or withdraw the exemption, that could not possibly affect the legislature 's competence to make any provision in that behalf either prospectively or retrospectively. (ii) The notification as interpreted by section 2 of the impugned Act benefits the artisans who produce ornaments themselves and who run manufactories. That is why the main object of granting exemption can be said to be achieved by holding that ,manufacturer ' means either a manufacturer properly so called or one who engages artisans to manufacture gold ornaments. In the present case the petitioners were not directly concerned with the production of ornaments, and admittedly, they did not produce the said ornaments themselves. Therefore, the persons who get the benefit of the exemption notification as a result of the provisions of section 2 of the impugned Act cannot be said to belong to the same class as that of the petitioners. The two categories are distinct and there is no sameness or similarity between them, and if that is so, the main argument on the basis of article 14 does not subsist. (ii) It would be difficult to accept the argument that because the retrospective operation may operate harshly in some cases, therefore, the legislation itself is invalid. In the circumstances of the present case it would not be possible to hold that by making the provision of section 2 of the impugned Act retrospective the legislature has imposed a restriction on the petitioner 's fundamental rights under article 19(1) (g) which is not reasonable and is not in the interest of the general public.

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 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]

The respondent bought new cars and chassis manufactured in Bombay and brought them by road. In the course of their journey from Bombay to Madras the vehicles passed through the territory of the State of Mysore for over 400 miles. The Road Transport Authorities of the State of Mysore demanded payment of road tax on the vehicles under section 3(2) of the Mysore Motor Vehicles Taxation Act, 1957 which provides that taxes are leviable on motor vehicles belonging to or in the possession or control of persons not ordinarily resident in the State of Mysore and kept in the State for periods shorter than a quarter but not exceeding thirty days. Allowing the respondent 's writ petition the High Court held that vehicles which passed through the State were not "kept" in the State within the meaning of section 3(2) of the Act and so were not taxable under it. In appeal to this court it was contended on behalf of the appellant that the vehicles passing through the territory of the State over a distance of 400 miles with halts on the way could be said to have been "kept" for use on loads in the State within the meaning of the section and were therefore taxable. Dismissing the appeal, ^ HELD : A vehicle in transit through the State of Mysore or even making necessary halt for short intervals during transit cannot be said to be a vehicle kept for use on roads in the State of Mysore. [6 B C] The word "kept", which has not been defined in the Act, has to be interpreted in its ordinary popular sense consistent with the context. In association with the use of the vehicle the word "kept" has an element of stationeries which is something different from a state of transit or a course of journey through the State. A mere state of running through or even halting of the vehicle in the course of the journey through the State for its outside destination, will not be sufficient to constitute "keeping" of that vehicle in the State within the meaning of section 3(2). [4 C E & 5 E] Dudley vs Holland , Biggs vs Mitchell ; referred to.

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.

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.

The first respondent was the owner of some buildings within the appellant Municipality. The appellant was governed by the Madras District Municipalities Act,, 1920, till April 1, 1965, when the Mysore Municipalities Act, 1964 came into force and thereafter by the Mysore Act. For the year 1966 67 the appellant issued notices of demand for payment of property tax under the Madras Act. The tax was higher than under the Mysore Act. The first respondent challenged the levy by a writ petition, and the appellant justified the levy under section 382(1) of the Mysore Act and its provisos. The High Court quashed the demand notices. In appeal to this Court, HELD : Under the second and third provisos to section 382(1) of the Mysore Act if a property tax has been imposed by the Madras Act, even though the rate of such tax is higher than that under the Mysore Act, the higher tax could be collected. The provisions of Madras Act namely sections 78, 81, 82, 124 and r. 8 of 'Schedule IV of the Act, show that the municipal tax is an annual tax leviable for a particular official year and the assessment list on the basis of which the tax is assessed is for such official year. Though, ordinarily, the Municipality would have to prepare a fresh assessment list every year, r. 8 of Schedule IV of the Madras Act which, by virtue of section 124 has to be read as part of Chapter VI of the Act dealing with Taxation and Finance permits the Municipal Council to continue the same assessment list for the next 4 succeeding years and to revise it once every 5 years. But, in order to enable the Municipal Council to levy and collect a tax, under section 78 it has to pass a resolution determining to levy a tax, the rate at which such tax has to be levied as also the date from which it shall be levied. In the present case, no such resolution was passed by the Municipal Council. Therefore, by merely preparing the assessment registers under the Madras Act on April 1, 1964, which will have currency for a period of 5 years till March 31, 1969, it cannot be said that a tax or that a tax at a higher rate had been imposed. No such tax having been imposed under the Madras Act, the provisos to section 382(1) of the Mysore Act do not apply and the demands for payment of the property tax were not justified. [757 E H; 758 D H; 759 A] Municipal Corporation vs Hiralal, ; , followed.

minal Appeal No. 341 of 1960. Appeal by special leave from the judgment and order dated July 20, 1960, of the Bombay High Court in Criminal Appeals Nos. 488, 426 of 1960 with Review Application. 555 and 641 of 1960. G. C. Mathur, for the appellant. B.R.L. Iyengar and D. Gupta, for the respondent. May 4. The Judgment of Kapur, Subba Rao and Shah, JJ. was delivered by Kapur, J., and the judgment of Hidayatullah and Dayal JJ., was delivered by Dayal, J. KAPUR, J. This is an appeal against the judgment and order of the High Court of Bombay imposing the sentence of death in appeal by the State against the order passed by the Sessions Judge, Dhulia. The facts of the appeal are these: The appellant, in about 1950, married Sindhubai the daughter of Chandrabhagabai. Sindhubai who is the deceased had read up to the 7th Standard. The appellant and Sindhubai were residing in a one room tenement in a house belonging to one Tavar pleader in which there 'are in all 12 to 15 tenements. The tenement of the appellant was not very far from ' that of the appellant 's cousin Shantabai who was residing with her husband Pandu Genda and the house of 777 Cliandrabhagabai was about a furlong away from that of the appellant. The relations between the appellant and the deceased were normal for sometime but about two years before the occurrence differences had arisen and there were frequent quarrels between them. A child of the marriage was born about 1 1/2 years before the occurrence. The deceased was a frequent visitor to her mother 's house to which the appellant took objection. The appellant bad stopped giving her the necessities of life including foodgrains etc. About a week before Diwali the appellant gave her a beating. The deceased used to have her meals with her mother and the appellant with his cousin Shantabai and the daughter of the marriage Urmila stayed with the mother of the deceased during the day time. The occurrence was on the Bhaubij day i.e. November 2, 1959 between 1.30 and 3.30 in the afternoon. After having her meals at her mother 's house the deceased returned to her husband 's house and went to sleep in the afternoon. It is stated that while she was sleeping the appellant gave her a beating and after sprinkling Kerosene oil on her clothes, set fire to them. The deceased with her clothes burning went in the direction of the house of Shantabai but fell down in front of it and was almost naked when some body covered her body with a dhoti. Chandrabhagabai received information, it is stated, from her nice Suman about this fact and Chandrabhagabai ran to the spot, and found her body burnt. The cousin, Shantabai and her husband Pandu Genda also arrived and on enquiry by Chandrabhagabai the deceased told her that her husband had set fire to her clothes after sprinkling kerosene oil on her. By this time a police constable informed the Police Station which was nearby and an ambulance car was sent and the deceased was taken to the Civil Hospital, Dhulia at about 4 15 P.m. She was examined by Dr. Javeri who 778 treated her and on his enquiry the deceased told him that her husband had set fire to her clothes after sprinkling kerosene oil on her clothes. Dr. Javeri then informed the police and advised that a dying declaration be recorded. At about 5 30 P.m. a Magistrate Mr. Mhatre recorded the statement of the deceased but she died at 8 15 P. M. on the same day in the hospital. The defence of the appellant was that of alibi, in that he was at work on the house of Mulchand Rajmal at Nehru Nagar which was being built and that he was entirely innocent of the offence. The trial court found that it was the appellant who had set fire to the clothes of the deceased after sprinkling kerosene oil; that the appellant had the intention of causing such bodily injury to the deceased as was likely to cause death and it therefore convicted the appellant of an offence under section 304 Part 1 and sentenced him to three years ' rigorous imprisonment and a fine of Rs. 100/ . The learned judge accepted the testimony of the mother Chandrabhagabai as to the dying declaration and also that of Dr. Javeri and finally he accepted the dying declaration recorded by the Magistrate which was in the form of questions and answers. In all her dying declarations the deceased had accused the appellant of setting fire to her clothes and thus causing her severe bums. The State took an appeal to the High Court which convicted the appellant of an offence under section 302, Indian Penal Code and sentenced him to death. Against that judgment and order the appellant applied for certificate to appeal to this Court under article 134 (1) (a) but the certificate was refused and this Court gave special leave under article 136 of the Constitution. The first question for decision is whether the appellant had a right of appeal to this Court under article 134 (1) (a) and the decision of that must depend 779 upon the construction to be put on the language used in that Article the relevant portion of which is as follows: 134 (1) ""An appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India if the High Court. (a) has on appeal reversed an order of acquittal of an accused person and sentenced him to death. " If the High Court reverses an order of acquittal of an accused person and sentences him to death an appeal shall lie as of right to this Court under the Article. The argument raised on behalf of the appellant was that as the appellant was acquitted of the offence of section 302 and was convicted under section 304 Part 1 it was a case of reversing an order of acquittal. The argument on behalf of the State was that the word acquittal meant complete acquittal. The decision of this must depend upon the construction of the word "acquittal". If a person is acquitted of the offence charged and is convicted of a lesser offence, as in the present case, can it be said that he was acquitted and the High Court had on appeal reversed the order of acquittal. " In our opinion the word "acquittal ? does not mean that the trial must have ended in a complete acquittal of the charge but acquittal of the offence charged and conviction for a minor offence (than that for which the accused was tried) is included in the word ", 'acquittal". This view has the support of a judgment of the judicial Committee of the Privy Council in Kishan Singh vs The King Bmperor (1). In that case an accused person was tried by the Sessions Judge under section 302 of the Indian Penal Code on a charge of murder but was convicted under section 304 for culpable homicide not amounting to murder, the Court having power to do that under section 238 (2) of the Criminal Procedure Code. He was sentenced to (1) (1928) L.R. 55 I.A. 390. 780 five years ' rigorous imprisonment. No acquittal of the charge under section 302 was recorded. There was no appeal to the High Court by the then local Government but, it applied for revision under section 439 on the grounds that the appellant should have been convicted of murder and the sentence was inadequate. The High Court convicted the appellant of murder and sentenced him to death. On appeal to the Privy Council it was held that the finding of the trial court was to be regarded as an acquittal on the charge of murder and that under section 439 (4) Criminal Procedure Code the word "acquittal" did not mean complete acquittal. At page 397 Sir Lancelot Sanderson observed: "Their Lordships, however, do think it necessary to shy that if the learned Judges of the High Court of Madras intended to hold that the prohibition in section 439 sub section 4 refers ' only to a case where the trial has ended in a complete acquittal of the accused in respect of all charges or offences, and not to case such as the present, where the accused has been acquitted of the charge of murder, but convicted of the minor offence of culpable homicide not amounting to murder, ' their Lordships are unable to agree with that part of their decision. The words of the sub sec tion are clear and there can be no doubt as to their meaning. There is no justification for the qualification which the learned Judges in the cited case attached. to the sub section. " We are in respectful agreement with the interpretation put on the word "acquittal" by the Judicial Committee of the Privy Council and the word "acquittal" therefore does not mean that the trial must have ended in a complete acquittal but would also include the case where an accused has been acquitted of the charge of murder and has been convicted of a lesser offence. In that view of the matter the appellant was entitled, to a certificate 781 under article 134 (1) (a) as a matter of right and this appeal must be treated as if it is under that provision of the Constitution. The facts of this appeal have been set out above. In support of the prosecution the evidence mainly, if not solely, consists of the dying declarations. The first dying declaration was made to the mother Chandrabhagabai as soon as she came to the place where the deceased was lying and in answer to her question "as to who had done it," the reply was that "it was done by her husband., also that the husband had set fire to her clothes. " In cross examination she stated that at the time when this statement was made by the deceased Shantabai and her husband Pandu Gonda were present. A suggestion was made to her that the deceased implicated the appellant at the instance of Chandrabhagabai but she repudiated this suggestion and both the trial court and the. High Court have accepted the correctness of this dying declaration and also that it was not prompted by the mother Cbandrabhagabai. Beyond a mere suggestion in the cross examination there is no material to support the contention of prompting by the mother. A similar statement accusing the appellant of setting fire to her was made by the deceased to the Doctor (Dr. Javeri) who asked the deceased as to how she got the burns and her reply was that her husband had sprinkled kerosene oil on her and bad applied a match stick to her clothes. This statement was also accepted by the High Court and we find no reason to differ from that conclusion. The third dying declaration was made in the presence of and was recorded by Mr. Mhatre, a Magistrate at about 5 30 P.M. in the presence of Dr. Javeri who certified that the deceased was in a fit state of mind to make the statement. The Magistrate asked her certain questions which are set out in detail and he took down the answers and his evidence is that the deceased understood the questions and replied to them. He 782 made a record of the questions and answers but that record was not signed by her nor her thumb impression taken on it because her hands were badly burnt. This examination took about an hour. This dying declaration was held by the trial Court to have been made without the help or prompting 'of anybody and according to Chandrabhagabai she was not present at the time. The learned Trial Judge held that the dying declaration was "freely given without the influence of anybody. It was not made under influence of any personal feelings. " The High Court Also accepted the correctness of this dying declaration and there is no evidence on the record which would in any way detract from the finding of the trial Court or of the High Court,.in regard to the correctness or the propriety of this dying declaration. The argument raised before us was two fold: (1) that the appellant was not present at the place of occurrence at all and (2) that it was a case of suicide. There are no cogent grounds which would lead to the, conclusion that the deceased wanted to commit suicide nor have any circumstances been shower to us which would lead to any such conclusion. Even though it may be true that the relations between the husband and the wife, were strained so much so that the husband had almost refused to maintain the deceased and was not prepared to give her even food there is no indication that the deceased was so worked up as to have lost her self control so as to commit suicide. Certain other circumstances as to the absence of any kerosene oil on the clothes of the appellant or the absence of kerosene oil on the bedding have been pointed out but in the circumstances of this case those circumstances are of no significance. Both the trial court and the High Court have found that the deceased had died as a result, of burns 'caused by the fire set to her clothes by the appellant who had sprinkled kerosene oil on her, 783 This is supported by the dying declarations against the correctness of which no cogent reasons have been given or suggested and a conviction based on such evidence has been held to be sustainable by this Court in khushal Rao vs The State of Bombay (2). The plea of alibi was sought to be supported by the evidence of Gangaram Sitaram a co worker of the appellant but his testimony was rejected by both the trial Court and the High Court and having gone through it we find no reason to differ from that opinion. In the result this appeal fails and is dismissed. RAGHUBAR DAYAL, J. We agree that the appellant had a right of appeal under article 134 (1) (a) of the Constitution, but regret our inability to agree with the view that the conviction of the appellant under s.302, I. P. C., be maintained. In appeals preferred under article 134 (1) (a) of the Constitution , we are to assess afresh the value of the evidence of record, and do not follow the practice of this Court in appeals, by special leave, under article 136 of the Constitution, that the concurrent findings of the Courts below be not interfered with, ordinarily, but be interfered with only when special circumstances exist. We are of opinion that it is not safe in this case to base the conviction of the appellant solely on the dying declarations made by the deceased, even though in law a conviction can lawfully be based on dying declaration alone if the Court feels fully satisfied about its giving a true version of the incident. The first dying declaration was made to her mother, by the deceased. It was certainly natural for the mother to question her daughter as to how she got burnt. But that does not really mean that (2) ; 784 the daughter did state all what the mother deposes. Two points arise there, and they are : (a) Did the mother speak the truth ? and (b) Did the daughter ,speak the truth ? The mother, P.W. 1, admittedly, has not good relations with her son in law. She made discrepant statements. The Sessions Judge has remarked, in paragraph 12 of his judgment, that there were lot of discrepancies in the statements of this witness. Reference may be made to her stating at one place that when she used to request the accused not to beat the daughter, the result was adverse and denying the correctness of this statement when questioned in cross examination. According to her, only she was sent away from the room when the Magistrate recorded the dying declaration of the deceased in the hospitals indicating that the accused and some others continued to remain in the room. This statement is not borne out by Dr. Javeri or by the Magistrate. She expressed ignorance about the deceased making a statement. to the police. The Sub Inspector and Dr. Javeri deposed about her making such a statement. She could not have been ignorant about it. She deposes that the accused came to the spot where Sindhubai, the deceased, lay injured, about five minutes after her arrival, She knew that he had set fire to Sindhubai 's clothes after pouring kerosene oil on her. She did not question him about it. She did not reprimand him. She did not abuse him. She did nothing which could have, been normally expected of a mother knowing that the, accused bad burnt her daughter The explanation that she was sorrow strike, lacks the ring of truth. Grief striken she must be, but that would not have made her mute. According to her Sindbubai made this dying declaration when Shantabai, cousin of the accused, and her husband Pandu Genda were present. These witnesses have not been examined by the prosecution to corroborate her statement. 785 The other dying declaration relied on by the Courts below was made by the deceased to Dr. Javeri, on his casually questioning the deceased as to how she got injured. It may be natural, but we have our doubts, for the Doctor to put such questions to the patient in agony, which had no real connection with his duties as a medical man, and such questioning cannot be said to have any comforting effect on the patient. Such questioning can be nothing but idle curiosity which a Doctor in that position should not evince. Any way, it would not be a good precedent to rely on such a statement to the Doctor in such circumstances, when the Doctor makes no record about it, even if it be not required to be noted in the medico legal register. We would consider it safe not to rely upon such a statement made to a casual question by the Doctor, the details of which statement are not clear. The dying declaration made to the police has been ignored, the Sessions Judge considering that it was not made at all, or not made at the time the Sub Inspector deposed to have got the dying declaration from the deceased. No significance attaches to this dying declaration in any case when it was recorded after the deceased had made a formal dying declaration to the Magistrate. The dying declaration to the Magistrate has certainly been recorded with care. The relevant statements made in this dying declaration are the following "I am suffering injuries of burning. My husband is my enemy. My husband has burnt me. Kerosene was poured over my body and a match stick was lighted. I was sleeping in the house. He, i.e., my husband, beat me and then burnt me. I shouted, but nobody came. He was ill treating me. He was harassing me and was causing me starvation for 786 the last 8 days. I had complained about it to Pandu Genda and Shanta Pandu. I did not send any information to my parents about the starvation. The High Court has stated several times in its judgment that Sindhubai was sleeping when the accused set fire to her clothes. The panchnama Exhibit No. 14. prepared about the room, does not show that the bedding had any oil sprinkled over it or that it got burnt. Quite a number of other clothes were burnt, which need not have caught fire. Absence of oil on the bedding is not consistent with her statement that she was sleeping in the house when the thing happened. This statement is also not consistent with the next statement made by her that her husband beat her and then burnt her. Her statement that nobody came on her shouts because the door of the house was shut, does not fit in with her statement to the police in Exhibit 19 that the accused ran away on his work after he had set fire. The probability too is that if the accused had set fire to her clothes he would run away just after setting fire as he could expect that the victim would shout and that her shouts would attract neighbours and persons passing by. Even if the door was latched for some time while the accused remained there because he did go subsequently, that does not explain the non arrival of any person. The persons could have come and could have knocked at the door. It is really remarkable that in this case not a single witness of the neighbourbood has come to depose anything in support of the prosecution case. There is no evidence at all from an outside source. The investigation seemed to have revealed nothing whatever. , There is nothing inthe case to lend assurance to any circumstance. Surely, this cannot be the result of the accused 'sinfluence on the witnesses or the result of a general inclination not to speak the truth in the interests of justice, even when the 787 accused committed the dastardly act of setting fire to his own wife. Their absence from the witness box may be due to their not standing what they knew to be untrue or did not consider to be true. It is always a difficult question to speculate why deceased accused a certain person of committing the crime, or why a witness deposes against a person with whom he has no ostensible cause of enmity or why the police. in the discharge of its public duty should influence persons to make inaccurate statements, when Courts come to the conclusion that the accusation or the evidence does not appear to be true and that there are reasons to suppose that the. police had influenced the testimony of witnesses. Anyway, the same difficulty occurs in the present case. But it is clear that the relations between the wife and the husband were strained to such an extent that, according to the prosecution, the accused not only starved her, but also set fire to her clothes with the intention to cause her death. Such a conduct of the husband cannot be on account of ordinary domestic unpleasantness, but must be the result of a very acute feeling of desperation and a desire not to live any more with his wife. If such were the relations which one is inclined to infer from what the prosecution wants the Court to believe, it should not be difficult to imagine that the wife 's motives in charging the husband falsely may be equally strong. She too must have been fed up with the misery of her life and might have committed suicide and put an end to her life, but when, as often happens, she was questioned, she accused her husband of setting fire to her clothes, not with a view to save herself from a conviction for attempting to commit suicide, but either on account of her feeling that her husband was responsible for all her troubles and that her disparate action was also due to the same cause or out of malice. Any way, a dying declaration is not to be believed merely because no possible reason 788 can be given for accusing the accused falsely. It, can only be believed if there are no grounds for doubting it at all. Apart from the above considerations indicating that implicit reliance cannot be placed on the dying declaration, there are other circumstances which add to the feeling of uncertainty about the truth of the accusation made in the dying declaration. The panchnama of the room shows that a few shirts and old trousers and pieces of two sarees lay near the southern wall of the room in a wet and half burnt condition There is no explanation why such clothes should have been burnt. There was no point in the accused pouring kerosene oil on these clothes even if they just lay huddled near the wall. If Sindhubai fell on the clothes lying there, that may burn some of them, but will not explain their getting wet. There is no suggestion that anybody had poured water over the 'burnt clothes in order to extinguish the fire, because none came there at all. In fact, Ranganath Sitaram, P.W. 6, one of the Panchs, states that the burnt clothes were also giving smell of rock oil. The panchnama further notes : "On the eastern wall, two feet height from the ground there is a black spot caused due to the burning of the clothes and the same is recent one. " There is no explanation why such a mark should be there. Sindhubai could not have stood opposite the wall and, even if she did, there should have been marks of burning along the length of her body beside the wall and not at a certain spot only. These two observations can be consistent only with somebody deliberately setting fire to the clothes and keeping some burning clothes beside the wall for a, little time, The appellant, or whoever 789 set fire to her clothes, would not have done this as he would have made a very quick exit after drenching Sindhubai with kerosene oil and setting fire to her clothes. Sindhubai does not make any statement about such a conductor the accused in her dying declaration. The only inference then possible is that she herself (lid all this, in accordance with her own inclinations. Why she did this, one cannot say. Sindhubai returned to her house with her daughter after taking her mid day meal at her mother 's house and sent back the daughter with Usha. This is according to the statement of her mother. She brought the child, when, according to her mother 's statement, she expected her husband to come to the house after taking his meal at his cousin 's place. The conduct is unusual, as, ordinarily, the child used to remain with her maternal grand mother during the day time, as for some reason the accused probably felt aversion to her. The conduct can 'be consistent with her intention to commit suicide. She brought the child to her place to fondle with her for the last time and then sent her back to her mother. Sindhubai 's running towards the house of Shantabai, her husband 's cousin, and not running towards her mother 's place, also appears to be unnatural. It may be that in such troubles moments one need not be absolutely logical, but it is expected to be instinctive that when in trouble one thinks of one 's relations who are expected to be sympathetic, and helpful, on the occasion. It is in the statement of her mother that the route to her house is different from the passage to the house of Shantabai. It may be that the accused did not go to the house as expected, and went away to his job from his cousin 's place. It was a day of festival. Sindhubai might have felt this conduct badly set fire to her clothes, and then run towards 790 Shantabai 's house where she might have expected her husband to be present. The time of the incident though said to be between 1 30 and 3 30 P.m., appears to have been near about 3 O ' clock. The mother states to have got information about that time. Tile police got information at about 3 45 P.m., and the ambulance took Sindhubai to the hospital at 4 15 P.M. The accused was not expected to be at his house at 3 P.m. The learned Judges of the High Court did not believe the defence evidence about the accused working at the house of Mulchand Rajmal from about 2 P.m. and to have gone to his house on receiving information from one Daga because Daga was. not examined, the Munim of the house owner was not examined and the register of workers was not produced. It is however the case for the prosecution that the accused used to go to work at 7 A.M., to return at 12 O 'clock and again go for work at 2 P.m., and then return at 6 P.m. Chandrabhaga, the mother of the deceased, deposes so. There is therefore no good reason 'to think that the accused did not go to his duty at 2 P.M., that day as deposed to by D.W. I. Sindhubai herself stated in her statement to the police that the accused, after setting her on fire, ran away to his work. If the time of the incident be calculated from the time the police was informed, i. e., from 3 45 P.m., the incident would have taken place some time between 3 and 3 30 P.m., and the accused would not have been at his house at that time. In fact, it appears to us that it is to avoid this difficulty that at Rome stage an attempt was made to time the incident at about 1 30 P.m. The incident could not have taken place before 2 P.m., as, in that case, information to the police would be very belated and in the normal course of events, it is not expected that Sindhubai would have tarried in the room for long or that the persons who must 791 have collected after her running towards Shantabai 's place and falling down there, Would not have taken steps to inform the police without any undue delay. The mother 's statement that Sindhubai used to tell her that if the ill treatment continued, she would sever her connection with the accused and would earn her own living would support the view that she had really got tried of her living with the accused and that this could have prompted her to attempt suicide. If Sindhubai was not actually asleep when the kerosene oil was poured on her, it does not stand to reason that she would not have made any attempt to run away and the possibility of the accused successfully setting fire to her clothes in the course of the struggle, would be remote, and even if he succeeded, it is a moot point whether he too would not have been singed, if not burnt. Those are the various considerations which make us feel doubtful about the truth of the dying declaration and take the view that the appellant 's conviction on the basis of the dying declaration should not be maintained. It appears from the High Court judgment that the case put before it was "sometime after 1.30 P.m., the accused latched the room from inside and while Sindhubai was sleeping he poured a large quantity of kerosene oil on her person. Her clothes became wet with that kerosene oil and before she could struggle and get up he searched for a match stick, lighted it and set Sindhu 's clothes on fire '. Such a case could not be made out from the dying declaration recorded by the Magistrate. Sindhubai had said at first she was sleeping when it happened, but, in answer to the very next question, she said that her husband beat her and then burnt her. If the burning followed the beating, there could be no question of throwing kerosene oil on 792 her while asleep. No reason for this conduct was stated. The, Magistrate who cleared the doubt full points failed to elicit why this deed was perpetrated. Further, the searching for a match box is very improbable thing. If the accused had decided to set fire to his wife, he would have got, a match box handy and if he did forget about it and had to search for it, that would give sufficient time to Sindhubai to make good her escape. The aversion of Sindhubai to tell the name of her husband could not have been on account of any tender feeling for her husband, but was the natural act of a Hindu married woman not to tell her husband 's name. This aversion to tell the name of her husband is no guarantee of the truth of her subsequent statement accusing her husband of the crime. We do not find any justification for the following observation of the High Court, when considering the defence evidence : "The accused has led evidence and his case is that he was not responsible for this murder at all. But in fact he was in the house when the incident took place. " The High Court had made the latter statement as a statement of fact, though there was no evidence to support it. Of course, on the basis of a dying declaration, the High Court had already held before discussing the defence evidence, that the accused was responsible for the murder of his wife. If the defence evidence is to be adjudged on the basis of the final finding of the Court, there is no use for defence evidence. It has to be taken into consideration before arriving at a final finding. The conduct of the accused in travelling in the same ambulance car and in remaining in the 793 hospital is in his favour and is against the prosecution. The accused stated in his examination that he paid the charges for the ambulance car. We would like to remark that the learned Judges who heard the appeal should not have heard it when they, at the, time of admitting it, felt so strongly about the accused being wrongly acquitted 'of the offence of murder that they asked the Government Pleader to look into the papers to find out whether it was a case where the Government would like to file an appeal against the acquittal, under section 302, I.P.C. Government did file an appeal against that acquittal. We do not know whether it was at the suggestion of the Government Pleader or not. But, in these circumstances, it would have beep better exercise of discretion if this appeal against the acquittal had not been heard by the same Bench which, in a way, suggested the filing of the Government appeal. In fact, to make such a suggestion, appears to be very abnormal. We are therefore of opinion that it is not satisfactorily proved that the appellant committed the murder of his wife by setting fire to her clothes. We would therefore allow the appeal. , set aside the order of the Court below and acquit the appellant of this offence. By COURT. In accordance with the opinion of the majority, this appeal fails and is dismissed.

The appellant was tried for an offence under section 302 Indian Penal Code for the murder of his wife. The evidence consisted mainly of the uncorroborated dying declaration of the wife. The Sessions judge accepted the evidence but convicted the appellant under section 304 Part 1 Indian Penal Code. On appeal by the State the High Court convicted the appellant of an offence under section 302 Indian Penal Code and sentenced him to death. The appellant contended that he had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution and that his conviction was bad. Held, that the appellant had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution. The conviction of the appellant under section 304 Part 1 of the Indian Penal Code by the Sessions judge amounted to an acquittal of the offence under section 302 and the High Court had reversed this order of acquittal and sentenced the appellant to death. The word "acquittal" in article 134 (1) (a) did not mean that the trial must have ended in a complete acquittal of the charge, but acquittal of the offence charged and conviction for a minor offence was included in the word "acquittal". Kishan Singh vs The King Emperor, (1928) L. R. 55, I.A. 390 relied on. Per Kapur, Subba Rao and Shah, JJ. The appellant was rightly convicted and sentenced by the High Court. it was legal to found a conviction on the uncorroborated dying declaration. The dying declarations had been accepted both by the Sessions judge and by the High Court and there was nothing in the evidence on the record which detracted from the findings of those courts in regard to the correctness or the propriety of this dying declaration. 776 Khushal Rao vs The State of Bombay, ; , referred to. Per Hidayatullah and Dayal, JJ. In an appeal under article 134 (1) (a) of ' the Constitution the Supreme Court assessed afresh the evidence on record and did not follow the practice in appeals by special Leave under article 136 that concurrent findings of the Courts below could be interfered with. only when special circumstances existed. In the circumstances of the present case it was not safe to rely on the dying declaration and the appellant was entitled to be acquitted.

The appellant (in Criminal Appeal No. 553/89) was prose cuted for selling adulterated supari with admixture of saccharin. He filed a petition in the Kerala High Court under section 482 of the Criminal Procedure Code for quash ing the criminal proceedings which was dismissed by a single judge. Against the decision of the single judge an appeal was filed in this Court. The appellant (In Criminal Appeal No. 283/91) was also prosecuted for selling adulterated Supari but was acquitted by the Chief Judicial Magistrate, Palakkad. On appeal the Kerala High Court set aside his acquittal and convicted him under section 16(1) (a) (i) of the Prevention of Food Adul teration Act and sentenced him to imprisonment for 6 months and a fine of Rs.1000. Against the order the Kerala High Court an appeal was filed in this Court. The appellant (In Criminal Appeal No. 284/91) was con victed ruder section 7(i) and (v) read with sections 16(i) (a) (ii) of the prevention of Food Adulteration Act for sale of adulterated supari with admixture of saccharin. He filed a Revision Petition in the Kerala High Court and a Single Judge dismissed the same. Against the order of the Single Judge an appeal was filed in this Court. The facts in the connected civil appeal (Nos. 3708 13/89) are that a batch of writ petitions was filed in the Andhra Pradesh High 391 Court for a declaration that the admixture of saccharin in supari was in accordance with Rule 44 of the Prevention of Food Adulteration Rules, 1955 and for restraining the re spondents from interfering with the business of sale of supari. A Division Bench of the High Court allowed the writ petitions. Against the decision of the Division Bench Union of India has filed appeals in this Court. Civil Appeal No. 1897/91 is directed against the order of the Division Bench of the Kerala High Court which held that the learned Single Judge should have declined jurisdic tion for the reason that the relief claimed was of a general character for a declaration that the admixture of saccharin in Roja Scented betelnut is not a blanket ban under Rule 47 read with Appendix 'B ' of the Prevention of Food Adultera tion Rules, 1955. Criminal Appeal No. 722/91 is directed against the order of the High Court of Kerala setting aside the order of acquittal passed by the trial court and remanding the matter to the trial court for fresh disposal according to law. The High Court did not agree with the submission that the arti cle of Supari was not adulterated as saccharin could be added to Supari. Accordingly it held that saccharin could not be added to supari and consequently remanded the matter to the trial court for fresh disposal according to law. In appeals to this court it was contended on behalf of the accused that on the construction of Rule 44(c) it per mits sale of Article of food which contains artificial sweetener with the standard as laid down in Appendix 'B ' to Prevention of Food Adulteration Rules, 1955. Disposing the appeals, this Court, FIELD: 1. Rule 44(g) of the Prevention of Food Adultera tion Rules, 1955 indicates that sale of any article of food which contains artificial sweetener is banned. The ban is lifted only if such artificial sweetener is permitted to be added to the article of food for which standards have been laid down in Appendix 'B ' to the Rules. Rule 47 in other form specifically bars saccharin or any other article of artificial sweetener to be added in any article of food, except where the addition of such artificial sweetener is permitted in accordance with the standards laid down in Appendix ' 'B '. Thus both Rules 44(g) and 47 constitute a total blanket ban on the addition of any artificial sweeten er including saccharin to any article of food 392 unless standards for that article of food is prescribed which authorises the use of such an artificial sweetener. [398 G, 399 A B] 2. The prescription of standard of saccharin or any artificial sweetener in Appendix 'B ' is really irrelevant. It is not the question of standard being prescribed for saccharin which is irrelevant what is relevant is the stand ard being prescribed in Appendix 'B ' of the article of food which is being sold and which standard permits user of saccharin. This is the real intention of the legislature while enacting Rule 44(g) of the Rules. [399 E F] 3. What one has to see is the article of food in which the artificial sweetener is sought to be added. The article which was being sold should contain a standard and the standard should permit artificial sweetener to be added. If the standards for that article of food is provided in Appen dix 'B ' to the Rules and such standards permit the addition of saccharin or any other artificial sweetener, then and then only saccharin or any other artificial sweetener could be added and not otherwise. [399 A C] 4. Admittedly no standard has been laid down for Pan Masala or Supari i.e. the article of food which was being sold. Therefore, the exception permitted by clause (g) of Rule 44 has no application and no relevance. [398 H, 399 A] Pyarali K. Tejani vs Mahadeo Ramchandra Dange and Ors., ; , explained and applied. State of Maharashtra vs Ranjitbhai Babubhai Suratwalla, ; Thummalapudi Venkata Gopala Rao vs The State. , M/s Wahab and Co. a proprie tary concern represented by its ' proprietor N.A. Wahab son of N. Mohammad Sheriff vs Food lnspector. Tiruchirappalli Municipal Corpn., Trichy. [1990] L.W. (Crl.) 437; Kailash vs The ,State of Rajasthan, ; State of Assam vs Ram Karani anti Ors., (1987) 3 All India Prevention of Food Adulleration Journal 153; Ujjain Municipal Corpn. , Ujjain vs Chetan Das, (1985) I F.A.C. 46, overruled. State by public prosecutor vs K.R. Balakrishnan, ; Food Inspector vs Usman. ; Krishna Chandra (In jail) vs State of Uttar pradesh, , approved.

The appellant was the legally married wife of the respondent. As he willfully neglected her, she filed an application before the Magistrate for maintenance under Section 125 of the Code of Criminal Procedure 1973. The Magistrate accepted the allegation of the appellant that she had been neglected by the respondent without reasonable or probable cause and awarded maintenance at Rs. 100/ per month for the appellant and the minor child. The High Court held that clause (b) of the explanation to Section 125(1) of the Code had no application to the facts of the case and that so far as the appellant was concerned, she was not entitled to any maintenance. It however affirmed the order of the Magistrate fixing Rs. 40/ per month as maintenance for her minor son. In the appeal, it was contended that the view taken by the High Court is legally erroneous and is based on wrong interpretation of clause (b) of the explanation to Section 125(1) of the Code. Accepting the Appeal, (Per Fazal Ali & Vardarajan, JJ.) ^ HELD: 1. In the instant case Section 127 does not apply at all because the respondent has not filed any application for cancellation of the maintenance on the grounds mentioned in Section 127(3)(b) of the 1973 Code but this case is squarely covered by Clause (b) of the Explanation to section 125(i) of that Code as a result of which the appellant in the eye of law continues to be the wife of the respondent, despite the decree for dissolution of marriage. [925 H, 926 A B] 2. It is clear that the 1898 Code by virtue of section 488 provided a summary remedy for awarding maintenance to neglected wives irrespective of the caste, creed, community or religion to which they belonged. Sections 488 and 489 were the corresponding provisions of the 1898 Code which were couched almost in the same language as sections 125 and 127 of the 1973 Code having some important additions that have been made under the 1973 Code. A provision like clause (b) of the Explanation to section 125(1) of the 1973 Code was conspicuously absent in section 488 of the old Code and has been added by the 1973 Code. [914 H, 915 A, D, 917 C D] 911 Nanak Chand vs Shri Chandra Kishore Agarwala & Ors. ; , Ram Singh vs State & Anr. AIR 1963 All. 355, Nalini Ranjan Chakravarty vs Smt. Kiran Rani Chakravarty AIR 1965 Pat. 442, Mahabir Agarwalla vs Gita Roy , referred to. The Mohomedan Law on the subject was that where a woman governed by the Mohomedan Law was awarded maintenance, the same would cease from the date of divorce given by the husband and the completion of the period of Iddat. [917 G H] In re Shekhanmian AIR 1930 Bombay 178, Syed Said vs Meera Bee , Mohamed Rahimullah & Anr. AIR 1947 Madras 416, Aahimunnissa & Ors. vs Mohd. Ismail AIR , Din Mohmmad 's V.I.L.R. 1883 226, referred to. Although a Mohomedan wife had a right to be awarded maintenance by the Magistrate under section 488 of the old Code, the said right ceased to exist if she was divorced by her husband and had observed the period of Iddat. This was the undoubted position of law under the 1898 Code as amended by the 1955 Amending Act. [920 A B] 5. Clause (b) has made a distinct departure from the earlier Code in that it has widened the definition of wife and, to some extent, over ruled the personal law of the parties so far as proceedings for maintenance under Section 125 are concerned. Under Clause (b), the wife continued to be a wife within the meaning of the provisions of the Code even though she has been divorced by her husband or has otherwise obtained a divorce and has not remarried. It follows, therefore, that the divorce resulting from the aforesaid dissolution of the marriage is also a legal divorce under the Mohomedan Law by virtue of the statute (1939 Act). [920 E F, 921 B] 6. Under the Mohomedan Law the commonest form of divorce is a unilateral pronouncement of divorce of the wife by the husband according to the various forms recognised by the law. A divorce given unilaterally by the husband is especially peculiar to Mohomedan Law. In no other law has the husband got a unilateral right to divorce his wife by a simple declaration because other laws, viz., the Hindu Law or the , contemplate only a dissolution of marriage on certain grounds brought about by one of the spouses in a court of law. [921 C D] 7. A wife thus had a statutory right to obtain divorce from the husband through the court on proof of the grounds mentioned in the Act. The Act provided for the wife an independent remedy which could be resorted to by her without being subjected to a pronouncement of divorce by the husband. It is, therefore, in the background of this Act that the words 'has obtained a divorce from her husband ' in clause (b) of the Explanation have to be construed. Thus the High Court in considering the effect of these words seems to have over looked the dominant object of the statutory remedy that was made available to the wife under the Act of 1939 by which the wife could get a decree for dissolution of marriage on the grounds mentioned in the 1939 Act by petitioning the civil court without any overt act on the part of the husband in divorcing her. The High Court also failed to consider the legal consequences flowing from the 912 decree passed by the Court dissolving the marriage, viz., a legal divorce under the Mohomedan law. [922 D F] 8. The interpretation put by the High Court on the second limb of clause (b) is not correct. This seems to be borne out from the provisions of Mohomedan law itself. It would appear that under the Mohomedan law there are three distinct modes in which a Muslim marriage can be dissolved and the relationship of the husband and wife terminated so as to result in an irrevocable divorce. [922 F G] 9. It is, therefore, manifest that clause (b) of Explanation to section 125 envisages all the three modes, whether a wife is divorced unilaterally by the husband or whether she obtains divorce under the mode numbers 2 and 3, she continues to be a wife for the purpose of getting maintenance under section 125 of the 1973 Code. In these circumstances the High Court was not at all justified in taking the two separate clauses 'who has been divorced ' and 'had obtained a divorce from her husband ' conjunctively so as to indicate a divorce proceeding from the husband and the husband alone and in not treating a dissolution of marriage under the 1939 Act as a legal divorce. [924 B D] 10. A clear distinction has been made between dissolution of marriage brought about by the husband in exercising his unilateral right to divorce and the act of the wife in obtaining a decree for dissolution of the marriage from a civil court under the Act of 1939. [925 E F] 11. The two limbs of clause (b) of the Explanation to section 125(1) have separate and different legal incidents one is reflected in clause (b) of sub Section (3) of section 127 and the other in clause (c) of sub section (3) of section 127. [925 G H] (Per A. D. Koshal, J. concurring) 1. The word 'divorce ' is not defined in the Code of Criminal Procedure and may legitimately be regarded as having been used in clause (b) of sub section 1 of Section 125 in the dictionary sense. As ordinarily understood, 'divorce ' is nothing more nor less than another name for dissolution of marriage, whether the same result from the act of parties or is a consequence of proceedings at law. It would be wrong to regard the two terms as not be synonymous with each other, unless the legislature makes a direction to the contrary. [927A, C D] 2. According to Section 125 of the Code of Criminal Procedure, a full fledged wife is entitled to maintenance. By reason of clause (b) even a divorced wife has that right provided that she has not re married. If that clause envisaged only divorce by voluntary action of the husband, the second limb of the clause which makes the definition of 'wife ' inclusive of a woman who has 'obtained a divorce from the husband ' would be rendered otiose. The word obtained may well be used in the sense of 'procured with effort ' and would certainly describe correctly a situation where something is achieved by a person through his exertion in spite of opposition from others. [928 E, F G] 3. Divorce by the Act of the husband, is not recognised by any system of law except that applicable to Muslims. Members of the other main communities inhabiting India, i.e. Hindus, Sikhs, Buddhists, Jains, Christians, etc. have perforce to go to courts in order to obtain divorce. If clause (b) was intended to 913 embrace only cases of divorce brought about by the Act of the husband, its applicability would be limited, by and large, only to Muslims, which per se appears to be an absurd proposition. [929 C D] 4. The expression 'a woman who has obtained a divorce from her husband ' has therefore to be interpreted as including a wife who has been granted a decree of dissolution of marriage by the Court. [929 E] Deacock vs Deacock referred to.

On 8th December 1956, the appellant served on the respondent three months ' notice in writing under section 14(1) (b) of the Bombay Tenancy and Agricultural Lands Act, 1948, terminating the tenancy on the ground of default in payment of rent. On 24th June 1957 the appellant filed an application under section 29(2) for possession. The Tahsildar allowed he application and the order was confirmed on appeal. But in revision, the Revenue Tribunal set aside the order on the ground, that the application was barred by limitation, because, it was filed more than two years, after 20th May 1955, which was the date of default. A petition ay the appellant under article 227, was rejected by the High Court. In the appeal to the Supreme Court, on the question whether the application was filed within the two yea& period of limitation prescribed by section 29 (2). HELD : Limitation for the application began to run from the date of the termination of the tenancy and not from the antecedent date of default in payment of rent and so, the application, filed within two years of the termination of the tenancy was not barred by limitation. 220 G] The legislature could not have intended that limitation would commence to run before the right to apply under section 29(2) accrues. The right to apply accrues to the landlord when the tenancy is terminated by notice under section 14(1)(b). But in spite of the termination of the tenancy the landlord has no right to obtain possession without an order under section 29(2). On the termination of the tenancy, the right to obtain possession, though in reality not accrued to the landlord, is, by a legal fiction, deemed to have accrued to him. Consequently, the date of termination of the tenancy is also the date when the right to obtain possession is deemed to have accrued to the landlord. Since the limitation for, the application under section 29(2) commences to run from the date when the right to obtain possession is deemed to have accrued to the landlord, it would follow that limitation begins to run from the date when the tenancy is terminated by the notice under section 14(1) (b). [218 A B, C D, F G] The history of the legislation also shows that both before and after the Amendment Act, 1951 which provided the two years ' period of limitation the date of the termination of the tenancy is the starting point of limitation. [218 H] Ramachandra Anant vs Janardan, approved. Chimanbai Rama vs Ganpat Jagannath, I.L.R. [1958] Dom. 917 (F.B.) overruled.

The appellant was a co operative society registered in Bombay under the Bombay Co operative Societies Act, 1925. The head office of the appellant was in Bombay and it had a branch in Mangalore. As the objects of the appellant were not confined to one State it was governed by MultiUnit Cooperative Societies Act, 1942 a Central Act. The appellant made a claim under section 54 of the Bombay Act in respect of a transaction which took place in Mangalore against the respondent who was a resident of Kesaragod and was a member of the appellant society. Both Mangalore and Kesaragod were at the relevant time in Madras Presidency. The Deputy Registrar of Co operative Societies Bombay gave an award regarding that claim. The award was sought to be executed as a decree in the Court of Subordinate Judge, Kesaragod. The respondent took an objection to the execution on the ground that the Deputy Registrar of Bombay bad no jurisdiction to pass the award and the same could not be executed as a decree in the courts in Kerala. Upholding the objection the Subordinate Judge dismissed the execution application. The High Court affirmed the decision. In appeal by special leave before this Court the appellant contended that since it was registered in Bombay State it was the Bombay Act which would govern the appellant society for purposes of registration, control and dissolution as laid down in section 2(1) of the Central Act. The word 'control it was urged comprehends within itself the adjudication of a claim made by the society against its members, and in the circumstances the award under, section 54 of the Bombay Act made by the Deputy Registrar Co operative Societies Bombay did not suffer from any legal infirmity. HELD, : As the objects of the appellant society were extended to the Presidency of Madras it should in view of sub section (1) of section 2 of the Central Act be deemed to have been registered under the law in force in the Presidency of Madras relating to co operative societies. The law which was then in force was the Madras Co operative Societies Act, 1932. Under section 51 of that Act a dispute between the appellant and the respondent in respect of its dealings relating to its Mangalore branch would normally have to be adjudicated upon by the Registrar appointed under the Madras Act. The fact that for the purpose of control the appellant society was governed by the Bombay Act would not justify a departure from the above normal rule. [166 B E] The word 'control ' is synonymous with superintendence, management, or authority, to direct restrict or regulate. Control is exercised by a superior authority in exercise of its supervisory power. Adjudication of disputes in a judicial or quasi judicial function and it would be unduly straining the meaning of the word 'control ' to hold that it also covers the adjudication of disputes between a co operative society and its members. There is a clear distinction between jurisdiction to decide a dispute which is a judicial power, and the exercise of control which is an administrative power, and it would be wrong to treat the two as identical or equate one with the other. [166 F G] 163 Panchshila Industrial Co operative Societies (Multi unit) vs Gurgaon Central Co operative Bank Ltd., Gurgaon, , distinguished. Since, as held above, the dispute between the parties could only be adjudicated upon in accordance with the provisions of the Madras Act the Registrar under the Bombay Act lacked inherent jurisdiction to decide the dispute and it was not a case of lack of territorial jurisdiction only [167 D E]

In the year 1943 the Divisional Superintendent, East Indian Railway placed certain purchase orders with the appellant for the supply of foodgrains for the employees of the East Indian Railway. The orders were not expressed to be made in the name of the Governor General and were not "executed on behalf of the Governor General as required by section 175 (3) of the Government of India Act, 1935. They were signed by the Divisional Superintendent either in his own hand or in the hand of his Personal Assistant. Some deliveries of foodgrain s were made under these orders and were accepted and paid for by the Railway Administration. But the Railway Administration declined to accept further deliveries of foodgrains. The appellant sold the balance of foodgrains under the purchase orders and filed a suit to recover the difference between the price realised by sale and the contract price. The respondent resisted the suit inter alia on the ground that the contracts were not binding on it. Held, that the contracts were not binding on the respondent and it was not liable for damages for breach of the contracts. Under s 175 (3) of the Government of India Act, 1935, as it stood at the relevant time, the contracts had: (a) to be expressed to be made by the Governor General, (b) to be executed on behalf of the Governor General and (F) to be executed by officers duly appointed in that behalf and in such mariner as the Governor General directed or authorised. The 881 authority to a person to execute contracts may be conferred not only by rules expressly trained and by formal notifications issued in this behalf but may also be specially conferred. The evidence in the case showed that such authority was specially conferred upon the Divisional Superintendent. But the contracts were not expressed to be made by the Governor General and were not executed on his behalf The provisions of section 175(3) were mandatory. The object of enacting these provisions was that the State should not be saddled with liability for unauthorised contracts and hence it was provided that the contracts trust show on their face that they were made by the Governor General and executed on his behalf in the manner prescribed by the person authorised. State of Bihar vs M/s. Karam Chand Thapar and Bros., Ltd. ; , followed. Liverpool Borough Bank vs Turner, ; , Municipal Corporation of Bombay vs Secretary of State, I. L. R. , Kessoram Poddar and Co., vs Secretary of State for India, I. L. R. section C. Mitra and Co., vs Governor General of India in Council, I.L.R. , Secretary of State vs Yadavgir Dharamgir, I. L. R. , Secretary of State vs G.T. Sarin and Co., 1. L. R. , U. I '. Government vs Lal Nanhoo Mal Gupta, A. 1. R. (1960) All. 420, and Devi Prasad Sri Krishna Prasad Ltd. vs Secretary of State, I. L. R. (1941) All. 741, referred to. section K. Sen vs Provincial P. W. D., State of Bihar, A. 1. R. (1960) Pat., Chatturbhui Vithaldas Jasani vs Moreshwar Prashram, ; ,J. K. Gas Plant Mfg., Co. (Rampur) Ltd. vs King Emperor, , Moreshwar Pangarkar vs State of Bombay, ; , State of Bombay vs Purshottam Jog Naik, ; and State of U.P. vs Manbodhan Lal Srivastava, (1958) section C. R. 533, distinguished.

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

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.

Appeal No. 9 of 1952. Appeal from the Judgment and Order dated 2nd January, 1950, of the High Court of Judicature at Madras (Satyanarayana Rao and Viswanatha Sastri JJ.) in Case Referred No. 68 of 1946. M. C. Setalvad, Attorney General for India, (P. A. Mehta, with him) for the appellant. K. section Krishnaswami Aiyangar (M. Subbaraya Aiyar, with him) for the respondents. December 22. The Judgment of the Court was delivered by MAHAJAN J. This is an appeal from,the judgment of the High Court of Judicature at 'Madras in a reference made by the Income tax Appellate Tribunal under section 66 (1) of the Indian Income tax Act, XI of 1922. 488 For several years prior to 1939 40 the respondents, .who are. brothers, had been carrying on in partnership the business of " The Hindu," a daily newspaper of Madras. The profits of this business had been charged to income tax in the hands of the respondents under the Indian Income tax Act of 1918. The firm 's year of account was a period of twelve months ending with 30th June each year. In respect of the profits of the year of account ending 30th June, 1938, assessment was made in the year 1939 40 and the firm was charged to income tax for that assessment year. On 1st March, 1940, the respondents transferred their business as a going concern to a private limited company called " Kasturi and Co. Ltd." For the assessment year 1940 41 the respondents claimed that the firm was not liable to pay any income tax on the income of its business from the end of the accounting year ending 30th June, 1938, to 29th February, 1940, the date on which the limited company succeeded to the business of the firm (i.e., for a period of 20 months) under section 25 (4) of the Act, as it had been assessed under the Indian Incometax Act, 1918. The Income tax Officer disallowed the claim and held that since the assessment pertained to the year 1940 41 the previous year with reference to that assessment would be the year ending 30th June, 1939, and the period for which exemption could be claimed under section 25(4) of the Act was the interval from the end of that previous year, i.e., 1st July, 1939, upto to the date of succession, i.e., 29th February, 1940, i.e, a period of eight months. This order was confirmed on appeal by the Appellate Assistant Commissioner. On further appeal the Tribunal held that on a proper construction of section 25(4) of the Act, tax was not payable by the firm in respect of the profits and accounts of the business for the whole of the period from 1st July, 1938, to 29th February, 1940, (a period of 20 months). At the instance of the Commissioner of Income tax (the appellant) the Tribunal stated a case to the High Court and referred to it the following question for its opinion: 489 " Whether on the facts of this case, the Appellate Tribunal was right in holding that the period the profits of which were entitled to exemption from the payment of tax under section 25(4). of the Indian .Income tax Act, 1939, was the period commencing from 1st July, 1938, and ending. With 29th February, 1940. " The reference was heard by Satyanarayana Rao and Viswanatha Sastri JJ. and they delivered divergent opinions on the question referred. Satyanarayana Rao J. agreed with the conclusion of the Tribunal and answered the question in the affirmative, while Viswanatha Sastri J. answered the question in the negative, with the result that under the provisions of the law the Tribunal 's order was confirmed, it being in accordance with the opinion delivered by the senior Judge. Leave to appeal to this Court was granted and this appeal is before us on a certificate given by the High Court. The principal question to decide in this appeal is whether on a true construction of section 25(4) of the Act, and on the facts stated the period the profits of which were entitled to exemption from the payment of tax is the period between 1st July, 1939, to 29th February, 1940, (a period of eight months) or the period commencing from 1st July, 1938, and ending with 29th February, 1940 (a period of 20 months). To decide this question it is necessary to set out the relevant provisions of the Act. Section 2(11), which defines " previous year " in so far as it is relevant for purposes of this appeal is : " (11) (a) the twelve months ending on the 31st day of March next preceding the year for which the assessment is to be made, or, if the accounts of the assessee have been made up to a date within the said twelve months in respect of a year ending on any date other than the said 31st day of March, then at the option of the assessee the year ending on the day, to which his accounts have so been made up." 490 Section 3 of the Act provides: Where any Central Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually. " This is the charging section. Section 25 of the Act makes different provisions to cover some special cases. The parts of the section relevant to this appeal pro vide as follows: (1)Where any business, profession or vocation to which sub section (3) is not applicable, is discontinued in any year, an assessment may be made in that year on the basis of the income, profits or gains of the period between the end of the previous year and the date of such discontinuance in addition to the assessment, if any, made on the basis of the income, profits or gains of the previous year. (3) Where any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918 (VII of 1918), is discontinued, then, unless there has been a succession by virtue of which the provisions of sub section (4) have been rendered applicable no tax shall be payable in respect of the income, profits and gains of the period between the end of the previous year and the date of such discontinuance, and the assessee may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period. Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on 491 the basis of such assessment, a refund shall be given of the difference. (4) Where the person who was at the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), carrying on any business, profession or vocation on which tax was at any times charged under the provisions of the Indian Incometax Act, 1918, is succeeded in such capacity by another person, the change not being merely a change in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period. Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference. (6) Where an assessment is to be made under subsection (1), sub section (3), or sub section (4) the Income tax Officer may serve on the person whose income, profits and gains are to be assessed, or, in the case of a firm, on any person who was a member of such firm at the time of its discontinuance, or, in the case of a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section. " For a proper construction of section 25 it is also necessary to set out the history and object of this enactment. Under the Act of 1918 income tax was levied on the income of the current year, i.e., the year of 492 assessment but as the income of that year could not be known till after the expiry of the year, the assessment was made on the basis of the income of the " previous year" but after the close of the assessment year an ,adjustment used to be made on the basis of the income of the assessment year. The Act of 1922 introduced a change in this respect. Under section 3 of the Act, 'the income of the previous year is made the subject of the charge and tax is levied on the income of the previous year though it is a tax for the assessment year. On the passing of the Act of 1922, the previous system of assessment was kept alive for one year. The result was that for the year 1922 23, there were two assessments, one under the Act of 1922 on the income of 1921 22 and another under the old system byway of assessment on the income of the same year 1921 22. In other words, the income of the year 1921 22 was assessed twice, once under the Act of 1918, and again under the Act of 1922. To remove this anomaly and in order to make the number of assessments tally with the number of years during which the business existed, section 25(3) of the Act of 1922 was enacted exempting from tax the profits for the period between the end of the previous year and the date of discontinuance in the case of a business whose profits had been assessed to tax under the Act of 1918. There was no provision in section 25 as enacted in 1922 for giving any relief in cases of succession to a business which was taxed under the Act of 1918. In 1939 a provision was made to extend similar relief to cases of succession and with this object section 26(2) of the Act was amended and section 25(4) was added by the amending Act of 1939. The result of the amendment of section 26(2) and the insertion of section 25(4) is that upon a transfer of business the transferor, i.e., the person who was succeeded in the business, would get the same relief as if the business had been discontinued by him. The scheme of the Act is that by the charging section, i.e., section 3, income tax is levied for a financial year at the rate prescribed by the annual Finance Act 493 on the total income of the previous year of every in dividual, etc. Each previous year 's income is the, subject of separate assessment in the relative assessment year. Though the year of assessment is the financial year, the previous year of an assessee need not necessarily be the previous financial year, for this expression is to be understood as defined by section# 2(11) (a) of the Act. The respondents were duly assessed to tax for the year of assessment, i.e. the financial year 1939 40, on the income of the previous year ending on 30th June, 1938. Their income of the accounting year ending 30th June, 1939, would in the ordinary course be liable to assessment in the financial year 1940 41, and the profits of the year ending 30th June, 1940, would be assessable in the financial year 1941 42. Succession took place in the accounting year 1939 40. Under sub section (2) of section 26, as it stood before its amendment in 1939, the person succeeding to a business was liable to tax for the year of succession, as if he had been carrying on business throughout that year and had received the profits of the whole of that year. Thus Kasturi and Company Limited would have been liable to be assessed on the profits earned during the year ending 30th June, 1940, irrespective of the fact that actually they would have only received profits in that year for a period of four months. After the amendment in 1939 sub section (2) of section 26 provides that the person succeeded and the person succeeding " each be assessed in respect of his actual share, if any, of the income, profits and gains of that year. " Thus the profits of the year in which the succession occurs are to be apportioned between the predecessor and the successor according to the actual share of each in the year 's profits, the predecessor and the successor are each liable to tax at the rate applicable to each and the profits of each have to be computed separately in accordance with the provisions of section 10 and other sections and each has to be granted the deductions and allowances appropriate to his case, and 494 assessment on each has to be separate and distinct. If the business was charged under the Indian Incometax Act, 1918, and the person succeeded is exempt from tax under section 25 (4) he would not charged in respect of the profits of the period from the end of the previous year up to the date of succession, while the person succeeding would be liable under sub section (2) of section 26 in respect of the profits earned by him after the date of succession. The proviso to sub section (2) lays down two exceptions to the general rule that the successor is not liable to tax in respect of the profits of the period prior to the date of succession. In two cages, namely, (1) when the predecessor cannot be found, or (2) when the tax assessed on the predecessor cannot be recovered from him, the successor is liable to pay the tax in respect of the profits of the year in which the succession took place up to the date of succession as well and further for the profits earned during the year preceding that year. In this case if either of those contingencies arose, Kasturi and Company Limited would have been liable to pay tax on profits of the whole accounting year ending 30th June, 1939, as well as of the whole of the accounting year ending 30th June, 1940, and end of the preceding year in this context would be 30th June, 1939. It is a question whether in this situation they would be entitled to the relief provided in section 25(4). On behalf of the Commissioner of Income tax, Madras, the learned Attorney General contended that Satyanarayana Rao J. was in error in granting exemption to the firm from tax in respect of the profits earned during a period of 20 months and that under section 25, sub section (4), the only relief permissible was in respect of profits earned during the period of 8 months from 1st July, 1939, to 1st March, 1940. It was said that the profits of the year of succession were liable to assessment in the usual course in the financial year 1941 42 and the Income tax Officer had no power to make an accelerated assessment in order to give relief to the persons succeeded in the business 495 and that being so, it was not right to hold that the expression " previous year" in section 25, sub section (4), was co related to the assessment year 1939 40, i.e the year in which,the succession took place or to the assessment year 1941 42 in which in the ordinary course assessment for those profits would have been made but that on a true construction of this sub section and having regard to the history of its enactment and the object for which it was inserted in section 25, the assessee firm was entitled to exemption from the payment of tax, only for the period between 1st July, 1939, and 29th February, 1940, and to no more. It seems to us that there is force in this contention, Section 25 (4) was inserted in the Act of 1922 in the year 1939 at the same time as section 26(2) was amended. On a plain reading of these two sections together, it is quite clear that the Income tax Officer is not empowered to make an accelerated assessment in the year in which succession occurs on the ' profits of that year, and prematurely assess the person succeeding to a business so that he may able to give ' relief to the person succeeded. The exemption provided for its section 25 (4) and the apportionment mentioned in section 26 (2) have to be made in the assessment year in which the profits of the year of succession fall to be assessed under sections of the Act, and in this situation the end of the 'previous year in this case can, in no circumstance, be the end of the accounting year beginning 1st of July, 1937, and ending 30th of June, 1938, because the income, profits and gains of the accounting year of succession (i.e., year beginning 1st July, 1939, and ending 30th June, 1940) which have to be apportioned between the predecessor and successor of the business under section 26(2) and for which the successor becomes liable in case the predecessor commits a default, could only be assessed in the assessment year 1941 42. The income, ' profits and gains of the accounting year beginning 1st July, 1938, and ending 30th June, 1939, for which the predecessor alone is liable in the first instance to 496 tax fall for assessment in the assessment year 1940 41. The successor in business, in case of default by the predecessor, is also liable to pay the tax on the profits of that year as well. What subjection (4) of section 25 provides is that when the profits of the year of succession fall to be assessed, the predecessor of a business can claim exemption from liability to pay tax on the profit earned from the end of the previous year to the date of succession, the "Previous year" here meaning the completed accounting year immediately preceding the date of succession (in this case year ending 30th June, 1939). He can further claim that the profits earned between 1st July, 1939, to 29th February, 1940, be deemed the profits of the accounting year 1st July, 1938, to 30th June, 1939, and if on those profits in assessment year 1940 41 tax in excess of what is chargeable on the profits of this broken period has been paid, be given refund for the excess. Truly speaking, the firm was entitled to the relief provided for in section 25(4) in the assessment year 1941 42 but the Income tax Officer was prepared to give him that in the assessment year 1940 41,and on that score the assessee can have no grievance. Satyanarayana Rao J. held that the words " previous year " in sub . section (1) of section 25 refer to the year of account relevant to the year of assessment in which the discontinuance occurs, that the section authorises the Income tax Officer to make a cumulative assessment in respect of the profits of the period between the end of the last accounting year of which the profits have been assessed before the date of discontinuance and that date, that " sub section (3) of section 25 is an exception to the general rule contained in sub section (1) of that section, and that, though the language employed in sub section (3) does not correspond to the language employed in sub section (1) indicating that in this Sub section also the assessment year should be taken to be the year in which the discontinuance occurs, all the same there is no reason 497 to depart and to place a different interpretation on the expression 'previous year ' in this sub section$ from the one placed on sub section (1). " On the same line of reasoning the learned Judge gave the same meaning to the expression " previous year " in subsection (4) of section 25 and as a result held that the firm was 'entitled to exemption from tax for profits earned between the 1st July, 1938, and 29th February, 1940, a period of 20 months. Mr. Krishnaswami Aiyangar appearing for the respondents, was not prepared to support the whole of the reasoning of Satyanarayana Rao J. but he contended strenuously that the conclusion reached by the learned Judge was the only one that could be reached on a true construction of the phraseology employed in the various sub sections of section 25. In short, his argument was that sub section (1) of section 25 confers an option on the Income tax Officer, in case of discontinuance of a business which was not assessed under the Act of 1918, to make an accelerated assessment in the year of discontinuance itself on the income, profits and gains earned up to the period of discontinuance and not assessed before in any preceding assessment year; that the expression " previous year" in the context of this sub sec tion means the end of the accounting year the profits of which have been last assessed to tax, which in this case means the year ending 30 th June, 1938. It was further contended that any other meaning given to these words would create a hiatus and would lead to the result that on the date of discontinuance the Income tax Officer would be entitled to assess the profits of the broken period without being entitled to assess the profits of a whole previous year that had expired, the profits of which in the usual course could not be assessed in the year of discontinuance and that such a construction would defeat the very purpose of the power given by the sub section. On a parity of reasoning it was suggested that the words "between the end of the previous year and the date of such discontinuance" in subsections (3) and (4) 498 should be given the same meaning as in sub section (1), and that the assessee should be given exemption in respect of profits earned between the 1st July, 1938, and 29th February, 1940. It was said that the two terminals fixed for the purposes of assessment under section 25(1) were the terminals fixed for exemption from tax in section 25(3) and (4) and it would be wrong to hold that the assessment under section 25(1) could be made for a period different from that for which relief could be given under section 25 (3) and (4). It was urged that the scope of the charge authorised by section 25 (1) was co extensive with the extent of the relief provided for in subsections (3) and (4). Before proceeding further it is convenient to make a few observations regarding the proposition stated by Satyanarayaua Rao J. that section 25 (1) provides for cumulative assessment in cases of discontinuance of business. The words of the section do not justify this conclusion. They do not empower the Incometax Officer to make a cumulative assessment in respect of profits earned in two different accounting periods or entitle him to merge the profits of two years into one total sum and apply to them the rate of one of the financial years. All that the section authorises the Income tax Officer to do is that it gives him an option to make a premature assessment on the profits earned up to the date of discontinuance in the year of discontinuance itself instead of in the usual financial year. This assessment he is entitled to make in addition to the normal assessment for the financial year of discontinuance. Mr. Aiyangar very rightly conceded that the construction placed on subsection(1) of section 25 by the learned Judge in this respect was not right. As regards the main contention of Mr. Aiyangar based on the analogy of the language employed in sub section (1) of section 25, we are of the opinion that this contention is based on a fallacy and cannot be sustained. As above pointed out, sub section (1) of section 25 merely empowers the Income tax Officer, 499 if he so chooses to do, to make an accelerated assessment in case of discontinuance of business at the time of discontinuance to save loss of revenue by the disappearance of an assessee. In other words, the subsection imposes a liability of premature assessment on the assessee. It confers no benefit on him. Sub sections (3) and (4) of section 25 have a different end in ' view and are not in pari materia with sub section (1). They are in the nature of substantive provisions intended to give relief from tax charged in certain cases. The mere circumstance of their being grouped together with sub section (1) in section 25 cannot lead to the conclusion that the provisions therein contained are of the same nature and character as the provi sions contained in sub section (1). Satyanarayana Rao J. was clearly in error when he held these two subsections were in the nature of exceptions to the rule laid down in sub section(1). The truth of the matter is that it is sub section(1) itself which is an exception to the general rule laid down in the charging section of the Act, namely, section 3. The object of sub sections (3) and (4) is to provide relief to a business for the double assessment suffered by it in the financial year 1922 23 and it is entitled to this relief in the year of assessment in which the income and profits of the accounting period in which discontinuance or succession takes place fall to be assessed. The Income tax Officer is not authorised to accelerate the relief by making a premature assessment on these profits. Not only is the language of these two sub sections different from the language of sub section (1), but they deal with two different categories of assessees. Sub 'section (1) deals with a category of assessees who were never subjected to double tax, while sub sections (3) and (4) deal with that class who suffered assessment under the Act of 191.8 and paid double tax. The liability for premature assessment imposed under section 25 (1) on the former class of assessees has feed imposed on considerations entirely different from those on which provision has been made for exemption to tax in sub sections 65 500 (3) and (4) for the other class. In, these circumstances, such relief cannot be said to be co extensive with the liability imposed. Moreover, the provisions of the Income tax Act in respect to exemptions and deductions cannot be construed on the 'analogy of the provisions contained in the charging sections of the Act even if the language of these provisions is similar. Mr. Aiyangar 's contention that sub section (1) crystallizes the rights of the assessee on the date of discontinuance and that not only does it relieve him from being taxed after the date of discontinuance, but that it entitles him to further relief provided for in sub section (3) does not seem to be well founded. Sub section (1) of section 25 confers no right of any kind on an assessee which can crystallize on the date of discontinuance and which cannot be varied subsequently to his disadvantage. On the other hand, as already said it imposes a premature burden on the assessee which but for this sub section he could not be called upon to bear till the appropriate year of assessment was reached. The learned Attorney General was not prepared to accept the construction placed on Sub section (1) of section 25 by Mr. Aiyangar and contended that sub section did not authorise the Income tax Officer to make an assessment in the year of discontinuance on the profits of an accounting year which had come to a close before the date of discontinuance, and that those profits had to be assessed in the usual way in the appropriate financial year, and that authority given to make an accelerated assessment only related to the broken period beginning with the end of the completed accounting year immediately preceding the date of discontinuance and ending with the date of discontinuance. In our opinion, it is not necessary for the purposes of deciding this case to finally express an opinion as to the true meaning of the words " between the end of the previous year to the date of discontinuance " used in section 25 (1) of the Act. After a careful consideration of the different provisions of the Act relevant to this enquiry, we have 501 reached the conclusion that the expression "end of the previous year " in sub sections (3) and (4) of section 25 in the context of those sub sections means the end of an accounting year (a period of full 12 months) expiring immediately preceding the date of discontinuance or succession, (in this case 30th. June, 1939). We are satisfied that Viswanatha Sastri J.". was right when he held that having regard to the object of the legislature in enacting sub sections (3) and (4) of section 25 and having regard to the plain language of these sub sections, the assessee 's contentions could not be upheld. We are, however, unable to subscribe to the conclusion reached by the learned Judge that the expression " previous year " in subsections (3) and (4) of section 25 was co related to the year of assessment 1940 41. The profits of the year of discontinuance could not, according to the scheme of the Act, be taxed till the financial year 1941 42 and the previous year co related to that assessment year would be the accounting year ending 30th June, 1940. It is obvious that the 'end of the accounting year falling after the date of discontinuance could not appositely be said to be the end of the previous year preceding that date. The expression ((previous year" substantially means an accounting year comprised of a full period of twelve months and usually corresponding to a financial year preceding the financial year of assessment. It also means an accounting year comprised of a full period of twelve months adopted by the assessee for maintaining his accounts but different from the financial year and preceding a financial year. For purposes of the charging sections of the Act unless otherwise provided for it is co related to a year of assessment immediately following it, but it is not necessarily wedded to an assessment year in all cases and it cannot be said that the expression "previous year" has no meaning unless it is used in relation to a financial year. In a certain context it may well mean a completed accounting year immediately preceding the happening of a contingency. The construction we have placed on 502 this expression in sub sections (3) and (4) of section 25 is in accord with the substance of the definition given in section 2 (1 1) of the Act. Any other construction of the section is bound to lead to a number of anomalies, the most glaring being that in case of persons whose year of account is the financial year, exemption from tax under section 25 (3) or (4) could never be given for a period of more than twelve months, while in case of persons who adopt different accounting year, exemption would become available for a period extending up to 24 months. Such could never have been the intention of the framers of the Act. That the "previous year" in the context of section 25(3) and (4) means a completed accounting year immediately preceding the discontinuance or succession is borne out by the provisions as regards nonliability for tax for the broken period and the 'claim to be made by the assessee that the income, profits and gains of the previous year shall be deemed to have been the income, profits or gains of the broken period. The intention of the legislature being to give relief against double assessment for the year 1922 23, the assessee in the case of discontinuance or succession would be entitled to claim exemption from payment of tax for the broken period and also claim that the income, profits or gains of the previous year, i.e.) the year preceding the broken period, should be treated as the income, profits or gains of the broken period. Reference was made in the judgment of the Appellate Tribunal to the views of the Select Committee when clause (1) of section 25 was considered at the time of the draft Bill No. XXVI of 1921 in support of its conclusion, but it was rightly held by the High Court that it was not a permissible consideration in interpreting a statute and Mr. Aiyangar did not seriously press this matter before us. He, however, drew our attention to the directions contained in the Income tax Manual in force for a number of years and contended that the department itself placed on sub sections (3) and (4) of section 25 the same construction as was 503 placed on them by the senior Judge in the High Court and that was the true construction of these two sub sections. This argument, in our opinion, has no ' validity. The department changed its view subsequently and amended the manual. The interpretation placed by the department on these sub sections cannot be considered to be a proper guide in a matter like this when the construction of a statute is involved. The result is that we allow the appeal and hold that the answer given by the senior Judge to the question referred was wrong and that the answer given by Viswanatha Sastri J. was the correct one. In the circumstances of this case we would make no order as to costs throughout. Appeal allowed. Agent for the respondent : M. section K. Aiyangar.

Two brothers who had been carrying on in partnership a business, which had been assessed to income tax under the Indian Income tax Act of 1918 and the accounting year of which was a period of 12 months ending on the 30th June each year, transferred the business to a limited company on the 1st March, 1940, and claimed in the assessment for the year 1940 41 that under section 25 (4) of the Income tax Act, 1922, they were not liable to pay income tax on the income of their business from 1st July, 1938, up to 29th February, 1940, a period of 20 months. The Income tax authorities were of the view that exemption could be claimed only 487 for the period from 1st July, 1939, to 29th February, 1940, a period of 8 months: Held, that the expression "end of the previous year" in sub sections (3) and (4) of section 25 in the context of those sub sections means the end of the accounting year (a period of full 12 months) expiring immediately preceding the date of discontinuance or succession and the assessee firm was entitled to claim exemption from tax only in respect of the period from the 1st July, 1939, to the 29th 'February,1940, On a true construction of sections 25 and 26, the Income tax Officer is not empowered to make an accelerated assessment in the year in which succession occurs on the profits of that year and prematurely assess the successor so that he , may be able to give relief to the person succeeded. The exemption provided for in section 25 (4) and the apportionment mentioned in section 26 (2) have to be made in the assessment year in which the profits of the year of succession fall to be assessed under section 3 of the Act. For the purposes of the charging sections of the Act the ex pression "previous year" is co related to a year of assessment immediately following it, but it is not necessarily wedded to an assessment year in all cases and it cannot be said that the expression "previous year" has no meaning unless it is used in relation to a financial year. In a certain context it may well mean a completed accounting year immediately preceding the happening of a contingency.

The respondent Company was assessed to wealth tax for the assessment year 1957 58 and the respondent claimed deduction of an amount laid out for setting up a new unit. The licence for setting up the new unit was granted in 1955; the construction of the factory building was completed by December 1957; the erection of the machinery and plant was completed in several stages commencing from June 1957; the licence for working the factory was obtained in June 1958; and time given to complete the project also was extended by Government up to March 17, 1959. The Wealth Tax Officer disallowed the claim on the ground that the unit was, set up prior to the date on which the Wealth Tax Act came into force, ie., April 1, 1957. This order was upheld in appeals. But in reference, the High Court answered the question in favour of the assessee, for, it proceeded on the basis that the unit was completed and became ready to go into business after the Act had come into force. HELD : The assessee was entitled to the claim as it satisfied the condition laid down in cl. (xxi) of section 5(1) of the Act. The criterion for determining the period of exemption is based on the commencement of the operations for establishment of the unit. These operations for establishment of the unit cannot be simultaneous with the setting up of the unit, but must precede the actual setting up of the unit. [1764 G H] The word "set up" in clause (xxi) of section 5(1) of the Act, is equivalent to the word "established" but operations for establishment cannot be equated with the establishment of the unit itself or its setting up. The applicability of the, proviso has, therefore, to be decided by finding out when the company commenced operations for establishment of the unit, which operations must be antecedent to the actual date on which the company is held to have been set up for purposes of the principal clause.[1764 D E] Western India Vegetable Products, Limited vs Commissioner of Income tax, Bombay City, referred to. In the present case, the Tribunal proceeded on the basis that whatever be the exact date of commencement of the operations for establishment of Ibis unit,, it was certainly before April 1, 1957 and that fact by itself is sufficient to entitle the assessee to claim the exemption. The Commissioner cannot be allowed to raise a new question and ask this Court to decide that the date of commencement of the operation for establishment of the unit by the respondent was different from that accepted by the Tribunal. That question was not raised and dealt with by the Tribunal, [766 E] Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co., Ltd., ; relied on.

The respondent was a company dealing in shares and securities and belonged to a group of companies all controlled by the same persons. In the year of account, corresponding to the assessment year 1951 52, the respondent sold the shares relating to Madhusudan Mills Ltd., which it had acquired sometime earlier, suffering a loss for which it claimed a set off against the profits in that year. The Income tax Officer found that the shares in question had been purchased by J, a company belonging to the group, at a price which was almost double the current market price, that it was so done with a view to removing the sellers from their managing agency and to securing for the respondent the purchasing and selling agency of the Mills, and that after the purchase J achieved the purpose in view of its controlling interest and the purchasing and selling agency of the Mills was given to the respondent, though the latter had done no more than give a loan to J. It was also found that soon after the purchase the shares in question came into the possession of the respondent and that when the shares were sold it was not in the market but at a loss to another company belonging to the same group. The Income tax Officer came to the conclusion that in getting the shares the respondent did not deal with them as stock in trade but was acquiring a capital asset of an enduring nature. Accordingly, he disallowed the claim holding the loss to be a a capital loss. The Appellate Tribunal, however, held in favour of the respondent on the view that a distinction must be made between the respondent company and J. The Commissioner of Income tax moved the Tribunal for a reference to the High Court, but it was dismissed on the ground that though it was barred only by one day and there was no negligence on the part of the Commissioner, the Tribunal had no power to extend time. An application to the High Court was also dismissed. The Commissioner of Income tax then applied for and got special leave to appeal against 866 the order passed by the Tribunal. When the appeal came on for hearing in due course the respondent raised an objection that the appeal was not maintainable because no appeal was filed against the order of the High Court, and relied on the decision in Chandi Prasad Chokani vs State of Bihar, ; ^ Held, that the appeal was maintainable because there was no question of by passing the order of the High Court which only related to the correctness of the decision of the Tribunal on the question of limitation which was not the subject of the present appeal. Held, further, that there were special circumstances which justified the grant of special leave. Baldev Singh vs Commissioner of Income tax , applied. Chandi Prasad Chokhani vs State of Bihar ; , distinghuished. Held, also, that, on the facts, the object was to purchase a large block of shares at a much larger price than the market value to acquire certain agencies of a profitable character, that the purchase of the shares by J was merely a device but the controlling interest was acquired by the respondent, and that the transaction must be regarded as one on the capital side. Ramanarain Sons (P.) Ltd. vs Commissioner of Income tax, ; and Oriental Investment Co. Ltd. vs Commissioner of Income tax, ; , applied. Salomon vs Salomon & Co. Ltd. ; , distinguished.

The appellant, a company resident in British India, had a cotton mill. The cloth manufactured in the mill was sold in British India as well as native States. For the assess ment years 194546, 194647 and 1947 48, the company was assessed under Section 14(2)(c) of the Income Tax Act, 1922, in respect of certain sums remitted to British India from native States, in addition to the assessment under Section 42(3), deeming 1/3rd of the profit from the sales effected in native States, as having accrued from the manufacturing part of business in British India. The assessee 's contention that 1/3rd of income having been assessed under Section 42(3), as income deemed to have accrued in British India, no further assessment should be made under Section 14(2)(c) was rejected by the Income Tax Officer, the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal. The Tribunal also rejected the assessee 's additional contention that if the remittances made to British India in any year exceeded the amount taxed under Section 42(3), then it was only so much of the excess which could be taxed under Section 14(2)(c). However, it reduced the additions made by the Income Tax Officer and affirmed by the appellate authority, by 1/3rd of such remit tances. On a reference made under Section 66(1), the High Court confirmed the Tribunal 's decision. In the appeal before this Court, on behalf of the appel lantassessee R was contended that where there was a mixed fund, as in the instant case, consisting partly of taxed and partly of untaxed monies, any remittance made should he deemed to have been paid out of that 294 part of the money which had suffered tax and that it was the right of the tax payer to attribute the payment to the taxed money so as to obtain the benefit allowed by the law. Dismissing the appeals, this Court, HELD: 1.1 If there were two funds at the disposal of the assessee one upon which tax had been already levied and another which was liable to be brought to tax a presump tion, in the absence of evidence to the contrary might arise that the remittance made by the assessee in the course of its business was made out of the fund that was already taxed and not out of the fund that remained to be taxed. [297F] Meyyappa Chettiar vs The Commissioner of Income Tax, , 45, referred to. 1.2 The tax payer is given the right of attribution in the way most favourable to himself. In the absence of evi dence to the contrary, it is presumed that payments are made out of income. This abstract principle of attribution is applicable in certain circumstances. Whether it is applica ble in a particular case depends upon the facts of that case and the provisions of the statute. It can be adopted only to the extent that it is consistent with the law and facts. [298E F] Paton (As Penton 's Trustee) vs Commissioners of Inland Revenue, 21 Tax Cases 626 and The Cape Brandy Syndicate vs The Commissioners of Inland Revenue, 12 Tax Cases 359, 366, referred to. In the instant case, on the facts found the assessee did not have two funds, but only one fund composed of taxed and non taxed amounts. As one third of this amount had already been taxed under section 42(3) of the Act, 1/3rd of the remittances to British India in a particular year was held to be exempted from levy. The Tribunal having excluded 1/3rd of the remittances to British India from taxation during a particular year, the High Court was justified in refusing to grant any further relief to the assessee. [297G; 299B]

The Appellant Bank which was registered under the Co operative Societies 'Act, 1922, received, in the relevant account years, by way of interest on deposits with the Imperial Bank of India certain sums of money. The Income tax Officer assessed the aforesaid sums under section 12 of the Indian Income tax Act 1922, as income from other sources, but the appellant claimed that the deposits were made not with the idea of making investments but for the purpose of carrying on its business as a bank and that as the interest received on the deposits was profit attributable to its business activities it was not subject to incometax because of the Notification issued by the Central Government under section 6o of the Act. Under the Notification profits of any Co operative Society are exempt from the tax payable under the Act but not income derived from "other sources" referred to in section 12 of the Act. Held, that the interest from deposits received by the Appel lant Bank in the present case arose out of a transaction entered into for the purpose of carrying on its banking business and fell within the income exempted under the Notification. The Punjab Co operative Bank Ltd. vs The Commissioner of Income tax, Punjab, , relied on.

The assessee a Hindu undivided family ( ) was assessed in 1944 45 for the income of its previous year ending October 30, 1943. The income shown in the return was from iron foundry business and property, and income from these sources only was taken into account in the original assessment. The assessee through a son of the karta was also a partner in the firm Raj Narain Durga Prasad. The accounting year of the firm ended on April 1, 1944 and the assessee 's return,did not show any income as share of profit in the firm nor was mention made in the return of the existence of the partnership. In December, 1943 the assessee along with Raj Narain Durga Prasad started a joint venture of supplying Sarpat and bamboo to the Government. Between the commencement of the joint venture and February 18, 1944, the assessee made investments in the Sarpat and bamboo business to the tune of Rs. 27,000 (as found by the Tribunal). The Income tax Officer, when he discovered the assessee 's connection with the firm Rajnarain Durga Prasad gave a notice under section 34 of the Indian Income tax Act, 1922 and made in 1952 a revised assessment for 1944 45, assessment year, in which he added the income of the assessee as found in the books of the firm to the income already assessed. Later, he discovered the assessee 's investments in the Sarpat and bamboo business and in 1954 he made another revised assessment for the assessment year 1944 45 treating the said investments as representing income from undisclosed sources. The assessee challenged both the assessments on the ground that section 34(1)(a) was not attracted. The assessee 's plea was rejected by the Appellate Assistant Commissioner and the Tribunal. The High Court in 'reference also held against the assessee who by special leave appealed to this Court. The contentions on behalf of the appellant were; (i) As regards income from firm Rajnarain Durga Prasad it was submitted that the accounting year of that firm ended on April 1, 1944 which was well after the close of the assessee 's previous year which ended on October 28, 1943. Neither the. income of the firm, nor the share of assessee had been determined till then, and it was not possible for the assessee to show the said income in the return for 1944 45. Moreover the full facts came to the knowledge of the Income tax Officer when the assessment for the next assessment year was made. Therefore section 34(1)(a) was not attracted. (ii) As regards investments in the Sarpat and bamboo business the assessee submitted that the business itself commenced in December, 1943 and having regard to the definition of previous year ' in section 2(11) as it existed at the relevant time, the income from this source could not be shown as income of his previous year which ended on October 28. The income from this source was duly disclosed to the Income tax Officer and was actually assessed in 1945 46. Therefore in the case of the 1954 revised assessment also 'section 34(1)(a) was not attracted. 801 HELD: (i) The High Court had rightly observed in dealing with the 1952 assessment that there was no finding of the appellate tribunal that the share of income from the firm was not known at the time when the return was filed. In view of the admitted fact that the return filed by the assessee did not disclose the fact of partnership in the firm Raj Narain Durga Prasad it was no longer open to the assessee to urge that section 34(1)(a) was not attracted, particularly when the burden lay upon the assessee to show that the Income tax Officer was aware of the income received from the firm. [804 G H] (ii) It is now weD settled that the only way in which income from undisclosed sources can be taxed is to take it as the income of the relevant financial year. Therefore the investments made by the assessee in Sarpat and bamboo business between December, 1943 and February, 1944 were rightly taxed by the Income tax Officer in the year 1944 45. The disclosure of the investments by assessee in the proceedings for 1945 46 cannot be treated as a disclosure for the purpose of assessment year 194445. The plea that the revised assessment made in 1954 was not covered by section 34(1)(a) could not therefore be accepted. [806 B C] Section 68 of the Indian Income tax Act, 1961 which provides that amounts credited. in the account books of the assessee and not satisfactorily explained by him should be treated as income of the 'previous year ', does not alter the position under the old Act. Even under the new Act the position, except where the credits are found in the assessee 's account books, is probably not different from that laid down in the cases under the old Act. [806 D F] Commissioner of Income tax, Bihar and orissa vs P. Darolia & Sons, and Bishan Dutt vs Commissioner of Income tax, U.P. & V.P. , applied. Jethmal vs Commissioner of Income tax, , approved. P.R. Mukherjee vs Commissioner of Income tax, West Bengal. referred to.

The appellant assessee is a firm carrying on business of manufacturing ice and preservation of potatoes in its cold storage. By an assessment order dated July 5, 1961 it was assessed to income tax for the assessment year 1961 62 on a total income of Rs. 53,548/ . The Income Tax Officer, in his proceedings started on December 21, 1961 under section 34(1) of the 1922 Act, found certain property income and income to the extent of one lakh from potato transaction put through in the name of benami persons by the assessee had escaped assessment and therefore, by his order dated December 22, 1965 he brought them to tax. The said order of the Income Tax Officer was annulled in appeal, on May 10, 1967 on the ground that the initiation of reassessment was not justified. This order became final as the department did not take further steps. On July 14, 1967 the Income Tax Officer issued a notice under section 148 of the Income Tax Act, 1961 in respect of the self same assessment year after obtaining the sanction of the Commissioner of Income Tax. Pursuant to the notice the appellant filed a return under protest on August 14, 1967. The appellant challenged the said notice by filing a writ petition in the Allahabad High Court, inter alia on the ground that under section 297(2)(d)(ii) of the 1961 Act no reassessment proceedings could be undertaken under section 147 of the 1961 Act inasmuch as in respect of the self same escaped income, proceed ings under section 34(1) of the 1922 Act had been undertaken and were pending on April 1, 1962 when the 1961 Act came into force. The High Court rejected the contention on the ground that in order that section 297(2)(d)(ii) should apply, proceedings under section 34 of the 1922 Act must be legal proceedings with jurisdiction. Allowing the appeal by certificate, the Court ^ HELD : The factual pendency of the proceedings under Section 34 of the 1922 Act on the relevant date, and not their legality is material for purposes of section 297(2)(d)(ii) of the 1961 Act. [238 D E] In the instant case: (a) admittedly proceedings under section 34(1) of the 1922 Act in respect of the item of Rupees one lakh (which was said to have escaped assessment) were factually pending on April 1, 1962 and therefore, the notice under section 148 of the 1961 Act would be incompetent, and [239 C D] 237 (b) The initiation of the proceedings under section 34 by the Income Tax Officer cannot be regarded as being without jurisdiction and hence non est. The reassessment order made by the Income Tax Officer on December 22, 1965 clearly shows that he had initiated the proceedings (in respect of property income) under section 34(1) (b) i.e., in consequence of information gathered by him from Assistant Appellate Commissioner 's order for earlier year and not under section 34(1)(a). [239 F H] section B. Jain vs Mahendra, and Gujar Mal Modi vs Commissioner of Income Tax, ; applied.

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.

Appeal No. 278 of 1959. Appeal by special leave from the judgment and order dated April 2, 1957, of the Punjab High Court, in Civil Revision No. 239 of 1956. C. K. Daphtary, Solicitor General of India, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant. section T. Desai and Naunit Lal, for the respondents. May 2. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The appellant Dr. Gopal Das Varma owns a double storeyed house known as 28, Barakhamba Road, New Delhi. The ground floor of this house consists of a block of offices and the first floor consists of four flats; three of these are in the occupation of the appellant while the fourth has been let out to respondent 1, Dr. Bhardwaj. Dr. Bhardwaj is an ear, nose, throat specialist, and in one of the four rooms of the flat be and his wife, respondent 2, reside, while the, three other rooms are used by him for the purpose of his profession. Respondent 1 ap. pears to have taken the premises on lease as early as 1934 although he executed an agreement of tenancy in favour of the appellant on November 8, 1935. This agreement shows that the appellant agreed to let out his flat to respondent 1 on a rent of Rs. 90 per month payable in advance. The tenancy was to commence from October 1, 1935, and was intended to continue up to _September 30, 1936. Parties agreed that the said 680 tenancy could be renewed on terms to be settled later. In fact the tenancy has been renewed from year to year and the flat is still in possession of respondent 1. In October 1953 the appellant sued the two respondents for ejectment on two grounds. He alleged that he required the premises in question for occupation as residence for himself and for the members of his family and that respondent 1 had recently built a suitable residence for himself in Golf Link Area, New Delhi. The first plea was made under section 13(1)(e) of the Delhi and Ajmer Rent Control Act, 1952 (Act XXXVIII of 1952) (hereafter called the Act), while the second was raised by reference to section 13(1)(h) of the Act. According to the appellant, since both the requirements of the Act were satisfied he was entitled to obtain a decree for ejectment against the respondents. The claim thus made by the appellant was denied by the respondents. Respondent 2 pleaded that she was not the tenant of the appellant and she alleged that it was she and not respondent 1 who had built the house in Golf Link Area. Respondent 1 admitted that he was a tenant under the appellant. He, however, contended that the appellant did not require the premises bona fide for his personal use, and he urged that he was using the premises for carrying on his medical profession and as such the appellant was not entitled to eject him. He supported his wife in her plea that the house built in Golf Link Area belonged to her and not to him. On these pleadings the learned trial judge framed appropriate issues. He found that respondent 1 alone was the tenant of the appellant and that the premises in question had been let to respondent 1 for residential purpose. According to the trial judge the premises in suit had been constructed for residential purposes and the flat in question was let out to respondent exclusively for that very purpose. The trial judge further held that the fact that a portion of the premises was used by respondent 1 for his profession or business would not make the tenancy one for nonresidential purposes. In that view he rejected the 681 argument raised by respondent 1 on the explanation to section 13(1)(e) of the Act. The trial judge also held that it was respondent 1 who had built a house in Golf Link Area and since the said house was suitable for his residence the requirements of section 13(1)(h) were satisfied. On the question about the bona fide requirements of personal residence pleaded by the appellant under section 13(1)(e) the trial court made a finding against him. Even so, as a result of his conclusion under section 13(1)(h) the trial judge passed a decree for ejectment in favour of the appellant. Both the respondents challenged this decree by preferring an appeal before the Senior Sub Judge at Delhi. The appellate Court held that on the facts proved in the case it cannot be inferred that the premises in suit were built for residential purposes alone, and that evidence did not show that the premises in question had been lot to respondent 1 for residence alone. The appellate judge examined the conduct of the parties and held that it was proved beyond any shadow of doubt that respondent 1 was using the premises both for his residence and his professional work since the inception of the tenancy without any objection on behalf of the appellant, and so in his opinion the premises could not be said to have been let for residence alone. He also found that under the proviso to section 13(1)(e) it cannot be said that the premises were used incidentally for profession without the consent of the appellant; in that view section 13(1)(e) did not apply to the case. Since the appellant had failed to prove that the premises were residential premises within the meaning of section 13(1)(e) and (h) the appellate Court held that respondent 1 could not be ejected. In the result the appeal preferred by the respondents was allowed and the decree for ejectment passed by the. trial Court against them was set aside. The appellant then took the dispute before the High Court of Punjab by his revisional application. The High Court has in substance agreed with the view taken by the appellate Court, confirmed its main findings and has dismissed the revisional application. The High Court has observed that in its opinion the 682 appellate judge was fully justified in holding that the premises were let out to the tenant for the purpose of residence and for the purpose of his work as a member of the medical profession. It has made an alternative finding that even if it was assumed that the premises were let out to respondent 1 for the purpose of residence the plea of bona fide requirement made by the appellant was not proved and the argument based upon section 13(1)(h) was not available to the appellant because the Golf Link building which respondent 1 had acquired cannot be said to be suitable for the conduct of business if the neighborhood or the locality in which it is situated is not suitable for that purpose. In the result the High Court dismissed the appellant 's revisional application It is against this decision that the appellant has come to this Court by special leave. It is relevant to refer to the material provisions of the Act before dealing with the points raised for the appellant by the learned Solicitor General in the present appeal. The Act applies to premises which are defined by section 2(g) as meaning, inter alia, any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose. Section 13(1) provides that notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any promises shall be passed by any Court in favour of the landlord against any tenant including tenant whose tenancy is terminated. This provision is, however, subject to the exceptions provided under the several clauses of the proviso. We are concerned with two of these. Section 13(1)(c) allows a decree for ejectment to be passed if the Court is satisfied that the premises let for residential purposes are required bona fide by the landlord who is the owner of such premises for occupation as a residence for himself or his family and that he has no other suitable accommodation. The explanation to this clause provides that for the purpose of this clause residential premises include any premises which having been let for use as a residence are, without the 683 consent of the landlord, used incidentally for commercial or other purposes; and section 13(1)(h) provides for ejectment in a case where the Court is satisfied that the tenant has whether before or after the commencement of this Act built, acquired vacant possession of, or has been allotted, a suitable residence. It is with these three provisions that we are concerned in the present appeal. It would be noticed that as soon as it is found that the premises in question have been used by respondent 1 incidentally for professional purposes and it is further established that this use is made with the consent of the landlord then the case goes outside the purview of section 13(1)(e) altogether. In the present case it has been found by the appellate Court and the High Court that right from the commencement of the tenancy a substantial part of the premises is used by respondent 1 for his professional purpose, and they have also found that this has been done obviously with the consent of the landlord. It is unnecessary to refer to the evidence on which this finding is based. Even the trial Court was apparently inclined to take the same view about this evidence but it did not fully appreciate the effect of the explanation; otherwise it would have realised that the professional use of a substantial part of the premises with the consent of the appellant clearly takes the case outside section 13(1)(e). In other words, where premises are let for residential purposes and it is shown that they are used by the tenant incidentally for commercial, professional or other purposes with the consent of the landlord the landlord would not be entitled to eject the tenant even if he proves that he needs the premises bona fide for his personal use because the premises have by their user ceased to be premises let for residential purposes alone. This position cannot be seriously disputed. Faced with this difficulty the learned Solicitor General attempted to argue that the very finding made by the Courts below about the nature of the tenancy takes the premises outside the purview of section 2(g) of the Act. The argument is that the premises cannot 684 then be said to have been let for use as a residence or for a commercial use and so they ceased to be premises under the Act. It is suggested that any other use which is specified by section 2(g) would not include a combination of residence with commercial or professional purposes. The other use there referred to may be use for charity or something of that kind which is different from use as residence or commercial use. In our opinion this argument is not well founded. The three kinds of user to which the definition refers are residence, commerce and any other purpose which necessarily must include residence and commerce combined. It may also include other purposes as suggested by the learned Solicitor General. As soon as it is shown that the premises have been let both for the use of residence and for commercial purposes it does not follow that the premises cease to be premises under section 2(g); they continue to be premises under the last clause of section 2(g). This position is wholly consistent with the division of the premises made with reference to their user in paragraphs 3, 4 and 5 of Part A in the Second Schedule to the Act. Therefore, in our opinion, the argument urged by the learned Solicitor General on the construction of section 2(g) cannot be sustained. It will be recalled that the present suit has been filed by the appellant himself praying for the respondent 's ejectment under the provisions of the Act, and so the argument that the Act does not apply to the premises in question can be justly characterised as an argument of desperation. Then it is contended that even if the appellant may not be entitled to claim ejectment under section 13(1)(e) he would be justified in claiming a decree for ejectment against the respondent independently under section 13(1)(h). It is urged that as soon as it is shown that respondent 1 has acquired a suitable residence he can be ejected even though section 13(1)(e) may not apply to his tenancy. In our opinion, even this argument is fallacious. Section 13(1)(h) applies to tenancies which are created for essential purposes, and it provides that in the case of such tenancies even if the landlord may not be able to prove his case under section 13(1)(e) he would nevertheless be entitled to eject the tenant once it is shown 685 that the tenant has acquired another suitable residence. The requirement is that the tenant must have suitable residence. Both words of the requirement are significant; what he has acquired must be residence, that is to say the premises which can be used for residence and the said premises must be suitable for that purpose. If the promises from which ejectment is sought are used not only for residence but ' also for profession how could section 13(1)(h) come into operation? One of the purposes for which the tenancy is acquired is professional use, and that cannot be satisfied by the acquisition of premises which are suitable for residence alone, and it is the suitability for residence alone, which is postulated by section 13(1)(h). Therefore, in our opinion, it would be unreasonable to hold that tenancy which has been created or used both for residence and profession can be successfully terminated merely by showing that the tenant has acquired a suitable residence. That is the view taken by the High Court and we see no reason to differ from the conclusion of the High Court. The last argument urged by the learned Solicitor General is that respondent 1 should not be allowed to approbate and reprobate as he has done in the present case. This argument is based on the conduct of the respondent at the previous stages of the dispute. It is true that in 1941 and onwards respondent 1 has successfully urged that the tenancy was for residence, and in consequence has secured the extension of tenancy under cl. 11A of the New Delhi House Rent Control Order, 1939, issued under r. 81(2)(bb) of the Defence of India Rules. The statements made by respondent 1 in that behalf indicate that he exercised his option of obtaining extension of the lease on the ground that the premises were let out to him for residence. The argument is that since by the said representations he had actually obtained an advantage he cannot be permitted now to contend that the lease is not only for residence. On the other hand the conduct of the appellant himself is also inconsistent with the stand taken by 87 686 him in the present proceedings. In 1942 when he demanded an increased rent from respondent 1 he made out a case which is inconsistent with his present story that the premises were let out to respondent 1 only for residence. The case then made out by him appears to be that the tenancy fell under paragraph 4 of Part A in the Second Schedule to the Act, and that would mean that the premises had not been let only for residence. Indeed the conduct of both the parties has been actuated solely by considerations of expediency and self interest in this case, and so it would prima facie be idle for the appellant to contend that respondent 1 should not be allowed to approbate and reprobate. But, apart from this fact, it is obvious that the appellant cannot be allowed to raise this contention for the first time before this Court. The plea sought to be raised can be decided only after relevant evidence is adduced by the parties, and since this plea has not been raised by the appellant at the proper stage respondent 1 has had no opportunity to meet the plea and that itself precludes the appellant from contending that though the lease may not be one for residence alone respondent 1 should not be permitted to urge that it is not for residence but for residence and profession, It is the settled, practice of this Court that new pleas of this kind which need further evidence are not allowed to be raised in appeals under article 136 of the Constitution. The result is the appeal fails, but in the circumstances of this case we direct that the parties bear their own costs throughout. Appeal dismissed.

The respondent as a tenant of tile appellant was occupying a portion of the premises in question for residence and the other major portion for his professional work as an ear, nose, throat specialist. The appellant sued for the ejectment of the respondent on the grounds that (i) he required the premises for his own residence and that (ii) the respondent had built a suitable residence for himself in another locality. The first plea was based on the ground mentioned in section 133(1)(e) and the second plea on section 13(1)(h) of the Delhi and Ajmer Rent Control Act, 1952. The trial court decreed the suit but the appellate court and the High Court dismissed it on the finding that from the beginning of the tenancy a substantial part of the premises was used by the respondent for his professional work obviously with the consent of the appellant. Held, that premises let for residential purposes but used by 679 the tenant with the consent of the landlord incidentally for commercial, professional or other purposes cease to be premises let for a residential purpose alone and as such the landlord would not be entitled to eject the tenant under section 13(1)(e) of the Act. Nor can such a tenant be ejected independently under section 13(1)(h) because a tenancy created or used both for residence and profession cannot be terminated merely by showing that the tenant had acquired a suitable residence. Premises let both for residence and commercial purposes do not cease to be premises under section 2(g) and continue to be so under the last clause of section 2(g).

The appellants in execution of a decree passed in their favour for possession over a house obtained possession thereof on July 22, 1951. The order for delivery of possession was made without notice to and in the absence of the respondent. The respondent made an application in the Executing Court under sections 47, 144 and 151, Code of Civil Procedure for setting aside the ex parte order of delivery and for redelivery of possession of the house to him or in the alternative, for an order to the appellants for giving facilities for removing the moveables from the house. The Executing Court upheld the contention of the appellant that 76 592 the respondent 's application was not maintainable. On appeal by the respondent the High Court held that the Executing Court had no jurisdiction to order the eviction of the respondent because of the provisions of the Mysore House Rent and Accommodation Control Order, 1948, which was in operation on the date of eviction and under sections 9 and 16 of which certain restrictions were placed on the eviction of tenants. On appeal to this Court by special leave, the appellants contended, inter alia, as they did in the High Court also , that the Mysore House Rent Control Order of 1948 was repugnant to the provisions of the (IV of 1882), which became applicable in the State of Mysore by Part B States (Laws) Act, 1951 (Act III of 1951), which came into force on April 1, 1951 ; and therefore the House Control Order could not operate on the rights of the parties on the day when the Executing Court made the order for delivery of possession to the appellants, i. e., July 9, 1951, or when delivery was actually given i.e., on July 22, 1951. Held, that the came into force only when it was extended by notification dated September 12, 1951, under section 3 of that Act, i.e., from October 1, 1951, and therefore the Mysore House Rent and Accommodation Control Order, 1948, was not repealed as from April 1, 1951, when the Part B States (Laws) Act, 1951, came into force and was in force when the possession was delivered. It was then an existing law which was saved by article 372 of the Constitution and remained unaffected by article 254, and the question of repugnancy to the (Act IV of 1882) did not arise in this case. M/s. Tilakram Rambaksh vs Bank of Patiala, A.I.R. 1959 Punj. 440, considered. Section 47 of the Code of Civil Procedure was applicable to the proceeding out of which this appeal has arisen because the question whether the decree was completely satisfied and therefore the court became functus officio was a matter relating to execution, satisfaction and discharge of the decree. Ramanna vs Nallaparaju, A, I. R. and J. Marret vs Mohammad Shirazi and Sons, A.I.R. 1930 P. C. 86, considered. Where the court was not aware of the statutory restriction by which the execution of a decree was prohibited and passed an ejectment decree against a tenant the Executing Court could not execute the decree and any possession given under an ex parte order passed in execution of such a decree could be set aside under section 151 of the Code of Civil Procedure. K.Muhammad Sikri Sahib vs Madhava Kurup, A.I.R. 1949 Mad. 809, considered. 1 The contentions of the appellant based on the ground of res judicata and estoppel were without any force. Sections 9(1) and 16 of the House Rent Control Order placed restrictions on 593 the power of the Court to execute the decree and ignoring them was not merely an error in the exercise of jurisdiction.

The respondents mortgaged a house property in Bhavnagar with ID possession to a business firm in July, 1947. The ground floor of the house was already in the occupation of a tenant and hence the mortgagors endorsed the rent deed to the mortgagee for the remaining period of the lease. Clause 5 of the mortgage deed gave option to the mortgagee to give the house property on rent to anyone and made the mortgagors accountable for loss of rental income. Clause 7 empowered the mortgagee to keep the property in his possession till the mortgage debt was repaid. Clause 10 entitled the mortgagors to redeem the mortgage at any time and stated that as soon as redemption took place, the mortgagee should return the documents of title and re deliver possession of the house to the mortgagors. Notwithstanding the mortgage purporting to be possessory the deed provided for payment of interest, and for the mortgagee to demand repayment of the mortgage amount at any time it deemed fit. When the existing tenant vacated the portion occupied by him, in November, 191;6, the mortgagee inducted the appellant as a tenant. The Saurashtra Rent Control Act, 1951 had in the meantime come into force. This was replaced by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 with effect from 1.1.1964. The ejectment proceedings initiated by the mortgagee against the tenant appellant were pending when the mortgage was discharged in October, 1972 in terms of the memo of compromise, which stated that the ground floor of the house had been given on rent to the appellant, that the mortgagee had filed a case against him, that in such circumstances the 77 vacant possession of the ground floor could not be delivered, and that the mortgagors were entitled to obtain vacant possession of the said portion from the appellant. In the execution proceedings taken out by the mortgagors thereafter the executing court held that they were entitled to get only symbolic delivery and not physical possession of the leased property. The High Court held that as the mortgage was an anomalous mortgage, the rights of the mortgagee have to be determined with reference to the terms of the mortgage deed, that though the mortgage deed permitted the mortgagee to create tenancies, the said permission did not extend to granting lease beyond the term of the mortgage and it was subject to the stipulation in the mortgage deed that the mortgagee should deliver possession whenever the mortgage was redeemed, and hence when the mortgagee 's right to possession came to an end, he ceased to be a lessor and the appellant was bound to surrender possession and he had no right to invoke the provisions of the Rent Acts to continue his tenancy, and that the appellant was not a necessary party to the suit or the execution application, as his possession was akin to that of a sub lessee and the execution application was therefore legally maintainable against him. In this appeal by certificate it was contended for the appellant tenant that his tenancy rights were protected under the Saurashtra Rent Act and the Bombay Rent Act, that the mortgagors had given an unrestricted power to the mortgagee to create a tenancy for any length of time, and were therefore, bound to accept the lease transaction even after the redemption of the mortgage deed, that his tenancy rights became enlarged by the subsequent legislation enacted for affording protection to tenants, and that by reason of the authority given to the mortgagee to create tenancy the mortgagors had constituted the mortgagee as their agent and hence they as principals were bound by the acts of their agent. Dismissing the appeal, ^ HELD: 1.1 A tenancy created by a mortgagee in possession may be binding even after the termination of the title of the mortgagee in possession if the mortgagors had concurred to the grant of the lease. [88B] 1.2 In the instant case, the mortgagors had not empowered the mortgagee to create a tenancy which would be binding on them after the 78 redemption of the mortgage. The authorisation given to the mortgagee was not an unconditional and absolute one. It was circumscribed by the stipulation that the mortgagee should re deliver the possession of the property whenever the mortgage was redeemed. The lease granted by the mortgagee could not thus enure beyond the term of the mortgage. [9lE, 90A, 91BC] 1.3 This was not a case where the mortgagee was put in possession of the mortgaged property in older to appropriate the usufructs in lieu of interest. The mortgagors had agreed to pay interest to the mortgagee at mercantile rate and also as per contractual rate. Furthermore, the mortgage deed absolved the mortgagee of any liability for loss of income from the mortgaged property due to fall in rent or non payment of rent or due to non leasing of the property and keeping the house vacant. On account of these guarantees the mortgagee was under no compulsion to lease out the property just because of the permission given to him to grant lease, either to secure rental income in lieu of interest or on grounds of prudent management. The mortgagee should have realised that by inducting the appellant, he was running the risk of being unable to deliver possession of the house to the mortgagors when the mortgage was redeemed and thereby he would be contravening clauses 7 and 10 of the mortgage deed. [90D E] 1.4 The mortgage in the instant case was an anomalous mortgage and not an usufructuary one. The rights of the parties to the mortgage therefore would be governed by section 98 of the , which provides for determination of the rights of the parties in accordance with the terms of the mortgage deed. Consequently, the appellant could claim tenancy rights only as against his landlord viz. the mortgagee and not against the mortgagors. As soon as the mortgagee 's rights became extinguished by redemption of the mortgage, neither he nor anyone inducted by him had a right to be in possession of the mortgaged property. [85CE, 91F] Film Corporation Ltd. vs Gyan Nath, ; Purshottam vs Madhavaji Meghaji, ; AIR 1976 Gujarat 161; ; SV Venkatarama Reddiar vs Abdul Gani Rowther & Ors. AIR 1980 Madras 276; and Devkinandan vs Roshan Lal, AIR , referred to. No question of imprudence can arise where the rights of the tenant were enlarged by tenancy legislation enacted after the tenant was put in possession by the mortgagee. In the instant case, the appellant 's rights, as a tenant, did not become enlarged by means of any tenancy 79 legislation which came to be enacted after the lease was granted. The Saurashtra Rent Control Act, 1951 was already in force when the appellant was inducted into possession from December 4, 1956. It cannot be claimed that the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 which had replaced the Saurashtra Act from January 1, 1964, was a subsequent tenancy legislation that had enlarged the tenancy rights of the appellant, since the second appeal pertaining to the standard rent application and the suit for ejectment filed by the mortgagee were instituted in 1963 before the repeal of the Saurashtra Act. [88A, 91E, 88F,H, 89AB,DE] Mahabir Gope vs Harbans Narain, ; ; Asa Ram vs Ram Kali, ; Dahya Lal vs Rasul Mohammed Abdul Rahim, [1963] 3 SCR l; Prabhu vs Ram Dev, ; and Mula 's , 7th Edn. p. 514, referred to. The relationship between the parties to the mortgage was always one of debtor and creditor. There was, thus, no question of the mortgagors constituting the mortgagee as their agent. [9lD] D 4. The appellant had no independent rights and hence it was not necessary that he should have been made a party to the suit filed by the mortgagors after the redemption of the mortgage. His position was akin to that of a sub tenant whose rights were co terminus with those of the tenant himself. The mortgagors were, therefore, entitled to seek ejectment of the mortgagee and the tenant inducted by him. The execution application taken against the mortgagee would be binding on the appellant. [9lG H]

The appellant (holder of an inam in Madhya Pradesh) served a notice an his tenant, the respondent, terminating to tenancy on the ground that he wanted the land for personal cultivation and filed a suit for ejectment. The trial court decreed the suit. During the pendency of the appeal in the District Court, article 32 of 1954 was enacted, and pursuant to its provisions the hearing of the appeal was stayed. After the Madhya Pradesh Land Revenue Code came into force in 1959, the District Court held that by virtue of section 185 of that Code the respondent acquired the rights, of an occupancy tenant and dismissed the suit. The High Court confirmed the judgment of the District Court. In appeal to this Court, it was contended that : (i) the rights of an occupancy tenant arise in favour of a personl under section 185(1) (i) (a) only if there was between him and the landlord a subsisting tenancy at the date when the Code came into force and since under the law in force before the commencement of the Code, the respondent had ceased to be a tenant because of the notice terminating the contract of tenancy the respondent was not invested with the rights of an occupany tenant; and (ii) bi virtue of sections 261 and 262(2), the operation of section 185 is expressly excluded when a person, against whom ejectment proceedings have been instituted prior to the commencement of the Code in enforcement of a right then acquired, claims the status of an occupancy tenant. HELD : (i) The respondent acquired the right of an occupancy tenant under the Code, because the expression "tenant" in section 185 (1) (ii) (a) includes a person whose tenancy was terminated before the commencement of the Code. The definition of the expression "tenant" in the Code postulates a subsisting tenancy, but the position of a tenant prior to the date on which the Code was brought into force is not dealt with in the definition. In the context in which the expression "tenant" occurs in section 185(1), that definition could not be intended to apply in deter ining the conditions which invest a holder of land with the status of an occupancy tenant at the commencement of, the Code. Therefore having regard to the object of the enactment the expression should be ascribed the meaning it 'has in Act 32 of 1954. Under sections 3 & 4 of that Act a person who was inducted into the land as a tenant and who continued 'to hold the land at the commencement of the Act was entitled to protection against eviction and continue as tenant, notwithstanding that under the law in force prior to the commencement of the Act. the contractual relationship of landlord and tenant was determined. [432 D; 432 14 433 C] 428 There is no reason to think that the Legislature sought to make a A distinction between tenants of Inam land in section 185 (1) (ii) (a) and ryotwari sub lessees of other lands in section 185(1)(ii)(b). Therefore, if the expression "ryotwari sub lessee ' in section 185(1)(ii)(b) includes a sub lessee whose tenaure was terminated before the commencement of the Code, a tenant of inam land, whose tenancy has been terminated would also be included in the protection, provided at some time prior to the date on which the Code was brought into force, he was in possession of the land as a tenant, and he continued to hold the land till the date of the commencement of the Code. [434 E H] (ii) The provisions of the Code appeal to tenants in proceedings for ejectment pending at the commencement of the Code. The proviso to section 261 protects a right which had been acquired under a law repeated by the Code and the right could be enforced as if the code had not been passed. But the right to evict a tenant was governed by the general law of landlord and tenant and was not acquired under any repealed law. The proviso had no operation and a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law enacted in the Code. Therefore, the tenant could not ' be evicted otherwise than in the manner and for reasons mentioned in a. 193 of the Code but, personal requirement for cultivation of land is not a ground on which a claim for ejectment could be maintained. [435 G436 A] Section 262(2) is only procedural it provides that a civil court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, Which, if it had been instituted after the Code was passed would have been tried by a revenue court; and in the disposal of such a suit, the civil court will be governed by the procedural law applicable there to prior to the commencement of the Code. It does not nullify the statutory conferment of occupancy right upon persons in the position of tenants against whom proceedings were taken at the date when the Code was brought into force. [436 B D]

Three separate suits for eviction by the appellant were brought against the three respondents within the framework of the Delhi & Ajmer Rent Control Act and were based on the provisions of section 13(g) for the bona fide requirements of rebuilding. Terms of compromise which were substantially in accordance with the provisions of section 15 of the Act were put in by the parties and decrees were passed in the suits, under which the premises had to be vacated by the respondents on a specified day, which condition the respondents failed to observe and actually handed over the possession of the premises in suit at a later date. On completion of the building the respondents filed an application under section 15 of the Act for their being put into possession. The High Court inter alia held that though section 15 of the Act was not applicable to the proceedings yet the respondents could impose the terms of the decree and the proceedings could be treated as execution proceedings for enforcing the said terms. The appellants challenged the judgments of the High Court and contended that on the facts of the case and the circumstances, the decrees in suit under section 13(1) proviso (d) shows that the order was passed and a decree made in accordance with the terms of section 15 of the Act and further it was significant that the respondents them selves had made the application to the Court under section 15 of the Act. The respondents submitted that the decree was not one under section 15 of the Act because the decree was based on a compromise and the time for giving possession was not. of the essence of the contract : Held, that as the tenant respondents did not deliver posses sion of the premises to the landlord appellant on or before the dates specified in the decree, the provisions of section 15 (3) of the Delhi and Ajmer Rent Control Act (38 of 1952) were not available to them and they were not entitled to be put in possession.

The appellants filed suit under the U.P Tenancy Act, 1939. for the ejectment of the respondents who were tenants of sir. The appellants filed the necessary extracts of papers in support of their case. The trial court decreed the suits 905 holding the land in suit was sir, that the appellants were sirholders, that each of them did not pay a local rate exceeding Rs 25, that he did not hold more then 50 acres of sir land or more than 50 acres of sir and khudkast land which had not been sublet and that the respondents had not become hereditary tenants. The respondents preferred appeals before the Commissioner. During the pendency of the appeals the U.P Tenancy (Amendment) Act.1947, amended s.19 of the Act Amended section 19 provided that in suits for ejectment of tenants of sir the sir holder shall, before the first day fixed for recording evidence, furnish such particulars as may be prescribed and further provided that for failure to file such particulars the suit shall be dismissed. Section 31 of the Amending Act provided that its provision shall apply to pending suits, appeals etc. The respondents contended that the appellants had failed to comply with the provisions of amended section 19 and that the suits should be dismissed. The Commissioner confirmed all the findings of the trial court and held that there had been sufficient compliance with the provisions of amended section 19 and according dismissed the appeals. The respondents preferred second appeals before the Board of Revenue. The Board held that the provisions of amended section 19 and of the rules framed thereunder had not been complied with and remanded the case to the trial court for compliance therewith and retrial. Held, that there had been sufficient compliance with the provisions of amended section 19 and the rules framed thereunder and that the Board was riot justified in remanding the cases for retrial. Section 19 did not bring about any real change in the substantive law affecting the question whether land was sir or not. Even after the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment. The only difference brought about by the amendment was in procedure and whereas prior to the amendment a sir holder could lead his evidence without informing the Court before hand about the material he would produce, after the amendment it was incumbent upon him to furnish such information to the Court before the date fixed for recording evidence, The necessary particulars had been furnished even prior to the amendment and the Commissioner could decide the appeals in accordance with the provisions of the Act as amended by the amending Act. The attention of the Board was not drawn to the relevant documents filed by the appellants and it erred in stating that there had been no substantial compliance with the provisions of amended section 19 and of the rules framed thereunder.

The appellant applied to the Accommodation Department of the State Government for allotment of a flat. The State Government urged down the request but requisitioned the flat by an order dated 9th April, 1948 under clause (a) of sub section(4) of section 6 of the Bombay Land Requisition Act, 1948. This order of requisition, did not set out the public purpose for which the flat was requisitioned. The Assistant Controller of Accommodation by an order dated 25th April, 1951 allotted the requisitioned flat to the appellant who entered into occupation and paid rent to the landlady from time to time but as he was irregular and committed several defaults the Controller of Accommodation sought to terminate the allotment. The 3rd respondent, on 30th May, 1973 purchased the building in which the requisitioned flat was situated, and requested the State Government to de requisi 694 tion the flat, as the allotment of the flat in favour of the appellant could not be said to be for a public purposes. The State Government did not pay any heed to this request. The 3rd respondent, thereupon filed a Writ Petition in the High Court challenging the validity of the order or requisition, contending that it could not survive for such a long period of time and that the State Government was therefore bound to de requisition the flat. The High Court allowed the Writ Petition and directed the State Government and the Controller of Accommodation to de requisition the flat, take steps to evict the appellant, and hand over vacant possession. In appeal this Court, it was contended inter alia on behalf of the appellant tenant that even the order of requisition was invalid as having been made for a purpose other than a public purpose, the 3rd respondent was not entitled to challenge the order of requisition after a lapse of over 30 years and that the Writ Petition should have been dismissed by the High Court. Dismissing Appeal, ^ HELD: 1. The order of requisition even if it was valid when made, ceased to be valid and effective after expiration of a reasonable period of time What period of time must be regarded as reasonable for the continuance of an order of requisition depends on the facts and circumstances of each case. [700 H] In the instant case, the order of requisition was made as far back as 9th April 1951 and even if it was made for housing a homeless person, and the appellant at that time, fell within that category, it cannot be allowed to continue for such an inordinately long period as thirty years. [700 G] 2. Requisitioning must be made for a public purpose, and so long as there is a public purpose for which an order of requisition is made, it would be valid irrespective of whether such public purpose is recited in the order of requisition or not. But if the order is challenged, the State Government would have to satisfy the Court by placing the necessary facts showing the public purpose for which the order of requisition was made. [698 B,G] 3. There is a basic and fundamental distinction recognised by law between requisition and acquisition. The Constitution itself in Entry 42 of List III of Seventh Schedule makes a distinction between acquisition and requisitioning of property. The original Article 31 clause (2) of the Constitution and recognised this distinction 695 between compulsory acquisition and requisition of property. The two concepts, one of requisition and the other of acquisition are totally distinct and independent. Acquisiting means the acquiring of the entire title of the expropriated owner what ever the nature and extent of that title may be. The entire of rights which was vested in the original holder passes on acquisition to the acquire leaving nothing to the former. The concept of acquisition as an aim of permanence and finality in that there is a transference of the title of the original holder to the acquiring authority. But the concept of requisition involves merely taking of "domain or control over property without acquiring rights of ownership" and must by its very nature be of temporary duration. [699 F H] 4. If the Government wants to take over the property for and indefinite period of the Government must acquire the property but it cannot use the power of requisition for achieving that object. The power of requisition is exercisable by the Government only for a public purpose which is of a transitory character. If the public purpose for which the premises are required is of a perennial or permanent character from the very inception, no order can be passed requisitioning the premises and in such a case the order or requisition, if passed, would a fraud upon the statute. What ever be the public purpose for which an order of requisition made, it is by its very nature temporary in character and it cannot endure for an indefinite period time. The period of time for which an order of requisition may be continued cannot be an unreasonably long period such as thirty years and it must therefore be held that the order of requisition, even if valid when made, ceased to be valid and effective. The Writ Petition challenging the order of requisition after a lapse of over thirty years was therefore maintainable.[700 C F,701 A] 5. The appellant was an allottee of the flat under the order of requisition and he was liable to pay compensation for the use and occupation of the flat to the State Government and the State Government was in its turn liable to pay compensation for the requisitioning of the flat. If, instead of the appellant paying compensation to the State Government and the State Government and the State Government making payment of an identical amount to the owner, the appellant paid directly to the owner with the express or implied assent of the State Government, the order of requisition could not cease to be valid and effective. It did not matter whether the appellant described the amount paid by him to the owner as rent, because whatever was done by him was under the order of requisition and so long as the order of requisition stood, his possession of the flat was attributable only to the order of requisition and no payment of amount described as rent could possible after the nature of his occupation of the flat or make him a tenant in respect of the flat.[701 F H] State of Bombay vs Bhanji Munji & Anr. [1955] 1 S.C.R. 777; Chiranjital 's case [1950]S.C.R. 869; referred to. 696

Plot No. 4635A (old number 5199) admeasuring bigha and 2 biswas and located in the Meerut municipal area was leased by the Lala Nanak Chand Trust to the predecessor in interest of the present respondents. According to the lease deed dated June 23, 1926 the lease was granted "for the purpose of planting a grove, erecting buildings and digging wells etc.". The period of the lease was 30 years but the lessor agreed that on the expiration of that period he would at the request of the lessee renew the lease for another 30 years. On the expiry of the initial period of 30 years on July 1, 1956 the lessor Trust instituted a suit for recovery of possession of the aforesaid land. The suit was dismissed by the trial court but decreed by the first appellate court. The respondents thereafter, on permission granted by the said first appellate court instituted a suit for the specific performance of the agreement to re let the land for another term of 30 years. The suit was dismissed on the ground of limitation by the trial court, as well as the first appellate court. In both the suits the present respondents filed second appeals in the High Court. While these appeals were pending the U.P. Urban Areas Zamindari Abolition and Land Reforms Act, 1956 was enforced in the city of Meerut. The land in dispute was declared an agricultural area ' under the Act and a notification under section 8 of the Act vesting the land in the State was issued on July 16, 1964. Rule 39 of the Uttar Pradesh Urban Areas Zamindari Abolition and Land Reforms Rules, 1957 provided for abatement of certain suits and appeals. Applying the rule the High Court abated the two aforesaid appeals filed by the respondents before it. The Trustees appealed to this Court by special leave. They also filed a writ petition under article 32 of the Constitution praying that the notifica tion under section, 8 of the Act dated July 16, 1964 be quashed as violative of Articles 14, 19(1)(f) and 31 of the Constitution. It was further contended that section 2(1)(d) of the Act whereby land held on lease duly executed before the first day of July 1955 for the purposes of erecting buildings thereon was included in the term 'agricultural area ' was protected by article 31 A of the Constitution. HELD : (i) The lease was not exclusively a building lease. Admittedly no building had been constructed. The respondents claimed to have planted a grove. If so, the land would be covered by section 2(1)(c)(viii) The lease could not therefore be held to fall exclusively under section 2(1)(d). [790B] 784 (ii) In Durga Prasad 's case the Allahabad High Court has pointed out the history of cl. The High Court has taken the view that section 2(1)(d) is limited to lands which are being used for agricultural purposes. The conclusion must be held to be correct though for different reasons, On this construction of section 2(1)(d) it cannot be said that this provision is not connected with agricultural reforms. It could accordingly receive the protection of article 31A and would be immune from attack on the ground of violation of Articles 14, 19 and 31. [792C] Durga Prasad vs Board of Revenue U.P. Allahabad and others, A.I.R. 1970 All. 159, referred to. (iii) The report of the Commission would not show that the land in dispute was a grove within the meaning of section 2(6) of the U.P. Tenancy Act, 1939. As the appellants had given the old number of the plot in their petition the Government did not reply to the allegation in the petition. Accordingly it was not possible to express any concluded opinion on the question whether the land in dispute was an 'agricultural area ' on the date specified under section 2(1) and was being used for horticulture. , The issue must be decided afresh by the appropriate authority under the Act. If it is held by him that the land in dispute is an 'agricultural area ' and the State Government issues a notification under section 8 of the Act with respect to the land, the appeals will be, disposed of by the High Court in accordance with the provisions of the Act. [793C] [Notification dated June 16, 1964 quashed, and orders of the High Court abating the appeals and suits set aside.]

Appeal No. 457/58. Appeal from the Judgment and order dated September 12, 1956, of the Punjab High Court in Letters Patent Appeal No. 38 of 1955. N. C. Chatterjee and Naunit Lal, for the appellants. Nanak Chand, for the respondents Nos. 4 to 9. 1961. May 4. The Judgment of the Court was delivered by MUDHOLKAR, J. In this appeal under article 133 (1) (c) of the Constitution the question which arises for consideration is whether after July 22, 1952 the Custodian of ' Evacuee Property in the State of Punjab of the Custodian General hearing an appeal from an order made by the Custodian after July 22, 1952 has the power to cancel an allotment of rural evacuee property on a quasi permanent basis except upon the grounds set out in r. 14 (6) of the Administration of Evacuee Property Rules, 1950 as amended by notification No. section R. 0. 1290 dated July 22, 1952. The circumstances under which this question arises may now be briefly stated. The appellants and their father Nand Singh were displaced persons from West Pakistan and got allotment of some land in the village Raikot, District Ludhiana on a temporary basis. Later, each of the appellants 1 to 3 was allotted 8 1/3 standard acres of land on a quasi permanent basis while Nail(] Singh, their father who was entitled to 41 standard acres and 7 units and to whom land to that extent had been temporarily allotted in the 740 village Raikot was allotted the same acreage of land in the village Hambran which is situate at a distance of 25 or 30 miles from Raikot. Nand Singh made an application for revising the order under which this was done but he died in the year 1951, during the pendency of that application. The appellants as his legal representatives continued the application. That application was rejected and revision application made against the order passed thereunder was also rejected on the ground that after July 22, 1952 the Additional Custodian was not competent to cancel an allotment made in favour of any person except upon the grounds set out in r. 14 (6) of the Evacuee Property Rules. Respondents 4 to 9 owned lands in Chak No. 127, G. B. Jaranwala, District Lyallpur and are also displaced persons. They were, therefore, allotted certain lands in the village Karodian as quasi permanent allottees. Subsequently some revenue papers were received from Pakistan from which it appeared that they were entitled to urban allotment. They, therefore, brought this matter before the Deputy Commissioner exercising the powers of Deputy Custodian. Thereupon he cancelled the allotment in their favour sometime in the year 1952 and proposed to the Additional Custodian, who was also acting as Director of Relief and Rehabilitation, for the allotment of the lands which were originally allotted to the respondents to others. Appellant No. 2, Gopal Singh, on behalf of his father Nand Singh applied to the Director of Relief and Rehabilitation that the allotment in the name of his father Nand Singh might be shifted from the village Hambran ' to the village Karodian. Additional Custodian not only allowed the Application of Gopal Singh and shifted the allotment of Nand Singh to the village Karodian but he also shifted the entire allotment of the appellants Nos. 1 to 3 from the village Raikot to the village Karodian with 741 the result that the lands allotted to the family were consolidated in the same village. The appellants thereupon obtained possession of the Karodian lands. Respondents 4 to 9 were allotted urban lands, which according to the appellants are more valuable and are of a superior quality. They did not prefer an application for review of the order of cancellation of their earlier allotment or of the order passed by the Additional Custodian allotting their lands to the appellants. Six months later, however, respondents 4 to 9 preferred an application before the Additional Custodian stating therein that the land abandoned by them in West Pakistan was rural and that their allotment should be shifted back to the village Karodian. To this application they did not make the appellants parties. The Additional Custodian held that he could not cancel the allotment in favour of the appellants in view of r. 14(6) of the Evacuee Property Rules already referred to. He, however, recommended the case to the Custodian General of India by his memo, dated October 14, 1953, for taking appropriate action. The Deputy Custodian General who heard the case sent it back to the Additional Custodian observing therein that if the respondents 4 to 9 are restored to their original lands the persons to whom those lands had been allotted will have to be shifted elsewhere and this process may involve "an interminable chain of cancellation of allotments. " He also observed that if the Additional Custodian could not cancel the allotment because of the coming into force of the amended r. 14 (6), the Custodian General also would be incompetent to cancel it. Thereafter the Additional Custodian heard the application of the respondents 4 to 9 on merits and dismissed it. Against his order dismissing the application respondents 4 to 9 preferred a revision application before the Custodian General. Curiously enough the Deputy Custodian General, 742 who heard it, this time granted the application and set aside the allotment in favour of the appellants. The appellants thereafter moved the High Court of Punjab under article 226 of the Constitution. The matter went up before a single Judge of the High Court who dismissed the petition observing as follows : "If the order of cancellation against the present opposite parties was made after the 22nd July, 1952, the order was inoperative in view of Rule 14 (6) and if it be said that the order of allotment was after the date then Rule 14 (6) is not bar to the cancellation of the order. In either case I am of the opinion that there is no error in the order of the Custodian General sufficient for the purpose of quashing his order . " The appellants thereupon preferred an appeal under the Letters Patent which was also dismissed by a Division Bench of the High Court. The substance of the reasoning of the learned Judges is that the allotment in favour of respondents 4 to 9 was wrongly cancelled and it was the duty of the Custodian to restore to 'them the lands from which they were ousted. They also said that the provisions of r. 14 (6) (lid not preclude the Deputy Custodian General from exercising the powers conferred upon him by section 27 of the or prevented him from cancelling the allotment made after July 22, 1952. The view taken by the Division Bench to the effect that r. 14 (6) did not stand in the way of the Custodian General of the Custodian from restoring the lands to the respondents the allotment with respect to which was wrongly cancelled by the Custodian cannot be sustained. No doubt it is one of the highest duties of all courts to take care that the act of the court does not do injury to suitors; but the court must have power to rectify the wrong. 743 Such power may either inhere in the Court or may be expressly conferred by statute. The law does not confer any express power on the Custodian to make restitution. But we will assume that be had inherent power to do so. Just as power can be conferred expressly by statute it can also be taken away or restricted and where it is taken away or restricted then, whether the power was statutory in its origin or was inherent in the court, it will be either wholly unexercisable or exercisable only subject to the conditions laid down in the statute, as the case may be. Here we have the notification dated July 22, 1952 which substituted the present sub r. 6 of r. 14 for the original sub r. 6. The amended sub rule has placed a limitation on the powers of the Custodian to cancel allotment of rural evacuee property on a quasi permanent basis. The result is that an allotment of such land can be cancelled only in the circumstances specified in that sub rule. Therefore, subsequent to July 22, 1952 the Custodian of Evacuee Property would have the power to cancel an allotment only upon a ground which falls within the exceptions enumerated in sub r. 6. Making of restitution is not within the exceptions and, therefore, it will have to, be said that the inherent power of the Custodian to cancel an allotment for making restitution has been abrogated by the amended sub rule. The other argument of the Division Bench is to the effect that the powers of the Custodian General under section 27 are untouched by sub r. 6 of r. 14 and that despite the making of this rule the Custodian General was not prevented from cancelling an allotment made after July 22, 1952. Now section 27 of the Act provides that the Custodian General may call for the record of any proceeding in which 4 District Judge or a 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 At. The 744 District Judge or the Custodian can in any matter before him do only that which the act or the rules made thereunder permit or require him to do. If he fails to do what he is required to do or if he does something which he is not permitted to do or if he commits an error in doing an act which he is permitted to do, the Custodian General has the power to order that to be done which the law requires the Custodian or the District Judge to do or to quash that which has illegally been done or to rectify the error which the Custodian or the District Judge has committed. He has no power to do something which the Custodian or District Judge could not have done or was prohibited from doing. Clearly, therefore, the High Court was in error in holding that the limitations placed by the present sub r. 6 of r. 14 did not affect the power of the Custodian General. The learned single Judge as well as the Division Bench have taken the view that where an allotment is made in favour of a displaced person subsequent to July 22, 1952, the provisions of sub r. 6 of r. 14 did not preclude the Custodian from cancelling that allotment. This view is sought to be supported by Mr. Nanak Chand on behalf of respondents 4 to 9 on, what he says, the language of sub r. 6 of r. 14. He says that according to this sub rule what the Custodian is precluded from doing is to cancel an allotment which had already been made, that is, made before the coming into force of the sub rule except upon certain grounds and does not place any further restrictions. We do not find any justification for placing such a restricted interpretation upon the plain language of the Sub rule. Learned counsel then referred to the second proviso to the sub rule and contended that it supported the interpretation which he was placing. The proviso reads thus : "Provided that where an allotment is cancelled or varied under clause (ii) the allottee 745 shall be entitled to retain such portion of the land to which he would have been entitled under the scheme of quasi permanent allotment of land: Provided further that nothing in this subrule 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 a lower authority on or before 22nd July, 1952. " How this proviso supports the argument of the learned counsel is difficult to appreciate. The proviso was not originally there when sub r. 6 was amended on July 22, 1952. It is possible that a doubt was entertained after the making of this subrule on the question whether the Custodian General or the Custodian before whom a revision application had been made against an order passed before July 22, 1952, could make an order cancelling the allotment. Apparently to remove the doubt such as may have existed this proviso had been added. Then learned counsel contended that this subrule can not take away the wide powers conferred upon the Custodian by section 10 of the Act. No doubt section 10 confers wide powers on the Custodian but the opening words of the section show that the powers conferred thereby are subject to the provisions of ruler, made under the Act and section 56 (2) (i) enables the Central Government to make rules to provide for "circumstances in which leases and allotments may be cancelled or terminated or the terms of any lease, or agreement varied. " We, have, therefore, no doubt that the High Court was in error in holding that sub r. 6 of ' r. 14 was not a bar to the, exercise by the Custodian General of the power to cancel an allotment after July 22, 1952. Having failed on the point which alone finds a place in the statement of the cases of both the 746 parties, Mr. Nanak Chand raised a contention that the allotment in favour of the appellants was itself bad because the cancellation of the allotment in favour of the respondents 4 to 9 was in contravention of r. 14 (6) and that, therefore, the appellants were not entitled to the relief from the High Court under article 226 of the Constitution and accordingly are not entitled to any relief in this Court. Since the respondents have not relied upon this ground in the statement of their case we are not prepared to consider it. There may be more than one answer to the point urged by the respondents and had they specifically raised it in their statement of case, the appellants would have been in a position to give an appropriate answer. Accordingly we allow the appeal with costs and quash the orders of the High Court as well as of the Deputy Custodian General. There is one more matter to which we must refer. It is this. During the hearing of the appeal learned counsel for the appellant brought to our notice the fact that on the records of the proceedings before the Deputy Custodian General there was a slip of paper from which it would appear that Deputy Custodian General had been approached by the then Speaker of the Punjab Assembly apparently on behalf of the respondents. We, therefore, asked for a report from the High Court. That report has come and it exonerates both the ex Deputy Custodian General as well as the ex Speaker. We are not satisfied with the report. However, considering the fact that the matter has become quite stale and we have allowed the appeal we do not propose to examine the matter further. Appeal allowed.

Respondents Nos. 4 to 9 who were displaced persons from Pakistan, were allotted certain rural lands in village Karodian on a quasi permanent basis. On information being received from Pakistan that they were entitled to urban allotment their allotment in village Karodian was cancelled and they were allotted urban land. The land thus vacated in village Karodian was allotted to the appellants. On July 22, 1952, r. 14(6) of the Administration of Evacuee Property Rules was amended and the power of the custodian to cancel quasi permanent allotments of rural evacuee property was taken away except in certain enumerated circumstances. Thereafter respondents Nos. 4 to 9 applied to the Custodian for shifting back their allotment to village Karodian on the ground that they were really ' entitled to allotment of rural property. The Custodian dismissed the application holding that r. 14(6) did not permit the cancellation of the allotment of the appellants. Respondents Nos. 4 to 9 filed a revision application before the Custodian General who allowed the application and cancelled the allotment of the appellants. The appellants contended that the Custodian General had no power to cancel their allotment. The respondents replied that the wide powers of the Custodian General under s.27 of , were not affected by the restrictions imposed by the amended r. 14 (6) on the power of the Custodian to cancel allotments. Held, that the Custodian General had no power to cancel an allotment of rural property made on a quasi permanent basis in a revision application against an order of the Custodian made after July 22, 1952. The power of the Custodian under section 10 of the Act to cancel allotments was subject to the rules. The amended r. 14(6) restricted the power of the Custodian to cancel such an allotment to the circumstances mentioned therein and the present case did not fall within any of those excep 739 tions. Amended r. 14(6) could not be resorted to for cancellation of allotments made before July, 22, 1952. The power of the Custodian General under section 27 of the Act was to see whether the order passed by the Custodian was legal and proper ; he had no power to do something which the Custodian could not have done or which he was prohibited from doing.

One Hazari Singh died in November 1918 leaving behind his widow Smt. Mam Kaur and two daughters viz., Smt. Pan Bai and Smt. Sohan Bai. The widow inherited the agriculture properties of her husband. The present appeals have arisen out of the two suits filed by the two daughters aforesaid claiming their half share in the property. The circumstances that led to the filing of the suits may be stated thus: Smt. Mam Kaur, the widow, adopted Ranjit Singh grand son of Sanehi Singh and son of Lakhi Singh (one of the collater als) in 1944 and gifted all the lands to him inherited by her from her husband. Both the adoption as also the gift were made orally. Munshi Singh and his brothers (reversions) filed a suit challenging the validity both of the adoption of Ranjit Singh and the gift of the properties to him. By a decree of the Court both the adoption as also the gift in favour of Ranjit Singh were declared invalid and a declaration was granted in respect of the gift so far as it affected the reversionary rights. Thereupon on 4th June, 1963, Smt. Mam Kaur sold away the entire property to Ranjit Singh & his brothers for Rs.50,000. Pan Bai, daughter of deceased Hazari Singh and Munshi Singh and others (revisioners) filed suits claiming pre emption rights to purchase the properties in question. By a decree of the Court it was held that Pan Bai has a superior right to purchase the property. Accordingly first preference was granted in favour of Smt. Pan Bai to deposit the sale amount and seek pre emption failing which her suit was to be dismissed and a later date was given to Munshi Singh and others. Pan Bai did not deposit the amount with the result Munshi Singh & others deposited the amount and took possession of the properties and came to be substi tuted in the sale. 1013 On the death of Mam Kaur in January, 1965, Smt. Sohan Bai (her 2nd daughter) filed a suit for a decree for posses sion of half of the share on the plea that in view of the declaratory decree of 24.7.47, on the death of Smt. Mam Kaur, succession had to be traced to Hazari Singh i.e. her father. Pan Bai, also filed a suit for the same relief. The Trial Court decreed the suit filed by Smt. Sohan Bai but dismissed the suit filed by Smt. Pan Bai on the ground that as Smt. Pan Bai had flied a suit claiming on the basis of pre emption earlier, she was estopped from disputing the validity of the sale made by Smt. Mam Kaur. On appeal the Additional District Judge maintained the decree passed in the suit of Smt. Sohan Bai and reversed the trial Court 's Judgment in the suit filed by Smt. Pan Bai and held that both the daughters were entitled to succeed to half share each in the property. Against the order of the Additional District Judge, defendants in both the suits filed Regular Second Appeals in the High Court which were dismissed by the impugned judgment. Hence these appeals. Before this Court it was inter alia contended by the appellants that ; in an earlier suit the adoption and the gift having been declared invalid, the donee who was the adopted son of Ranjit Singh was not left with any rights in the properties; on the other hand it was contended by the Respondents that no doubt adoption was declared invalid but so far as gift was concerned, it was declared invalid in a suit for declaration by reversioners to the limited extent that this gift will not affect the rights of the reversion ers thereby meaning that so far as the life estate of Smt. Mam Kaur was concerned, it was transferred by the gift deed but the right of the reversioners to succeed on the death of Smt. Mam Kaur was protected as it was declared that this gift will not affect the rights of the reversioners. Dismissing the appeals, this Court, HELD: The gift will not affect the rights of the rever sioners on the death of Smt. Mam Kaur but it could not be disputed that so far as Smt. Mam Kaur during her life time is concerned, as she had gifted away the property to Ranjit Singh and delivered possession, she had no rights left with her. [1020E F] What residuary rights could be thought of were not the rights of the widow but the right of the reversioners to get as heirs of her husband on her death and on that basis it could not be said that she could be said to be possessed of any right in the property which she held 1014 as a limited owner on the date the Hindu Succession Act came into force. [1020G H] On the date on which Smt. Mam Kaur executed the sale deed, in fact, she had no title to the property nor she was in possession thereof. [1022D E] Jagannathan Pillai vs Kunjithapadam Pillai & Ors., ; Gopal Singh & Ors. vs Dile Ram (dead) by Lrs. & Ors., Kuldip Singh & Ors. vs Surain Singh and others, referred to.

Practice and Procedure Conduct of parties to be taken into account while granting relief in writ petition. The property in dispute was undivided property (composite property) of three brothers, one of whom died and his sons migrated to Pakistan. One third share of the property was declared evacuee property and vested in the Custodian under the . It was allotted to the appellant who was a refugee. The Competent Officer issued individual notices under Section 6 of the to the two remaining brothers of the evacuee and their acknowledgments were placed on record. Since no claim was filed by anyone, an order was made by the Competent Officer on 31 8 1955 vesting the property in the Custodian under Sec. 11. As the property was again reported to be composite property, fresh notices were inadvertently issued to the co sharers, but no claim was filed by anyone and an order was again made on 23 3 1957 vesting the property in the Custodian. Possession of the evacuees one third share in the property was delivered to the appellant under order of Assistant Custodian. After a lapse of time, the respondents filed an application for 'restoration ' alleging that no notice for separation of the evacuee interest in the property was ever served on them and that they learnt of the vesting order only when the Manager of the evacuee property went to the village to take possession. The Competent Officer passed an order setting aside the vesting order dated 31 8 1955 and transferred the property to the sons of the deceased brother for Rs. 5,000/ . The Assistant Custodian of Evacuee Property made an application to the Competent Officer for a review of his order, pointing out a wrong impression. It was stated that the evacuee interest in the property had already been allotted to the appellant. The Competent Officer partly allowed the review. The respondents questioned the power of the Competent officer to review his order, but the objection was rejected. The respondents filed a writ petition under article 226 of the Constitution. The High Court quashed the order of review on the ground that in the absence of any provision in the Act for review, it was not permissible for the Competent Officer to review his order. Allowing the appeal to this Court, 892 ^ HELD: (1) The conduct of the respondents was such as to disentitle them to a writ and the High Court erred in ignoring that important aspect of the matter even though it was sufficient for the dismissal of the writ petition. [899B] (2) Review is a creature of a statute and cannot be entertained in the absence of a provision therefor. [897G] Harbhajan Singh vs Karan Singh & Ors., ; ; Patel Chunibhai Dajibhai etc. vs Narayanrao Khanderao Jambekar & Anr., ; referred to. Baijnath Ram Goenka vs Nand Kumar Singh, 40 I.A. 54; Ananatharaju Shetty vs Appu Hegde, AIR 1919 Mad. 244, approved. (3) The earlier two orders of the Competent Officer setting aside the vesting order and transferring the evacuee interest in the property to the respondents were therefor without jurisdiction. [897H 898A] (4) But when the respondents had themselves unlawfully invoked the review jurisdiction of the Competent officer, which did not exist, to their advantage, and to the disadvantage of the appellant, they could not be heard to say, when the Department invoked the self same jurisdiction on two important grounds, that the review orders of the Competent Officer were void for want of jurisdiction and must be set aside for that reason. [898H 899B] (5) The High Court failed to appreciate that while it was true that want of jurisdiction to review the order by the Competent Officer could not be cured by waiver, it would not necessarily follow that the Court was obliged to grant a writ at the instance of a party whose conduct was such as to disentitle it for it. The High Court was exercising its extraordinary jurisdiction and the conduct of the petitioners was a matter of considerable importance. [898E] (6) The High Court did not take due notice of the fact that the respondents had allowed the passing of the impugned orders, in spite of the individual notices to them. It did not notice the further fact that when that order had become final because of the failure to file an appeal or an application for revision it was not permissible in view of the specific bar of Sec. 18 for the respondents to move a "restoration" application and to obtain its reversal by the Competent Officer. [898F G]

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.

The appellant Panchayat owned 1200 Bighas of land in Village Kanonda Distt. Rohtak in Haryana. A Scheme of con solidation of Holdings under Section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act 1948 was confirmed on 15.1.1974, as a result whereof the Panchayat 's land was consolidated, repartitioned and allot ted to persons, allegedly having no right to hold the same with the result, the Panchayat was reduced as a landless person, and financially weak. The Panchayat, therefore, on 20.9.1977 moved an application under section 42 of the Act objecting to the utilization of the Land of the value of /2/ (Two annas) and the allotments made to other right holders. After hearing the parties, the Director of Consolidation of Holdings by his order dated 8.2.79 set aside the scheme and remanded the case to the consolidation officer with some directions. The Director took the view that even though the application had been made much beyond the period of limita tion of six months contemplated under Rule 18, yet in view of the fact that the Panchayat had no other land to culti vate due to which the Panchayat was unable to develop the agricultural Schemes, condoned the delay and allowed the application as aforesaid. Against the said orders the Re spondents moved the High Court by means of a Writ Petition urging inter alia that the Director had condoned the delay without there being any ground for the same and thus had acted illegally. The High Court held that the Director condoned the delay on extraneous considerations and accord ingly quashed the impugned 577 order of 8.2.79 passed by the Director. Hence the Panchayat has filed this appeal after obtaining Special Leave. Allowing the appeal, this Court, HELD: (Per K.N. Saikia & M. Fathima Beevi, JJ.) Section 42 of the Act envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made. These are the distinct proceedings for the purpose of exercising jurisdiction under this section. [585B] Applying Rule 18, the application has to be one under section 42 of the Act, and it has to be against an order and under the first proviso, a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded. [585F]. Rule 18 has to be interpreted as it is found, and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense. Two different meanings cannot be given to the same word "order" namely, that, in section 42 it does not include scheme prepared or confirmed or reparti tion made, while in Rule 18, it would include them. [586B C] The Rule did not come into play when a petitioner chal lenged either the scheme of consolidation including its preparation or confirmation or the repartition made in pursuance thereof. The amendment made this position clear. [586E] Though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a proceeding where an order was passed. There is the maxim expressio unius est exclusio alterius expression of one thing implies the exclusion of another. When mention has been made only of "orders", the inference would be that preparation or confirmation of scheme and repartition are excluded. [588F G] In matters like consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter, the objections may arise at various stages for various reasons and it will 578 not be possible to prescribe any hard and fast rule as to the reasonable period after which an application could be made under section 42 of the Act. The Legislature itself did not do so. [589C D] In the instant case, it has not been shown that the Panchayat earlier moved an application under section 42 on the same subject matter. There is no material to hold that the instant order of the Director is an order of review of his earlier order. [590A] (Per K. Ramaswamy, J.) As regards the exercise of the power under sections 19 & 20, the statute does not envisage passing any orders. But when exercising the power, the officer is enjoined to pass orders and appeals are provided within the prescribed limi tation against those orders to the appellate forums. This also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42. [580C D] The prescription of limitation of six months under Rule 18 would be confined only to order passed by an officer under the Act, it would not apply to the revision filed against the scheme prepared on confirmed or repartition made in pursuance thereof. [580F] It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time. [580G] What is reasonable time is always a question of fact depending upon the facts and circumstances of each case. [580G] When legislature chose not to fix a particular period of limitation, by judicial dicta it is not permissible to limit to a particular period. :While exercising power under Sec tion 42, the revisional authority may take into account the long lapse of time as a factor in the light of the facts and circumstances obtainable in an appropriate, case. No abso lute or precise period of limitation could be predicted or laid. [580H] Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, AIR 1984 Punjab & Haryana 216, ap proved. Haqiqat Singh vs Addl. Director, Consolidation of Hold ings, AIR 1981 Punjab & Haryana 204; Joginder Singh & Ors. vs The Director, 579 Consolidation of Holdings, and Harbha jan Singh vs Karam Singh & Anr., ; , referred to.

section 7 of the Punjab Customs (Power to Contest) Act, 1920 provided that no person shall contest any alienation of non ancestral immovable property on the ground that such alienation is contrary to custom. section 3 of the Amendment Act 12 of 1973 amended section 7 with the .result that no challenge could be made to the alienation of any immovable property, whether ancestral or non ancestral, on the ground that it is contrary to custom. A gift deed was executed by one Mula, in favour of appellant No. 13 Bhagwati Deyi, on December 3, 1964. Appel lants 1 to 12 claiming to be potential reversioners obtained a decree on May 31, 1966 in a suit flied against the donor and the donee for a declaration that under the Punjab Cus toms (Power to Contest) Act Z of 1920 the gift deed was not binding on them and that decree was confirmed in appeal on October 16, 1967. On July 10, 1966, Mula adopted the re spondent. On March 11, 1970 appellant No. 13 executed in favour of appellants 1 to 12,, a lease in respect of the property which was the subject matter of the gift. Mula died on August 23, 1971. On December 13, 1971, respondent filed a suit for possession of certain properties including the property which Mula had gifted to appellant No. 13. The suit was decreed on January 20, 1971 and that decree was confirmed in appeal by the District Court and the High Court. In appeal by special leave. , the appellants contended (i) In decreeing the suit the Courts below had over looked the relevant provisions of the Punjab Customs (Power to Contest) Amendment Act, 1973 by virtue of which the legali ty of the gift made by Mula to appellant No. 13 could not be contested and (ii) since the respondent was not entitled to impeach the gift in favour of Bhagwati Devi, having been adopted after the date of the gift, the decree obtained by appellants 1 to 12 cannot enure for his benefit, under section 8 of the Punjab Limitation (Custom) Act, of 1920. Dismissing the appeal, the Court HELD: (1 ) That a declaratory decree obtained under the Punjab Customs (Power to Contest) Act by a reversioner to the effect that an alienation would not bind them after the. alienor 's death, had the effect of restoring the property alienated to the estate of the alienor and therefore, all persons who are heirs to the deceased were entitled to obtain possession of the alienated property. [367 E F] (ii) The decree obtained by appellants 1 to 12 on May 31, 1966 would enure for the benefit of all persons who are entitled to a share in the property of the. deceased as it existed at the moment of his death. Since Mula 's property stood freed from the encumbrance of the, gift at the moment of his death, respondent as the adopted son would be en tiled to the possession of the gifted property. [367 H, 368 A] Giani Ram vs Ramji Lal ; , relied on to; Chand Singh vs bid Kaur approved. (iii) It is true that, if it became necessary after the amending Act of 1973 to contest the gift executed by Mula in favour of Bhagwati Devi, section 7 of the Act of 1920 would operate as a bar to such a contest. But in the instant case, the basis on which the respondent has asked for the relief is that upon the death of Mula in 1971, the gift ceased to be operative by reason of the decree passed in suit No. 143/1965. He has not and indeed he need not have contested the validity of the gift deed since the question was decided finally in the aforesaid suit. [367 B D] 366

In response to a notice issued under Section 10(2) of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960, the appellant contended that he was not in possession of 23.61 acres of surplus agricultural land as set out in the said notice, and that the authorities had failed to notice that he had transferred by means of a registered deed of gift dated January 7, 1972 an extent of 12.35 acres of land to his invalid daughter who remained unmarried inspite of being 30 years old because she was born a crippled child, and that the lands were part of Abadi and, therefore, stood excluded from the operation of the said Ceiling Act. The Prescribed Authority as well as the Appellate Authority did not find favour with the aforesaid contentions, and held that the appellant had failed to establish that the transfer of land in favour of his daughter was made in good faith, and was not intended for the immediate or deferred benefit of the appellant and other members of his family, and furthermore the transfer appeared to be a device to defeat the provisions of the Act. Being aggrieved with the order of the Prescribed Authority, that was affirmed by the Appellate Authority the appellant approached the High Court by way of Writ Petition to quash the said orders. The High Court, however, dismissed the Writ Petition. In the appeal to this Court it was contended on behalf of the 541 appellant: ( 1 ) though the registered deed of gift had been executed after the prescribed date viz. January 21, 1971, the transfer was in pursuance of an earlier family arrangement to provide maintenance for the invalid daughter and, therefore, the transfer falls outside the purview of Section 5(6) of the Act; (2) if the transfer attracted the operation of Section 5(6) and did not constitute an excepted transfer under Clause (b) of the proviso to Section 5(6), then Section 5(6) should be held ultra vires Article 31 A of the Constitution; (3) the Ceiling Act is violative of Article 14 of the Constitution in that it discriminates between major unmarried daughter and minor unmarried daughter by excluding the former from the definition of family ' under Section 3(7) of the Act. Dismissing the Appeal, ^ HELD: 1(i) From the definition of 'family ' in Section 3(7) it can be seen that a major daughter of a tenure holder, even if she is unmarried. is undoubtedly not treated as a member of the family. [544D] (ii) The Legislature has provided by section 5(6) that any extent of land transferred after 24.1.197l has also to be included in the total extent of holding of the tenure holder for the purposes of calculation of the ceiling area, unless the transfer falls within the category of excepted transfers under clauses (a) or (b) of the proviso. [544E] In the instant case, the finding of the Prescribed Authority and the Appellate Authority, which has found acceptance with the High Court, is a finding of fact and as such its correctness cannot be canvassed in an appeal under Article 136 of the Constitution. Even otherwise, the appellant had failed to prove that there was an earlier family arrangement and if there was one, to explain why he had delayed the execution of gift till after the Ceiling Act came into force, especially when the purported gift would only result in himself and his sons being in possession of the land and enjoying the income therefrom. [544F G] 2. There is, no scope for the appellant to raise any contention that section 5(6) is ultra vires Article 31 A. Its constitutionality cannot be assailed by reason of the immunity enacted in Article 31 B. [545A,B] 3. The provisions of the Ceiling Act do not discriminate between man and woman qua man and woman but merely organise a scheme where life 's realism is legislatively pragmatised. [545E] D.G. Mahajan vs Maharashtra, ; and Ambika 542 Prasad vs U.P. State, ; , referred to.

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.

Appeals Nos. 347 to 350 of 1960. Appeals by special leave from the judgment and order dated January 18, 1953, of the Incometax Appellate Tribunal, Calcutta Bench, in Incometax , Appeals Nos. 7062 7064 and C.P.T.A. No. 548 of 1951 52. N.C. Chatterjee, A. V. Viswanatha Sastri and D.N. Mukherjee, for the appellants. K.N. Rajagopal Sastri, and D. Gupta, for respondent. July 17. The Judgment of the Court. was delivered by HIDAYATULLAH, J. These appeals with special leave, were filed by one Kanhaiyalal Lohia, who died during the pendency of the appeals, and who 841 is now represented by the executors appointed under his will. By these appeals, which are consolidated, the appellants question an order dated January 8, 1953, of the Income tax Appellate Tribunal (Calcutta Bench) in appeals filed by the Department against the order of the Appellate Assistant Commissioner. The Tribunal reversed the order of the Appellate Assistant Commissioner and restored that of the Income tax Officer. Kanbaiyalal Lohia made petitions under section 66 (1) to the Tribunal, setting out a number of questions of which the following was I referred to the High Court : "Whether in the cirumstances of this case where the Income tax Officer, District III (2), separately assessed the business run in the name of Brijlal Nandkishore as belonging to a partnership firm consisting of Brijlal and Nandkishore, the Income tax Officer, Non Companies E. P. T., District can assess the income from the same business in the hands of the assessee ?" This question was answered against him. Kanhaiyalal Lohia also applied under section 66 (2) to the High Court of Calcutta for reference of the other questions, but failed. No appeal has been filed by him against the order of the High Court refusing to direct the tribunal to state a case or against the decision on the question referred, and the present appeals have been filed against the decision of the Tribunal. At the hearing of these appeals, we asked counsel for the appellants how, in view of the recent decisions of this Court in Chandi Prasad Chokhani vs State of Bihar (1) and Indian Aluminium Co. Ltd. vs Commissioner of Income tax (2), these appeals were maintainable, if the two decisions of the High Court had become final. Mr. A. V. Viswanatha Sastri relied upon the decisions in (1) ; (2) Civil Appeal No. 176 of 1959 decided on April 24, 1961. 842 Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax West Bengal (1) and Sardar Baldev Singh vs Commissioner of Income tax Delhi and Ajmer (2), and pointed out that in those cases, appeals were entertained from the Tribunal 's order, though he conceded with his usual frankness that special circumstances must exist. He contended that this was a case in which such circumstances existed. We shall deal with the appeals from that point of view, because unless special circumstances exist, the appeals must be regarded as not competent, in view of our recent rulings above mentioned. Kanhaiyalal Lohia, who was a prosperous dealer in jute, had his head office in Calcutta. He had no issue, and his family consisted of his wife,, his brother, Brijlal Lohia and Brijlal 's son, Nandkishore Lohia. The properties of Kanhaiyalal Lohia were self acquired, and he was always assessed as an individual. He maintained accounts according to the Ramaswami year. In his return for the account year, April 14, 1943 to April 1, 1944 corresponding to the assessment year, 1944 45), he indicated that he had closed down in the middle of 1943 his purchasing centres in East Bengal, which stood in the name of Nandkishore, and that, he had gifted to his brother Rs. 5,1 1, 1. 01 on July. 12, 1943, and to his nephew, Rs. 2,50,000 on September 30, 1943. He showed income of his East Bengal business only up to the closure of that business. Brijlal and Nandkishore entered into partnership between themselves, and started a business under the name and style of "Brijlal Nandkishore. " They took over the purchasing centres in East Bengal. They opened accounts in banks in the name of "Brijlal Nandkishore", and became members of the Baled Jute Association, and the Jute ,Baler,sAssociation, and traded in their own names. A deed of partnership between them was also executed on August 5, 1953. The business of Kanhaiyalal Lohia and of "Brijlal Nandkishore (1) ; (2) ; 843 was within the jurisdiction of the same Incometax Officer. In the assessment of the partnership firm, notices were issued to the partnership both under section 22(2) and section 34, and the partner ship also applied for registration under section 26A of the Income tax Act,which was granted. The partnership was also assessed for the years, 1945 46 and 1946 47. The assessment of Kanhaiyalal Lohia was completed by the Income tax Officer, Non Companies Income Tax cum Excess Profits Tax District, and during the assessment for the year, 1945 46 a notice was issued under section 22(4) of the Income Tax Act on August 24, 1949, calling for accounts of the head office at Calcutta and also the branches including the business being carried on as "Brijlal Nandkishore", Kanhaiylal Lohia proved, the above facts, producing the books of account, bank statements, registration certificate of "Brijlal Nandkhore" and evidence showing the membership of "Brijlal Nandkishore" of the two Associations. He also produced letters from four persons including one Sri A.L. Mazumdar who was questioned by the Income tax Officer without notice to ' Kanhaiyalal Lohia and whose statement was also recorded. Kanhaiyalal Lohia objected to this procedure, but the Income tax Officer, it is alleged, paid no heed to his protests, and on. March 31, 1950 the assessment was completed, and the income of the branches under the direct control of "Brijlal Nandkishore" was pooled with the income of Kanhaiyalal Lohia. The Income tax Officer held that the gifts were not bonafide, and were colourable transactions. He relied upon the statement of Sri A. L. Mazumdar, which was recorded when Kanhaiyalal Lohia was not present. Against the assessment, Kanhaiyalal Lohia, appealed to the Appellate Assistant Commissioner before whom two more letters from leading businessmen were filed. The Appellate Assistant Commissioner accepted the letters which were filed, and held that the gifts were proved and were bona fide and directed the exclusion 844 of the income of "Brijlal Nand kishore" from the assessment of Kanhaiyalal Lohia. The order of the Appellate Assistant Commissioner was pronounced on December 27, 1951. The Department appealed to the Appellate Income tax Tribunal, Calcutta Bench. The Tribunal disagreed with the Appellate Assistant Commissioner, all held on January 8, 1953, that the gifts were not proved by the assessee by unimpeachable evidence, and that the income of "Brijilal Nandkishore" was rightly included in the assessment. As stated already,. applications under section 66 (1) and section 66 (2) were made to the Tribunal and the High Court respectively. The Tribunal referred one question, but declinedto refer the. other quest ions. The High Court then moved under section 66 (2) but without success. The High Court agreed with the Tribunal and answered the question which was referred, against Kanhaiyalal Lohia. Before the High Court, Kanhaiyalal 's counsel, Dr. Pal, admitted that he. could not persuade the Court to answer the referred question against the, Department, and it appears that it was conceded by the Department before the High Court that the assessment of "Brijlal Nandkishore" would be cancelled. Kanhaiyalal Lohia then filed the present appeals against the order of the Tribunal dated January 8, 1953. This Court has pointed out in Chandi Prasad, Chokhani vs State of Bihar(1) and Indian Aluminium Co., Ltd. vs Commissioner of Income tax (2) that the two cases in which this Court interfered with appellate orders of a Tribunal and relied upon before us, were of a special kind. In Dhakheshwari Cotton Mills case(3) there was a breach of the principle, of natural justice, and that was held sufficient to entitle an aggrieved party to come to this Court against the appellate order of the Tribunal under article 136. In (1) ; (2)Civil Appeal No. 176 of 1959 decided on April 24, 1961. (3) ; 845 Baldev Singh 's case (1) this Court entertained an appeal against the appellate order of the Tribunal, because limitation to take other remedies was IS barred without an fault of the assessee concerned. The ratio in each of these cases is that a circumstance which cannot be corrected by the procedure of a stated question of law on a statement of the case may afford a ground for invoking the jurisdiction of Court under article 136. That ratio does not apply, where a question of law can be raised, and is capable of being answered by the High Court or on appeal by this Court. An appeal against an order of the High Court deciding a question referred or against a refusal to call for a statement can be brought before this Court under section 66A, if the High Court decides the question referred and under article 136, if the High Court refuses to call for a statement. In the present case, the order of the High Court on the question referred was not brought before this Court by the ordinary, mode indicated in the Indian Income tax Act, presumably because of the concession of counsel that he could not claim that the question be answered in favour of the assessee and the attitude of the Department that the assessment of "Brijlal Nandkishore" would be cancelled. The order refusing to call for a statement on questions other than the one referred is also not questioned before us. The attempt is to bring this case within the ratio of Dhakeshwari Cotton Mills ' case(2),and in support, it has been pointed out mainly that the examination of Sri A. L. Mazumdar in the absence of Kanhaiyalal Lohia was against the principles of natural justice. The statement of Sri A. L. Mazumdar was taken on March 28, 1950, and it is recorded as follows : "Mr. Mazumdar is questioned by me as to what be knows regarding the alleged gift as recorded in the books of Kanhaiyalal Lohia in favour of Brijlal and Nand Kishore. He says (1) ; (2) ; 846 that I don 't remember things very distinctly but 1 can say that the gifts to Brij Lal or Nand. Kishore were not made in my presence as alleged. Mr. Kanhaiyalal Lohia used to tell me that his brother and nephew are idling away their time hence I shall give them a. gift and make them work by that money. The partnership deed was most probably drawn up by me. The gift, was reported to have been made to Brij Lal and Nand Kishore before I should have taken up the drafting of the deed. Kanhaiyalal told me several times that he wanted to separate his brother and nephew. When the firm was started then Brijlal came to me and asked me if father and son 's partnership deed could be drawn up. I don 't know anything else than this in the matter. " The lie given by Sri Mazumdar to the statement of Kanhaiyalal Lohia has affect his credibility. The order sheet shows that Mr. B. Sen Gupta took a copy of Sri Mazumdar 's statement and expressed a desire to cross examine him; but when the opportunity was given, he failed to appear. It is impossible to think in these circumstances that there has been any breach of the principles of natural justice. The order sheets of March 29 and 30, 1950 clearly record the absence of Mr. B. Sen Gupta. In our opinion, there is no breach of the principles of natural justice in this case to entitle the appellants to invoke the ruling in Dhakeshwari Cotton Mills case It was contended before us that the finding of the Tribunal was perverse, and that on an examination of the total circumstances, it is quite clear that the gifts were not only real, but were acted upon. This was a matter within the jurisdiction of (1) ; 847 the Appellate Tribunal as the final fact finding authority. The Tribunal acted within its powers in refusing to accept the evidence tendered, and looking at the circumstances of the. case, we cannot say that the finding has been perversely reached. For a number of years, the brother and the nephew were supported by Kanhaiyalal Lohia, and it does not appear that a gift of even a small sum was made to them to put them on their legs. Suddenly in the year 1943, 'Kanhaiyalal Lohia made up ' his mind to put them in business with a gift of the order of Rs. 7,60,000 odd. For this purpose, he had to overdraw his accounts with the Bank and to pay interest to the Bank. It does not appear why he felt that the establishment of his brother and nephew in business should be made on such a grand scale, which involved him in debt. This circumstance, taken with the fact that Mr. Mazumdar stated that he had always complained that they were good for nothing and were idlers, makes the transactions auspicious. It was presumably done with a view to reduce the assessable profits in the hands of Kanhaiyalal Lohia, and on the evidence, the Tribunal was entitled to hold, as it did, that this was a sham transaction. In our opinion, no special circumstances exist, on which the appellants can claim to come to this Court against the decision of the Tribunal, by passing the decision of the of High Court on the question referred and there fusal 'the High Court to call for a statement of the case from the Tribunal on questions which the Tribunal refused to refer to the High Court. The appeals are, therefore, within the rulings of this Court in Chandi Prasad Chokhani vs State of Bihar (1) and Indian Aluminium Co., Ltd. vs Commissioner of Income tax(2), and must be regarded as incompetent. The appeals are dismissed with costs, one set. Appeal dismissed.

The appellant supported his brother and his nephew for a number of years as they were doing no work. In the year 1943 he made a gift of Rs. 7,60,000 odd to them though he had to overdraw his account with the Bank and to pay interest or the amount borrowed to raise the money. He also made a transfer of some of his businesses to them. His explanation was that these gifts were made to set these two persons up in business. The Income tax Officer held that the gifts were riot bonafide and he assessed, the income of all the businesses in the hands of the appellant. The appellant had produced letters from some businessmen in support of his case. One such person was one M. who was examined by the Income tax Officer without notice to the appellant. Later, however, a copy of the statement of M. was taken by the appellant 's counsel and at his request M. was summoned for cross examination but on the date fixed none appeared for the appellant who was also absent. The appellant made a petition under section 66(1) of the Income tax Act to the Tribunal asking that a number of questions of law be referred to the High Court. Only one question was referred by the Tribunal which declined to refer the other questions. In the High Court the question referred by the Tribunal was answered against the appellant on the admission of his counsel. The High Court was moved also under section 66(2) to order a reference of the remaining questions but the High Court rejected the application. The appellant did not appeal against these two orders of the High Court and instead filed appeals against the orders of the Tribunal. The appellant relied upon two cases of this Court viz. Dhakeshwari Colton Hills ' Case and Baldev Singh 's case and contended that tile appeal to this court was competent. Held, that the appeals were incompetent in view of the decisions of this Court in Chandi Prasad Chokhani vs State of Bihar and The Indian Aluminium Co., Ltd. 840 Held. further, that an appeal against an order of the High Court deciding a question referred or against a refusal to call for a statement can only be brought before the Supreme Court under section 66(A) of the Income tax Act, if the High Court decides the question referred, and under article 136 of the Constitution if the High Court refuses to call for a statement. There can be no direct appeal to the Supreme Court by passing the decisions of the High Court. Held,. also, that there was neither any breach of the principles of natural justice in this case nor the existence of circumstances as existed in Baldev Singh 's case to justify the appeal. Held, that where a witness has been examined by the Income tax Officer behind the back of the assessee but a copy of the statement of the witness is made available, to the assessee and an opportunity is given to him to cross examine the witness, thereis no breach of the principle of natural justice. ChandiPrasad Chokhani vs State of Bihar. (1962) 2 S.C.R. 276and Indian Aluminium Co., Ltd., vs Commissioner of Income tax. (Civil Appeal No. 176 of 1959, decided on April 24, 1961) followed. Dhakeshwari Cotton Mills Ltd. vs Commissioner of Income. tax ; and Sardar Baldev Singh vs Commissioner of Income tax, Delhi and Ajmer. ; , explained. ,

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.

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

In respect of its business as a middleman relating mainly to sales of coal and coke in the course of inter State trade, the appellant firm was assessed to Central sales tax under section 8(2) of the , by the Commercial Tax officer. The appellant without availing itself of the remedies under the Act, applied for and obtained special leave to appeal under article 136 of the Constitution of India directly against the order of assessment When the appeal was taken up for hearing, the question was raised as to whether it should be entertained, when even the facts had not been finally determined by the final fact finding authority under the Act, nor had the jurisdiction of the High Court been invoked to exercise its powers under the Act. Held, that an assessee is not entitled ordinarily to come up to the Supreme Court directly against the judgment of the Assessing Authority and invoke the Court 's jurisdiction under article 136 of the Constitution without first exhausting the remedies provided by the taxing statutes. Mahadayal Premchandras vs Commercial Tax Officer Calcutta, and The State of Bombay vs M/s. Ratilal Vedilal, [1961] 2 section C. R. 367, explained. Chandi Prasad Chokhani vs The State of Bihar, [1962] 2 section G. R. 276 and Kanhaiyalal Lohia v, Commissioner of Income Tax Bengal, [1962] 2 section C. R. 839, followed. ^ Held, further, that in the present case, in which there, were no special circumstances and in which the facts had not yet been finally determined, the appeal must be considered to be incompetent.

The validity of section 34(1A) of the Income tax Act was challenged by the assessees as contravening article 14 of the Constitution. It was ,,contended, that the remedy by way of appeals and revisions available in cases under section 34(1) was denied to the assessees against whom proceedings were taken under section 34(1A), and that while under section 34(1)(a), as it then stood, the assessing authority could not act beyond 8 years, this protection was not available to assessees against, whom action was taken under section 34(1A). 827 Held: Section 34(1A) was valid and did not contravene article 14 of the Constitution. It could not have been the intention of the legislature when it enacted section 34(1A) that the procedure prescribed by the relevant provisions of the Act beginning with section 22 should not be applicable to proceedings taken under section 34(1A), and that the procedure to be followed in the said proceedings and the powers to be exercised by the Income tax Officers dealing with them should be, what is vaguely described as "the inherent or incidental powers" of such officers. The words "thereupon" and "accordingly" in section 34(1A) seems to emphasise the applicability of the relevant provisions of the Act to the proceedings taken under section 34(1A). The object of the legislature being to catch income which ' had escaped assessment, it would be legitimate for the legislature to deal with the class of assessees in whose cases the income which had escaped assessment was much larger, because that would be a basis for rational classification which has an intelligible connection with the object intended to be achieved by the statute. Jai Kishan Srivastava vs Income tax Officer, Kanpur, I.L.R. [1959] II All. 451, approved. Suraj Mull Mohta vs A. V. Viswanatha Sastri, [1955]1 S.C.R. 448 and Shree Meenakshi Mills Ltd., Madurai vs Sri A. V. Viswanatha Sastri, [1955]1 S.C.R. 787 referred to.

The appellants failed to file their return within the prescribed time and on a notice issued under section 28(1)(a) of the Indian Income tax Act, 1922, to show cause why penalty should not be imposed on them, they filed a written reply. Without affording them an opportunity of being heard as required by section 28(3) of the Act the Income tax Officer imposed a penalty on them. On appeal the Appellate Assistant Commissioner set aside the order and directed refund of the penalty. Thereafter the Income tax Officer issued a further notice giving an opportunity to the appel lants of being heard. The appellants objected to this notice and 72 contended that the Income tax Officer could no longer proceed to re assess the penalty in the absence of an express order of remand by the Appellate Assistant Commissioner whose order had become final. Held, that where an order of imposition of penalty made by the Income tax Officer under section 28(1)(a) of the Indian Incometax Act was vitiated, not by any initial illegality but by one which supervened during the course of the proceedings and the said order was vacated on appeal, the Income tax Officer was well within his jurisdiction in continuing the proceedings from the stage at which the illegality had occurred and could re assess the penalty though no express order of remand was made. Jos Chacko Poothokaran vs Income tax Officer, Ernakulam Cir cle, , not applied.

Respondents Nos. 2 to 14 were appointed to the cadre of Income tax Officers, Class I, against vacancies reserved for Scheduled Caste and Schedules Tribes, as a result of a competitive examination or test as envisaged by sub rule (3) of Rule 6. The Petitioner was similarly appointed to the same cadre but against a vacancy reserved under sub rule (1) of Rule 4 for certain officers of the Armed Forces of the Union. He was placed in the impugned seniority list below respondents Nos. 2 to 14. He made a representation against the seniority assigned to him on the ground that under sub rule (3) of Rule 6 he was entitled to rank immediately below candidates appointed against unreserved vacancies. The representation was rejected by a letter dated 16th March, 1979. The petitioner filed a petition under article 32 of the Constitution of India seeking the issuance of a writ quashing that letter. At the hearing it was not disputed that the petitioner was entitled to the benefit of reservation sub rule (1) of Rule 4 and to have his seniority determined in accordance with sub rule (3) of Rule 6. However, it was contended on behalf of the respondents Nos. 2 to 14, inter alia, that the rules of the service had been amended earlier to 1971, so as to place candidates covered by sub rule (1) of Rule 4 below those who had been appointed against reserved vacancies through a competitive examination. Accepting the petition, it was ^ HELD: (1) Sub rule (3) of Rule 6 is not ambiguous in any manner whatsoever and lays down in clear terms that the officers appointed against vacancies reserved under sub rule (1) of Rule 4 shall rank below candidates who were appointed against unreserved vacancies in the Services concerned through a competitive examination, etc. [40 F G] 2. Respondents Nos. 2 to 14 have been appointed against vacancies reserved for Scheduled Castes and Schedule Tribes. Clearly therefore, they must rank below the petitioner inasmuch as it cannot be said with any plausibility that they were appointed against unreserved vacancies. [41 A B] 3. The argument that the rules of the service in question had been amended to 1971, so as to place candidates governed by Rule 4(1) below those who had been appointed to reserved vacancies through a competitive examination has no substance and makes no difference to the interpretation which is given above to 39 sub rule (3) of Rule 6, Rule 8 of the Rules declares in no uncertain terms that all rules regulating the recruitment of persons to Central Civil Services and Posts, Class I, to which the Rules apply, shall be deemed to have been amended to the extent provided for in the Rules. Although the rules regulating the seniority of the petitioners and respondents Nos. 2 to 14 were so amended earlier to 1971 as to assign to the petitioner seniority below respondents Nos 2 to 14, the situation is wholly irrelevant to the present dispute because after the amendment brought about by Rule 8 of the Rules, the members of the service to which the contenting parties belong, have to be governed by the later amendment, of which sub rule (3) of Rule 6 forms a part. This is the inescapable consequence flowing from Rule 8 of the Rules. [41 G H, 42 A D] 4. The word 'recruitment ' is comprehensive enough to embrace the content of all the rules proceeding Rule 8 including the fitment of candidates recruited to the service vis a vis each other. [42 D E]

% 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]

Appeals Nos. 1661 68 of 1959. Appeals by special leave from the judgment and decree dated April 15, 1955, of the former Hyderabad (now Andhra Pradesh) High Court in Reference Nos. 198 and 199 of 1953 and 19 of 1954. A.V. Viswanatha Sastri and K. R. Choudhri, for the appellant. K.N. Rajagopal Sastri and D. Gupta,, for the respondent. July 17. The Judgment of the Court was delivered by HIDAYATULLAH, J. The appellant, Rajah Hid section V. Jagannath Rao, was the Jagirdar of Jatprole Samasthan in the former Hyderabad State. In the year 1357 Fasli, the Income tax Act (1357 Fasli) was passed by the Legislature, to come into force on Azur 1, 1357 Fasli. The present appeals, with special leave, concern the assessment of the appellant 's income to income tax and super tax under the Act of 1357 Fasli for the assessment years, 1357 Fasli and 1358 Fasli, corresponding to 850 the years, 1948 49 and 1949 50. They are directed against a common judgment of the High Court of Hyderabad, by which certain questions of law referred by the Income tax Appellate Tribunal, Bombay, in the assessment of the present appellant and some others, were answered by the High Court of Hyderabad against the present appellant. The appellant had submitted returns of his income for the two accounting years under protest. According to him, the Income tax Act, 1357 Fasli was ultra vires the by legislature. For the account year 1356 Fasli, corresponding to the assessment year, 1357 Fash, the appellant had urged that the Act could not affect the income of that year, because it came into force only from Azur 1, 1357 Fasli. The appellant also claimed to deduct certain expenses (details of which will be given later) under as. 14(5)(a) and (b) of the Act. These were the three matters on which the Income tax Appellate Tribunal framed the following three questions for the decision of the High Court : "1. Whether the Hyderabad Income tax Act is ultra vires in so far as it seems to levy a tax on Jagirs and Samasthans ? 2.Whether the provision relating to the taxation of income of 1356 F in the Hyderabad Income tax Act is intra vires ? 3.Whether the sum of Rs. 14,390 and Rs. 38, 079 or a part thereof, could be allowed as revenue deduction under section 14(5)(a) or 14(5)(b) of the Hyderabad Income tax Act ?" As stated already, all the three questions were answered by the High Court against the appellant. He obtained special leave from this Court on three separate petitions for special leave, on December 17, 1966, and April 9, 1957, and filed the present appeals. 851 The second question mentioned above is covered by the decisions of this Court in Union of India vs Madan Gopal Kabra (1) and Rajputana Mining Agencies Ltd. vs The Union of India and another (2) and was, therefore, rightly answered against the appellant. Mr. A. V. Viswanatha Sastri, counsel for the appellant, conceded frankly that he had nothing to urge against the decision of the High Court on that question. We shall, therefore, confine ourselves to the two remaining questions in these appeals. It may be mentioned that the ,first question also arises in Civil Appeal No. 17 of 1961, and what we say here will govern the disposal pro tanto of that appeal also. The contention of the appellant on the validity of the Act is this : The Act was passed by the Hyderabad Legislative Assembly and was assented to by His Exalted Highness, the Nizam. Under the Hyderabad Legislative Assembly Ain, there was a prohibition on the introduction of certain kinds of bills in the Assembly. The appellant relies upon sub sections (8) and (9) of section 18 of the Ain, which in their English translation read as follows "18. There shall not be introduced into, or moved in the Assembly,, any bill, or motion, or resolution, or question, or other proceedings relating, to or affecting the following matter: (8)The relation of His Exalted e Highness with the holders of Samasthanis and Jagirdars and with such other grantees as derive grants from sanads. (9)The powers of His Exalted Highness over the present or future grants, whether they be in the form of land or cash.". (1) ; (2) ; 852 These two sub sections deal with laws affecting the relations between the holders of Samasthans and JaGirs on the one hand, and His Exalted Highness the Nizam, on the other. The Act in question imposes a tax and does not seek to affect the relations aforesaid. It is a little difficult to read into the Income tax Act any encroachment upon the relations between the holders of Samasthans and Jagirs and the Nizam. Even if the Income tax Act can be said to affect indirectly those relations, it is manifest that it was passed with the assent of the Ruler, which admittedly was given. There have been a number of rulings of this Court on the powers of Rulers of Indian States to promulgate laws in their States in the exercise of their sovereignty and on the nature of their sovereignty. Two such cases of this Court 'Considered the legislative powers of His Exalted Highness the Nizam, and in those cases, it was held that the legislative power of the Nizam was not subject to any limitations or control of any kind whatever. The first of these cases, Ameer un Nissa Begum vs Mahboob Begum (1) dealt with a Firman issued by His Exalted Highness the Nizam, and. in dealing with his powers, in general and his legislative powers, in particular, it was observed by this Court as follow: "It cannot be disputed that prior to the integration of Hyderabad State with the Indian Union and the coming into force of the Indian Constitution, the Nizam of Hyderabad enjoyed uncontrolled sovereign powers. He was the supreme legislature, the supreme judiciary and the supreme head of the executive, and there were no constitutional limitations upon his authority to act in any of these capacities. The 'Firmans ' were expressions of the sovereign will of the Nizam and they were binding in the same way as (1) A.I.R. 1955 &C. 352. 853 any other law; nay, they would override all other laws which were in conflict with them. So long as a particular 'Firman ' held the field, that alone would govern or regulate the rights of the parties concerned though it could be annulled or modified by a later 'Firman ' at any time that the Nizam willed. " The same view was reaffirmed in the second case reported in Director of Endowments, Government of Hyderabad vs A kram Ali (1). It is contended that a limitation on the powers of the Legislative Assembly in Hyderabad State was created by the Ain, which was, in essence the supreme law, and any bill introduced in contravention of the Ain was void ab initio. According to the learned counsel for the appellant, a law which was void at its inception remained so, even if subsequently assented to by the Nizam. If one were to think in terms of a legislature of limited jurisdiction, this might be true. Laws are really commands embodying rules of conduct emanating from one whose will is sovereign, or, in other words, supreme. Legislative Sovereignty must be found to uphold the laws. It depends upon the ' Constitution of a particular State, where it resides. It may not reside in a Ruler but in a legislature where the Ruler has surrendered or been made" to surrender his powers, as, for example, the King in Parliament in England, or it may reside in ' an absolute and sovereign Ruler, who has not parted with it, the legislature being merely his amanuensis. In the latter case, the will of the Ruler expressed as a rule of conduct is the law, whether made by him directly or through his legislature. The Ain itself derived its authority from the Nizam only, and the Nizam, as the supreme legislator, could frame a law in derogation of the Ain, which was his own creation. The Ain was (1) A. I. R. 854 not a supreme law such as a Constitution, the limits imposed by which could not be exceeded even by the Nizam. The Ain prohibited the, introduction of laws of a particular kind in the Assembly, and the Nizam could reject them as being in contravention of the Ain even if passed by the Assembly. The position, however, was not the same when a law which the Nizam could refuse to accept was accepted by him. As a supreme legislator, the Nizam could have written out the entire Income tax Act in his own hand writing and signed it; and it would have been as valid and binding as the Ain itself. It made no difference if the law was passed by a body of men and was sent to the Nizam for his assent, because on his assent, the law was as effective as if made by the Nizam himself. The Nizam could withhold his assent to a law contrary to the Ain if he chose; but once he assented to it. , the law derived its vitality, not from the act of the Legislative Assembly but from the act of the Nizam. It could not be questioned any more than a Firman issued by the Nizam. The Income tax Act must, therefore, be regarded as binding upon those affected by its terms, and the question whether it could be introduced in the Legislative Assembly hardly arises. It must be regarded as a law emanating from His Exalted Highness the Nizam, the supreme legislator in the State, whose laws promulgated in any manner were binding upon the subject. See Madhaorao vs State of Madhya Bharat (1). The first question was thus answered correctly by the High Court. It remains to consider the third question. in the assessment year 1357 Fasli, a sum of Rs. 14,390 was claimed as expenses under a. Act (5) (a) or s.14(5)(b) of the Hyderabad Income tax Act. A sum of Rs. 38,079 was similarly claimed for the assessment year 1358 Fasli. The sum of Rs. 14,390 has been (1) ; , 855, ,shown in the assessment year as spent on account of "domestic servants, drummers and other paraphernalia", which the Income tax, Officer treated as personal expenditure. The sum 'of Rs. 38,079 for the following year consisted of these items (a) Stables and elephants Rs. 16,907 (b) Festivals and Jatras Rs. 789 (c) Charity and subscriptions Rs. 11,233 (d) Body guards Rs. 9,150 _______________ Rs. 38,079 _______________ The Income tax Appellate Tribunal allowed these expenses as being admissible under cls. (a) and (b) of section 14(5). No reasons were given by the Tribunal for coming to this conclusion. The High Court answered the question against the assessee without advertence to the two clauses. The reason given by the High Court was as follows : "The jagirdar, however anxious he be to maintain his dignity, cannot claim deductions of money so spent professedly unless there be orders in exercise of prerogative powers of the grantor authorising such expenditures. For example, he may be authorised by the Sanad creating his tenure to maintain elephants or bodyguards. These expenditures would then though personal, be necessary and legal, because of the constitutional position of the grantor when the tenure was created and con tinued. But the statement of the case should show the legal basis upon which deductions are allowed. If the assessee was entitled to maintain elephants, stables, paraphernalia etc. , under the grants, he should have filed them before the Income tax authorities. Evidently this has not been done; at any rate there is no mention of the fact in the statement of the case. In the result, the answer to the question is in the negative," 856 The relevant provisions of the law may now be read. Section 14 (5) as translated by Messrs Ramchandra Rao Kurtadikar and B. V. Subbarayudu reads as follows : "In respect of income from land revenue paid to the Jagirdar by the holder of any non Khalsa land in lieu of the use or possession thereof and in respect of any income derived by giving over Abkari trees for extracting sendhi or toddy and from "Baitbak 'which under proviso 2 and Explanation respectively of clause (4) of section 2, is deemed to be non agricultural income, such income, profits and gains shall be computed after making the following allowances : (a)All such expenses not being his private or personal expenses which the assessee may incur in relation to such land or the inhabitants thereof towards management or superintendence or on works of public welfare. (b)Such necessary expenditure as the assessee may incur under any law. (c)Five per cent of the income chargeable to tax towards necessary expenses. " The Tribunal, however, pointed out that the English text published by Government Press, Hyderabad, was slightly different. It reads as follows : "14 (5) The income from land revenue paid to jagirdar by the occupier of non Khalsa land for its use or possession, the income that arises from renting of trees for extraction of sendhi or toddy, the income from Abkari rental$ and the income which under the provi sions of Section 2 (4) is deemed to be ,non agricultural ' income, all such incomes, profits 857 and gains shall be computed after making the following allowances namely: (a)all such expenditure,, not being, in the natureof capital, private or personal expenditure, incurred by the assessee in connection with land or its inhabitants for administration or on works of general improvement and benefit ; (b)any compulsory expenditure incurred by such assessee under any law in force and (c)in respect of compulsory expenditure five per cent of the income subjected to tax." A literal translation of cl. (a) made by us reads as follows " 'All such expenditure which the assessee makes in connection with such land or its inhabitants on administration or works of public welfare, which expenses. do not include, his private or personal expenses. " This shows that the official translation is accurate., and we shall refer to it only. The question thus is whether the expenditure in respect of which deduction is, claimed can be described to be private or personal expenditure of the assessee, or in connection with land and its administration. The High Court apparently thought that unless it ' was incumbent upon the jagirdar by reason of his Sanad to maintain bodyguards. , elephants, etc., the expenses could not but be regarded as private or personal. In our opinion the High Court put the burden of proof somewhat strictly upon the assessee. The Tribunal, though it gave no reasons. , held that the expenses were incurred in relation to the management. The conclusion is based on some evidence. The maintenance 858 of elephants, $tables, bodyguards, etc., is not entirely for the Jagirdar 's personal or private ends, and cannot be said to be wholly unrelated to the management of the Estate. Such equipage is considered part and parcel of the administration of an estate, such as jagir. Elephants, drummers and bodyguards are used on occasions for administ rative purposes, and even if these might be few and far between, the expenditure must be regarded as one incurred in connection with land and its administration. The expenses over drummers (but not over domestic servants) in the first year, and over stables, elephants and bodyguards (but not over festivals and jatras or on charities and subscriptions) in the second year, were deductible. These expenses fall within c 1. (a) of section 14 (5) as expenditure in connection with land or its administration, and they amounted to Rs. 26,057 in the year 1358 Fasli. For the year 1357 Fasli, the amount debatable to these items from Rs. 14,390 will have to be determined. ' The evidence before us is not sufficient to state the exact amount. We set aside the answer of the High Court, and answer the third question in the affirmative, to the extent indicated here. In view of the partial success in these appeals, the parties shall bear their own costs in this Court. A appeals allowed in part.

The appellant who was a jagirdar in the former Hyderabad State was assessed to income tax and super tax for the assessment years, 1337 Fasli and 1358 Fasli, corresponding to the years, 1948 49 and 1949 50, under the provisions of the Hyderabad Income tax Act, 1357 Fasli, which was passed by the Hyderabad Legislative Assembly and came into force on Azur 1, 1357 Fasli. The appellant challenged the validity of the assessment on the grounds(1) that under the Hyderabad Legislative Assembly Ain the Assembly was prohibited from introducing bills which dealt with laws affecting the relations between the holders of jagirs on the one hand and the Nizam on the other, that the provisions of the Act in so far as they seemed to levy a tax on jagirs amounted to an encroachment upon the relations between the jagirdars and the Nizam, and that the bill introduced in contravention of the Ain was, void ab initio, even though it had been assented to by the Nizam, (2)that the Act could not affect, in any case, the income for the account year 1356 Fasli, corresponding to the assessment year 1357 Fasli, because the Act came into ' force only from Aur 1,1357 Fasli, and (3) that the Income tax Officer erred in disallowing the claim for deduction of the amount spent on account of maintenance of elephants, stables, drummers,, bodyguards, etc., in connection with management of the jagir Estate, and in treating the amount as personal expenditure. Held, (1) that the Hyderabad Income tax Act, 1357 Fasli, did not affect the relations between the holders of Jagirs and the Nizam, and that even if it could be said to affect indirectly these relations, the Act having been passed with the assent of the Nizam, was valid, and the question whether it could be introduced in the Legislative Assembly did not arise as it must be regarded as a law emanating from the Nizam, the supreme legislator in the State, whose laws promulgated in any manner binding upon the subject,. 849 Ameer un Nissa Begam vs Mahboob Begum, A. I. R. 1955 section C. 352, Director of Endowments, Government of Hyderabad vs Akram Ali, A. 1. R. and Madhaorao vs State of Madhya Bharat, ; , applied. (2)that the income for the 1356 Fasli was rightly assessed tinder the provisions of the Act for the assessment year 1357 Fasli. Union of India vs Madan Gopal Kabra, ; and Rajputana Mining Agencies Ltd. vs The Union of India, ; , followed. (3)that the maintenance of elephants, stables, drummers, and bodyguards by the jagirdar was not entirely for his personal or private ends but must be considered part and parcel of the administration of the estate, and the expenditure for such maintenance must be regarded as one incurred in connection with land and its administration within the meaning of section 14(5)(a) of the Act. It was accordingly deductible for purposes of income tax.

The appellant owned a cardamom plantation. For the assessment year 1957 58, he submitted a return under the Madras Plantations Agricultural Income tax Act, 1955. The Agricultural Income tax Officer did not accept the return, and 'added to the income the value of stocks of cardamom sold in the accounting year. The High Court in revision, confirmed the assessment made by the Department. In appeal to this Court, it was contended that: (1) the agricultural produce itself was income and became charged to tax under the Act when it was received and not when it was sold, used or consumed, and therefore, the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of account and ought to have brought to tax only that quantity and excluded the value of the rest of the produce received in earlier years, from taxation; and (2) from the fact that the appellant applied to compound the tax for the earlier years, it must be inferred that the produce which was sold by him in the year of account had already suffered tax in the earlier years. HELD : (1) Merely because the produce of the plantation was received in the earlier years, income derived from sale of that produce in the year of account was not exempt from tax under the Act in that year. [953 B] Section 3 of the Act read with the definition of "agricultural income" charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation. The expression "income" in its normal con notation does not mean mere production or receipt of a commodity which may be converted into money. Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity. It is not necessary, however, for income to accrue that there must be a sale of a commodity : consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income. [952 G H; 953 A B] Dooars Tea Co. Ltd. vs Commissioner of Agricultural Income tax, West Bengal; , , referred to. (2) It had to be proved by evidence that the crop sold related to the years in respect of which the assessee had applied to compound the tax, but there was no such evidence. [954 F]

The appellant assessee filed a memorandum of appeal to the Assistant Commissioner, Sales Tax, stating therein that the amount of admitted tax had been paid and forfeited the statement by an affidavit. Before the hearing, he produced a certificate from the Sales Tax Officer that the tax had been paid. The Assistant Commissioner relying on the Allahabad High Court 's decision in Swastika Tannery, Jaimau vs Commissioner of Sales tax, U.P. rejected as defective the memorandum of appeal, holding that it was not accompanied by the challan showing the deposit of admitted tax under section 9 of the Uttar Pradesh Sales Tax Act, 1948 and r. 66 of the U.P. Sales tax Rules. Against this order the assessee directly filed special leave to appeal to this Court without exhausting the remedies of revision and reference provided in the Act. This Court granted Special Leave and; HELD:The appeal must be allowed. (i) By the word "entertain" in the proviso to section 9 is meant the first occasion on which the Court take up the matter for consideration. It may be at the admission stage or if by the rules of that Tribunal, the appeals are automatically admitted, it will be the time of hearing of the appeal. But on the first occasion when the court takes up the matter for consideration, satisfactory proof must be presented that the tax was paid within the period of limitation available for the appeal. Rule 66(2) lays down one uncontestable mode of proof which the Court will always accept but it does not exclude the operation of the proviso when equally satisfactory proof is made available to the officer hearing the appeal and it is proved to his satisfaction that the payment of the tax has been duly made and in time. [512E F; 513E G] In the present case, when the Assistant Commissioner took tip the appeal for consideration, satisfactory proof was available in the shape of a certificate. Swastika Tannery of Jaimau vs Commissioner of Sales tax, U.P. Lucknow, (1963) 14 S.T.C. 518, disapproved. Kundan Lal vs Jagannath Sharma, A.I.R. 1962 All. 547; Dhoom Chand Jain vs Chaman Lal Gupta and Anr. A.I.R. 1962 All. 42: Haji Rahim Bux & Sons & Ors. vs Firm Samiullah & Sons, A.I.R. 1963 All. 320, approved. (ii) Though this Court would not ordinarily grant special leave to appeal against an order when other remedies were available and had not been exhausted, there is no inflexible rule that this Court will never entertain such an appeal. It would have been futile in this case for the assessee to have gone to the court of revision which was bound by the decision in Swastika Tannery of Jaimau vs Commissioner of Sales tax, U.P. and it would have been equally 506 futile to have gone to the High Court on a reference. The matter was more easily disposed of by giving special leave in this Court and this was one of those extra ordinary cases in which the ends of justice would be better served, by avoiding a circuity of action and by dealing with this matter in this Court directly. [513H 514C]

The respondent assessee was a partner in the partnership firms of M/s. Malabar Tile Works and M/s. Malabar Plywood Works and alongwith her there were other partners including her husband and minor daughter. In her returns for the assessment year 1964 65 for which the relevant accounting year was the calendar year ending 31st December, 1963, the assessee filed a return of income omitting the amounts representing the shares of her husband and minor daughter in the partnership firms from her income. The Income Tax Officer, however, brought the amounts, namely, Rs. 59,506 to tax and referred the case for taking action under section 271(1)(c) of the Act to the Assistant Appellate Commissioner who imposed a penalty of namely, Rs. 7,000 on the assessee for having concealed her income. In appeal the Tribunal set aside the order and the High Court on reference affirmed the Tribunal 's order. Hence the appeal by Revenue to this Court after obtaining special leave. Dismissing the appeal, the Court ^ HELD: (1) The assessee, in view of the fact that the prescribed form for filing of returns under section 139 of the Act, prior to 31st March, 1972, did not contain separate column to show "income arising to spouse/minor child or any other person referred to in Chapter V of the Act", and in view of the decision of three Judges Bench reported in SC could not be said to have concealed her income by not disclosing in the return filed by her the amounts representing the shares of her husband and minor daughter in the two partnership firms. [788B] (2) The term "his income" for the purpose of section 271(1)(c) of the Act, is "his income" which the assessee is liable to disclose for the purposes of assessment and yet fails to do so. The return of income under section 139(1) of the Act is required to be filed in order to enable the Revenue Authorities to make a proper assessment of tax on the assessee. A fortiorari, it follows that the assessee must disclose in the return every item of income which is liable to be taxed in his hands under sections 4 & 5 of the Act. [785B; F H] 782 (3) The definition of "total income" in section 2(45), no doubt refers to section 5 which lays down that all the income profits and gains accrued or arisen to the assessee or received by or on behalf of the assessee shall be liable to be included in his total income but this provision is subject to the other provisions of the Act and therefore if the income of any other person is declared by any provision of the Act to be includible in computing the total income of the assessee, such income would form part of the total income exigible to tax under section 4 of the Act. section 64(1) is one such provision which provides for inclusion of the income of certain other persons in computing the total income of the assessee. [785F H] Section 64(1) makes it clear that though the share of the spouse or minor child in the profits of a partnership firm in which the assessee is a partner is not the income of the assessee but is the income of such spouse or minor child it is liable to be included in computing the total income of the assessee and it would be assessable to tax in the hands of the assessee. The total income of the assessee chargeable to tax would include the amounts representing the shares of the spouse and minor child in the profits of the partnership firm. Obviously the words "his income" in section 139 sub section (1) must include every item of income which goes to make up his total income assessable under the Act. The amounts representing the shares of the spouse and minor child in the profits of the partnership firm would be part of "his income" for the purpose of assessment to tax and would have to be shown in the return of income filed by him. [786B D] (4) It is true that the form of the return prescribed by Rule 12 of the Income Tax Rules, 1962 which was in force during the relevant assessment year did not contain any separate column for showing the income of the spouse and minor child liable to be included in the total income of the assessee, but it did contain a Note stating that if the income of any other person is includible in the total income of the assessee under the provisions, inter alia, of section 64, such income should also be shown in the return under the appropriate head. This Note clearly required the assessee to show in the return under the appropriate head of income, namely, "profits and gains of business or profession" the amounts representing the shares of the husband and minor daughter of the assessee in the profits of the two partnership firms. The assessee however failed to disclose these amounts in the return submitted by her and there was plainly and manifestly a breach of the obligation imposed by section 139 sub section (1) requiring the assessee to furnish a return of her income in the prescribed form. To accept the contention that despite the Note the assessee was still not liable to show in the return the amounts representing the shares of her husband and minor daughter in the two partnership firms would render the Note meaningless and futile and turn it into a dead letter 783 and that would be contrary to all recognised canons of construction. The assessee was guilty of concealment of this item of income which plainly attracted the applicability of section 271 sub section (1) clause (c). [786G 787D] V.D.M.RM.M.RM. Muthiah Chettiar vs Commissioner of Income Tax, , doubted

Respondent No. 1 obtained a mortgage decree for Rs. 1,14,581/14/6 against one Rao Raja Inder Singh (the judgment debtor). The mortgage money was advanced under three mortgages, and the mortgaged properties consisted of Jagirs and some non Jagir immovable property. The latter property was sold in execution and Rs. 33,750/ paid to the decree holder in partial satisfaction of the decree. Then the decree holder filed an execution petition in the Court of the District Judge for the balance amount i.e. Rs. 99,965/3/6, praying for attachment of the amount of compensation and rehabilitation grant which would be paid to the judgment debtor on account of resumption of his Jagir. The judgmment debtor submitted two applications in which he claimed relief under sections 5 and 7 of the Rajasthan Jagirdars ' Debt Reduction Act. The decree holder, in his reply, to those petitions urged that the provisions relied in were ultra vires the Constitution of India, being in contravention of articles 14, 19 and 31 of the Constitution. Thereafter the decree holder moved a petition under article 228 of the Constitution before the High Court, praying that the execution case pending in the Court of the District Judge, be withdrawn from that court to the High Court. The High Court transferred the case to its file. By its judgment the High Court could held that apart from the later part of section 2(e) excluding certain debts and section 7 (2) of the Act, the rest of the Act was valid. The High Court granted a certificate under article 133(1)(c) of the Constitution to the State of Rajasthan to file an appeal to this Court. Hence the appeal: Held: (i) That the impugned part of section 2(e) infringes article 14 of the Constitution for the reason that no reasonable classification is disclosed for the purpose of sustaining the impugned part of section 2(e). It is now well settled that in order to pass the test of permissible classification, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentiation which distinguishes persons or things that are to be put together from others left out of the group, and (2) that the differential must have a rational relationship to the object sought to be achieved by the statute in question. The said condition No. 2 above has clearly not been satisfied in this case. The object sought to be achieved by the impugned Act was to reduce the debts secured on the Jagir lands which had been resumed under the provisions of the Rajasthan Land Reforms and Resumption of Jagirs Act. The fact that the debts are owed to a Government or local authority or other bodies mentioned in the impugned part of section (2) (e) has no rational relationship with the object sought to be achieved by the Act. Further, no intelligible principle underlies the exempted categories of debts. The reason why a debt advanced on behalf of a person by the Court of Wards is clubbed with a debt due to a State or a scheduled bank and why a debt due to a non scheduled bank is not excluded from the purview of the Act is not discernible. Manna Lal vs Collector of Jhalwar. ; , Nand Ram Chhotey Lai vs Kishore Raman Singh, A.I.R. (1962) All 521 and 905 Jamnalal Ramlal Kimtee vs Kishendas and State of Hyderabad, A.I.R. (1955) Hyd. 194, distinguished. (ii) Section 7(2) is valid as it imposes reasonable restrictions, in the interests of general public. on the rights of a secured creditor. This sub section has been designed with the object of rehabilitating a Jagirdar whose Jagir properties have been taken over by the State for a public purpose at a low valuation. If this provision was not made, the Jagirdar would find it diffcult to start life afresh because his future income and acquired properties would be liable to attachment and sale for the purpose of satisfying the demands of such creditors.

The appellant firm had its factory in the State of Madras, where it manufactured, assembled and sold motor vehicles, spare parts and accessories. For the assessment year 1952 53, the sales tax authority computed the appellant 's taxable turnover of sales for that year excluding a sum which represented the value of vehicles etc., sold outside the State of Madras, but on revision, the taxable turnover was increased by including a sum which related to certain transactions with dealers outside the State of Madras on the ground that the sales covered thereby were made within the State of Madras and were therefore liable to tax under the Madras General Sales Tax Act, 1939. The appellant claimed that these sales were in the course of inter State trade and commerce and not liable to sales tax by reason of the provi sions of article 286(2) Of the Constitution of India. The matter was taken up to the Supreme Court and in the meantime, the Sales Tax Laws Validation Act, 1956, had been passed by Parliament. The question was whether the transactions in question, even if they were considered as having taken place in the course of inter State trade, came within the protection of the Validation Act of 1956 and, therefore, the assessment in the present case was valid. The appellant contended (1) that the Validation Act was applicable only when the law of the State imposed, in express terms, a tax on the sale or purchase of any goods in the course of inter State trade or commerce, and (2) that the new section 22 inserted in the Madras General Sales Tax Act, 1939, by Madras Act 1 of 1957, which operated retrospectively from January 26, 1950, talked of sales in which the goods were delivered for consumption in the State of Madras, and, therefore, the Validation Act did not operate on sales of an inter State character other than such sales. Held: (1) that the effect of the Sales Tax Laws Validation Act, 1956, was to liberate the State laws from the fetter placed on them by article 286(2) of the Constitution of India and enable such laws to operate on their own terms. Consequently, the transactions in question were liable to tax under the provisions 608 of the Madras General Sales Tax Act, 1939, and it was not necessary to provide in that Act in express terms that it was taxing sales in the course of the inter State trade. M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh and Another, , relied on. (2) that the transactions in question came within the definition of sale in section 2(h) of the Madras General Sales Tax Act, 1939, and the power to tax conferred on the State by the charging section, section 3, was not affected by section 22 in view of sub section (2) therein.

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 appellant an advocate who maintained his accounts on the cash system gave up practice when he was elevated to the Bench in 1957. Certain outstanding professional dues were however received by him in the accounting years 1958 and 1959. These receipts were shown by him as income in his return for the assessment years 1959 60 and 1960 61 and were assessed by the Income tax Officer. The appellant then went in revision to the Commissioner of Income tax contending that the said receipts were not income and had been wrongly taxed. The Commissioner having decided against him the appellant came to this Court under article 136 of the Constitution. HELD: (i) The receipts in the present case were clearly the fruits of the assessee 's professional activity and fell under the fourth head of section 6 of the Indian Income tax Act 1922. They were however not chargeable to tax under that head because under the corresponding computing section that is. section 10. an income received by the assessee who kept his accounts on the cash basis in an accounting year in which the profession had not been carried on at all is not chargeable. [297 D F] Commissioner of Income Tax vs Express Newspapers Ltd., , relied on. (ii) The income could not be taxed under section 12 either. Section 12 deals with income which is not included under any other preceding heads covered by sections 7 to 10. If the income is so included, it falls outside section 12. It follows that if, as in the present case, the income is profits and gains of profession it cannot come under section 12. [301 E] The heads of income in section 6 are mutually exclusive and it would be incorrect to say that as the receipts could not be brought to tax under the fourth head they could not fall under that head and must therefore fall under the residuary head 'other sources '. There is no justification for the assumption that an income falling under one head has to be put under another head if it escapes taxation under the computing section corresponding to the former head. [298 A; 300 E F] The character of the income cannot change merely because the assessee received it at a certain time or adopted a certain sYstem of accounting. [301 B] Section 4 does not say that whatever is included in total income must be brought to tax. The income has to be brought under one of the heads mentioned is section 6 and can be charged to tax only if it is so chargeable under the computing section corresponding to L/S5SCI 296 that head. Income which falls under the fourth head can be brought to tax only if it can be so done under the rules of computation laid down in section 10. [298 G 299 B] In re: B, M. Kamdar, , not approved. The United Commercial Bank vs The Commissioner of Income Tax, ; , Salisbury House Estate Ltd., vs Fry. 15 Tax Cases 266 and Commissioner of In tax vs Cocanada Padhaswami Bank Ltd., , relied on. Probh At Chandra Barua vs King Emperor, 57 I.A. 228, distinguished, Per Bachawat J. (dissenting) The receipts in question were chargeable under section 12. Any income Chargeable under a specific head can be charged only under that head, and no part of that income can be charged again under section 12. But any part of a total income of the assessee not me*sable under a specific head is assessable under the residuary head covered by section 12, [305 C] The income in question was not exempt under section 4(3). The receipts were liable to be included in total income under section 4. This income could not be included under section 10 owing to the method of accounting adopted by the assessee. Nor did it fall under any other head. It followed that the income must fall under the residuary head specified in section 12, This was not a case where the Revenue had taxed or could tax the income under s, 10 and again sought to tax the income under a. 12. [306 C. G H]

Appeal No. 349 of 1959. Appeal from the judgment and order dated February 1, 1957, of the Punjab High Court, in Civil Writ Application No. 385 of 1955. B. K. Khanna and D. Gupta, for the appellants. The respondent did not appear. May 4. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by certificate is preferred against the order of the Punjab High Court dated November 9, 1956, setting aside the order of the Consolidation Officer and directing him to proceed with the matter in accordance with law. The respondents are members of a joint Hindu family and are evacuees from Pakistan. On March 3, 1950, in lieu of the lands left by the family in Pakistan, the Custodian of Evacuee Property allotted to the said. family 11 standard acres and 9 units of Grade 'A ' land in Pati Kankra, Shahabad Estate in Tehsil Thanesar in Karnal District. The said units were valued as equal to 123 standard kanals and 18 standard marlas of 'A ' Grade land. The family took possession of the said land, and, it is alleged, made improvements thereon. On July 28, 1954, the State Government issued a notification under section 14 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (hereinafter called the Act), declaring its intention to make a scheme for the consolidation of the holdings. On April 30, 1955, a draft scheme was proposed by the Consolidation Officer and published indicating, inter alia, that the respondents ' family would be given 84 standard kanals consisting of 50 standard kanals and 7 standard marlas of 'A ' Grade land, and 34 standard kanals and I standard marla of 'B ' Grade land. The lands proposed to be substituted for the lands already allotted on quasi permanent tenure to the respondents ' family are admittedly of a lesser value than the land allotted to them earlier. The said consolidation was not made 714 in strict compliance with the provisions of the Act, but pursuant to administrative directions given to the Consolidation Officer by the State Government. Broadly stated, under the said directions the Consolidation Officer was directed to take into consideration, for the purpose of consolidation, the number of acres held by the evacuee and not the actual valuation at site of the land allotted to him. The objections filed by the respondents were rejected by the Consolidation Officer. By an order dated August 6, 1958, the Settlement Commissioner confirmed the scheme pro pounded by the Consolidation Officer. Meanwhile, the (44 of 1954) became law; it came into force on October 9, 1954, i.e., after the Estate had been notified for consolidation of holdings. On March 24, 1955, the Central Government issued a notification under section 12 of the Displaced Persons Act (44 of 1954) acquiring all the evacuee properties to which that Act applied. This notification was issued before the scheme of consolidation was confirmed by the Settlement Commissioner. On February 23, 1956, the Central Government issued a sanad conferring proprietary rights on the respondents in respect of the lands allotted to them in 1950. This sanad was issued after the order of the Settlement Commissioner confirming the scheme of consolidation. On November 9, 1955, i.e., before the said sanad was issued to them, the respondents filed a petition in the High Court of Punjab under article 226 of the Constitution praying for the issue of an appropriate writ to quash the said scheme of consolidation. The High Court by its final order dated February 1, 1957, allowed the said objection and issued a direction to the Consolidation Officer to proceed with the matter before him in accordance with law. Mr. Khanna, learned counsel for the State, raised before us the following two points: (1) The respondents had no legal right to maintain the petition under article 226 of the Constitution. And (2) the directions issued by the State Government were validly issued and, therefore, the Consolidation Officer was 715 within his rights to formulate the scheme on the basis of those instructions. ' Re. The existence of a right and the infringement thereof are the foundation of the exercise of the jurisdiction of the court under article 226 of the Consti tution. The right that can be enforced under article 226 of the Constitution shall ordinarily be the personal or individual right of the applicant. It may be first considered whether the respondents had such a right on the date when they filed the petition under article 226 of the Constitution. They filed the petition on November 9, 1955, i.e., after the Central Government issued the, notification acquiring all the evacuee properties and before it issued the sanad conferring proprietary rights on the respondents in respect of the lands allotted to them. The nature of interest of a displaced person in the properties allotted to him under the evacuee law has been authoritatively decided by this Court in Amar Singh vs Custodian, Evacuee Property, Punjab (1). There, Jagannadhadas, J., speaking for the Court, after an elaborate survey of the law on the subject, came to the conclusion that the interest of a quasi permanent allottee was not property within the meaning of article 19(1)(f) and article 31(2) of the Constitution. But the learned Judge made it clear that, notwithstanding the said conclusion an allottee had a valuable right in the said interest. The learned Judge stated the legal position in the following words: "In holding that quasi permanent allotment does not carry with it a fundamental right to property under the Constitution we are not to be supposed as denying or weakening the scope of the rights of the allottee. These rights as recognized in the statutory rules are important and constitute the essential basis of a satisfactory rehabilitation and settle ment of displaced land holders. Until such time as these 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 (1) [1957] S.C.R. 801, 836. 716 courts by appropriate proceedings where there is usurpation of jurisdiction or abuse of exercise of statutory powers. " It may be mentioned that the learned Judge in coming to the conclusion noticed all the relevant Acts on the subject, including the (44 of 1954) and particularly section 12 thereof. The observations of this Court indicate that notwithstanding such notification an evacuee has a valuable right in the property allotted to him, and that the said right is entitled to the protection of the constituted authorities and the courts. A perusal of the relevant provisions of Act 44 of 1954 demonstrates the correctness of the said observations. Section 10. Where any immovable property has been leased or allotted to a displaced person by the Custodian under the conditions published (a) by the notification of the Government of Punjab in the Department of Rehabilitation No. 4891 S or 4892 S, dated the 8th July, 1949; or (b) by the notification of the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No. 8R or 9R, dated the 23rd July, 1949, and published in the Official Gazette of that State, dated the 7th August, 1949, and such property is acquired under the provisions of this Act and forms part of the compensation pool, the displaced person shall, so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition, and the Central Government may, for the purpose of payment of compen sation to such displaced person, transfer to him such property on such terms and conditions as may be prescribed. Section 12. (1) If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation to such 717 persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a notification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section. A reference to r. 14(6) of the rules made under the , will also be useful in this context. Tinder that rule, the Custodian has no power to make any order after July 22, 1952, cancelling or varying the allotments made, subject to certain exceptions with which we are not concerned here. The result of these provisions is that under the , the respondents became quasi permanent allottees in respect of the land allotted to them in 1950. After July 22, 1952, the Custodian ceased to have any authority to cancel or modify the said allotment. After the notification issued by the Government under section 12 of the Act, so long as the property remained vested in the Central Government, the respondents continued to be in possession of the property on the same conditions on which they held the property immediately before the date of acquisition, that is, under a quasi permanent tenure. The contention that on the issue of the said notification, the respondents ceased to have any interest in the said land is without any foundation. It is, therefore, clear that on the date when the respondents filed the petition in the High Court they had a very valuable, right in the properties allotted to them which entitled them to ask the High Court to give them relief under article 226 of the Constitution. That apart, on February 23, 1956, the Central Government issued a sanad to the respondents conferring an absolute right on them in respect of the said properties. Though the sanad was issued subsequent to the filing of the petition, it was before the petition came to be disposed of by the High Court. At the time the High Court disposed of the petition, the limited right of the respondents had blossomed 91 718 into a full fledged property right. In the circumstances of the case, the High Court was fully justified in taking note of that fact. From whatever perspective this case is looked at, it is obvious that the respondents hate sufficient interest in the property to sustain their petition under article 226 of the Constitution. Re (2). The second point has absolutely no legs to stand upon. The East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, was enacted, in the words of the long title annexed to the Act, to, provide for compulsory consolidation of ' agricultural holdings and for the. prevention of fragmentation of agricultural holdings in the State of Punjab. Under section 15 of the said Act, the scheme prepared by the Consolidation Officer shall provide for the payment of compensation to any owner who is allotted a holding of less market value than that of his original holding and for the recovery of compensation from any owner who is allotted a holding of greater market value than that of his original holding. There is no provision in the Act empowering the Consolidation Officer to deprive a person of any part of his property without allotting to him property of equal value or paying him compensation if he is allotted a holding of less market value than that of his original holding. In the present case it is not disputed that while the respondents were allotted 123 kanals and 18 marlas of 'A ' Grade land on a quasi permanent basis by the Custodian and later confirmed by the Central Government, the consolidation proceedings gave him only 50 kanal 8 and 7 marlas of 'A ' Grade land, and 34 kanals and 1 marla of 'B ' Grade land. The area given under the consolidation pro ceedings is admittedly of less value than that of the holding allotted to the respondents by the Custodian, and the Consolidation Officer has not paid any compensation for the deficiency. This unjust situation in which the respondents have been placed is sought to be supported by learned counsel for the State on the basis of the instructions given to the Consolidation Officer by the State Government. There is no provision in the Act empowering the State Government to 719 give any such instructions to the Consolidation Officer; nor does any provision of the Act confer on the State Government any power to make rules or issue notifications to deprive owners of land of any part thereof or to direct the Consolidation Officer as to how he should exercise his statutory duties. Any such rule would be repugnant to the provisions of the Act. That apart, no such statutory rule empowering the State Government to issue such instructions has been placed before us. Both here as well as in the High Court, learned counsel appearing for the State has not been able to sustain the validity of such instructions on any legal basis. The order of the appropriate officers confirming the 'scheme on the basis of the said instructions was obviously illegal and, therefore, was rightly set aside by the High Court. In the result, the, appeal fails and is dismissed with costs. Appeal dismissed.

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

This appeal challenged the validity of the Jammu and Kashmir Big Landed Estate Abolition Act, XVII Of 2007 which was enacted by Yuvaraj Karan Singh on October 17, 1950, in exercise of the powers vested in him by section 5 of the Jammu and Kashmir Constitution Act 14 of 1996 (1930) and the final proclamation issued by Maharaja Hari Singh on June 20, 1949, by which he entrusted all his powers and function to the Yuvaraj. The object of the Act was to improve agricultural production by abolishing big landed estates and transferring land to the actual tillers of the soil. The suit out of which the present appeal arises was brought by the appellant in a representative capacity for a declaration that the Act was void, inoperative and ultra vires and that he was entitled to retain peaceful possession of his lands. Both the trial Court as also the High Court in appeal found against him and dismissed the suit. Hence this appeal by special leave. The validity of the Act was challenged mainly on the ground that Yuvaraj Karan Singh had no authority to promulgate the Act. It was contended that (i) when Maharaja Hari Singh conveyed his powers to the Yuvaraj by his proclamation of June 20, 1949, he was himself a constitutional monarch and could convey no higher powers, (2) the said proclamation could not confer on the Yuvaraj the powers specified therein, (3) the powers of the Yuvaraj were substantially limited by his own proclamation issued on November 25, 1949, by which he sought to make applicable to his State the Constitution of India, that was soon to be adopted by its Constituent Assembly, in so far as it was applicable, (4) as a result of the application of certain specified Articles, including article 370 of the Constitution of India to the State of Jammu Kashmir, the Yuvaraj became a constitutional monarch without any legislative authority or powers and (5) the decision of the Constituent Assembly of the State not to pay compensation was invalid since the Assembly itself was not properly constituted. Held, that Yuvaraj Karan Singh, when lie promulgated the Act, had the power to do so and its validity was beyond question. 271 It was indisputable that prior to the passing of the Independence Act, 1947, Maharaja Hari Singh like his predecessors, was an absolute monarch so far as the internal administration of his State was concerned. Section 3 Of the Regulation 1 of 1991 (1934) issued by the Maharaja not only preserved all his preexisting powers but also provided that his inherent right to make any regulation, proclamation or ordinance would remain unaffected. The Constitution Act 14 of 1996 (1939) promulgated by him did not alter the position. Sections 4 and 5 of that Act preserved all the powers that he had under section 3 of the Regulation 1 of 1991 and section 72 preserved his inherent powers so that he remained the same absolute monarch as he was before. With the lapse of British paramountcy on the passing of the Independence Act, 1947, the Maharaja continued to be the same absolute monarch, subject to the agreements saved by the proviso to section 7 Of the Act, and in the eyes of international law could conceivably claim the status of an independent sovereign. It was unreasonable to suggest that the provisions of the Instrument of Accession signed by the Maharaja on October 25, 1947, affected his sovereignty, in view of cl. 6 thereof, which expressly recognised its continuance in and over his State. There was no substance in the argument that as a result of his proclamation issued on March 5, 1948, which replaced the emergency administration by a popular interim Government headed by Sheik Mohammad Abdullah and constituted a Council of Ministers who were to function as a cabinet, the Maharaja became a constitutional monarch. The cabinet had still to function under the Constitution Act 14 of 1996 (1939) under the overriding powers of the Maharaja. When the Maharaja on June 20, 1949, therefore, issued the proclamation authorising the Yuvaraj to exercise all his powers, although for a temporary period, it placed the Yuvaraj in the same position as his father till the proclamation was revoked. The Maharaja was himself an absolute monarch and there could be no question as to his power of delegation. In Re. ; , , referred to. The proclamation issued by the Yuvaraj on November 25, 1949, did not vary the constitutional position as it stood after the execution of the Instrument of Accession by the Maharaja nor could it in any way affect the authority conferred on the Yuvaraj by his father. The contention that the application of certain specified Articles of the Indian Constitution to the State by the Constitution (Application to Jammu and Kashmir) Order (C. O. 10) issued by the President on January 26, 1950, affected the sovereign powers of the Yuvaraj was not correct. Neither the scheme of article 370 nor the explanation to cl. (1) of that Article Contemplated that the Maharaja was to be a constitutional ruler. The temporary provisions of that Article were 272 based on the assumption that the ultimate relationship between India and the State should be finally determined by the Constituent Assembly of the State itself. So, that Article could not, either expressly or by implication, be intended to limit the plenary legislative powers of the Maharaja. Till the Constituent Assembly of the State, therefore, made its decision, the Instrument of Accession must hold the field. The initial formal application of article 385, which was sub sequently deleted from the list of Articles applied to the State, could not justify the conclusion that it had adversely affected the legislative powers of the Yuvaraj. There was no substance in the contention that the decision of the Constituent Assembly not to pay compensation was invalid as the Assembly itself was not properly called or constituted. There could be doubt that the Yuvaraj was perfectly competent to issue the proclamation dated April 20, 1951 in variation of the Maharaja 's, under which the Assembly was ultimately constituted, and so the Assembly was properly convened.

The respondent, a displaced person from Pakistan was allotted 55 80 Standard Acres of land in lieu of the land left by him in Pakistan. While determining the surplus area, the appellant State interpreting the phrase "as the case may be" in proviso (ii)(a) to Section 2(3) of the Punjab Security of Land Tenures Act, 1953, left with the respondent 100 ordinary acres equivalent to 29.81 Standard Acres and treated 25.99 standard acres equivalent to 78.57 ordinary acres as surplus. The respondent preferred an appeal contending that the surplus should be 5.80 standard acres on a true interpretation of the proviso, which failed. The revision before the Financial Commissioner met with the same fate. The contention of the respondent was upheld by the High Court while allowing the Writ Petition filed by him. The Letters Patent Appeal filed by the State was dismissed. On an appeal by special leave, the Court, while dismissing it, ^ HELD: (i) The contention that the words "as the case may be" in proviso (ii)(a) to section 2(3), gives a discretion to the authorities to determine the permissible area either in standard or in ordinary acres is not correct. [212 B C] (ii) On a plain reading, proviso (ii)(a) indicates that where the land allotted to a displaced person was in standard acres and its area exceeded 50 standard acres, the permissible area would be 50 standard acres, and where the land was allotted not in standard acres, the permissible area would be 100 ordinary acres. The nature of the original allotment whether it was in standard acres or in ordinary acres is the determinating factor. [212 C D] (iii) The meaning given to proviso (ii)(a) by the Full Bench of the Punjab & Haryana High Court, in Khan Chand vs State of Punjab A.I.R. 1966 Punjab 423, is correct It is only construed this way that the words "as the case may be" acquire a significance, otherwise they would be mere surplusage. [212 D E] Khan Chand vs State of Punjab, A.I.R. 1966 Punjab 423, approved.

The defendant appellant No. 1 and plaintiff respondent were brothers and defendant appellant No. 2 was the wife of appellant No. 1. The appellant No. 1 was in Government service ever since 1953. The plaintiff respondent was looking after the entire agricultural property in the village. Partition was effected during consolidation proceedings and entered in the revenue records and chaks were carved out in accordance with the share of the parties in the consolidation proceedings. During the consolidation operation, the plaintiff respondent did not raise any dispute that he was owner of the entire property and the names of defendants appellants were wrongly mentioned as benami. Later, the plaintiff respondent filed a suit on the ground that the suit land was purchased by him alone through 4 sale deeds dated 10.6.1968, 21.6.1968,17.1.1976, and 23.6.1977 wherein the names of the defendants appellants were included only as benamidar and he was the real owner of the land. The defendants appellants contended that they had paid their part 16 of the sale consideration and the land was jointly purchased in the name of both the parties. The trial court dismissed the suit holding that the names of the defendants appellants in the sale deeds were not mentioned as benamidars and that the plaintiff respondent did not take any objection in the consolidation proceedings. When the plaintiff respondent filed an appeal before the first appellate court, it reversed the judgment and decree of the trial court and decreed the suit in favour of the plaintiff respondent. The second appeal filed by the defendants appellants was dismissed by the High Court. The defendants filed a special leave petition before this Court on 15th March 1988. During the pendency of the special leave petition the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance,1988 was promulgated on 19.5.1988. The ordinance was replaced by the Benami Transactions (Prohibition) Act, 1988, which received the President 's assent on 5.9.1988. The defendants filed an application on 1.5.1989 for allowing them to take additional grounds made available on the basis of the aforesaid `Benami Act '. Thereafter special leave was granted by order dated 21.8.1989 and the parties were given liberty to file additional documents, if any, within four weeks. The defendants appellants contended that the suit filed by the plaintiff respondent was not maintainable and barred under Section 49 of the U.P. Consolidation of Holdings Act, 1954 as the point regarding the land in question being benami was never raised by the plaintiff respondent during consolidation proceedings and the chaks were allowed to be recorded in the name of the defendant appellants. The plaintiff respondent contended that if the ratio of Mithilesh Kumari 's case, JT. 1989(1) SC 275, was applied, it could be made available only in a case where appeal was pending before the higher Court and that no advantage could be taken by the defendants appellants, of Section 4 of the Benami Act, as no appeal was pending on the date when the Benami Act came into force. 17 On the question, whether any suit relating to benami transactions can be decreed after the coming into force of the Benami Act, this Court, allowing the appeal of the defendants, HELD : 1.01. In a suit for recovery of benami property if any appeal is pending on the date of coming into force of Section 4, the appellate court can take into account the subsequent legislative changes. [20C] 1.02. The Law Commission 's view was that the legislation replacing the ordinance should be retrospective in operation and that no locus penitentia need be given to the persons who had entered in the benami transaction in the past. [20G] 1.03. In the present case the defendants, having lost in High Court, could have approached this Court only through a special leave petition under article 136 of the Constitution and it is only after the grant of such special leave that the appeal could be heard. Though the special leave might have been granted subsequently on 21.8.89 but it is a fact that the Judgment and decree of the High Court had already been challenged by the defendant appellants, and it cannot be said that no appeal was pending before this Court simply on the ground that only special leave petition was pending when the Benami Act came into force. [21C E] 1.04. An appeal is a continuation of suit and in the present case, the appeal was pending before this Court. The suit had been filed by the plaintiff respondent claiming that he was the real owner of the property and the names of the defendants appellants were mentioned in the saledeeds as benami. [21E F] 1.05. Section 4 of the Benami Act is a total prohibition against any suit based on benami transaction and the plaintiff respondent is not entitled to get any decree in such suit or in appeal. [21F] Mithilesh Kumari and Anr. v Prem behari Khare, J.T. , referred to . 2.01. The expression "shall lie" in Section 4(1) and "shall allow" in Section 4(2) of the Benami Act are prospective and shall apply to present (future stages) and future suits, claims or actions only. [20B] 2.02. The expression "any property held benami" is not limited to any particular time, date or duration. [20C] 18 3. No foundations were laid in the written statement nor any issue was raised by the defendants appellants, on the question of applicability of Section 49 or th U.P. Consolidation of Holdings Act. The defendants appellants cannot be allowed to take such plea. [19H 20A]

The land owned by the respondents were requisitioned by the first appellant under the Bombay Land Requisition Act for a public purpose viz., for establishing a new village site to resettle victims of flood. The respondents filed a writ petition in the High Court challenging the validity of the order on the ground that since Act was a temporary Act extended until then upto 1963, the power to requisiton thereunder would inhere to the Government only during the time that it subsisted; so an order passed for a permanent purpose could not be in the contemplation of the Act. The High Court accepted the objection and, quashed the order. In a appeal to this Court: Held: The power to requisition under the Act could be exercised whether the public purpose was temporary or not and the excercise of that power for the purpose for the purpose of rehabilitation of flood suffers was neither in abuse of nor unjustified under the Act. The words for any public purpose in section 5(1) are wide enough to include any purpose of whatsoever nature do not contain any restriction regarding the nature of that purpose. It places no limitation on the words competent authority as to what kind of "for any public purpose in section 5( 1) are wide enough to include any purpose of whatsover nature and do not contain any restriction regarding the nature of that purpose. It places nolimitation on the competent authority,as to what kind of Public purpose it should be for the valid exercise of its power nor does it confine the exercise of that power to a purpose which is a temporary one. [404E F; 405AB] There is no antitheses between the power to requisition and the power of compulsory acquisition under the Land Acquisition Act. Neither of the two Acts contains any provision under which it can be said that if one is acted upon, the other cannot. [405D E]

The appellant Piarey Lal had agreed to sell his original holding to Hori Lal but later refused to do so on the ground that his property which was the subject matter of the con tract had been consolidated under the U.P. Consolidation of Holdings Act, 1953, and it was impossible to perform the agreement. Hori Lal filed a suit for specific performance contending that the agreement for sale had created a liabil ity for Piarey Lal for the purpose of section 30(b) of the Act, and the same was transferred to the new plot or "chak" allotted to him as a result of the consolidation. The suit was decreed by the Trial Court and Piarey Lal 's appeals before the District Court and the High Court were dismissed. Allowing the appeal by Special Leave the Court, HELD: By virtue of section 54 of the Transfer of Property Act, the agreement for sale did not give rise to any inter est "in" the original holding of the defendant as the ten ure holder. There could thus be no occasion for the transfer of any such , 'liability" in his new land or "chak" so as to attract clause (b) Of section 30 of the Act. When he lost that property as a result of the scheme of consolida tion, the agreement for sale became void. [918 C E] Sagna & Anr. vs Kali Ram & Ors. , approved. Shanti Prasad vs Akhtar & Anr. and Chettan Singh & Ors. vs Hira Singh & Ors. overruled.

The appellant wife and her husband were estranged and living apart. The husband, by a letter dated July 28, 1956, entrusted.to the appellant the land in dispute alongwith another piece of land and a house and agreed to pay a sum of Rs.100 per mouth for her maintenance. After a few years, the husband conceived the idea of selling the land in dispute. The appellant protested by her letter dated June 15, 1966 and implored him not to sell the land. Despite this, the husband sold the said land to the plaintiff respondents. The purchaser instituted a suit for an injunction re straining the appellants from interfering with possession, which was contested initially on the ground that the land had been gifted to the appellant orally by the husband, and that title had been acquired by adverse possession. Later, the written statement was amended and a further plea was taken that the said land had been given in lieu of mainte nance and that she had become the absolute owner of the land under Section 14 of the Hindu Succession Act. All courts found that there was no oral gift. A Single Judge of the High Court held that the land was given to the appellant by her husband in lieu of maintenance and that by Section 14 of the Hindu Succession Act, she had become full owner of the property. On appeal under the Letters Patent, a Division Bench of the High Court held that "The reading of the letter left no meaning of doubt that there was never any intention on the part of the husband to give away the land to the lady and that instead of sending the total amount in cash he allowed her to utilise the amount of ckakota for meeting her day to day expenses", that she did not at all acquire any such right or interest in the property as could be termed 'limit ed ownership ' so as to permit 577 her to take the benefit of the provisions of Section 14(1) of the Hindu Succession Act, that "if the husband had given over the land in dispute completely to the lady, then the question of sending more money could not have arisen" and reversed the Judgment of the Single Judge. The appellant appealed to this Court. On behalf of the respondents, it was contended that even if the land was given to the appellant in lieu of maintenance, it must be established that what was given to her was a limited estate in the sense of ownership without the right of alienation and that under Section 14 of the Hindu Succession Act only such a limited estate would blossom into an absolute estate. Allowing the appeal, this Court, HELD: 1.1 Section 14 is aimed at removing restrictions or limitations on the right of a female Hindu to enjoy, as a full owner, property possessed by her so long as her posses sion is traceable to a lawful origin, that is to say, if she has a vestige of a title. It makes no difference whether the property is acquired by inheritance or devise or at a parti tion or in lieu of maintenance or arrears of maintenance or by gift or by her own skill or exertion or by purchase or by prescription or in any other manner whatsoever. The Explana tion to the Section expressly refers to property acquired in lieu of maintenance and the widow is not required to estab lish her further title before she could claim full owner ship, under Section 14(1) in respect of property given to her and possessed by her in lieu of maintenance. [582F H] 1.2 The very right to receive maintenance is sufficient title to enable the ripening of possession into full owner ship if she is in possession of the property in lieu of maintenance. Sub section (2) of Section 14 is in the nature of an exception to Section 14(1) and provides for a situa tion where property is acquired by a female Hindu under a written instrument or a decree of court and not where such acquisition is traceable to any antecedent right. [582H; 583A] 2. If a female Hindu is put in possession of property pursuant to or in recognition of a right to maintenance, it cannot be denied that she has acquired a limited right or interest in the property and once that position is accepted, it follows that the right gets enlarged to full ownership under Section 14(1) of the Act. That is clear from the language of Section 14(1) of the Act. [586B C] 3.1 In the instant case, the question was not whether the husband 578 intended to give away the land in dispute absolutely but whether the land was given to her in lieu of maintenance. A perusal of the letters exchanged between the husband and the appellant wife clearly establishes that the land in dispute was given by the husband in lieu of maintenance. The Divi sion Bench of the High Court was wrong in making distinction between day to day expenses and maintenance. [581F G] 3.2 It is rather late in the day to contend that the land which was given to the appellant in lieu of maintenance did not vest in her absolutely. [586F] [The Judgment of the Division Bench of the High Court set aside and that of the Single Judge restored. ] Eramma vs Verrupanna & Ors., , distin guished. Badri Pershad vs Smt. Kanso Devi, ; ; Naraini Devi vs Smt. Rano Devi and Ors., ; ; V. Tulasamma & Ors. vs V. Sesha Reddi (Dead) by L.Rs.; , ; Bai Vajia (Dead) by L.Rs. vs Thakorbhai Chelabhai and Ors., ; ; Santhanam vs Subramanya AIR 1977 SC 2024 and Jagannathan Pillai vs Kunjithapadam Pillai, ; , referred to.

U.P. Government issued a notification under Section 7(1) of the U.P. Land Acquisition (Rehabilitation of Refugees) Act, 1948 for acquiring the land belonging to the appellant for the purpose of Sufferers Cooperative Housing Society. The Society entered into an agreement with the Government under section 6 of the Act. The Land Acquisition Officer determined the amount of compensation for the acquired land. The appellants challenged the validity of the said notifica tion on the following grounds: 1. The notification did not properly speci fy the land sought to be acquired. The notification was ultra vires the Act because it sought to acquire land for the rehabilitation of displaced persons and not for the rehabilitation of refugees. The notification was not in accordance with the provisions of section 7(1) of the Act. The single Judge of the High Court did not go into the first ground but accepted the second and third grounds and quashed the notification. He held that according to the definition of refugees in section 2(7) a refugee is a person who has migrated from Pakistan to any place in the U.P. and has been since then residing in U.P. and that there was nothing to show that the displaced persons who are the members of the Society had settled in U.P. While accepting the third ground the learned Judge held that section 7(1) requires to indicate in the notification that it had decid ed to acquire the land. However, the notification did not mention the expression "decided". On an appeal, the Division Bench disagreed with the conclusions of the Single Judge and allowed the appeal. The Division Bench held that the notification was substantially in accordance with the sect.ion 7( 1 ) and that the members of the Society consisted of refugees. The Division Bench also held that the notification was not vague and it proper ly specified the land sought to be acquired. In an appeal by Special Leave the appellants repeated the 3 grounds. Dismissing the appeal HELD: 1. The ground about the members of the Society not being refugees has not been taken in the Writ Petition at all. The question whether those members have settled in U.P. is essentially one of fact. In the absence of any averment in the writ petition the material facts having bearing on the point could not be brought on record. A party seeking to challenge the validity of a notifi cation on a ground involving questions of fact should make necessary averments of fact before it can assail the notification on that ground. [229 F H] 227 2. The recital in the earlier part of the notification as well as the operative part of the notification that the land shall be deemed to have been acquired permanently and shall vest in the State Government lends clear support to the conclusion that the State Government decided to acquire the land and the order of acquisition was merely an implementa tion of that decision. The fact that the word decided has not been used in the notification would not prove fatal when the entire tenor of the notification reveals the decision of the State Govt. to acquire land. The court would not strike down a notification for acquisition on hypertechnicality; what is needed is sub stantial compliance with law and the impugned notification clearly satisfies that require ment. [230 D F] 3. The contention that the notification in question is vague is not substantiated. The notification makes an express reference to the site plan. [230 G 231 A]

Appeals Nos. 509 and 510 of 1960. Appeals by special leave from the judgment and order dated October 26, 1956, of the former Madhya Bharat High Court Indore. in Civil Misc. Cases Nos. 26 of 54 and 48 of 55. A. V. Viswanatha Sastri, C. B. Agarwala and A. G. Ratna parkhi, for the appellants. R.J. Bhave and 1. N. Shroff, for the respon. dents. July 26. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. ,The appellant, the Indore Iron and Steel Registered Stock holders ' Association (Private) Ltd., is a 'registered Association whose constituent members carry on business generally in fabricated iron and steel material and more particularly in iron sheets, plain or corrugated, bars, rods, light and heavy structurals, nails, joints, wire nails and all kinds and varieties of wirer, and 926 pipes. This business is carried on by the constituent members of the appellant at Indore and Ratlam at which places they have their registered offices. The State of Madhya Bharat, by its Act No. 30 of 1950, imposed sales tax in the territory of Madhya Bharat on the sales of goods therein specified with effect from May 1, 1950, and under the provisions of the said Act the Commissioner of Sales Tax, Madhya Bharat, and the, Sales Tax Officer, Indore, who are respondents 2 and 3, were appointed authorities for the assessment of tax leviable under the Act and for its recovery in their respective areas. Section 3 of the Act is the charging section and it provides for the incidence of taxation, Section 4, which deals with the application of the Act exemption and exclusion, provides by Sub section (2) that no tax shall be payable under the Act on the sale of goods specified in the second column of Sch. 1 on conditions mentioned in column 3 of the Schedule. " 'Iron and steel" appears in, Sch. 1 as item 39. Section 5 prescribes the rate of tax and it provides that the tax will be recoverable as notified from time to time by the Government by publication in the official gazette subject to the condition that it shall not be less than Rs. 1 9 0 per cent or more than 61 per cent. Section 4(3) authorises the Government by notification to modify Sch. 1 from time to time. Similarly section 5(2) authorises the Government while notifying the tax payable by a dealer to notify the goods and the point of their sale at which the tax is payable. It is by virtue of this delegated power that the State 'Of Madhya Bharat, respondent 1 purported to issue notifications to which we will presently refer. On May 22, 1950. a notification was issued under section 5(2) specifying serially the articles taxed, 'the stage of sale by traders in Madhya Bharat on which the tax is levied and the rate of sales tax per cent. Item 27 in the list dealt with goods manu 927 factured from things (wastu) except gold and silver or goods manufactured from more than one metal (except circles and sheets of copper, brass and aluminium). The notifications provided that the tax had to be paid by the producer or importer at that rate of Rs. 3 2 0 per cent. Meanwhile article 286(3) of the Constitution had come into force. This Article as it then stood provided that no law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community, shall have effect unless it has been reserved for the consideration of the President and has received his assent. Thereafter Parliament by law proceeded to make the declaration as contemplated by this Article by section 2 of Act 52 of 1952 [Essential Goods (Declaration and Regulation of Tax on sale or purchase) Act] (hereafter called the Act) which was passed on August 9, 1952. Section 2 of the Act provides that the goods specified in the Schedule are hereby declared to be essential for the life of the community. Item 14 in the Schedule refers to ,iron and steel '. Thus, as a result of these provisions in on and steel came to be declared as essential for the life of the community within the meaning of article 286(3) as from August 9, 1952. Respondent 1 thereupon purported to give effect to the provisions of article 286(3) and section 2 of the Act by issuing two notifications on October 24, 1953. By the first notification it was provided that no tax shall be payable enter alia on the sale of iron and steel. 'Iron and steel ' was placed at item 39 in the said Schedule. The other notification issued on the same day by item 9 in the list provided for the sale of the articles specified in the said item. This item reads thus: 928 Every kind of metal including copper brass, manganese, zinc, lead, mercury, bronze, nickel, aluminium, tin and their ore form (ex cluding iron, steel, gold and silver) and goods prepared any metal other than gold and silver, utensils and wires, goods prepared from one ore more than one metal, utensils and wires which also includes mangars, metal pieces and scraps, cutting and lantern, gas, stove and type letters (excluding circles and sheets of copper, bra,% and aluminium). " It is common ground that under this notification the articles in which the constituents of the appellant deal would be liable to pay the sales. tax in question. After this notification was issued the appellant wrote to respondent 3 claiming exemption from payment of sales tax for the goods and articles in which its constituent members are dealing but this plea was rejected by the said respondent, and the constituent members of the appellant were called upon to pay sales tax each in respect of their individual turnover. It was under these circumstances that the appellant filed two writ petitions under article 226 of the Constitution in the High Court of Madhva Bharat at Indore in which it challenged the validity of the assessment orders passed for the two years 1953 54 and 1954 55 respectively (Petitions Nos. 26 of 1954 and 48 of 1955). The appellant 's case was that the articles in which the constituent members of the appellant dealt were covered by the parliamentary declaration contained in section 2 of the Act and as such were no longer liable to pay sales tax. This plea was resisted by the respondents. It was urged on their behalf that the notification issued by respondent 1 on October 24, 1953 was valid, and item 27 in the list notified brought the articles in question within the mischief of the Sales Tax Act and so the petitioners were not entitled to any writ as claimed by them. The High Court has upheld the plea 929 raised by the respondents, rejected the contentions urged by the appellant and has dismissed the ' writ petitions filed by it. It is against these orders of dismissal passed by the High Court in the two writ petitions filed by the appellant that the present appeals, No. 509 and 510 of 1960, have been brought to this Court by special leave granted by this Court. Two points have been urged before us by Mr. Viswanatha Sastri, on behalf of the appellant, in support of these appeals. It is urged that section 2 of the Act which contains the parliamentary declaration as contemplated by article 286(3) covers iron and steel as understood in their commercial sense. The words "iron and steel" should not be interpreted in their narrow dictionary meaning. They do not mean iron and steel as they come out after smelting but they mean articles exclusively made from iron and steel in which the identity of iron and steel has not been lost. In other words, iron and steel in the context mean all articles made exclusively of iron and steel in which steel merchants normally and generally trade. It is further argued that in construing the words " 'iron and steel" we must bear in mind the fact that the object, of article 286(3) is to safeguard the 'interest of the consumer in regard to the articles which Parliament may declare to be essential for the life of the community, and it is suggested that if the narrow dictionary meaning of the words is adopted it would not serve the said object and purpose of the constitutional provision. Mr. Sastri has also relied on what he has described as the legislative history which indicates that the said words should receive a broad and wide construction in the context. In that connection he has invited our attention to the provisions of ' section 2(d), section 3. and the categories specified in the Second Schedule to the Iron and Steel 930 (Control of Production and Distribution) Order, 1941. , These categories, according to Mr. Sastri unmistakably support his argument that the expression ",iron and steel" as used in the order was obviously used in a very wide and broad sense. Similarly, he has referred to the provisions of section 2(a)(vii) of Act XXIV of 1946 [The Essential Supplies (Temporary Powers) Act, 1946] and section 2(a)(vi) of Act 10 of 1955 (The ). His contention is that it would be legitimate for the Court to consider the legislative history in the matter of the use of these words and their denotation, and that the legislative history to which he has referred supports his argument that the words ',iron and steel" should receive a very liberal interpretation in determining the effect of the provisions of section 2 of the Act. The High Court Was not impressed by this argument. It has held that the words "iron and steel" as used in Entry 14 to Sch. 1 of the Act do not include within their ambit articles made of iron and steel such as those with which we are concerned in the present proceedings. Mr. Sastri seriously questions the correctness of this conclusion. It is clear that even if we were to accept Mr. Sastri 's contention in regard to the denotation of the words ",iron and steel" as used by the relevant provisions of the Act it would still have to be shown by the appellant that the impugned notification is invalid because it contravenes the provisions of article 286(3). In other words, in order to succeed in the present appeals the appellant has to prove two facts, (1) that the words ""iron and steel" in respect of which the requisite parliamentary declaration has been made by section 2 of the Act include commodities like those with which we are concerned, and (2) that the impugned notification contravenes article 286(3). It would thus be seen that unless the appellant succeeds in both these contentions the appeals are bound to fail. Since 931 we have reached the conclusion that even on the assumption that the parliamentary declaration made by the relevant provision of the Act includes commodities with which we are concerned is correct it does not follow that the impugned notification contravened article 286(3) we do not propose to deal with the first point raised by Mr. Sastri. In dealing with these appeals we would assume in hip, favour that the words "iron and steel" should receive the broad and wide interpretation for which he contends. Assuming then that the articles in which the constituents of the appellant deal are covered by the parliamentary declaration made by the Act does it follow that the impugned notification contravenes article 286(3) ? That takes us to the provisions of article 286(3) which we have already cited. This provision can be successfully invoked only if three conditions are satisfied. The first condition is that the impugned law must be one which is made by the Legislature of a State which obviously means a State which came into existence under and after the Constitution ; and that shows that the impugned law must be a law made by the Legislature of a State subsequent to the Constitution. This condition is satisfied in the present case because the impugned notification has been issued by virtue of the authority delegated to respondent 1 by Act 30 of 1950 and this Act was passed after the Constitution was adopted. Let us then consider the second condition which is also in the nature of a condition precedent. This condition requires that the impugned law must impose or authorise the imposition of a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community. There can be little doubt that this condition postulates that at the time when the impugned law is passed there is a [1962] preexisting declaration made by Parliament in regard to the essential character of a commodity. The material words in respect of this condition are that the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community. Therefore, if the parliamentary declaration follows the impugned enactment it cannot retrospectively affect the validity of the said enactment. Article 286(3) contemplates that if in the face of an existing parliamentary declaration about the essential character of a commodity the Legislature of a State purports to impose or authorise the imposition of a tax on such commodity the enactment would be invalid unless the law made by the Legislature has been reserved for the consideration of the President and has received his assent. The third condition emphasises that the impugned law must have been passed subsequent to the Constitution, because unless the relevant provision of the Constitution for the reservation of the law for the consideration of the President has come into force this condition cannot apply. This requirement obviously means that the office of the President must have come into existence and so this condition can become operative only after the Constitution has come into force. Therefore, the third condition supports the conclusion which arises from the words used in the first condition itself. Thus the position is that Act 30 of 1950 satisfies the first condition but not the second. It is conceded that the relevant provisions of the M. B. Act of 1950 authorise the, imposition of tax on the commodities in question and that the impugned notification is otherwise consistent with, and justified by, the said provision of the Act. Now, if the said M. B. Act authorises the imposition of tax on the goods in question and the said goods were not declared by Parliament by law to be 933 essential for the life of the community before the date of the said: Act its validity cannot be challenged on the ground that it was not reserved for the consideration of the President and ha not received his assent. It is only when all the conditions prescribed by article 286(3) are present that the validity of the impugned law can be successfully challenged. The question about the construction of article 286(3) has been considered by this Court on two occasions. In Sardar Soma Singh vs The State of Pepsu and Union of India(,), section R. Das, J., as he then was, who spoke for the Court has observed that it is quite clear that section 3 of Act 52 of 1952 does not affect the Ordinance there challenged for the said Ordinance was not made after the commencement of the Act, and that article 286(3) contemplates a law which can be but has not been reserved for the consideration of the ' President and has not received his assent. This position clearly points to post constitutional law for there can be no question of an existing law continued by article 372 being reserved for the consideration of the President for receiving his assent. This decision supports the conclusion that the law contemplated by the first condition specified in article 286(3) must be post constitutional law. To the same effect are the observations made in the majority judgment of this Court in Firm of A. Gowrishankar vs Sales Tax Officer, Secunderabad (2). In this connection it would be relevant to refer to section 3 of the Act itself. It provides that no law made after the commencement of this Act by Legislature of a State imposing or authorising the imposition of t tax on the sale or purchase of any goods declared by this Act to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his (1) ; (2) A.I.R. 1958 S.C. 883. 934 assent. This provision also shows that the declaration made by the Act was intended to be prospective in operation and it would affect laws made after the commencement of the Act, and that clearly must mean that if a law had been passed prior to the commencement of the Act and it authorised the imposition of a tax on the sale or purchase of certain commodities its validity cannot be challenged on the ground that the said commodities have been subsequently declared by the Act to be essential for the life of the community. The impugned notification with which we are concerned and the Act under which it has been issued are thus outside the purview of section 3 of the Act. That in substance is the finding made by the High Court on the second contention raised before it by the appellant. In our opinion, the conclusion of the High Court on t is point is right. In the result the appeals fail and are dismissed with costs. Appeals dismissed.

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.

The respondents are dealers under the Tamil Nadu Sales Tax Act. Section 14 of the Central Sales Tax Act declares certain goods enumerated therein of ` ' special importance in inter state trade or commerce. The list of goods given at serial No. IV reads as under: (IV) Iron and Steel, that is to say (a) pig iron and iron scrap . (b) iron plates sold in the same form in which they are directly produced by the rolling mill; (c) steel scrap, steel ingots, steel billets, steel bars and rods, (d) (i) steel plates (ii) steel sheets, (iii) sheet bars and tin bars, (iv) rolled steel sections, I mill. (v) tool alloy steel, J sole in the same from in which they are directly produced by the rolling mill. The said clause IV was amended by the Central Sales Tax Amendment Act, Act 61 of 1972 by which certain more entries were added. Section 15 of the Central Sales Tax Act provides that the tax payable under a State Law on sale or purchase of declared goods shall not be levied at more than one stage. Respondents used to purchase iron scrap and thereafter used to convert them into steel rounds, flats, plates etc. The scrap was already subject to tax once. The respondents contended that the entry Iron & Steel was wide enough to include scrap as well as the steel rounds, flats, plates, etc. made out of the scrap which was subject to tax once and that, therefore, the sale of the steel rounds, flats, plates, etc., cannot be subjected to tax again under the Tamil Nadu Sales Tax Act. The High Court accepted the contention of the respondents. Allowing an appeal by certificate, ^ HELD: 1. The intention was to consider each sub item in clause IV as a separate taxable commodity for purposes of sales tax. The object was not to lay down that all the categories or sub items of goods specified separately were to be viewed as a single saleable commodity called iron and steel for purposes j of determining a starting point for a series of sales. The note against sub division of Clause IV makes it clear that even each sub category of a sub item retains its identity as a commercially separate item for purposes of sales tax so long as it retains the sub division. [171Gm, 172B C] 2. The expression 'that is to say ' is employed to make it clear and fix the meaning of words to be explained or defined. Such words are not used, as a rule, to amplify a meaning while removing a possible doubt for which purpose the word 'includes ' is generally employed. The precise meaning of the words 169 that is to say ' must vary with the context. The purpose of the expression in a sales A lax law would be to indicate the types of goods each of which would constitute separate class for a series of sales. [172F H, 173B] 3. The chemical composition of iron and steel cannot afford a clue to the meaning of iron and steel. Sales Tax Law taxes sales of goods and is not a taxation on sales of substance out of which goods are made. We prefer to follow the more natural and normal interpretation which follows plainly from the fact of separate specification numbering of each item. State of Madhya Pradesh vs Hira Lal; (1966) 17 STC 313 315 distinguished. The case cf Devidas applied. [173C. E F] 4. It has not been shown to, us that any provision of the Tamilnadu Sales Tax Act violates section 15 of the Central Sales Tax Act enacted in accordance with Article 286(3) of the Constitution. Section 2(j) of the Tamil Nadu Act defines goods and section 4 imposes charge in respect of tax on declared goods. The Tamilnadu Act borrows clause (IV) of section 14 of the Central Sales Tax Act. [176 C H] C

Under section 6 of the Bihar Sales Tax Act, 1947, the Government issued a notification exempting certain goods from the 499 payment of sales tax, including "green vegetables other than potatoes, except when sold in sealed containers". The appellant who was a producer of sugar can was assessed to sales tax. He contended that sugar cane was a green vegetables and was exempted from tax and that he was not a dealer as defined in section 2 (c) of the Act and could not be assessed to sales tax. ^ Held, that sugar cane was not a green vegetable and was not exempted under the notification. The word "vegetables" in taxing statutes was to be understood as in common parlance i.e. denoting class of vegetables which were grown in a kitchen garden or in a farm and were used for the table. The dictionaries defined sugar cane as a "grass." Ramavtar Budhaiprasad vs Assistant Sales Tax Officer, Akola, ; , followed. The State of Bombay vs R. section Phadtare, [1956] 7 section T. C. 495, disapproved. Held, further, that the appellant was a dealer within the definition in section 2(c). Section 2(c) was amended by the Bihar Annual Finance Act, 1950. The amended was not a temporary amendment for only one year; the amended section was applicable to the present case. The amending Act did not require the assent of the President as the matter fell entirely within entry 54 of the State List.

The appellant Manganese ore (India) Ltd. (a commercial venture where the Government of India, Government of Maharashtra and Government of Madhya Pradesh hold shares in the ratio of 17 per cent each) entered into four types of "contracts of sale" with buyers in India and outside India for selling the manganese ores extracted from the mineral mines leased out to it and situated li in the States of Madhya Pradesh and Maharashtra. They were (a) category I are the contracts where the appellant directly sent the ores to two foreign companies on f.o.b. terms; (b) category II represents contracts which were entered into by the appellant with tho Mineral and Metals Trading Corporation of India Ltd., under which the appellant despatched manganese ore of varying percentage to the M.M.T.C., f.o.b. Bombay and the M.M.T.C. in turn exported the goods to foreign buyers; (c) category III relates to the sales to M/s. Ram Bahadur Thakur & Co., Bombay and other buyers who in their turn sold the goods to M.M.T.C. for export; and (d) category IV relates to the sales in favour of the buyers within the territories of India, but outside the State. According to section 3(a) ant 9 of the , the State of Madhya Pradesh was competent to levy tax on the sales in the course of inter state trade or commerce. Under section 5(1) of the , sales occasioning export or in the course of export are exempt from the purview of the Act. In respect of categories II to IV, the Sales Tax Authorities levied tax under the Central Act, holding that they were in the course of inter State trade or commerce and imposed a penalty of Rs. 1,000/ under the Madhya Pradesh General Sales Tax Act for belated filing of returns. The writ petition filed by the assessee in the Madhya Pradesh High Court failed. Dismissing the appeal by special leave and quashing the penalty imposed, the Court. ^ HELD: As no export was involved so far as the buyers in India are concerned, section 5(1) of the has no application at all. This 100 point is no longer "res integra" in view of the Constitution Bench division of this Court in Md. Serajuddin and others vs State of Orissa, Where the sale Y/as not directly and substantively connected with export, and where between the seller and ultimate buyers intermediaries are involved, such a sale would not occasion any export and would not fall within the purview of section 5(1) of the . [102 G, 103 C D] Md. Serajuddin & others vs State of Orissa, , applied. (2) The doctrine of "Stare Decisis" is a very valuable principle of precedent which cannot be departed from unless there are extraordinary or special reasons to do so, and more so to reconsider a recent constitutional decision. [103 G] (3) Before a sale can be said to take place in the course of inter state trade or commerce, the following conditions must be satisfied: (1) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another. (ii) that in pursuance of the said contract the goods in fact moved from one State to another. and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move. If these conditions are satisfied, then by virtue of section 9 of the Act, it is the State from which the goods move which will be competent to levy the tax under the provisions of the Act. [104 D F] Balabhgas Hulsachand and others vs Stare of Orissa, ; relied on. (4) So far as section 3(a) of the is concerned, there is no distinction between unascertained and future goods and goods which are already in existence, at he time when the sale takes place these goods have come into actual physical existence. [108 Bl Balabhgas Hulsachand and others vs State of Orissa, ; applied. (5) In the absence of any provision for penalty under the itself it is not open to the Sales Tax Authorities to press into the service the provisions of the State Sales Tax. [108 G] (6) In the instant case, a careful perusal of the agreements would clearly show that what the buyers wanted and what was actually sold to them was manganese are and after all the goods were stocked together, the required percentage under the contracts of sale automatically come into existence. The word "oriental mixture" is merely a technical terminology or just another name for what is known in the commercial world as manganese ore. therefore, It is clear that it was manganese ore and manganese ore alone which was sought to be sold by the appellant to various buyers in India. The mere fact that certain specific contracts have been mentioned does not alter the character and quality of the goods that are actually supplied by the appellant to its various purchasers. In these circumstances, therefore, the theory of the ore supplied by the appellant being only one constituent and not the entire goods sold is illusory. [105 D F, 107 B D] Central Provinces Manganese ore Co., Ltd. vs The State of Maharashtra, S.T. Ref. 17 20/1964 decided on 7 4 1969 by Bombay High Court, Commissioner of Sales Tax, Eastern Division Nagpur vs Hussenali Adamji and company and another, 10 S.T.C. 297, (Distinguished).

At the instance of the steel controller exercising powers under the Iron and Steel (Control of Production and Distribution) Order, 1941, the appellant supplied certain steel products to various persons in Madras State during the financial years 1953 54, 1954 55 and part of the financial year 1955 56. The State of Madras assessed the turnover of the appellant relating to those transactions to sales tax under the Madras General Sales Tax Act, the law in force at that time. The appellant contended before the authorities under the Sales Tax Act as well as the High Court that the transactions were not sales and therefore could not be taxed. The further contention was that there was no material to show that the deliveries were for consumption within the State of Madras so as to become taxable within the State. From the adverse decision of the High Court the appellant, by special leave, came to this Court. In support of the contention that the transactions were not sales it was urged that they were effected under the directions of the Iron and Steel Controller given under cl. 10B of the Order and that being so there was no mutual assent between the parties to the transactions. HELD:The authority of the controller to pass the orders in question came from cl. 5 of the order and not cl. 10B. The orders were in respect of goods not yet manufactured whereas under cl. 10B directions could be given only in respect of goods already in stock. So far as cl. 5 is concerned admittedly it does not require the controller to regulate or control every facet of a transaction between a producer and the person to whom he supplies iron and steel products. [488H: 489C H] In modern times the doctrine of laisser faire can have only a limited application. That does not mean that there is no freedom of contract. So long as mutual assent is not excluded in any dealing, in law it is a contract. On the facts of the present case it was not possible to accept the contention that nothing was left to be decided ' by mutual assent. On the other hand the controller 's directions were confined to narrow limits and there were several matters which the parties could decide by mutual consent. [49OB; 491B C] Kirkness vs John Hudson & Co. Ltd. ; M/s. New India Sugar Mills Ltd. vs Commissioner of Sales tax, Bihar, [1963] Supp. 2 S.C.R. 459; Calcutta Electric Supply Corporation Ltd. vs Commissioner of Income tax. West Bengal. ; M/s. Cement Ltd. vs State of Orissa, 12 S.T.C. 205; State of Madras vs Gannon Dunkerley, ; ; North Adjai Coal Company (P) Ltd. vs, Commercial Tax Officer & Ors. 17 S.T.C. 514 and section K. Roy vs Additional Member, Board of Revenue, West Bengal, 18 S.T.C. 379, refer red to. (ii)From the facts and circumstances the Tribunal rightly found ' that the supplies were made to stockists in the State of Madras for 480 consumption in that State. It may be that a small portion of the supplies had gone out of the State. But that was not a relevant circumstance. What had to be seen Was whether the supplies in question were made for consumption in the Madras State. On that question the finding of the Tribunal was conclusive. [496B C]

The respondents in these appeals were convicted by Magistrates for offences under section 26(1) of the Indian Forest Act. Appeals were filed to the Sessions Judge, where the respondents raised the contention that the forest areas in which the alleged offences were committed were not "Reserve forests" within the meaning of the Act. For establishing that these "reserves" were "reserved forests" within the Indian Act, the appellant relied on two circumstances. First, there was a Forest Act promulgated by the Ruler of Tripura State (Act 2 of 1257 T.E. 1297 T.E. ?) which contained provisions somewhat analogous to those contained in the Indian Act. Next, section 5 of the Tripura Act enabled the State Government to declare by notifications published in the State Gazette, the boundaries of the forest areas to be governed by the State Act. Such notifications were published by which the boundaries of the reserves of the forests in question were defined. The appellant urged that the Tripura Act was replaced by the Indian Forest Act by reason of legislative provisions upon the merger of the native State of Tripura with the Dominion of India, and that the notifications under the Tripura Act which were continued in force by these same provisions rendered these reserves "Reserved forests" under the Indian Forest Act. The Sessions Judge held that by reason of these notifications the forest areas became "reserved forests" under the relevant provisions of the Indian Forest Act and dismissed the appeals. Thereafter, revisions were filed before the Judicial Commissioner, who 'differing from the Sessions Judge held that they were not "reserved forests" and directed the acquittal of the respondents. On appeal by special leave: HELD:. .(i) From the provisions of the Indian Forest Act, it would be seen that it is the notification under section 20 after complying with the procedure prescribed by the other sections of Chapter 11 commencing with section 4 that constitutes a forest area "a reserved forest" within the Act. (ii).The fact that under the Tripura Act there were no preliminaries Prescribed before a forest could be notified as a reserved forest does not detract from such a notification being a notification under the Indian Forest Act. (iii). .In substance the object and purpose of the Tripura Act was the protection of particular trees the seven types of trees specified in section 4. The notification under section 5 is for the purpose of constituting areas where These types would be protected. The penal provisions enacted are for insuring the protection of these trees. (iv) The prime purpose of Chapter II of the Indian Forest Act is the constitution of reserved forests in which (1) all private rights within the reserved area are completely eliminated by their being bought up where these are ascertained to exist by payment of compensation, (2) the entire area being devoted to siviculture, every tree in the forest being protected 160 from injury and within the scope of the penal provision contained in section 26. In other words, the reservation here is to the "forest area" as such and not the protection of the particular specified trees or species of trees in such a forest. The object of Ch. IV of the Indian Forest Act is the protection of particular trees and the setting apart of particular areas as protected forests for the purpose of ensuring the growth and maintenance of such trees. The object sought to be achieved by the reservation in Ch. IV is exactly similar to that which is sought to be achieved by the Tripura Act. Only the Tripura Act makes the cutting of protected trees even outside a forest an offence, whereas there is no such provision under the Indian Forest Act. (vi).The notification under section 5 of the Tripura Act would constitute the area in question only as a "protected" forest under Ch. IV of the Indian Forest Act and not as a "reserved" forest under section 20 contained in Ch. 11 of the Act, (vii). .The Judicial Commissioner was right in considering that the Provision.in the Indian Forest Act "corresponding" to the Tripura Forest Act under.which the notifications fixing the boundaries of these forests in question were issued was that as regards "a protected forest" under Ch. IV and not "reserved forest" within section 20 contained in Ch.

The appellant firm had its factory in the State of Madras, where it manufactured, assembled and sold motor vehicles, spare parts and accessories. For the assessment year 1952 53, the sales tax authority computed the appellant 's taxable turnover of sales for that year excluding a sum which represented the value of vehicles etc., sold outside the State of Madras, but on revision, the taxable turnover was increased by including a sum which related to certain transactions with dealers outside the State of Madras on the ground that the sales covered thereby were made within the State of Madras and were therefore liable to tax under the Madras General Sales Tax Act, 1939. The appellant claimed that these sales were in the course of inter State trade and commerce and not liable to sales tax by reason of the provi sions of article 286(2) Of the Constitution of India. The matter was taken up to the Supreme Court and in the meantime, the Sales Tax Laws Validation Act, 1956, had been passed by Parliament. The question was whether the transactions in question, even if they were considered as having taken place in the course of inter State trade, came within the protection of the Validation Act of 1956 and, therefore, the assessment in the present case was valid. The appellant contended (1) that the Validation Act was applicable only when the law of the State imposed, in express terms, a tax on the sale or purchase of any goods in the course of inter State trade or commerce, and (2) that the new section 22 inserted in the Madras General Sales Tax Act, 1939, by Madras Act 1 of 1957, which operated retrospectively from January 26, 1950, talked of sales in which the goods were delivered for consumption in the State of Madras, and, therefore, the Validation Act did not operate on sales of an inter State character other than such sales. Held: (1) that the effect of the Sales Tax Laws Validation Act, 1956, was to liberate the State laws from the fetter placed on them by article 286(2) of the Constitution of India and enable such laws to operate on their own terms. Consequently, the transactions in question were liable to tax under the provisions 608 of the Madras General Sales Tax Act, 1939, and it was not necessary to provide in that Act in express terms that it was taxing sales in the course of the inter State trade. M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh and Another, , relied on. (2) that the transactions in question came within the definition of sale in section 2(h) of the Madras General Sales Tax Act, 1939, and the power to tax conferred on the State by the charging section, section 3, was not affected by section 22 in view of sub section (2) therein.

These appeals by special leave arose from applications made by the respondents, who were employed as timekeepers in the time office of the Central Railway Workshop and Factory, Parel, Bombay, claiming payment of overtime wages under the (4 of 1936). The case of the respondents was that they were workers within the meaning of section 2(1) of the (LXIII Of 1948) and as such were entitled to overtime wages under section 59 of the said Act. Alternatively, they urged that even if they were not workers within the meaning of section 2(1) of the said Act, they would nevertheless be entitled to overtime wages under the section 59 by reason Of section 70 of the Bombay Shops and Establishments Act, 1948 (Bom. 79 of 1948). The validity of the claim on both the grounds was disputed by the appellant. The Authority under the found that only four of the respondents, who were required to do the work of progress timekeepers, could claim the status of workers within the meaning Of section 2(1) Of the and the rest were merely employees of the workshop, but the Authority accepted the alternative case made by the respond ents and directed the appellant to file a statement showing the overtime wages due to each of the respondents and ordered it to pay the same. Held, that the Authority was right in the view that it took Of section 70 Of the Bombay Shops and Establishments Act, 1948, and its decision must be affirmed. On a proper construction Of section 70 Of the Act it is clear that the first part of the section excludes a factory and its employees from the operation of the Act; but the second part makes the relevant provisions of the applicable to them. The non obstante clause in the section shows that the employees in a factory, although they might not be workers within the meaning Of section 2(1) of the , are entitled to claim overtime wages as provided for by that Act. It is not correct to say that section 4 Of the Bombay Shops and Establishments Act, 1948, has the effect of excluding the operation Of section 70 Of the Act. Section 4 applies only to establishments and not to factories; but even if it applied, to factories 18 138 that cannot materially affect the application Of section 70 which is intended to operate not withstanding the other provisions of the Act. Consistently with its policy, the Act, which provides for overtime wages for employees in all establishments, provides for overtime wages for employees in factories as well by making the relevant provisions of the applicable to them.

Appeal No. 401 of 1957. Appeal from the judgment and decree dated June 15, 1954 of the Assam High Court in First Appeal No. 23 of 1950. D. N. Mukherjee, for the Appellants. B. Sen, P. K. Chatterjee and P. K. Bose, for the Respondent. 1961, May 5. DAS GUPTA, J. This appeal is from the judgment and decree of the High Court of Judicature in Assam affirming the judgment and decree made by the Subordinate Judge of Upper Assam Districts, in a suit brought by the respondent Shyamsundar Tea Co., Ltd., against the present appellants. The 804 appellant companies are joint owners of Steamer service between Dibrugrah and Calcutta. The main service is along the Brahmputra River. Desang is one of the tributaries of the Brahmputra and meets the main stream at Desangmukh Ghat. The plaintiff 's case in the plaint was that the defendant companies as common carriers received goods at Dillibari Ghat which is situated on the Desang about 70 miles up stream from Desangmukh Ghat for carriage "therefrom by boats to Desangmukh Ghat and then by their steamers to different stations on payment of freight". It is further the plaintiff case that on September 10, 1946, the plaintiff company delivered 120 chests of tea to the defendants at Dillibari Ghat for carrying therefrom and delivery of the same at Kidderpore in Calcutta. The boat carrying these. tea chests sank; the tea chests were lost and could not be salvaged. The accident was, according to the plaintiff, due to the negligence on the part of the defendant companies ' agents and servants. On this ground of negligence as also on the ground that the companies as common carriers were liable to make good the loss whether or not there was negligence, the plaintiff claimed the sum of Rs. 1,6,224 12 0 is compensation for the loss. The defendants raised a four fold defence. The first contention was that there was no delivery to the defendants at all at Dillibari Ghat and the defendants did not undertake any carriage of the goods from Dillibari Ghat. Secondly, it was said that the sinking of the boat was not due, to any negligence on the part of the defendants ' servants. The third contention that the defendants were not a common carrier in respect of carriage of goods from Dillibari Ghat to Desang. Lastly it was pleaded that in any case the conditions of the Forwarding Note which was executed by the plaintiff company completely absolved the defendants from all liability. 805 The trial Court held on a consideration of the evidence that the goods were delivered by the plaintiff to the defendants at Dillibari Ghat for carriage from there to Kidderpore, Calcutta. It also held that the sinking of the boat was due to negligence on the part of the defendants ' servants. Accordingly, without coming to a clear conclusion whether the defendants were common carriers or not in respect of this contract of carriage the Trial Court gave the plaintiff a decree for the sum as claimed. On appeal the High Court of Assam affirmed this decree, though not for quite the same reasons. The High Court agreed with the Trial Courts ' conclusion. that there was delivery of the goods to the defendants by the plaintiff at Dillibari Ghat for carriage therefrom. On the question whether the sinking of the boat was due to the negligence of the defendants ' servants the learned Judges of the High Court did not however accept the Trial Court 's view. Their opinion, it appears, was that the plaintiff had not been able to establish the case of negligence on the part of the defendant 's servants. The High Court however came to the conclusion that the defendants undertook this carriage from Dillibari Ghat in their capacity as common carriers and so the question whether there ,was negligence or not was irrelevant. The High Court also found that the terms and conditions of the Forwarding Note did not in any way absolve the defendants from liability. Accordingly, the High Court affirmed the decree made by the Trial Court. It may be mentioned that though on both the points, viz., whether the delivery of the goods at Dillibari was to the defendants and whether the defendants were, for such carrying from Dillibari, common carrier, one of the learned judges, Ram Labhaya J. appears to have, been hesitant in coming to his conclusion but ultimately on both these points he agreed with the Chief Justice and 806 the agreed conclusions of both the learned judges were, as we have mentioned above. The High Court gave a certificate under article 133(1)(c) of the Constitution and on that certificate the present appeal has been brought. On behalf of the appellants Mr. Mukherjee has J. tried to persuade us to examine the findings of the Courts below that the plaintiff delivered the tea chests in question to the defendants at, Dillibari Ghat. He tried to show that it was Meeneill and Company who used to run this boat service from Dillibari to Desangmukh and that the defendants had nothing to do with this business. Apart from the fact that such a case that Macneill and Company used to carry on an independent boat service business to Desangmukh was not made in the plaint, we are satisfied that there is nothing that would justify us to depart from the well established practice of this Court not to interfere with eoncurrent findings of facts, of the Trial Court and the first court of appeal. We may however indicate that having been taken through the evidence we have no hesitation in stating our agreement with that finding, ' viz., that the plaintiff delivered the tea chests in question to the defendants at Dillibari Ghat for carriage therefrom. We see no reason also to interfere with the High Court 's findings that the plaintiff has not been able to establish its case of any negligence on the part of the defendants ' agents. This brings us to the main question in controversy, viz., whether the appellants were common carriers of goods between Dillibari Ghat and Calcutta. The appellants admit that they are common carriers between Desangmukh Station and all other places on its steamer routes. They contend however that that does not make them common carrier between Dillibari Ghat or other 'places not in its steamer service route, to any places on the steamer service route. 'The respondent ' secase, on the other 807 hand is that once it is established that the defendants are common carriers within the meaning of the definition in the Carriers Act, they must be held in law to be common carriers whenever they undertake carriage of goods, unless with respect to the particular carriage they show definitely that they did not act as common carriers. The Carriers Act, 1865 (Act III of 1.865) defines "common carrier" in these words " 'Common carrier ' denotes a person, other than the Government, engaged in the business or transporting for hire property from place to place, by land or inland navigation, for all persons indiscriminately." This definition is based on the English common law as regards the common carriers. The common law in England developed from quite early times to make the profession of common carriers a kind of public service ; or as stated by Lord Holt in an early case "a public trust". (Vide Lane vs Cotton) (1). It is where such a public trust has been undertaken as distinct from t mere private. contract that a carrier ceases to be a private carrier but becomes a public carrier or as English law calls "a common carrier. " Explaining the distinction between a mere carrier and a common carrier, Alderson B, said in Ingate and Another vs Christis(2) "Everybody who undertakes to carry for anyone who asks him, is a common carrier. The criterion is, whether he carries for parti cular persons only, or whether he carries for everyone. If a man holds himself out to do it for everyone who asks him, he is a common carrier ; but if he does not do it for everyone, but carries for you and me only, that is a matter of special contract." (1) (2) ; The question in any particular case whether the carrier was a common carrier or a private carrier has therefore to be decided on the ascertainment of what he publicly professes. This profession, it need hardly be mentioned may be by public notice or by actual indiscriminate carrying of goods. It is also clear that the profession to carry goods indis criminately may be limited to particular goods or to particular routes or even is to two or more specified points. In Johnson vs Midland Rly., Co.(3) the question arose whether the Railway Company were as common carriers bound to carry coal from Melton Mowbray to Oakham, Parke B, with whom Alderson B, Rolfe, B, and Platt B, agreed stated the law thus: "A person may profess to carry a particular description of goods only, for instance, cattle or dry goods, in which case he could not be compelled to carry any other kind of goods; or he may limit his obligation to carrying from one place to another, as from Manchester to London, and then he would not be bound to carry to or from intermediate places. " Turning to the facts of the case before him the learned Baron stated: "Now, if the defendants stand in the situation of carriers at common law, they are not liable, because it does not appear in evidence that they ever had been a public profession by them that they would carry coals from Melton Mowbray to Oakham." Ultimately the learned Judge recorded the conclusion thus: "I think that the circumstances of their having undertaken to be carriers does not (3) ; , 809 bind them to carry from or to each place on the line, or every description of goods. " This is goods authority for the appellants ' contention that the more fact that they are engaged in the transport of goods from certain places on their Steamer Service to other places does not necessarily justify the conclusion that whatever carriage they may undertake elsewhere is also done as a common carrier. It is therefore necessary to examine the nature of the public profession made by the appellants with regard to the carriage of goods from Dillibari Ghat. It is true, as pointed out by the appellants ' counsel that there is no public notice, as there is in respect of places on the Steamer Service route, with regard to carriage from Dillibari Ghat. It is legitimate however to consider in this connection the usual conduct of the appellant companies in connection with carriage from Dillibari Ghat and other surrounding circumstances. It has to be noticed that tea gardens which supply the bulk of the companies ' cargo traffic for its despatch steamers find it convenient and economical to bring, their goods to the nearest point on some river and to enter into contracts of carriage of goods from these points to places on the Steamer Service routes. It appears clear from the evidence adduced in this case that for such carriage the tea gardens make requests to the appellants to arrange for carriage to the Steamer station and the companies invariably comply with such requests. Their own witness, the Joint Agent at Dibrugarh, has said in this connection "We always try to give facilities to the interior tea gardens and to all customers whenever they require any help. " He has not said a single word as to requests" of any customers for arrangements of carriage from Dillibari Ghat having been refused. Indeed, when one remembers that it is by getting the custom from these interior tea gardens, not all of which are situated 'on or , near the main stream of the 810 Brahmputra that the companies are able to get sufficient cargo for their steamers, it was only natural that they would accept goods for carriage from places away from the main stream as indiscriminately as they do for carriage from stations on the main steamer route. The defendants ' witness Mohammad Abdulla who is their Ghat Supervisor at Desangmukh has stated that "the Steamer Company bears expenses of the clearance of the rivers to make them navigable. " Such conduct is consistent only with the case that the companies are anxious to receive whatever cargo they get for carriage from places on the river Desang and other tributaries to stations on the main steamer route for further carriage on the steamer route. The service on these tributaries can therefore be reasonably described as a "feeder service" for the main route and the admitted public profession for indiscriminate carriage of the goods of every person on the main route cannot but attach to the service on these "feeder routes" also. Against all this, Mr. Mukherjee pressed for our consideration three circumstances: (i) that the rate for carriage from Dillibari was not a fixed rate; (ii) that there was no regular service but boats were supplied only on requisition; and (iii) that the carriage was made without profit. Nothing turns on the third fact assuming that it has been established that carriage from Dillibari to Desangmukh is made without profit. If this is actually the case it is obvious that the defendants deliberately do this as a part of their business so as to attract good business on the main steamer service route where they hope to make sufficient profits to make up for the loss in feeder service. The circumstance that there was no regular 811 service but boats were supplied only on requisition is also wholly irrelevant for ascertaining whether there was a public profession to carry indiscriminately. Even if there was a regular service, there might not be a profession to carry indiscriminately ; whereas even if there was such a profession it would not necessarily happen that regular service should be maintained. If, as the evidence appears to establish, the companies were ready to supply boats whenever requested, without picking and choosing, that would be sufficient public profession to act as a common carrier. Nor is the fact that there was no fixed rate for carriage of goods from Dillibari to Desangmukh of any assistance to the appellants ' contention that they were not common carriers, for the law does not require that a common carrier must have one and the same rate for all goods. The law was stated thus by Blackburn J. in G. W. Ry. Co., vs Sutton (4) : "There was nothing in the common law to hinder a carrier from carrying for favoured individuals at an unreasonably low rate, or even gratis. All that the law required was, that he should"not charge any more than was reasonable." "The requirement of equality of charges", as pointed out by Prof. Otto Kahn Fre und in the law of Carriage by Inland Transport (3rd Edition) at P. 190, "in so far as it existed, was entirely the creation of statute while the common law regards inequality as nothing more than possible evidence of 'unreasonableness. " That there was no fixed charge for carriage from Dillibari can not therefore be any reason to think that appellants were not common carriers in respect carriage from Dillibari. (4) at. 812 The next argument of Mr. Mukherjee was almost an argument of despair. He points out that there was a Forwarding Note (exhibit B) executed by the plaintiff in respect of the journey from Desangmukh to Calcutta and there was a special contract there limiting the carriers ' liability. If the appellants were really common carriers in respect of the carriage from Dillibari, is it conceivable, he asks, that there would not be a similar Forwarding Note covering the carriage from Dillibari to Desangmukh? That however is a totally wrong approach to the problem. A common carrier may restrict his liability by special contract. 'But the absence of a special contract cannot show that he is not a common carrier. The fact that the appellants did not,take care to make a special contract in respect of carriage from Dillibari is therefore wholly irrelevant. On a consideration of the entire evidence therefore we are of opinion that the appellants did profess by their. conduct, even if not by any public notice, that they would carry goods indiscriminately for all those who ask for such carriage from Dillibari to various places on their main steamer route. They were thus common carriers in respect of the carriage of the plaintiff 's goods from Dillibari. A last contention was raised, again, on the Forwarding Note. It was urged. that in any case this should be interpreted as covering the carriage from Dillibari also. In terms the Forwarding Note was limited to the contract of carriage as from Desangmukh to Calcutta. By no method of construction of the document can it be extended to the journey ' from Dillibari. All the contentions raised in the appeal therefore fail. The appeal is accordinly dismissed with costs. Appeal dismissed.

The question whether a carrier is a common carrier or not has to be decided on its public profession and such profession may be either by public notice or by conduct. It is immaterial if the carrying is limited to particular goods or particular routes or between specified points. Lane vs Cotton12 Mod. 474; Ingate, vs Christis, (1950) 3 Car. and K. 61 and Jhonson vs Midland Rly., Co. ; , referred to. 803 Consequently, where, as in the instant case, the steamer companies, which were by public profession common carriers in the main stream and invariably agreed, when requested, to arranged for carriage of goods by boats from stations situated on its tributary to the steamer station, accepting goods as indiscriminately as in the steamer service, were sued for loss of goods in the tributary and the High Court, while reversing the finding of the trial court as to the negligence of the companies, affirmed its decree against them on the ground that they were common carriers. Held, that the decision of the High Court was correct and must be affirmed. There could be no doubt that the service in the tributary was in the nature of a feeder service to the main route and the public profession made in respect of the latter attached to it. Held, further, that it was of no consequence that the feeder service yielded no profits. Nor was regularity or otherwise of the feeder service a relevant consideration. Law does not require that a common carrier must have fixed rate for carriage of all goods and the absence of such fixed rate in the feeder service was wholly immaterial.

% The Assam Taxation (on Goods Carried by Road or Inland Water ways) Act,1954 was struck down as ultra vires the Constitution in Atiabari Tea Co. Lld. vs State of Assam, ; A new Act was thereafter passed which received the President 's assent on April 6, 1961. The High Court declared the said Act to be ultra vires on August 1, 1963. The State and other respondents preferred appeals before Supreme Court against the decision. In the meantime, in Khyerbari Tea Co. Ltd. & Anr. vs State of Assam, ; the Court held the Act to be intra vires on December 13, 1963. Following the decision in Khyerbari case the appeals filed by the State and others were allowed by this Court on April 1, 1968. After this decision the respondents required the appellants by notices under section 7(2) of the Act issued on July 8, 1968 to submit return for the period ending June 30, 1961, September 30, 1961, December 31, 1961 and March 31, 1962. Due to the penal consequences mentioned in the said notices the appellants filed returns on July 11, 1968. The assessment orders were passed under section 9(3) of the Act. The tax was duly paid. In November 1973 the appellants filed writ petitions before the High Court seeking direction for refund of the tax paid under mistake relying on the High Court 's Judgment in Loong Soong Tea Estate (Civil Rule No. 1005 of 1969) dated July lO, 1973 declaring the assessment as without jurisdiction. 475 The High Court set aside the orders and notices of demand but refused claim of refund on the ground of delay and laches. It took the view that it was possible for the appellants to know about the legality of the tax sought to be imposed as early as 1963, when the Act in question was declared ultra vires. The taxes having been paid in 1968 the claim in November 1973 was belated. It, however, held that the claim for refund was a consequential relief. In the appeals to this Court it was contended for the appellants that they had paid the tax under a mistake of law and were entitled to seek refund thereof, and a writ petition seeking refund of tax realised without the authority of law cannot be rejected on the ground of limitation or delay unless such delay can be said to amount to laches or has caused some irreparable prejudice to the opposite party. Allowing the appeals, ^ HELD: By the Court: (Per Sabyasachi Mukharji & Ranganathan, JJ.) The money was refundable to the appellants. The writ petitions were within time. [4X4H] Per Mukharji, J. 1. No State has the right to receive or to retain taxes or monies realised from citizens without the authority of law. There is in such cases concomitant duty to refund the realisation as a corollary of the constitutional inhibition that should be respected unless it causes injustice or loss in any specific case or violates any specific provision of law. [480H; 485E F] In the instant case, tax was collected without the authority of law. The notices were without jurisdiction. So was the assessment made under section 9(3) of the Act. The respondents, therefore, had no authority to retain the money so collected, and as such the money was liable to refund. [480D] 2.1 In an application under Article 226 of the Constitution the Court has power to direct the refund unless there has been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause an injury either to respondent or any third party. [484C D] 476 2.2 Courts have, however, made a distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment etc. A petition of the former nature is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit wherein it is open to the State to raise all possible defences to the claim, defences which cannot in most cases be appropriately raised and considered in the exercise of writ jurisdiction. [480F H; 48;B] In the instant case, s.23 of the Assam Act provided for refund to a producer or a dealer any sum paid or realised in excess of the sum due from him under that Act. The section thus applies only in a case where money is paid under the Act. If there is no provision for realisation of the money under the Act, the act of payment was ultra vires, the money had not been paid under the Act. In that view of the matter the case did not come within section 23 of the Act. The High Court having found that the claim for refund was a consequential relief, it could have directed the State to refund the amount in question. [483 G H;484A B] 2.3 Exercise of every discretion must be fair and equitable. The period of limitation prescribed for recovery of money paid by mistake under the was three years from the date when the mistake was known. In the instant case, knowledge is attributable from the date of judgment in Loong Soong 's case on 10th July, 1973. There being a statement that the appellants came to know of that fact in October 1973 and there being no denial by the averment made on this ground, the High Court was in error in presuming that there was a triable issue on this ground and refusing to grant refund. Within a month in November 1973 the present petitions were filed. There was no unexplained delay. The appellants had proceeded diligently. There is nothing to indicate that had they been more diligent, the appellants could have discovered the constitutional inhibition earlier. The position is not clear even if there is a triable issue. The position becomes clearer only after the decision in Loong Soong 's case. It could not, therefore, be said that the appellants had abandoned their claims. [487B D] Suganmal vs State of Madhya Pradesh and others. , AIR 1965 SC 1740; Tilokchand Motichand & Ors. vs H.B. Munshi & Anr., ; Kantilal Babulal vs H.C. Patel 21 S.T.C. 174; Chandra Bhushan & Anr. vs Deputy Director of Consolidation (Regional), U.P. & Ors., ; ; R.L. Kapur vs State of Madras, ; ; State of Madhya Pradesh vs Bhailal Bhai & Ors. J [1964] 6 477 SCR. 261; Ramchandra Shankar Deodhar & ors. vs The State of Maharashtra & Ors., ; ; A.V. Venkateswaran, Collector of Customs, Bombay vs Ramchand Sobhraj Wadhwani and another; , ; Shiv Shankar Dal Mills etc. vs State of Haryana & Ors. etc. ; , and State of Madhya Pradesh and others etc. vs Nandlal Jaiswal and others etc. ; , referred to. It is only on the delivery of the judgment in Loong Soong 's case in 1973, the appellants realised the right to claim the relief of refund as a consequential relief, setting aside the assessment and the assessment was set aside by the very order itself. That right has been granted by the High Court. The High Court has not refused the setting aside on the ground of delay. It would be inconsistent for the High Court to refuse to grant consequential relief after setting aside the assessment. If the realisation was without the authority of law and that was declined by the High Court by the judgment in the instant case, which claimed also the consequential relief, that relief must automatically follow. Refunding the amount as a consequence of declaring the assessment to be bad and recovery to be illegal will be in consonance with justice, equity and good conscience. [489F H] 4. The challenge to the assessment on the ground that the assessment was bad could not be made in an appeal under the Act because the right to appeal being a creature of the Act, if the Act is ultra vires that right would not ensure to the benefit of the appellant. Section 16 of the Act under which an appeal lay within thirty days from the date of service of an assessment order therefore had no application. Similarly, rule 55 of the Rules framed under the Act barring claims of refund unless made within one year from the date of the original order of assessment being unconstitutional had no application. [485H; 486A B; 487H] 1. The assessments on the appellants were illegal. The taxes demanded on the basis thereof had been collected without the authority of law. The High Court, therefore, while allowing the appellant 's prayer for quashing the assessment should also have allowed the refund of the illegally collected taxes. [490D] Superintendent of Taxes vs Onkarmal Nathmal Trust, [1975] Supp. SCR 365, applied. 478 The petitions filed in November, 1973 were within the period of limitation prescribed in Article 113 of the read with section 23 of the Assam Act. The appellants ' averment that they realised their mistake only when they came to know about the decision of Loong Soong Tea Estate case in July, 1973 stands uncontroverted. There is nothing on record to show that the appellants had realised their mistake earlier[491D f] State of M. P. vs Bhailal Bhai [1964]6 SCR 261 referred to. It was considered unnecessary therefore to consider the larger question whether the bar of limitation would be fatal to a writ petition for refund.

The Board of Revenue on a consideration of the material on record as to the suitability or otherwise of the rival pairs of claimants upheld the grant of a liquor licence made by the Deputy Commissioner in favour of the appellants. It held that respondent No. 1 was a mere benamidar of a prominent businessman and respondent No. 2 being still a student studying for his B.Sc. degree could not be treated as an 'educated unemployed youth ' within the meaning of the note beneath r. 223 of the Assam Excise 'Rules, 1945. The respondent Nos. 1 and 2 and the interveners separately moved the High Court under article 226 of the Constitution. The High Court instead of taking up both the petitions together: took: the writ petition filed by respondents Nos. 1 and 2 and on a reappraisal of the evidence came to the conclusion contrary to that reached by the Board. It accordingly quashed the order of the Board of Revenue and remanded the matter to the Board for a decision afresh, in the light of the directions made by it. The Board took serious exception to certain observations made by the High Court and held that the directions issued were nothing but mere observations and therefore it was not bound by it. After hearing the parties, the Board maintained its earlier order confirming the settlement of the liquor shop by the Deputy Commissioner with the appellants. Respondents Nos. 1 and 2 again moved the High Court under article 226. The High Court passed strictures on the Board of Revenue for not having complied with its directions and on a consideration of the facts appearing came to the same 826 conclusion as before and quashed the order of the Board but instead of remanding the matter to the Board for complying with its earlier orders issued a writ of mandamus directing him to settle the country liquor shop with respondents Nos. 1 and 2 on condition that the grant would be subject to an inquiry as to whether respondent No. 1 was a mere be subject and also subject to the result of earlier writ petition filed by the interveners which was still pending. In appeal, the two questions which arose were :(1) whether it was impermissible for the High Court to have embarked upon an inquiry into facts and on a reappraisal of the evidence come to a finding contrary to that reached by the Board of Revenue and upon that basis issue a writ of certiorari under article 226 quashing the order of Board. And (2) Whether it was a proper exercise of jurisdiction by the High Court under article 226 to have issued a writ of mandamus ordaining the Deputy Commissioner to settle the country liquor shop with respondents Nos. 1 and 2. Answering the first question in the affirmative and the second in the negative. ^ HELD : 1. The High Court clearly exceeded its jurisdiction while issuing a writ of certiorari under article 226 of the Constitution in quashing the impugned order of the Board of Revenue to have embarked upon an inquiry into the facts and upon a reappraisal of the evidence come to the conclusion contrary to that reached by the Board of Revenue viz. whether or not respondent No. 1 was a mere benamidar. [837 F G] 2. It was also not a proper exercise of jurisdiction under article 226 for the High Court to have issued a writ of mandamus directing the Deputy Commissioner to grant the liquor licence to respondents Nos. 1 and 2 in preference to the appellants. Although a writ of mandamus may be a necessary adjunct to a writ of certiorari, if the High Court was satisfied that a writ of certiorari had to be issued to quash the impugned order of the Board of Revenue on the ground that its order was vitiated by an error apparent on the face of the record, the proper course for the High Court to adopt was to issue a writ of mandamus to the Board to hear and redetermine the appeal according to law. [835 E F] HWR Wade 's Administrative Law, 5th edn., p. 638, referred to. The construction placed by the High Court on the meaning of the expression 'educated unemployed youth ' appearing in the note beneath r. 223 of the Rules is apparently erroneous. When a person is still pursuing his course of studies in a university, one fails to see any basis for creating him as an 'educated unemployed youth. The expression 'educated unemployed youth, in the note beneath r. 223 has a definite legal connotation. It denotes a class of citizens, who after completing their education, are faced with the growing problem of unemployment. [837 B D] 827 4. The direction made by the High Court while issuing a writ of mandamus to the Deputy Commissioner ordaining him to grant the liquor licence to respondents Nos. 1 and 2 that the grant would be subject to the result of an inquiry as to whether respondent No. 1 was a mere benamidar and also subject to the result of the writ petition which was filed by the interveners and still pending, appears to be unwarranted. If that were to be so, it would affect the validity of the grant itself. It was also irregular for the High Court to have taken an undertaking from respondent No. 2 who was a student still undergoing his studies for B.Sc. degree in a university that he would give up his studies in case he was given the liquor licence. The procedure adopted by the High Court in separately hearing the writ petition filed by respondents Nos. 1 and 2, while the writ petition filed by the interveners was still pending, and in not taking up both the writ petitions together, and directing the Deputy Commissioner to issue a liquor licence to respondents Nos. 1 and 2, was not in consonance with the procedure established by law and clearly in denial of rules of fairplay and justice. The Board of Revenue was bound to comply with the directions made by the High Court and it was not open to it to say that they were mere observations and not directions issued. The refusal of the Board to comply with the directions of the High Court issued under article 226 was in effect a denial of justice and also destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of Courts. Bhopal Sugar Industries Limited vs Income tax Officer, Bhopal. [1961] 1 S C.R. 474 relied on.

Bhavani Tea and Produce Co., a Public Ltd. Company is engaged mainly in plantations of Tea, Coffee, Cardamom, Rubber and some other plantions in the western ghats comprising R.S Nos 2,3, 3/1 and 5/1 in Sholyar village Mannarghat Taluk of Palghat District, Kerala known as Siruvani Group of Estate of four divisions namely, Siruvani, Varddymalai, Elamali and Halton with the total area in its possession being 3, 151.20 acres. As the forest officials undertook survey over the Company 's plantations under the Kerala Private Forests (Vesting & Assignment) Act, 1971, which had come into force on 10.5.1971, to locate and determine the forest area in the estate that would vest in the State, the Company moved an application under section 8 of the Act before the Tribunal asserting that no portion of the land in the estate as shown in the schedule to the application was liable to vest in the state. An advocate commissioner was appointed by the state as vested forests. The Advocate Commissioner in his final report found an area of 1397.60 acres indentified as plots nos. 1 to 69 claimed by the State as vested forests. 551 The Company thereupon amended its application showing these 69 plots as schedule 'B ' to the application. Out of the total 3,151.20 acres 1,753.60 acres are admitted not to have vested under the Act. Of the remaining 1, 397.60 acres, 609.91 acres are admitted to be private forest on the periphery of the Estate and hence vested under the Act. This covers plots Nos. 11, 18, 25, 28, 30 and 63. Out of the remaining plots, the Tribunal allowed 33 plots totalling 206.06 acres and declared total area of 1, 184.68 acres as vested forests. Both parties preferred appeals to the High Court which by its impugned judgment partly allowed the appeal of the company as well as of the State. Both side have again preferred appeals by special leave to this court. The result of the High Court 's judgment is that the dispute before this Court is now confined only to an area of 641.73 acres covered by plots nos. 12,13,14,15,16,26,27,29,33,36,37,38,39,40,41,44,46,50,51,55, 56,58,59,61,62,64, and 65. On behalf of the company it has been argued that these disputed plots must be held to have been principally used for cultivation of tea, coffee, rubbers and cardamom etc. and for purposes ancillary thereto; that if these plots are not exempted, the plantation will be broken down in unity, economy and contiguity and that the plantation must be taken as a whole and not piece by piece or plot by plot. The argument on behalf of the State was to emphasise the objects and purposes of the vesting Act namely, to distribute agricultural land to landlords, agriculturists/labourers so as to reduce the scarcity of such land, and not to allow few individuals to remain in control. It was also contended that vesting Act did not use the word 'plantation ' and therefore private forest has to be determined on the basis of land where upon forest stands irrespective of its size. Keeping in view the detailed findings of the Tribunal as well as the High Court this Court comes to the conclusion that out of the plots which are in dispute now as pointed out above, plot nos. 33,39,40,44,46,50,51,55,58,59 and 61 also have to be treated as not to have vested in the state under the vesting Act. As regards the existing roads falling within the vested areas these shall have such margins on either side of the road as required under the PWD rules of the state and shall be maintained and controlled by the company. But no construction of new roads by the company in or through the vested areas shall be permissible. Thus in partly allowing the rival appeals by modifying the judgment of the High Court to the extent indicated above, this Court, 552 HELD: If the land was not private forest but plantation under the Madras preservation of Private Forest Act and was similarly not private forest but plantation on 10.5.1971, it could not, without anything more, become private forest thereafter even though it was not under the same efficient or successful plantation as it was earlier. Whether the plantation yielded any crop or not was not for the owners to decide and not by the authority under the Vesting Act, unless it did made specific provisions to cover such a situation. We have not been shown any such provision or any provision as to such land reverting to nature. Nature, according to Collins English Dictonary, means all natural phenomena and plant and animal life as distinct from man and his creations; a Wild primitive State untouched by man or Civilzation. According to Shorter Oxford English Dictionary, natural vegitation means self sown or planted; land not cultivated; uncultivated or undomesticated plants or animals. There is no finding as to prevalence of such a condition in these plots.[570F 571A] While, we are not inclined to agree that the entire estate of the Company was required to be taken as one whole, we find it difficult to agree that wherever some forest was found under the Company 's estate the Vesting Act would apply. We find that M.P.P.F. Act, the Kerala Forest Act, the Kerala Reforms Act, considered the plantations as Units by providing that they would include the land used for ancillary purposes as well. Therefore while applying the Vesting Act to such plantations the same principle would be applicable. It is on record that the estate of the Company is divided into four divisions. In conformity with the idea of plantations, it would be reasonable to take each division as a Unit, subject, of course, to natural and geographical factors. [573 A C] Balmadies Plantation Ltd. & Anr. vs State of Tamil Nadu, ; ; The Kannan Devan Hills Produce vs The State of Kerala and Anr., ; ; State of Kerala & Anr. vs The Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. etc. ; , ; V. Venugopala Verma Rajaa vs Controller of Estate Duty, Kerala, ; State of Kerala vs Anglo American Direct Tea Trading Co. Ltd., ; Malankara Rubber & Produce Co. & Ors. etc. vs State of Kerala & Ors. , ; ; State of Kerala & Anr. vs Nilgiri Tea Estate Ltd., [1988] (Supp) SCC 79; State of Kerala & Anr. vs K.C. Moosa Haji & Ors., and Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. vs The Custodian of Vested Forests, Palghat & Anr., ; , referred to.

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.

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 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 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.

Appeal No. 171 of 1958. Appeal by special leave from the Judgment and order dated March '7, 1956, of the Punjab High Court (Circuit Bench) at Delhi in Civil Misc. No. 249 D of 1956. WITH Civil Appeals Nos. 172 to 186 of 1958. Appeals from the judgment and order dated August 26, 1954, of the Punjab High Court in Civil Revisions Nos. 243, 274, 276, 277, 281 to 286, 288, 290 and 293 and 295 of 1951. Anoop Singh, for the appellant in Civil Appeal No. 171 of 1958. Basant Kumar Jaggi, for the respondent. (In Civil Appeals Nos. 172 to 186 of 1958). A.V. Viswanatha Sastri, R. Ganapathy Iyer and O. Gopalakrishnan, for the appellants in Civil Appeals Nos. 1722 to 186 of 1958. C.K. Daphtaru Solicitor General of India, C.B. Aggarwala and K.P. Gupta, for the respondent$ Nos: 1 to 4. 949 1961. August 2. The Judgment of the Court ,",as delivered by S.K. DAS, T. These are 16 appeals which have been heard together. For facility of considering them on merits, it would be convenient to classify them into three categories. In the first category fall Civil Appeals Nos. 172 to 184 of 1958. In the second category are two appeals, Civil Appeals Nos. 185 and 186 of 1958. In the third category falls Civil appeal No. 171 of 1958. The appeals in the first two categories arise out of a judgment in revision rendered by the High Court of Punjab at Simla on August 26, 1954. That decision was reported in British Medical Stores vs L. Bhagirath Mal (1). The appeal in the third category arises out of a short order of the said High Court dated March 7, 1956, by which it dismissed an application made by the appellant tenant under article 227 of the Constitution. It appears that the order war, based on the decision given by the High Court in the first two categories of cases. The appeals in the first two categories have been brought to this Court on a certificate granted by High Court, and have been consolidated by an order made by the said Court. Civil Appeal No. 171 of 1958 has been brought to this Court in pursuance of special leave granted by. this Court on November 19, 1956. The reason why these appeals have been put in three categories is this. The judgement of the High Court against which appeals are really directed is the judgment rendered in the first two categories of eases (reported in Messrs. British Medical Stores vs L. Bhagirath Mal (1). That judg ment related to four sets of ' buildings of Chandini Chowk in Delhi. In Civil Appeals Nos. 172 to 186, we are concerned with two of these buildings owned by the landlord Bhagirath Mal, who has since died ,(1) Punjab 639. 950 and is now represented by some of the respondents. For convenience, however, we shall refer to him as the landlord. The two buildings we are concerned with are called (1) "Chemists ' Market", also known as "Medicine Market", and (2) "Prem Building". Both these buildings are part of a colony called " 'Bhagirath Colony". Several tenants took on rent flats or rooms in the said buildings and the question which fell for determination was the fair and standard rent payable for the said flats or rooms under section 7A of the Delhi and Ajmer Marwara Rent Control Act, 1947, (Act XIX of 1947), hereinafter referred to as the Control Act, 1947. In the first two categories of appeals, the main point for consideration before us is whether the judgment rendered by the High Court on August 26, 1954, was correct, the High Court having held that the whole proceedings taken before the Rent Controller were ultra vires and without jurisdiction. 'The reasons given for this finding by the High Court were not quite the same in respect of the two buildings; somewhat different reasons were given in the cases of the two tenants in the Prem Building. Therefore, it would be convenient to deal with the main judgment of the High Court in Civil Appeals Nos. 172 to 184 of 1958 of the tenants in the building known as "Chemists ' Market". We shall then deal with the special considerations arising in the two appeals preferred by the tenants of the "Prem Building". Lastly, we shall deal with Civil Appeal No. 111 of 1958 which relates to a different building altogether belonging to a different proprietor, namely two ground floor flats of a house on plot No 20, Block No. 13 in Western Extension Area, Karolbagh, New Delhi. shall later state the facts of that appeal, but it is sufficient to state here that the application for fixation of standard rent for the flats in the Karolbagh house was dismissed on the ground that the High Court had held earlier in the first two categories of cases, that section 7A of the Control Act, 1947 was unconstitutional and 951 void after the coming into force of the Constitution of India on January 26, 1950. Civil Appeals Nos. 172 to 184 of 1958 Having made these preliminary remarks with regard to the classification of the appeals, we proceed now to state the facts with regard to the first category of appeals relating to the "Chemists ' Market" in Bhagirath Colony. On July 30, 1948, nine tenants made an application to the Rent Con troller, Delhi, asking for a determination of fair and standard rent of the tenements (shops) rented to them by the landlord, on the ground that under the stress of circumstances which resulted from the partition of the country and scarcity of business premises available in Delhi after partition, they were forced to take on rent the shops in question on an excessive and exorbitant rate of rent charged by the landlord. They alleged that the premises were completed after March 24, 1947, and they were entitled to have the fair and standard rent determined for the shops in question by the rent Controller. On August 1, 1948, the Rent Controller recorded an order to the effect that in order to fix the rent of the shops in question in accordance with section 7A read with Sch. TV of the Control Act, 1947 a summary enquiry would be held on August 18, 1948. A notice was issued to that effect to the landlord, directing him to attend and bring all relevant authenticated records such as plans, account books, vouchers etc., showing the cost of construction of the building; the landlord was also asked to bring documentary evidence relating to the date of completion of construction of the building. It is necessary to explain here why the date of completion of construction of the building was important. The Control Act, 1947 came into force on March 24, 1947. By section 1(2) thereof, as it originally stood, it was not applicable to any premises the construction 952 of which was not completed by March 24, 1947, and which was not let to a tenant before the enforcement of the Act. Later, there was an Ordinance (Ordinance No. XVIII of 1947) followed by all Act (Act L of 1947)by which enactment only constructed buildings were brought within the purview of the Control Act, 1947 by repealing section 1(2) of the Act in so far as it affected buildings iii. Delhi and by introducing s,7 A and Sell. IV to the Act. We shall presently read section 7 A and the relevant provisions of Sch. We may just state here that s.7A laid down that the fair rent of the constructed buildings shall be fixed according to the provisions set forth in Sch. Buildings which were completed earlier than March 24, 1947, had to be dealt with by the Civil Court under s.7 of the Act. Under s.7A read with. IV, the Rent Controlled had jurisdiction to fix the, fair and standard rent in respect of buildings which were not completed before the commencement of the Act. Therefore, the Rent Controller had to determine the date of completion of the building, in order to have jurisdiction under s.7A of the Control Act, 1947. We have referred to the notice which the Rent Controller had directed to be issued to the landlord on August 12, 1948; fixing August, 18 1948, as the date for the hearing of the case. On August 18, the landlord made an application by means of a letter sent to the Rent Controller in which he, asked for postponement of the case to some date in September. The case was postponed to August 26, 1948, but on that date the landlord again asked for an adjournment. Then on September 1, 1948, an application was made on behalf of the landlord, in which there was a reference to 14 tenants who had applied for fixation of standard rent for the shops in the Chemists ' Market. In this application the landlord stated that he himself had applied for fixation of 953 standard rent under section 7 of the Control Act, 1 947 in the Court of the Subordinate Judge, Delhi and as those applications were pending, he prayed that the proceedings for determining the identical question of fixation of standard rent by the Rent Controller tinder s.7A should be stayed. The printed record does not clearly show how and when tenants other than the 9 tenants who had originally applied for fixation of standard rent on July 30, 1948, had also applied for fixation of standard rent for the shops in their occupation. It is clear, however, from the application of, the landlord dated September 1, 1948 that 14 tenants including some of those who had applied on July 30, 1948 had applied for fixation of standard rent for the shops occupied by them. On November 9, 1948, the Rent Controller wrote a letter to the landlord in which he referred to some enquiry held in his officer on September 1, 1949 and said:. "On that day you promised to produce some papers to show that these shops were completed before March 24, 1947. As the case is unnecessarily being delayed, you are requested to appear in my office with all the necessary document at 3 P.m. on Wednesday the 17th November, 1948. It may please be noted that no further adjournment will be possible. Your failing to comply with this notice, ex parte decision will be given". On November 15, 1948 the Rent Controller again wrote to the landlord that on a representation by the landlord 's representative, the date had been extended to November 19, 1948 and the landlord should produce all necessary documents relating to the building in quest ion. The Rent Controller again reminded the landlord that there would be a final hearing on November 19. On that date, however, the landlord again made an application saying that as there were regular suits for the determination 954 of the standard rent pending in the Court of the Subordinate Judge, Delhi, the proceedings before the Rent Controller should be stayed. On November 26, 1948 the Rent Controller wrote to the landlord to the following effect: " 'As you have failed to attend my office personally on the fixed date and your attorney did not possess any information or documents regarding the newly constructed "Chemists ' Market", you are now directed to submit your written statement on oath, duly countersigned by your advocate, giving full details regarding the date of construction of the said building. Please note that your statement must reach this office before the 3rd December 1948". Then on December 3, 1948 the Rent Controller wrote to the landlord saying that he would be visiting the premises on December 5, 1948. On December 3, a telegram was sent on behalf of the landlord saying that lie was out of station. On that date the Rent Controller recorded the following order: "These shops were first let out from 1st April, 1948. The Advocate for the landlord was requested to tell the landlord that he must submit his statement in writing (countersigned by the. Advocate) within the next 15 days whether he contends or does not contend that this building was completed after 24th March, 1947. The Advocate for the landlord gave an application asking for staying the proceedings as he had applied to the Sub Judge for fixa tion of standard rent of the premises. He was told that I was not prepared to stay the pro ceedings unless he or his client were prepared to say on oath that the building was completed before the 24th March, 1947. " 955 On December 9, 1948 the Rent Controller again wrote to the landlord to the following effect: " I am in receipt of your telegram dated the 3rd December, 1948. On 19th November, 1948, the last date of hearing, your Advocate Shri Jugal Kishore and your General Attorney Shri Kundal Lal were given definite instruction to see that your written statement, as to when the construction of ' the "Chemists ' Market" was started and when completed, was sent to me within 15 days. These instructions were later confirmed in writing vide this office No. R. C. 42/ Camp. dated the 26th November, 1948. My instructions, however, have not been complied with so far and it is presumed that you are try g to evade the issue. I, however, give you another final opportunity and direct you to submit your written ,statement on oath within one week from the receipt hereof, showing the date of completion of construction of ' your building known as "Chemists ' Market" in Bhagiratli Colony, Chandni Chowk, Delhi. Please take notice that your failure to comply with (torn) within the stipulated period will amount to disobeying the orders of this Court and the case will be referred to appropriate authorities for necessary action in the matter. " The landlord took no steps whatsoever to furnish any written statement. In these circumstances, the Rent Controller passed his final order on January 10, 1949. In that order he recited the facts stated above and ended up by saying that though the landlord had been given sufficient oppor tunity, he had not made any statement in writing or 956 otherwise and that the landlord was clearly trying to avoid the trial of the issue. The Rent Controller had inspected the building on December 12. 194S and made local enquiries. He came to the finding that the shops in question were completed only in the beginning of 1948. He said: "I inspected this building on 12th December, 1948 and made local enquiries when it transpired that the building (shops) was com pleted only in the beginning of 1948. The very look of the building also confirms this information. On the other hand, no data has been placedbefore me by the landlord, his attorney or the advocate to show that the construction of the building was completed. before 24th March, 1947. According to the admitted statement of the attorney the shops have been let out for the first time in 1948 and otherwise too his statement of 19th Novem ber, 1948 shows that the building had not been.completed before 24th March, 1947. No completion certificate or house tax receipts have been produced in support of this conten tion. It is, therefore, not understandable how it is claimed that the shops were comple ted before 24th March, 1947. The owner is knowingly avoiding to give a statement himself that the shops were completed before 24th March, 1947. Evidently because he realises that this is not true. It has also not been stated what use was made of these shops till January, 1948, when they were first let out if they had been completed before 24th March, 1947 as alleged. It is unbelievable that shops like these could remain unoccupied for nearly 9 to 1.0 months after completion. I am, therefore, convinced beyond a shadow of doubt that the construction of there shops was completed long after 24th March, 1947, and the fixation 957 of their standard rent definitely falls within the scope of section 7 A of the Delhi and Ajmer Marwara Rent Control Act, 1947(as amended). I,therefore, proceed to fix the rent accordingly. " After taking into consideration the nature of the construction and the fittings, etc., and other relevant considerations the Rent Controller fixed the valuation at Rs. 9 7 0 per sq. ft. of plinth area for working out the probable cost of the construction of the building. The cost of the land, he estimated at Rs. '275 per sq. ; but he allowed only one third of the estimate inasmuch as the building was one storeyed and all the buildings in the vicinity were mostly three storeyed. On these calculations, lie held that the standard rent for all the shops in the building work out at Rs. 335 per month including 10% for repairs but excluding house tax and charges for consumption of water and electricity. A calculation sheet was prepared fixing the standard rent for each of the shops including some shops which were vacant, oil the aforesaid ' basis. The calculation sheet showed that the standard rent of 18 ,shops in the building varied from Rs. 10 per month to Rs. 50 per month. Against the order of the Rent Controller dated January 10, 1949, nineteen appeals were taken to the District Judge. One of the points taken before the District Judge was that the Rent Controller had no jurisdiction to fix the standard rent inasmuch as the building had been completed before March 24, 1947. The learned District Judge dealt with this point at length, and held that the Rent Controllers finding on the question of jurisdiction was correct. As to fair rent, he held that though the building was single storeyed, there was no reason why the landlord should not be allowed the full value of the land on which the building. stood. Allowing full value for the land and having regard to the rent of premises in the neighbouring area the learned 958 District Judge modified the order of ' the Rent Controller and fixed the standard rent of the building at Rs. 670 per month, viz., double. of what was fixed by the Rent Controller. The learned District Judge passed his order on January 15, 1951. It appears that from the order of the District Judge, Delhi dated January 15, 1951, certain applications in revision were. made to the Punjab High Court. Most of the applications were by the landlord, but one of them was by a tenant. These applications were heard together by the High Court. The High Court allowed the applications of the landlord and held in effect that the proceedings before the Rent Controller violated the principles of natural justice and were, therefore, bad and without jurisdiction. The High Court, it appears, travelled over a wide field and dealt with a number of questions, though its decision was based on the finding stated above. The first question which the High Court considered was whether s.7A read with Sch. IV of the Control Act, 1947 prescribed a discriminatory procedure without a reasonable classification in respect of premises completed after March 24, 1947 and thus violated the guarantee of equal protection under article 14 of the Constitution. Along with this question was canvassed another connected question viz., whether these cases would be governed by the law in force at the time of the decision given by the Rent Controller or by the law existing at the time when the District Judge heard the appeals. It may be here noted that the Constitution of India came into force on January 26, 1950 and at the date of decision of the Rent Controller article 14 of the Constitution was not in force. The High Court expressed the view that the law to be applied was the law in existence at the time when the District Judge decided the appeals. It further held that section 7A read with Sch. IV of the Control Act, 1947 was violative of the guarantee of equal protection 959 of laws under article 14 of the Constitution, there being no rational nexus between the classification made regarding premises old and new and the objects of the statute. Having given these two findings, the High Court said, however, that it would prefer not to base its judgment on these findings, because to do so might be giving retrospective effect to the Constitution. The High Court then went, on to consider the further contention urged before it that in the proceedings before the Rent Controller there was a violation of the principles of natural justice inasmuch as all recognised principles governing tribunals which exercise quasi judicial powers or follow a procedure subserving the orderly administration of justice had been. disregarded. On this point the learned Judge, delivering the judgment of the Court, expressed himself as follows "In the present case no 'evidence as to rent was called from the parties or recorded by the ' Controller nor was any opportunity afforded to the parties to adduce such or any evidence which they considered necessary to submit. The Controller made private enquiries and his order shows that he has based his decision on the cost of the building which he himself calculated without allowing the petitioner an opportunity to show that such calculation was wrong or its basis erroneous. Of course, there is no procedure prescribed by the Schedule and whatever procedure was followed does not subserve the orderly administration of justice. So that the, determination is based oil private enquiries, unchecked calculations and no evidence of the parties who were afforded no opportunity of proving their respective cases. " With regard to the flats in 'Prem Building 'a farther ground given by the High Court was that they were, 960 not now construction as held by the District Judge, and therefore s.7A was not applicable for determination of fair and standard rent in respect thereof. We may first dispose of the constitutional point that s.7 A read with Sch. IV of the Control Act, 1947 violated the fundamental right guaranteed under. article 14 of the Constitution. We may 'here read s.7A and some of the provisions of Sch. "7A. The provisions set out in the Fourth Schedule shall apply to the fixation of rent and other matters relating to the premises in Delhi (hereinafter referred to as the newly constructed premises) the construction of which was not completed before the commencement of this Act. The Fourth Schedule 1."Rent Controller or the purposes of this Schedule means the person appointed by the Central Government as the Rent Controller. 2.If the Rent Controller on a written complaint 'or otherwise has reason to believe that the rent of any newly constructed premi ses is excessive, he may, after making such inquiry as he thinks fit proceed to fix the standard rent thereof. 3.The Rent. Controller in fixing the standard rent shall state in writing his reasons therefor. 4.In fixing the standard rent the Rent Controller shall take into consideration all circumstances of the case including any amount paid or to be paid by the tenant by way of premium or any other like sum in addition to rent. 961 5 and 6. x x x x x 7.For the purposes of an inquiry under paragraphs 2, 5 and 6, the Rent Controller may (a)require the landlord to produce any book of account, document or other information relating to the newly constructed premises, (b)enter and inspect such premises after due notice, and (e)authorise any officer subordinate to him to enter and inspect such premises after due notice. 8 to 10. x x x x x 11. Any person aggrieved by an order of the Rent Controller may, within thirty days from the date on which the order is communicated to him, appeal to the District Judge, Delhi. " This very question was considered by a Full Bench of the same High Court in a later decision (see G. D. Soni vs section N. Bhalla(1). In that decision the High Court went into the entire history of legislation with regard to the control of house rent in both old Delhi and New Delhi from 1939 onwards when the second world war broke out. The High Court pointed out that the New Delhi House Rent Control Order, 1939 made under r. 81 of the Defence of India Rules was the first Control Order seeking to control rent of houses in New Delhi and the Civil Lines. From 1939 till 1942 no Rent Control Act applied to the municipal area of Delhi. On October 16, 1942 the Punjab Urban Rent Restriction Act, 1941 with suitable adaptations was extended to that area. Under that Act a landlord could recover only standard rent from the tenant and the term "standard rent ' was defined as meaning the, rent at (1) A I.R. 1959 Punj. 381. 962 which the premises were let on January 1, 1939 and if not so, the rent at which the were last let. In cases not governed entirely by this definition, the Court was given the power to fix standard rent. In 1944 the then Governor General promulgated the Delhi Rent Control Ordinance, 1944. Under this Ordinance the Chief Commissioner could apply it to any area within the Province of Delhi and whenever the Ordinance was made applicable to any area, the Punjab Urban Rent Restriction Act, 1941 ceased to be operative. In the Ordinance also standard rent was defined substantially in the same terms as in the Punjab Act. The Central legislature then enacted the Control Act, 1947 which repealed the Punjab Act as extended to Delhi and also the Rent Control Order of 1939 and the 1944 Ordinance. By s.1(2) the Act, was made inapplicable to any premises the construction of which was not completed by March 24, 1947 and under s.7 of the Control Act, 1947, at Court in case of dispute had to determine the standard rent on the principles set forth in the Second Schedule. We have already stated earlier that s.1 (2) of the Control Act, 1947 was later repealed (so far as, it affected buildings in Delhi), and newly constructed buildings were brought within the purview of the Control Act, 1947 by introducing s.7A and Schedule, IV to it. From this brief survey of the legislative history of the control of rent of premises situated in the Province of Delhi, it is clear that the Control Act, 1947 brought about uniformity in the law relating to rent control by laying down that the standard rent of newly constructed premises shall be fixed by the Rent Controller while the Court will fix the standard rent in respect of other premises. There is no doubt that a classification was made between premises the construction of which was, completed before March 24, 1947 and those the construction of which was completed after that date. The question is whether this classification is based on 963 intelligible differentia having a rational nexus with the objects of the statute. Dealing with this question Bishan Narain, J. delivering the judgment of of Full Bench said: 'The learned counsel for the landlord challenged the validity of these provisions on the grounds (1) that there is no reasonable basis for fixing the standard rent of newly constructed premises differently on a different principle from the principle on which standard rent is fixed for old buildings in the same locality and (2) that there is no reason for discriminating against the landlords of newly constructed buildings by laying down that their standard rent shall be fixed by Rent Controllers appointed by the Central Government while the standard rent of other buildings is to he fixed by courts of law which are bound to follow procedure laid down in the the Civil Procedure It is urged that the Rent Controller is not bound by any procedures laid down by the Civil Procedure Code or the Punjab Courts Act. x x x Section 7 says that the standard rent shall be determined in accordance with the principles set forth in the Second Schedule. The Second Schedule fixes basic rent as determined tinder the Control Order of 1939 or under the 1944 Ordinance and in other cases the contractual rent on 1 11 1939 or if not on that day then on the date first let after 1 11 1939. The standard rent thus fixed is to be increased by certain percentage specified in the Schedule. If the premises were let after 2 6 1944 then the basic rent and the standard rent were to be the same. Obviously this principle for fixation of standard rent could not possibly have any application to premises constructed and let after 964 24 3 1947. Section 7 then proceeds. to lay down that if for any reason it is not possible to determine the standard rent of any premises set forth in the Second Schedule then the courts shall determine it having "regard to the standard rent of similar premises in the same locality and other relevant considerations". Para 4 of Schedule IV lays down In fixing the standard rent the Rent Controller shall take into consideration all the circumstances of the case including any amount paid or to be paid by the tenant by way of premium or any other like sum in addition to rent. ' It was argued on behalf of the landlord that the critera laid down in s.7(2) and para 4 of Schedule IV of the Act is substantially different and that there is no valid reason for such a differentiation. He urgent that the Rent Controller (1) may ignore the standard rent of similar premises in the same locality while he is under an obligation to take into consideration any amount Paid or agreed to be paid by the tenant by way of premium etc. in addition to rent and that the Rent Controller (2) cannot interfere with the agreed rent unless he finds it excessive and in that he can only reduce the rent fixed between the parties and cannot increase it. It; is urged that under section 7(2) it is open to the Court to increase the standard rent and also not to take into consideration any amount paid by the tenant as premium in addition to rent. Now the Rent Controller is enjoined by para 4 to take into consideration all the circumstances of the case when fixing standard rent. It is not understood how a Rent Controller can omit to consider the standard rent of similar premises in the same locality. This is obviously a relevant consideration though para 4 does not specifically mention it. It is true that this criteria has been 965 specifically mentioned in s.7(2)of the Act and has not been so mentioned in s.7A.but. this circumstance cannot lead to the inference that it is open to the Rent Controller to ignore it. The words of para 4 are in fact as.wide in effect as the words used in s.7(2) of the Act. In this context it must not be forgotten that if such a mistake is made by the Rent Controller then the aggrieved party (may he be landlord or the tenant) can appeal to the District Judge whose powers are co extensive with those of the Rent Controller and who can set right any mistake made by the Rent Controller. I am, therefore, of the opinion that the criterion laid down for fixation of standard rent in s.7(2) and para 4 is substantially the same in scope and is not different. x x x x x Undoubtedly under Schedule: IV the Rent Controller can fix standard rent only if he finds that the rent agreed upon between the parties is excessive. This provision is to protect the landlord from frivolous applica tions by tenants and it is not clear why a landlord should object to this provision. The reason for this provision is intelligible. It is. well known that rents in Delhi prior to 1 11 1939 were very, low and in some cases uneconomic. Therefore the legislature decided that in such cases a landlord should be. in a position to, got standard rent fixed at a rate higher than fixed by agreement of the parties in 1939 or earlier. No such consideration arises in the 'case of buildings constructed. or completed after 1947. In 1947 there existed an acute shortaae of accommodation in Delhi and the landlords were in, a position to dictate terms and, there fore, presumably the fixed between the parties were not so low as to require, in 966 considered unnecessary to provide for increase of rent in Schedule IV. I am, therefore, of the opnion that it is not possible on these grounds to hold that s.7 A and Schedule IV are unconstitutional. The learned counsel then brought to our notice two other matters in which the newly constructed buildings have been treated differently from the old buildings. He pointed out that under para 10(2) of Schedule IIV the standard rent fixed by Rent Controller must necessarily be retrospective in effect while under s.7(5) the Court can fix the date from which the payment of Estandard rent would become effective. He further pointed out that under section 4(2) a landlord on making improvements can increase the standard rent by an amount not exceeding 61 per cent of the cost of improvement, while under para 6 of the Schedule IV the Rent Controller can increase the standard rent in such circumstances to an amount not exceeding 7 1/2 per cent of the cost of improvement. These are, however, no grounds for hold. ing the impugned provisions to be unconstitu tional. ' The Delhi and Ajmer Marwara Rent Control Act, 1947, came into force on 24 3 1947 originally for two years only and s.7 A with Schedule IV were introduced in September 1947. Therefore the standard rent for new buildings could well be fixed from the beginning of the lease. The old buildings were let long before 1947 and, therefore, it was considered advisable to leave it to courts to fix the date from which the payment of standard rent would become effective. This is a rational difference. So is the Matter of differenace of return on the cost of 967 improvements. There is no reason for equating the return on cost of improvements of old buildings with the return oil ' the cost of improvements of new buildings. This is a matter for the legislature to consider and this possible slight difference, in returns cannot be said to be discriminatory and violative of Article 14 of the Constitution. For these reasons I am of the opinion that the criteria for the fixation of standard rent for new and old buildings is substantially the same and does not violate Article 14 of the Constitution and there is no valid reason for coming to the conclusion that the standard rent of old and new buildings of the same type and in the, same locality would necessarily be different. The first ground, therefore, fails and rejected. The second ground also has no force. It is urged that in Schedule TV there is no provision for recording the evidence of the parties nor is it laid down whether the evi dence is to be on oath. It is futher urged that the principles of natural justice have been disregarded by Schedule IV and it is open to the Rent Controller to fix standard rent arbitrarily without recording any evidence. Now para 2 Schedule IV says that the Rent Controller shall make such enquiry as he considers fit to fix the standard rent. x x x x x In fixing standard rent the Rent; Controller decides a dispute between a landlord and a tenant. To do this effectively he has to take evidence and to hold a judicial inquiry particularly when he has to give reasons for his decision. Para 7 is also indicative of such a judicial. inquiry. There is no reason for Presuming and assuming that the 968 Rent Controller would not hold s a oh an inquiry. If he does"not do go then the aggrieved party can always appeal to the District Judge, Delhi who invariably is a very senior and experienced judicial officer. x x In this context it must not be forgotten that considering the ' recent rise in prices of land, building material and labour costs in Delhi the standard rent should be correlated to these costs. In the circumstances the legislature in its wisdom has thought fit that the enquiry, into standard. of new building should continue to remain with the Rent Controllers who can expeditiously decide the matter. In this context it can be reasonably expected that the Central Government will appoint only those persons as Rent Controllers who can use: their own knowledge and experience to calculate these costs. In these circumstances it cannot be said that the differentiation in the procedure adopted in the statute has no rational relation to the, object sought 'by the legislature. We agree with these observations of the Full Bench, and we further accept the view expressed by it that the criteria for the fixation of standard rent for both new and. old buildings under the Control Act, 1947 are not substantially different. The minor differences that exist in the matter, which have been adverted to in the judgment of the High_ Court, can be justified on the grounds of (a) difference in the. cost of construction of old and new buildings, (b) difference in the rate of return on investments made in building houses before and after 1947(c) the need to encourage the, building of houses to meet the acute shortage of 969 accommodation in Delhi after 1947, and (d) the opportunity presented of charging excessive tent after 1947. Perhaps, it is also necessary to emphasise again that the provisions in Schedule IV of the Control Act, 1947, do not give an arbitrary power to the Rent Controller. Paragraph 3 of the. Schedule requires the Rent Controller to state 'in writing his reasons for fixing the standard rent. Paragraph 4 states that in fixing the standard rent, the Rent Controller shall take into consideration all the circumstances of the case including any amount paid or to be paid by the tenant by way of premium or any other like sum in addition to rent. Paragraph 7 gives the Rent Controller power to require the landlord to produce any book of account, document or other information relating to the newly constructed premises, to enter and inspect such premises after due notice, and to authorise any officer subordinate to him to enter and inspect any such premises after due notice. Paragraph. II provides for an appeal to the District Judge by any person aggrieved by an order of the Rent Controller. These provisions clearly indicate that the power given to the Rent Controller is not an arbitrary power. The power has to be exercised by the Rent Controller on a judicial consideration of all the circumstances of the case. We think that the High Court was in error in the view it expressed that no reasonable procedure is prescribed by the provisions of Schedule IV and the Rent Controller is at liberty to do whatever he likes. This brings us to the main question for decision in these appeals was there a violation of the principles of natural justice in the procedure which the Rent Controller actually followed in fixing the standard rent ? 'We are unable to agree with the High Court that there, was any. such violation. On behalf of the landlord, it has been contended before us that in respect of both the matters 970 completion of construction of the building and fixation of standard rent, the Rent Controller proceeded on (i) private enquiries, (ii) local inspection without notice, and (iii) inadmissible evidence. Before we deal with this argument, it is necessary to say a few words about the principles of natural justice. This Court considered the question in New Prakash Transport Co., Ltd. vs New Suwarna Transport Co., Ltd. (1). After a review of the case law on the subject, it pointed out that the rules of natural justice have to be inferred from the nature of the tribunal, the scope of its enquiry and the statutory rules of procedure laid down by the law for carrying out the objectives of the statute. The mere circumstance that the procedure prescribed by the statute does not require that evidence should be recorded in the manner laid down for ordinary courts of law does not necessarily mean that there is a violation of the principles of natural justice. In Union of India vs T. R. Varma (2) this Court said "Stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant. evidence on which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross examining the witnesses examined by that party, and that no materials should be relied on against him without his being given an opportunity of explaining them. If these rules are satisfied, the enquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking evidence was not strictly followed. " Judged in the light of the observations referred (1) (2) (1958) section C. R. 499) 507. 971 to above, was there a violation of the principles of natural justice in the cases under our consideration? We have pointed out earlier that the landlord was repeatedly given an opportunity of producing such evidence as he wished to produce. On August 12, 1948 be was asked to bring all relevant records including account books, vouchers etc. He did not, choose to do so. He asked for an. adjournment which was granted to him. On September 1, 1948 the landlord again asked for time. This was also granted to him and he was told that the cases would be finally heard on November 17,1948, He was also informed that no further adjournment would be given. It appears from the record that on September 1, 1948 some statements were recorded in the presence of the representative of ' the landlord. On November 19, 1948 which ",as the date fixed for final hearing, the landlord again asked for time and time was again granted to him. On December 3, 1948 the landlord was told that the Rent Controller would inspect the house on. Sunday December 5, 1948 between 9 A. m. and 1 P. m. The landlord was asked to be present. On December 3 the Advocate of the landlord was present and was informed that the landlord must submit his written statement in writing within 15 days. The Advocate, however, gave an application for postponement of the cases on the ground that certain proceedings were pending before the Subordinate Judge, Delhi. On December 9, 1948 the landlord was again given one A week 's time to file his written statement and produce such other evidence as he wished to produce. In these circumstances it is difficult to understand how the landlord can complain that there has been a violation of the principles of natural justice and that he had no opportunity of producing evidence or of cross examining the witnesses whose statements were recorded by the Rent Controller. It, is indeed true that the Rent Controller made some local enquiries when he inspected the building on December 12, 1948. If, however, 972 the landlord chose to be absent in spite of repeated intimation to him, he cannot be heard to say that the enquiries were made in his absence and are, therefore, bad. To bold in such circumstances that there has been a violation of the principles of natural justice would be to put a premium on the recalcitrance of a party. Even in the ordinary courts of law, if a party chooses to be absent in spite of notice, evidence is recorded ex parte and the party who chooses to be absent cannot be heard to say that he had no opportunity of being present or of cross examining the persons whose statements were recorded by the court. After all, what natural justice requires is that a party should have the opportunity of adducing all relevant evidence and that he should have an opportunity of the evidence of his opponent being taken in his presence. Such an opportunity was clearly given to the landlord in the present cases. If anybody is to blame for the ex parte order of the Rent Controller, it is the landlord himself. It appears from the order of Rent Controller that the attorney or advocate of the landlord did appear on several dates and even made a statement as. to the letting out of the building in question but. took no other 'part in the proceeding except asking repeatedly for adjournment. The Rent Controller was not far wrong when he said that the landlord was bent upon avoiding a trial of the issue before the Rent Controller on the ground that be had made applications under section 7 to the Subordinate Judge, Delhi, for fixation of ' standard rent. In view of the recalcitrant attitude which the landlord adopted the Rent Controller did his best in the circumstances. He took into consideration such relevant circumstances as the cost of the, land, cost of construction, cost of fittings, the open. area in front of the shops, cost of repairs etc. The learned District Judge also took in to consideration the return which the landlord could:. reasonably expection his outlay and also. the rent of other premises in the. area. Taking these 973 additional circumstances into consideration, the District Judge doubled the standard rent which the Rent Controller had fixed. 'It does, not appear from the order of the learned District Judge that any objection was pressed before him on the ground that in the actual proceedings. before the Rent Controller there was a violation of ' the principles of natural justice, though in paragraph 7 of the grounds of appeal it was stated that the procedure adopted by the Rent Controller was contrary. to the provisions of law etc. A ground appears to have been seriously pressed for the first time I in the revision applications to the High Court. Some grievance has been made before us of the circumstance that in his letter dated December 3, 1948 the Rent Controller said that be would inspect the building on December 5,1948. He however, actually inspected the building oh December 12, 1948 as his order shows. Our attention has been drawn to para 7 (b) of So 'IV and it has been contended that the inspection was made without notice to the landlord '. This, it is stated, has. vitiated the entire proceedings. This argument might have had some force, but for the attitude adopted throughout the proceedings by the landlord. On the very date on which the, Rent Controller intimated to the landlord that he would visit the building on December 5, 1948, the landlord sent a telegram purporting to be on his behalf stating that he was out of, station. The Rent Controller then noted an order on that very date stating that the advocate for the landlord gave an application for staving the proceedings. The application was rightly refused by the Rent Controller. In these circumstances we do not think that the landlord can make any complaint that the inspection was without notice or that he had, no opportunity of being present at the time of the inspection. It is obvious that from the very beginning the landlord had taken up an attitude of non co operation in the proceedings before the 974 Rent Controller. It is worthy of note that even in statement of the case in this Court, the landlord has made No. grievance that the inspection was held without notice to him; nor did he take any such plea before the District Judge. A further contention urged on behalf of the landlord arises out of para 2 of Sch. IV That paragraph says that if the Rent Controller "has reason to believe that the rent of any newly constructed premises is excessive, he may after making such enquiry as he thinks fit, proceed to fix a standard rent thereof". The argument before us is that before proceeding to fix the standard rent the Rent Controller did not bold a preliminary enquiry nor did be record a finding to the effect that the rent charged by the landlord was excessive ; therefore. , the provisions of para 2 were violated. We do not think that there is any substance in this contention. In the, application which 9 tenants made on July 30, 1948 they definitely stated that under the stress of circumstances resulting from a partition of the country and the heavy demand for business premises in Delhi, they were forced to accept the excessive and exorbitant rent which the landlord was charging from them. On this appli cation a note was recorded by the Rent Controller 's office to the effect that the entire case relating to the fixation of standard rent for the building in question was already under consideration, presumably because, other tenants had also made similar applications. The Rent Controller thereupon recorded an order which said that "in order to fix the rent of the premises in accordance with section 7A of the Control Act, 1947 a summary enquiry would be held by him". It is obvious from this order that the Rent Controller was prima facie satisfied that the rent charged was excessive and action was required under s.7A of the Control Act, 1947. The argument urged. on behalf of the landlord really comes to this, viz. that under para 2 of Sch. IV there must always be ' two 975 enquiries, first an enquiry as to whether there are reasons to believe that the rent charged is excessive and, secondly, an enquiry for fixing the standard rent. We do not think that para 2 necessarily involves two enquiries in all circumstances. In a case where the Rent Controller has a written complaint, as in these cases, the complaint itself may give reasons which the Rent Controller may prima facie accept that the rent charged by the landlord is excessive. In the cases before us the tenants had stated the reasons, which were common to all, why they had to submit to excessive and exorbitant rate of rent charged by the landlord. It was, we think, open to the Rent Controller to accept those reasons as prima facie good reasons for proceeding to make an enquiry to fix the standard rent in that enquiry it was open to the Rent Controller to give the necessary finding that the rent charged by the landlord was excessive. The final order of the Rent Controller shows with out doubt that he was satisfied that the rent charged by the landlord was exorbitant and excessive. We are unable to hold that in these circumstances there has been any contravention of para 2 of Sch. IV of the Control Act, 1947. Another objection taken by the landlord to the proceedings before the Rent Controller arises out of the circumstance that the Rent Controller in fixing the standard rent for the entire building had fixed the rent even for vacant shops i.e. shops which were not in occupation of any tenant at the time. In the final order which the Rent Controller passed, he fixed the standard rent for all the shops at RS. 335/ per month and in the calculation sheet, which was part of the final order made by the Rent Controller on January 11, 1949, three shops have been shown to be vacant. It has been contended before us that the Rent Controller had not jurisdiction to fix the standard rent for vacant shops and the argument is that the way he proceeded to fix 976 the rent for the entire building vitiated the proceedings before him. It has further been argued that only 9 tenants, six of whom are appellants before us, applied for the fixation of standard rent on July 30, 1948. Therefore, the Rent, Controller had no jurisdiction to fix the standard rent in respect of persons who had not applied for such fixation. It has been contended before us that in six of the appeals before us (viz. Civil Appeals Nos. 176, 178, 181, 189, 183 and 184 of 1958) the appellants had made no application for fixation of standard rent. We take up first the question of vacant shops. It is clear from s.7A and the provisions of Sch. IV that the Rent Controller has to fix, the standard rent of newly constructed "premises" if the condition stated in para 2 of Sch. TV is satisfied. The word "Premises" as defined in s.2 of the Act means "any building or, part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose etc. " Each shop let out or intended to be let out separately is therefore "premises" within the meaning of the Control. Act, 1947. It may, therefore, be correct to say that it was not necessary for the Rent Controller to fix the standard rent for vacant shops. It is obvious, however, that for shops which had been let out to tenants the Rent Controller had to take into consideration the cost of the entire building, value of the land, the fittings etc. In other words he had to take the entire building into consideration for the purpose of fixing the standard rent of the shops in the building let out to various tenants. That being the position, we do not consider that the proceedings before the Rent Controller were rendered abortive merely because the Rent Controller also fixed the standard rent for some of the vacant shops. For the purpose of these appeals, the standard rent fixed for the vacant shops may well be ignored: that will not 977 affect the rent fixed for the shops which had been let out to tenants. As to the point that some of the appellants had made, no application for fixation of standard rent, we are unable to accept the contention as correct. It is indeed true that 9 tenants had made an application for fixation of standard rent on July 30, 1948, but it appears that there were other applications also from other tenants. This is clear from the office note, to which we have already referred earlier, appended to the application of 9 tenants. Moreover the application which the landlord himself had made on September 1, J948 showed that 14 tenants had made applications for the fixation of standard rent of their shops in Chemists ' Market in Bhagirath Colony. Unfortunately, all the applications have not been printed in the paper book. The order of the Rent Controller shows that he treated all the applications as ' though they gave rise. to a single proceeding, because they related to the same building. This point which has now been taken before us does not appear to have been taken before the District Judge who said that there were 19 appeals before him arising out of a single order of the Rent Controller fixing rent for 18 different shops of a building belonging to the landlord. In the calculation sheets which the Rent Controller and the learned District Judge had prepared and which give the names of all the tenants the standard rent for whose shops was. fixed, are shown the names of all the appellants. It is, me think, too late in the day for the landlord to contend that some of the appellants had not applied for the fixation of standard rent, In any view of the matter, the landlord has not placed sufficient materials before us in support of that contention. We may point out here. that M/s. Narang Medicine Co., appellant in Civil Appeal No. 182 of 1958, did not join in the application made on July 30, 1948. Yet we find from the 978 record that a copy of the letter which the Rent Controller wrote to the landlord on November 9, 1948, was sent to M/s. Narang Medicine Co. As we have earlier pointed out the very petition of the landlord dated September 1, 1948, shows that many more than 9 tenants had applied for fixation of standard rent for their shops in Chemists ' Market, Bhagirath Colony. Therefore, we are unable to uphold the ' contention of the landlord that the Rent Controller had fixed the standard rent of some of the shops, tenants whereof had not applied for the fixation of the standard rent. This concludes the discussion with regard to the Chemists ' Market in Bhagirath Colony. In these appeals we have come to the conclusion, for reasons given above, that the High Court was wrong in interfering with the order of the District Judge in appeal. We would, ;therefore, set aside the order of the High Court dated August 26, 1954 and restore that of the learned District Judge in appeal, so far as the appellants herein are concerned. Civil Appeals Nos. 185 and 186. of 1958. We now turn to the two appeals relating to Prem Building. The two tenants are M/s. Dhawan & Co., and Firm Gokal Chand Madan Chand. M/s. Dhawan & Co. had made ,in application for fixation of standard rent on June 14, 1948. A Similar application was made by Firm Gokal Chand Madan Chand on the same date. In the applications an averment was made that the flats were completed after March 24, 1947, and that the tenants being without any accommodation and under the pressure of circumstances were forced to accept the exorbitant rent of Rs. 360 per month in one case and Rs. 350 per month in the other. Both of them asked for fixation of standard rent under s.7A of the Control Act, 1947. Both the landlord and the tenants appeared before the Rent Controller and 979 made statements before him. The main question taken before the Rent Controller on behalf of the landlord was that the second floor on which the two flats of the tenants were situated ",as completed before March 24, 1947, and therefore, no proceeding in respect thereof was maintainable under s.7A of the Act. The Rent Controller %vent into the evidence adduced before him very carefully and came to the conclusion that though the ground floor and the first floor of the building were old, the second floor was constructed some time. in August, 1947. He, therefore, held that the second floor was a new construction within the meaning of s.7A of the Control Act, 1947 and be fixed the standard rent for each flat at Rs. 96 8 0. The matter wasthen taken in appeal to the District Judge. Again the main contention before the District Judge was that the Rent Controller bad no jurisdiction as the premises in question were not newly constructed. The District Judge dealt with this point in the following way: "The premises, are two flats on the second floor of a large building belonging to the appellant, and the rent Controller has found that these flats were constructed after 24th March, 1947. The record shows that the general attorney for the appellant admitted before the Rent Controller that only a temporary construction was in existence on the second floor before 24th March 1947, and that temporary construction consisted of wooden purlins with corrugated iron sheets and stone slabs on top of them. Subsequently, however, this construction was brought down and proper flats were built with reinforced concrete roofs, and it is in evidence that the first tenant, who occupied one of the flats, did so in September, 1947, and a second tenant went into occupation in January, 1948. It is on. this evidence abundantly clear that 980 the premises or the flats now in dispute were in every sense newly constructed premises and the, Rent Controller was competent to fix the rent. " It is clear from the orders of the Rent Controller and of the District Judge in appeal that the question whether the second floor was newly constructed or not was really a question of fact, though undoubtedly a jurisdictional fact on which depended the power of the Rent Controller to take action under s.7A. If the Rent Controller had wrongly decided the fact and assumed jurisdiction where he had none, the matter would be open to reconsideration in revision. The High Court did not, however, go into the evidence, nor did it say that the finding was not justified by the evidence on record. The High Court referred merely to certain submissions made on behalf of the landlord and then expressed the opinion that what was done to the second floor was mere improvement and not a new construction. We think that the High Court was in error in interfering with the finding of fact by the Rent Controller and the District Judge, in support of which finding there was clear and abundant evidence which had been carefully considered and accepted by both the Rent Controller and the District Judge. In these two appeals we have come to the conclusion that the judgment of the High Court dated January 26, 1954, should be set aside and that of the District Judge restored. We may here note that so far as the standard rent fixed by the Rent Controller was concerned, the District Judge himself noted that the learned advocate for the landlord was not able to find any fault with the assessment made by the Rent Controller. Civil Appeal No. 171 of 1958. We now come to Civil Appeal No. 171. The facts of this appeal are somewhat different. We 981 have already stated that this appeal relates to two flats on the ground floor of plot No. 20, Block No. 13, Western Extension Area, Karolbagh. The tenant, who is the appellant before us, took the flats on a rent of Rs. 220 per month including tax on December 15,1950. On May 15, 1951 he made an application for fixation of standard rent under s.7A of the Control Act, 1947, on the ground that the rent charged was excessive and exorbitant. The application was contested by the landlord. On December 7, 1951, the Rent Controller fixed Rs. 150 per month as the standard rent inclusive of tax. The landlord filed an appeal to the District Judge Which was dismissed on May 12, 1953. The landlord then filed an application in revision to the High Court and the High Court accepted the application on May 10, 1954, and remanded the case for afresh trial. When the case came back to the Rent Controller, the landlord made an application to the Rent Controller to the effect that s.7A read with Schedule IV of the Control Act. ' 1947, was rendered unconstitutional and void on the coming into force 'of the Constitution of India. Apparently, this point was taken in view of the judgement of the Punjab High Court dated August 26, 1954, already discussed in the other appeals. On May 30, 1955, the Rent Controller held, on the basis of the aforesaid decision, that section 7A read with Schedule IV of the Control Act, 1947, was unconstitutional and therefore the application was not maintainable Accordingly, he dismissed the application. The matter was then taken to the District Judge in appeal. The learned District Judge who was bound by the decision of the Punjab High Court also held that s.7A of the Control Act, 1947, was unconstitutional and therefore the application was not maintainable. The tenant appellant then made an application under article 227 of the Constitution to the Punjab High Court. That application was summarily dismissed on March 7,.1956, 982 We have already dealt with the constitutional point as to whether s.7A read with Sch. IV of the Control Act, 1947 is, void after the coming into force of the Constitution of India by reason of a violation of the fundamental right guaranteed under article 14 of the Constitution and we have come to the Conclusion that s.7A and the relevant provisions of Sch. IV of the Control Act, 1947 are not unconstitutional. That being the position, the main ground on which the application of the appellant was dismissed disappears and the application must now be dealt with in accordance with law. Our attention has, however, been drawn to the Delhi and Ajmer Rent Control Act, 1952 (Act No., XXXVIII of 1952), which by s.46 repealed the Control Act, 1947. That section, however, contains a saving clause which is as follows : "46. Repeals and savings.(1) x x x (2)Notwithstanding such repeal, all suits and other proceedings pending at the commencement of this Act, whether before any court or the Rent Controller appointed under the Fourth Schedule to the said Act, shall be disposed of in accordance with the provisions of the said Act as if the said Act bad continued in force and this Act had not been passed : Provided that the procedure laid 'down in this Act shall, as far as may be, apply to suits and other proceedings pending before an Court. " We consider it unnecessary to determine the effect of the aforesaid saving clause in the present appeal. Neither the Rent Controller, nor the District Judge, nor the High Court considered the effect of the saving clause. The, application of the appellant was dismissed on the simple ground that s.7A read with Sch. TV of the Control Act, 1947 was unconstitutional. We consider that that ground is not 983 correct and the application of the tenant appellant for fixation of standard rent must now be deter . mined in accordance with law. It would be for the competent authorities to consider now the effect of s.46 of the Delhi and Ajmer Rent Control Act, 1952 or of any other law bearing on the question which may have come into existence since then. We, would, therefore, allow this appeal and set aside the orders of the Rent Controller, the District Judge and the High Court dismissing the application of the appellant. The application must now be dealt with in accordance with law by the authority competent to do so in the light of the observations made above. In the result the appeals in all three categories are allowed as indicated above. The appellants in all the appeals will be entitled to their costs, but there will be one set of hearing fee for each of the three categories of appeals. Appeals allowed.

The appellants applied to the Rent Controller for fixation of fair and standard rent of certain shops and other premises alleging that the rent charged by the landlords was exorbitant. The questions arising for determination were (1) whether the Delhi and Ajmer Marwara Rent Control Act, 1947 in so far as it provided for the fixation of standard rent in respect of premises the construction of which was completed after March 24, 1947 by the Rent Controller violated the fundamental right guaranteed under article 14 of the Constitution; and (2) whether the procedure to be followed by the Rent Controller 'violated the principles of natural justice. Held, that section 7A and the relevant provision , of Sch. IV of the Act laying down the procedure for fixing standard rent by the Rent Controller are not unconstitutional and do not violate article 14 of the Constitution. The classification between premises the construction of which was completed before March 24, 1947 when the Act came into force and those which were completed thereafter, is reasonable, and the criteria for the fixation of standard rent for both old and new buildings under the Act were not substantially different. The procedure laid down under those provisions does not violate the principles of natural justice. The power given to the Rent Controller is not arbitraly and he has to exercise it on a judicial consideration of all the circumstances of the case. 948 G.D. Soni vs section N. Bhalla, A.I.R. 1959 Punj. 381 approved. New Prakash Transport, Co. Ltd. vs New Suwarna Transport Co. Ltd., , Union of India vs T.R. Verma (1958) S.C.R. 499 followed. In the instant case ample opportunity was given to the landlord for producing all relevant evidence in the case which he did not avail himself of. It was not necessary under para 2, Sch. TV, to have two enquiries one for ascertaining whether there were good reasons for believing that the rent charged was exorbitant and another for fixing the standard rent. The proceedings before the Rent Controller were not vitiated merely because standard rent of certain vacant shops was also. , fixed in the process of fixing the standard rent for the entire building in which those shops were situated; that would not affect the legality of the fixation of the rent for the shops which had been let out to tenants.

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).

Nanak Chand, father of the appellant, a displaced person from West Pakistan and having a verified claim in his name for some land, disappeared some time in December 1954. A report about his disappearance was lodged by the appellants brother, Dewan Chand, Respondent No. 2, with the local police in Punjab. The police made an enquiry in the matter and ultimately gave out that Nanak Chand could not be traced. In response to a notice issued in the year 1956 in suo moto revision in regard to the verified claim, in the absence of Nanak Chand, Dewan Chand appeared and alleged bat Nanak Chand had died leaving behind three sons including him as the only legal heirs. Dewan Chand produced a certificate to the effect that Nanak Chand had died one year and 10 months prior to 25th October, 1956. The certificate Was issued on his request by some respectable persons of the place where the family once resided. The Additional Settlement Commissioner, Delhi, by his order dated 27th October, 1956 allowed the application for substitution and directed the three sons to be brought on record as legal representatives of the deceased Nanak Chand although Nanak Chand had left behind three sons, three daughters including the appellant and his widow. The appellant, in an attempt to have her name substituted, filed a revision application against the order of the Additional Settlement Commissioner before the Chief Settlement Commissioner under s 5 of the . By his order dated 25th September 1965, the Chief Settlement Commissioner confirmed the order of the Additional Settlement Commissioner dated 27th October, 1956 and dismissed the revision application of the appellant without affording an opportunity of being heard to the appellant. The High Court dismissed the appellant 's writ petition and Letters Patent Appeal against the order of the Chief Settlement Commissioner. The High Court observed that the Additional Settlement Commissioner acted rightly in relying upon the death certificate produced by Dewan Chand and substituting the sons of Nanak Chand as heirs of the deceased of his certified claim. Hence this appeal, Allowing the appeal, 764 ^ HELD: A certificate given by respectable persons of the place where the deceased once resided, to say the least, is not admissible in evidence, Sec. 35 of the evidence Act provides that an entry in any public or other official book, register, or record, stating a fact in issue or relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty, specially enjoined by the law of the country in which such book, register or record is kept, is itself a relevant fact. [769B C] In the instant case a certificate by certain respectable person of the place where the family once resided does not satisfy the requirements of section 35 of the evidence Act. There is no proof that any statutory duty was cast upon the person issuing the certificate to keep a record of birth and death and therefore, the certificate of death has no evidentiary value. It is very easy for a person to obtain a death certificate from the so called respectable persons in order to grab the property. If according to Dewan Chand, Nanak Chand had died he must also indicate where did he die and it is the place of his death which will be relevant and not the place of his birth or residence. The certificate obviously is not of the place where Nanak Chand died. The authorities have gravely erred in relying upon the certificate of death which was inadmissible in evidence. [769D E] To see whether daughters would be entitled to interest in the property left by Nanak Chand will depend upon the death of Nanak Chand before or after the enforcement of Hindu Succession Act and to decide as to when Nanak Chand died it was absolutely essential that an opportunity should have been offered to the appellant in accordance with the principles of natural justice. [769H; 770A]

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]

The Ziarat Shareef of Hazrat Baba Ibrahim, a holy place of worship, in the Rakhbahu area of Jammu City was granted certain land to the Ziarat by the State Government vide two orders dated September 22, 1955 and November 29, 1958. The Ziarat was being managed by the 1st appellant and his brothers, since the death of their father in 1963. The Committee of Muslim Wakf, incorporated under the Jammu and Kashmir Muslim Wakf Act, which came into force in 1959, file a suit for restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat, on the allegation that the appellants defendants were treating the lands granted to the Ziarat, as their personal property and mismanaging and also alienating the same. Resisting the suit, the appellants, defendants contended, inter alia, that notwithstanding the use of the word "Ziarat" in the two Government orders the transfer of the land in dispute was in their father 's favour in his personal capacity, in lieu of his possessory right over about 400/500 kanals of land which was taken over by the Government, and not in the form of any dedication, and as such the land was not the property of the Ziarat but their father 's absolute property, and had devolved upon them by succession and, therefore, they had the right to deal with the property in any manner they liked. The trial court dismissed the suit, holding that the two grants were in fact made in favour of defendants ' father and not the Ziarat. 254 The first appellate court upheld the trial court 's findings. However, in second appeal, the High Court held that from the recitals of the two orders of the Government of 1955 and 1958 it was clear that the two grants were in favour of the Ziarat. Hence, the appellants defendants filed the appeal, by special leave before this Court contending that the High Court had erred in upsetting the findings of the courts below, based on appreciation of the evidence that, as a fact, the appellants defendants were the owners of the property, the subject matter of the Government grants. Dismissing the appeal, the Court, HELD: 1.1 The two orders of the Government dated September 22, 1955 and November 29, 1958 are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to the Ziarat alone and not to the appellants defendants in their personal capacity. In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders. The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shareef of Baba Ibrahim Shah be granted to the said Ziarat permanently. The later order of 1958 also says the same thing. It is nowhere mentioned in any of those orders that the land was given not to the Ziarat but to the father of the appellants defendants, who was Majawar of the Ziarat, either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government. [259A, B C] 1.2 A manager or a trustee in possession of a religious shrine cannot be allowed to assert a hostile title unless he formally surrenders possession to the lawful authority. [260B] In the instant case, there was no justification for the appellants defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same, which was as managers or trustees and assert a hostile title to it. Even if they were in possession of the lands, it would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat. In other words, the possession would be for. the benefit of the Ziarat. [259H, 260A, E] 1.3 In the face of clear and unambiguous terms of the Government orders, it was not permissible for the appellants defendants to adduce evidence to show that the grant was made to them and not to the 255 Ziarat. The question was of interpretation of two Government orders, which was essentially a question of law. [260G] In the circumstances, the High Court was not in error in upsetting the findings of the courts below. [260F]

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.

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.

The respondent, a displaced person from Pakistan was allotted 55 80 Standard Acres of land in lieu of the land left by him in Pakistan. While determining the surplus area, the appellant State interpreting the phrase "as the case may be" in proviso (ii)(a) to Section 2(3) of the Punjab Security of Land Tenures Act, 1953, left with the respondent 100 ordinary acres equivalent to 29.81 Standard Acres and treated 25.99 standard acres equivalent to 78.57 ordinary acres as surplus. The respondent preferred an appeal contending that the surplus should be 5.80 standard acres on a true interpretation of the proviso, which failed. The revision before the Financial Commissioner met with the same fate. The contention of the respondent was upheld by the High Court while allowing the Writ Petition filed by him. The Letters Patent Appeal filed by the State was dismissed. On an appeal by special leave, the Court, while dismissing it, ^ HELD: (i) The contention that the words "as the case may be" in proviso (ii)(a) to section 2(3), gives a discretion to the authorities to determine the permissible area either in standard or in ordinary acres is not correct. [212 B C] (ii) On a plain reading, proviso (ii)(a) indicates that where the land allotted to a displaced person was in standard acres and its area exceeded 50 standard acres, the permissible area would be 50 standard acres, and where the land was allotted not in standard acres, the permissible area would be 100 ordinary acres. The nature of the original allotment whether it was in standard acres or in ordinary acres is the determinating factor. [212 C D] (iii) The meaning given to proviso (ii)(a) by the Full Bench of the Punjab & Haryana High Court, in Khan Chand vs State of Punjab A.I.R. 1966 Punjab 423, is correct It is only construed this way that the words "as the case may be" acquire a significance, otherwise they would be mere surplusage. [212 D E] Khan Chand vs State of Punjab, A.I.R. 1966 Punjab 423, approved.

minal Appeal No. 146 of 1958. Appeal by special leave from the judgment and order dated April 14, 1957, of the Bombay High Court at Rajkot in Criminal (jail) Appeal No. 73 of 1956. AND Criminal Appeal No. 174 of 1959. Appeal by special leave from the judgment and order dated June 4, 1956, of the Calcutta High Court in Criminal Revision No. 623 of 1958. 13 H. R. Khanna and T. M. Sen, for the appellant in Cr. A. No. 146 of 1958. Specimen handwritings of the accused had been taken during investigation while the accused was in police custody. These have been excluded from consideration by the Courts below on the ground that obtaining of such signatures offended article 20 (3)11 the courts holding that an element of compulsion was implicit in the accused being in police custody at the time the handwritings were taken. The mere fact that the accused was in police custody does not by itself imply that compulsion was used for obtaining the specimen handwritings. Even if there is compulsion, it does not amount to testimonial compulsion. Action taken under sections 94 and 96 Criminal Procedure Code to secure production of documents though search warrants, does not amount to compulsion within the meaning of article 20 (3). Section 73, Evidence Act also contemplates the obtaining of specimen handwriting. If a person gives the specimen handwriting voluntarily ,it cannot be said that he was compelled to give it. If the police merely requests the accused, then it does not amount to compulsion, but if it directs the accused to write and if physical force is used or if there is any show of force or threat, then alone would it be compulsion. Inducement is not compulsion. I.L.R. ; 1957 Mad. 66, , , A.I.R. 1959 Bom. 865, I.L.R. , A.I.R. 1955 Cal. 247, I.L.R. 1952 Tr. Co. 447, A.I.R. 1958 All. 119. Refers to Willis on Constitutional Law dealing with self incrimination. In A. 1. R. section 27 of the Evidence Act has been held to be constitutional. M.C. Setalvad, Attorney General of India, B. Sen and T. M. Sen, for Intervener No. 1. There are four elements in article 20(3) which must be satisfied before a person can claim the protection of article 20(3), namely (i) he must be accused, (ii) he must have been compelled, (iii) he Must have 14 been compelled to be a witness and (iv) his witnessing must be against himself. There must be an element of compulsion, a voluntary act is not compulsion. Coercion is an element of compulsion. In inducement or moral compulsion, the mind is not free. There was nothing in England which prevented a voluntary statement. ; and (1960) 3 S.C.R. 116, 125. The fact whether a person has been compelled does not rest solely on the effect which the presence of a police officer might have on the mind of the person. I.L.R. , Willis p. 524, A.I.R. 1955 Cal. 247. Even a direction under section 73, Evidence Act would not amount to compulsion. A.I.R. 1958 All. 119, Merely because a person who makes a statement is in police custody it cannot be inferred that compulsion has been used. Willis p. 521. Observations in Sharma 's case with regard to the words "to be a witness" are excessive. It would be useful to see what is the American fifth amendment. To be a witness means that a person either says something or writes something which he knows. He must depose or write as to something of which he has knowledge. In giving a thumb impression or specimen writing a person does not say or write anything against himself. section M. Sikri Advocate General, Punjab, N. section Bindra and D. Gupta, for respondent in Cr. Nos. 110 and 111 of 58. Section 5 of the , permits the obtaining of finger prints of an accused person by order of a Magistrate. This is not hit by article 20 (3). Article 20 (3) does not apply to the stage of investigation. It only prohibits the compulsory examination or famishing of incriminatory statements or communication by the accused. It does not include the compulsory production of documents. Even if article 20 (3) prohibits the compulsory production of documents, it does not prohibit the compulsory 15 examination of the body of the accused or any part of it. In order to test whether there has been compulsion or not it is the nature of the action of the authority or court that determines the question and not the state of mind of the accused. The privilege granted to an accused person under Art, 20 (3) is by its nature capable of waiver and if there is no protest, it is deemed to have been waived. The Article deals with the stage of conviction. Wigmore vol. 8, p.276, 304, 317 and 319. ; ,109; , and 1030. The word " 'witnesses" should be given its natural interpretation. The original rule in England was that you will not be put in court and compelled to give evidence against yourself and referred only to testimony given in court. Article 20 (3) gives the same guarantee. Wigmore vol. 8, p. 623, Phipson on Evidence, 9th Edition, p.214. It protects extraction of incriminatory statements or communi cations, but not the exhibition of body or any part of it for examination. Merely handing over of a document is not covered by the guarantee as it does not amount to communication. ; There is no compulsion if the witness or accused does not object. ; , 76 L.Ed.211; , , Wigmore vol. 8, p. 399. section M. Bose Advorate General for the State of West Bengal, B. Sen, and P. K. Bose, for appellant in Cr. 174 of 1959. The question concerned in Cr. A. No. 174 of 1959 is whether the obtaining of specimen handwriting under s.73 of the Evidence Act amounts to testimonial compulsion. Decision, , which hold that it is so are : A. 1. R. 1957 M. P.73, A. I. R. 1959 M. P. 411; A. I. R. 1960 Ker.392; A. I. R. Willoughby vol. 2, para 720, 29 L.Ed. Testimonial compulsion means that you cannot make a witness say what he does not want to say in court. Section 118, Evidence Act indicates that "testify" means to make statements in Court and not statements outside court. Article 20(3) applies only to oral statements made before the court. section P. Verma, for respondent in Cr. A. No. 146/1958. Sharma 's case puts the right construction on article 20(3). The question of inconvenience should not be taken into consideration. ; Article 20(3) could be split up into 6 components, i. e. (i) No person, (ii) accused of an offence, (iii) shall be compelled, (iv) to be, (v) to be a witness, and (vi) to be a witness against himself. In the present case it is not necessary to discuss (i). (ii) indicates a time whenever incrimination is eminent and the guarantee comes into play. " 'Accused of an offence" is merely descriptive of the person. Whenever a person is accused, nothing obtained from him by compulsion can be used against him. ; ; ; ; "Accused of an offence" does not mean accused at the time when a person is compelled to provide evidence. A. I. R. (iii) In case of police custody there is irrefutable presumption of compulsion. A. I. R. In other cases it may be a question of fact whether there was compulsion or not. Compulsion means an act which is involuntary, under threat, coercion or inducement. It has to be seen what has motivated the act. Compulsion means any non voluntary positive act not of free volition. (iv) The words used are ",to be" and not ,to appear". This brings in the idea of all kinds of testimony (evidence) and removes all restrictions as to time and place. (v) To be a witness, means to furnish evidence. Wigmore 8th vol. p.362. Best on Evidence p. 11 2. Phipson, p. 2. ; A.I.R. 1960 Ker. 392; American Jurisprudence, vol. 58, p. 57. To be a witness against himself means to do a positive act which would incriminate him. A.I.R. 1956 Mad. 165. Compelling the production of any sort of evidentiary document which is likeiy to help the prosecution 17 is hit by the guarantee. The object of the guarantee is not to let a person degrade 'himself ; I.L.R. 1957 Cutt, 200. R. C. Datta, for Intervener No. 3. P. section Safeer and R. section Gheba, for appellant in Cr. Nos. 110 and 111 of 1958. The words used in article 20(3) are not "appear as a witness against himself. " It covers the stage of investigation also and protects all action of an accused person that may be used against him at the trial. Section 6 of the Prisoners Identification Act makes a person who refused to give his photograph or measurement, guilty of an offence. No person can waive the fundamental right guaranteed under article 20(3). ; Any part of the evidence contributed to by the accused under compulsion is hit by the guarantee. H. R. Khanna in reply. Sections 1, 118,132 and 139 of the Evidence Act show that the words "to be a witness" means giving evidence in court and must he restricted to judicial proceedings. The mere fact that an accused person 'is in police custody does not raise any presumption. that compulsion has been used. August 4. The Judgment of Sinha C. J., Imam, Gajendragadkar, Subba Rao, Wanchoo, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar JJ., was delivered by SINHA C. J. These appeals have been beard together only insofar as they involve substantial questions of law as to the interpretation of the Constitution, with particular reference to, cl.(3) of article 20. This larger Bench was constituted in order to reexamine some of the propositions of law laid down by this Court in the case of M.P. Sharma vs Sathish Chandra(1),because when one of the cases was heard by five of us, we felt that (1) ; 18 some of the propositions therein laid down may have been too widely stated, and, therefore, required to be restated with more particularity. We have not heard counsel for the parties ion the merits of the orders passed by the Courts below, but have confined the discussions at the Bar, insofar as they had any bearing on the questions of law relating to the interpretation of el. (3) of article 20 of the Constitution. It is not necessary to state in any detail the facts of each of the cases now before us. We shall, therefore, state only so much of the facts as have 'Occasioned calling in aid of the provisions of el. (3) of article 20 of the Constitution. In the first case, namely, Criminal Appeal 146 of 1958, the. State of Bombay is the appellant,. The ,respondent was charged, alongwith another person, under section 302, read with section 34 of the 1. P. C., as also under section 19(e) of the Indian Arms Act (XI of 1878). The Trial Court found him guilty of those charges and sentenced him to imprisonment for life under section 302, read with section 34 of the I.P.C. and to. a term of two years rigorous imprisonment for the. offence under the Arms Act. At the trial the identification of the respondent, as one of the two alleged culprits, was the most important question to be decided by the Court. Besides other evidence, the prosecution adduced in evidence a chit exhibit 5 alleged to be in his handwriting and said to have been given by him. In order to prove that exhibit 5 was in the handwriting of the respondent, the police had obtained from him, during the investigation, three specimen handwritings of his on three separate, sheets of paper which were marked as Exs. 27, 28 and 29. The disputed document, namely, Ex.5 was compared with the admitted handwritings on Exs. 27, 28 and 29 by the Handwriting Expert whose evidence was to the effect that they are all writings by the same person. At the trial and in the High Court, 19 the question was raised as to the admissibility of the specimen writings contained in Exs. 27, 28 and 29, in view of the provisions of article 20(3) of the Constitution. It is an admitted fact that those specimen writings of the accused had been taken by the police while he was in police custody, but it was disputed whether the accused had been compelled to give those writings within. the meaning of cl. (3) of article 20. The plea of the accused that he was forced by the Deputy Superintendent of Police to give those writings has not been accepted by the learned Trial Judge. But those documents have been excluded from consideration, as inadmissible evidence, on the ground 'that though there was no threat or force used by the police in obtaining those writings farm the accused person, yet in the view of the Court ""the element of compulsion was implicit in his being at that time in police custody. " In this conclusion both the Trial Judge and the High Court have agreed. The identification of the accused person was also sought to be proved by the evidence of witnesses, who identified him at an identification parade. But the holding of the identification parade has not been sought to be brought within the prohibition of cl. (3) of article 20. After eliminating the Exs. 27, 28 and 29 from their consideration the High Court, on a consideration of the other evidence in the case, came to the conclusion that the identity of the respondent had not been established beyond a reasonable doubt. Hence, giving him the benefit of doubt, they acquitted him. The State of Bombay moved this Court and obtained special leave to appeal from the Judgment and Order of acquittal, passed by the High Court. On these facts, the only questions of constitutional importance that this Bench has to determine are; (1) whether by the production of the specimen handwritings Exs. 27, 28, and 29 the accused could be said to have been "a witness against himself ' within the meaning of article 20(3) of the 20 Constitution; and (2) whether the were fact that when those specimen handwritings had been given, the accused person was in police custody could, by itself, amount to compulsion, apart from any other circumstances which could be urged as vitiating the consent of the accused in giving those specimen handwritings. This Bench is not concerned with the further ques tion whether in all the circumstances "closed by the evidence in this case, the accused could be said to have been compelled, as a matter of fact, to give. those specimens. In Criminal Appeals 110 and 111 of 1958, which arose out of the same set of facts, the accused person has been convicted by the Courts below under sections 380 and 457 of the I.P.C., as also under. s.19(f) of the Indian Arms Act. The facts of the case necessary for bringing out the points in controversy are that a shop in Hissar in Punjab was burgled. In the course of the burglary four double barrelled guns, one single barrelled gun and a rifle were stolen. During his interrogation by the police at the investigation stage, the appellant is alleged to have given the information that out of the arms stolen from the shop at Hissar he had buried one 22 bore rifle, two 12 bore doublebarrelled gunk; and one 18 single barrelled gun at a certain place. It is alleged that as a consequence of the information thus given by the accused and on his pointing out the exact location where these buried articles could be found, the rifles and guns were actually recovered. During the investigation the police had taken possession of certain glass panes and phials from the burgled shop which bore some palm and finger impressions (Exs. P10 to P12) In order to compare the impressions on those glass panes and phials with those of the accused the investigation police officer got the impressions of the palms and fingers of the accused taken in the presence of a Magistrate. On the evidence adduced by the prosecution,including the 21 fact of the recovery of the firearms and the evidence of the identity of the impressions of the accused taken as aforesaid, he was convicted and sentenced by the Courts below to certain terms of imprisonment and was also ordered to pay a fine of one thousand rupees. On appeal, the sentence of fine and imprisonment was modified by the Court of Appeal. In revision in the High Court, both the revisional applications were dismissed. The convicted person prayed for and obtained the necessary certificate of fitness under article 134(1) (e) of the Constitution from the High Court of Punjab. The points raised in this Court were; (1) that section 27 of the Indian Evidence Act is violative of article 14 of the Constitution; and (2) the impressions of the appellant 's palms and fingers taken from him after his arrest, which were compared with the impressions on the glass panes and phials, were not admissible evidence in view of the provisions of article 20(3) of the Constitution. Though the provisions of sections 5 and 6 of the , (XXXIII of 1920) have not in terms been attacked as ultra vires article 20(3) of the Constitution, the effect of the argument based on that article is to bring into controversy the constitutionality of sections 5 and 6 of the Act. As a matter of fact, one of the propositions of law to be urged in support of the appeals is stated in these terms; "that sections 5 and 6 of the , read with article 20(3) of the Constitution render the evidence of measurements to be inadmissible". In the last case, Criminal Appeal 174 of 1959, the State of West Bengal has preferred this appeal by special leave granted by this Court under article 136(1) of the Constitution against the judgment and order of the High Court at Calcutta, dated June 4, 1959, passed in its revisional jurisdiction, against an order of the Magistrate, First Class, Howrah; directing, the respondent to give his 22 specimen writing and signature, under section 73 of the Indian Evidence Act. It is only necessary to state the following facts in order to bring out the questions of law bearing on the interpretation of the Constitution. During the investigation of a criminal case relating to trafficking in ,contraband opium, the respondent 's residence was searched and certain quantity of contraband opium was alleged to have been found in his possession. The respondent, along with another person, was produced before a Magistrate of the first Class at Howrah and was later released on bail. from the materials and statements obtained during the investigation of the case by the police, it was considered that there were reasonable grounds to believe that the endorsement on the , back of certain railway receipts for consignment of goods seized at Howrah Railway Station was in the handwriting of the respondent, and it was, therefore, necessary to take his specimen writing and signature for the purpose of comparison and verification. When the accused were produced before the Magistrate, the Investigating Officer made a prayer to the Magistrate for taking specimen writing and signature of the respondent. On an adjourned date when the accused persons, including the respondent, were present in the Court of the Magistrate, the respondent declined to give his specimen writing and signature, contending that article 20 (3) of the Constitution prohibited any such specimens being taken against the will of the accused. After bearing the parties, the learned Magistrate overruled the objection on behalf of the accused and allowed the prayer by the prosecution for taking the specimen writing and signature of the respondent. The respondent moved the High Court at Calcutta under section 439 of the Cr. P.C. and article 227 of the Constitution. The case was heard by a Division Bench consisting of J.P. Mitter and Bhattacharyya, JJ, on July 2 and 3, 1958, but the judgment was not delivered until the 23 4th of June, 1959. The Court held that the prohibition contained in article 20 (3 of the Constitution applied: to the case of writing and signature to be taken, as directed by the learned Magistrate. The Court. relied upon the decision of this Court in: M.P. Sharma 's case.(1) In coming to this conclusion, the Division Bench disagreed with the previous decision of another Division Bench of that, Court in the case of Sailendra Nath Sinha vs The State (2), which had laid down that a mere direction under s.73 of the Evidence Act to a person accused of an offence to give his specimen writing did not come within the prohibition of article 20 (3) of the Constitution. The earlier Bench further held that the decision of this Court in Sharma 's case(2), referred to above, did not govern the case of direction given by the Court under s.73 of the Evidence Act for giving specimen writing. Instead of referring the question to a larger Bench, the later Division Bench took upon itself to pronounce against the considered view of that Court in the earlier decision. The State of West Bengal naturally had to come up to this Court to get the constitutional issues determined because the issues raised were of far reaching importance in the investigation and trial of criminal cases. The main question which arises for determination in this appeal is whether a direction given by a Court to an accused person present in Court to give his specimen writing and signature for the purpose of comparison under the provisions of s.73 of the Indian Evidence Act infringes the fundamental right enshrined in article 20 (3) of the Constitution. The arguments at the Bar may be classified as taking three distinct lines. The first line, on the one extreme, may be said to have been taken by Mr. Sikri, the Advocate General of Punjab, and which may be characterised as a narrow view, (1) ; (2) [1955] A. 1. R. Cal. 24 runs as follows: Cl. (3) aforesaid, in view of its setting, its history and the policy underlying, the privilege accorded by the Constitution to an accused person, should not be applied at ,he stage of investigation of an offence. It should be confined to cases of compulsory extraction of incriminating statements or communications by an accused person in Court, the expression compelled to be a witness ' being understood as meaning being compelled to give oral testimony '. It does not include the compulsory production of documents. Similarly, it does not prohibit the compulsory. exhibition or examination of the body of the accused, or any part of it, or the taking of specimen writ ing, thumb impression of the palm or the feet or the fingers of an caused. Whether or not there has been compulsion should be judged by the nature of the action taxi by the authority, or the Court that determines the controversy, and not the state of mind of the accused. On the other extreme is the argument by Mr. S.P. Varma, for the accused in the first case, who contended that the clause aforesaid of the Constitution gives complete protection of the widest amplitude to an accused person, irrespective of the time and place and of the nature of the evidence, whether it is oral or documentary or material. The extreme form, which his argument took can best be stated in his own words as follows : ""Anything caused, by any kind of threat or inducement, to be said or done, by a person, accused or likely to be accused of any. offence, by non voluntary positive act or speech, of that person which furthers he cause of any prosecution against him or which results or is likely to result in the incrimination of hat person qua any offence, is violative of the, fundamental right guaranteed under el. of article 20 of the Constitution of India According to his argument, if an accused person makes any statement or any discovery, there 25 is not only a rebuttable presumption that he had been compelled to do so, but that it should be taken as a conclusive proof of that inferential fact. Any kind of inducement, according to him, is also included in the expression 'compulsion ' by the police or elsewhere. The test, according to him, is not the volition of the accused but the incriminatory nature of the statement or communi cation. Hence, any statement made to a police officer, while in police custody, brings the same within the prohibitory ambit of the clause of the Constitution. On the face of them, the propositions propounded by Mr. Varma are much too broadly and widely stated to be accepted. The third view, which may be characterised as an intermediate view, was advocated by the learned Attorney General, appearing for the Union. According to him, a person seeking protection under the clause must satisfy %II the four constituent elements contained in cl. (3) of article 20, namely, (1) he must be an accused person; (2) be must have been compelled; (3) the compulsion must be to be a witness; and (4) against himself. Compulsion, according to him, means coercion or constraint and does not include mere asking by the police to do a certain thing or the direction by a court to give a thumb impression or specimen writing. In other words, compulsion has to be equated to what has been sometimes characterised as " 'third degree" methods to extort confessional statements. "To be a witness" is an expression which must be understood in consonance with the existing law of evidence and criminal, procedure, e.g. ss, 27 and 73 of the Evidence Act and sections 94 and 96 of the Code of Criminal Procedure. Though, according to English Law, the expression is confined to oral testimony, he was prepare to go to the length of conceding that any statement, whether oral or in writing by an accused person, transmitting his knowledge disclosing relevant 26 facts of which he was aware, would amount to bring a witness ' against himself. But mere production of some material evidence, by itself, could not come within the ambit of the expression to be a witness ', The several questions for decision arising out of this batch of cases have to be answered with reference to the provisions of cl. (3) of article 20 of the Constitution which is in these terms : "No person accused of any offence shall be compelled to be a witness against himself" These provisions came up for consideration by the Full Court in the case of M. P. Sharma V. Satish Chandra. (1) Though the question directly arising for decision in that case was whether a search and seizure of documents under the provisions of sections 94 and 96 of the Code of Criminal Procedure came within the ambit of the prohibition of cl. (3) of article 20 of the Constitution, this Court covered a much wider field, Besides laying down that the search and seizure complained of in that case were not within the prohibition, this Court examined the origin and scope of the doctrine of protection against self incrimination with reference to English Law and the Constitution of the United States of America, with particular reference to the Fourth and 'Fifth Amendments. On an examination of the case law in England and America and the standard text books on Evidence, like Phipson and Wigmore, and other authorities, this Court observed as follows : "Broadly stated the guarantee in Art.20(3) is against "testimonial compulsion". It is suggested that this is confined to the oral evidence of a person standing his trial for an offence when called to the witness stand, We can see no reason to confine the content of the constitutional guarantee to this barely literal import. So to limit it would (1) ; 27 be to rob the guarantee of its substantial purpose and to miss the substance for the sound as stated in certain American decisions. The phrase used in article 20(3) is "to be a witness". A person can, "be a witness" not merely by giving oral evidence but also by producing documents or making intelligible gestures as in the case of a dumb witness (see section 119 of the Evidence Act) or the like. "To be a witness" is nothing more than "to furnish evidence", and such evidence can be furnished through lips or by production of a thing or of a document or in other modes. So far as production of documents is concerned, no doubt, section 139 of the Evidence Act says that a person producing a document on summons is not, a, witness, But that section is meant to regulate the right of cross examination. It is not a guide to the connotation of the word "witness", which must be ' understood in its natural sense, i.e., as referring to a person who furnishes evidence. Indeed, every positive volitional act which furnishes evidence is testimony, and testi monial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the negative attitude of silence or submission on his part. Nor is there any reason to think that the ' protection in respect of the evidence so: procured is confined to what transpires at the trial in the court room. The phrase used in article 20(3) is "to be a witness" and not to " 'appear as a witness" : It follows that the protection afforded to an accused in so far as it is related to the phrase "to be a witness" is not merely in respect of testimonial com pulsion in the court room but may well extend to compelled testimony previously obtained from him. It is available therefore ', to a person against whom a formal accusation 28 relating to the commission of an, offence has been levelled which in the normal course may result in prosecution. Whether :it is avail able to other persons in other situations does not call for decision in this case." This Court did not accept the contention at the guarantee against testimonial compulsion to be confined to oral testimony at the witness stand when standing trial for an of Fence. The guarantee was, thus,held to include not only oral testimony given in court or out of court, but also to statements in writing which incriminated the maker when figuring as an accused person. After having heard elaborate arguments for and against the views thus expressed by this Court after full deliberation, we do not find any good reasons for departing from those views. But the Court went on to observe that " 'to be a witness" means "to furnish evidence" and includes not only oral testimony or statements in writing of the accused but also production of a thing or of evidence by other modes. It may be that this Court did not intend to lay down certainly it was not under discussion of the Court as a point directly arising for decision that calling upon a person accused of an offence to give his thumb impression, his impression of palm or fingers or of sample handwriting or signature comes within the ambit of ",to be a witness" which has been equated to "to furnish evidence". Whether or not this Court intended to lay down the rule of law in those wide terms has been the subject matter of decisions, in the different High Courts in this country. Those decisions are, by no means, uniform ; and conflicting views have been expressed even in the same High Court on different occasions. It will serve no useful purpose to examine those decisions in detail. It is enough to point out that the most recent decision, to which our attention was called, is of a Full Bench of the Kerala High Court in the case of State of Kerala 29 vs K.K. Sankaran Nair(1). In that case, Ansari C. J., who delivered the opinion of the Court, has made reference to and examined in detail the pronouncements of the different High Courts. Ultimately he came to the conclusion that the decision of this Court in Sharma 's Case (2) also covered the case of a specimen handwriting given by an accused person, under compulsion. "To be a witness" may be equivalent to "furnishing evidence" in the sense of making oral or written statements, but not in the larger sense of the expression so as to include giving of thumb impression or impression of palm or foot or fingers or specimen writing or exposing a part of the body by an accused person for purpose of identification. "Furnishing evidence" in the latter sense could not have been within the contemplation of the Constitution makers for the simple reason that though they may have intended to protect an accused person from the hazards of self incrimination, in the light of the English Law on the subject they could not have intended to put obstacles in the way of efficient and effective investigation into crime and of bringing criminals to justice. The taking of impressions or parts of the body of an accused person very often becomes necessary to help the investigation of a crime. It is as much necessary to protect an accused person against being compelled to incriminate himself, as to arm the agents of law and the law courts with legitimate powers to bring offenders to justice. Further more it must be assumed that the Constitution makers were aware of the existing law, for example, s.73 of the Evidence Act or sections 5 and 6 of the Identification of prisoners Act (XXXIII of 1920).Section 5 authorises a Magistrate to direct any person to allow his measurements or photographs to be (1)A.I.R.1960 Kerala 392 (2)[1954] S.C.R.1077. 30 taken, if he is satisfied that it is expedient for the purposes of any investigation or proceeding under the Code of Criminal Procedure to do so Measurements ' include finger impressions and foot print impressions. If any such person who is directed by a Magistrate, under section 5 of the Act, to allow his measurements or photographs to be taken resists or refuses to allow the taking of the measurements or photographs, it has been declared lawful by section 6 to use all necessary means to secure the taking of the required measurements or photographs. Similarly, s.73 of the Evidence Act authorises the Court to permit the taking of finger impression or a specimen handwriting or signature of a person present in Court, if necessary for the purpose of comparison. The matter maybe looked at from another point of view. The giving of finger impression or of specimen signature or of handwriting, strictly speaking, is not ",to be a witness". "To be a witness" means imparting knowledge in respect of relevant fact, by means of oral statements or statements in writing, by a person who has personal knowledge of the facts to be communicated to a court or to a person holding an enquiry or investigation. A person is said to be a witness, to a certain state of facts which has to be determined by a court or authority authorised to come to a decision, by testifying to what he has seen, or something he has heard which is capable of being beard and is not hit by the rule excluding hearsay or giving his opinion, as an expert, in respect of matters in controversy. Evidence has been classified by text writers into three categories, namely, (1) oral testimony; (2) evidence furnished by documents; and (3) material evidence. We have already indicated that we are in agreement with the Full Court decision in Sharma 's case (1) that the prohibition in cl.(3) of Art.20 covers not only oral testimony given by a person accused of an offence but also (1) ; 31 his written statements which may have a bearing on the controversy with reference to the charge against him. The accused may have documentary evidence in his possession which may throw some light on the controversy. If it is a document, which is not his statement conveying his personal knowledge relating to the charge against him, he may be called upon by the ' Court to produce that document in accordance. with the provisions of s.139 of the Evidence Act, which, in terms, provides that a person may be summoned to produce a document in his possession Cur power and that he does not become a witness by the mere fact that he has produced it; and therefore, lie cannot be cross examined. Of course, he can be cross examined if he is called as a witness who has made statements conveying his personal knowledge by reference to the contents of the document or if he his given his statements in Court otherwise than by reference to the contents of the documents. In our opinion, therefore, the observations of this Court in Sharma 's case(,) that s.139 of the Evidence Act has no bearing on the connotation of the word 'witness ' is not entirely well founded in law. It is well established that cl.(3) of Art.20 is directed against self incrimination by an accused person. Self incrimination must mean conveying information based upon the personal knowledge of the person giving the information and cannot include merely the mechanical process of producing documents in court which may throw a light on any of the points in controversy, but which do not contain any statement of the accused based on his personal knowledge. For example, the accused person may be in possession of a document which is in his writing or which contains his signature or his thumb impression. The production of such a document, with a view to comparison of the writing or the signature or the impression, is not the statement of (1) ; 32 an accused person, which can be said to be of the nature of a personal testimony. When an accused person is called upon by the Court or any other authority holding an investigation to give his finger impression or signature or a specimen of his handwriting, he is not giving any testimony of the nature of a 'personal testimony '. The giving of a "personal testimony ' must depend upon his volition. He can make any kind of statement or may refuse to make any statement. But his finger impressions or his handwriting, in spite of efforts at concealing the true nature of it by dissimulation cannot, change their intrinsic character. Thus, the giving of finger impressions or of specimen writing or of signatures by an accused person, though it may amount to furnishing evidence in the larger sense, is not included within the expression to be a witness '. In order that a testimony by an accused person may be said to have been self incriminatory, the compulsion of which comes within the prohibition, of the constitutional provision, it must be of such a ' character,that byitselfit should have the tendency of incriminating the accused, if riot also of actually doing so. In other words,it should be a statement which makes the case against the accused person atleast probable, considered by itself. A specimen handwriting or signature or finger impressions by themselves are no testimony at all being wholly innocuous because they are unchangeable except in rare cases where the ridges of the fingers or the style of writing have been tampered with. They are only materials for comparison in order to lend assurance to the Court that its inference based on other pieces of evidence is reliable. They are neither oral nor documentary evidence but belong to the third category of material evidence which is outside the limit of 'testimony '. Similarly,during the investigation of a crime 33 by the police, if an accused person were to point out the place where the corpus delicti was lying concealed and in pursuance of such an information being given by an accused person, discovery is made within the meaning of section 47 of the Evidence Act, such information and the discovery made as a result of the information may be proved in evidence even though it may tend to incriminate the person giving the information, while in police custody. Unless it is held that the provisions of section 27 of the Evidence Act, in so far as they make it admissible evidence which has the tendency to incriminate the giver of the information, are unconstitutional as coming within the prohibition of el. (3) of article 20, such information would amount to furnishing evidence. This Court in Sharma 's case (1) was not concerned with pronouncing upon the constitutionality of the provisions of section 27 of the Evidence Act. It could not, therefore, be said to have laid it down that such evidence could not be adduced by the prosecution at the trial of the giver of the information for an alleged crime. The question whether section 27 of the Evidence Act was unconstitutional because it offended article 14 of the Constitution was considered by this court in the, case of State of U. P. vs Deomen Upadhyaya(2). It was held by this Court that section 27 of the Evidence Act did not offend article 14 of the Constitution and was, therefore, intra vires. But the question whether it was unconstitutional because it contravened the provisions of el. (3) of article 20 was not considered in that case. That question may, therefore be treated as an open one. The question has been raised in one of the cases before us and has, therefore, to be decided. The information given by an accused person to,, a police. officer leading to the discovery of a fact which may or may not prove incriminatory has been made admissible in evidence by that Section. If it is not incriminatory of the person giving the (1) ; (2) [1961] 1 S.C.R.14. 34 information, the question does not arise. It can arise only when it is of an incriminatory character so far as the giver of the information is concerned. If the self incriminatory information has been given by an accused person without any threat, that will be admissible in evidence and that will not be hit by the provisions of el. (3) of article 20 of the Constitution for the reason that there has been no compulsion. It must, therefore, be held that the provisions of section 27 of the Evidence Act are not within the prohibition aforesaid, unless compulsion has been used in obtaining the information. In this connection the question was raised before us that in order to bring the case within the prohibition of cl. (3) of article 20, it is not necessary that the statement should have been made by the accused person at a time when he fulfilled that character ; it is enough that he should have been an accused person at the time when the statement was sought to be proved in Court, even though he may not have been an accused person at the time he had made that statement. The correctness of the decision of the Constitution Bench of this Court in the case of Mohamed Dastagir vs The State of Madras (1) was questioned because it was said that it ran counter to the observations of the Full Court in Sharma 's Case. (2) In the Full Court decision of this Court this question did not directly arise ; nor was it decided. On the other hand, this Court, in Sharma 's case(2), held that the protection under article 20 (3) of the Constitution is available to a person against whom a formal accusation had been levelled, inasmuch as a First Information Report had been lodged against him. Sharma 's case (2), therefore, 'did not decide anything to the contrary of what this Court said in Mohamed Dastagir vs The State of Madras(,). (1) ; (2) ; 35 The latter decision in our opinion lays down the law correctly. In order to bring the evidence within the inhibitions of cl. (3) of article 20 it must be shown not only that the person making the statement was an accused at the time, he made it and that it had a material bearing on the criminality of the maker of the statement, but also that be was compelled to make that statement. "Compulsion ' in the context, must mean what in law is called 'duress '. In the Dictionary of English Law by Earl Jowitt, 'duress ' is explained as follows. : " Duress is where a man is compelled to do an act by injury, beating or unlawful imprisonment (sometimes called duress in strict sense) or by the threat of being killed, suffering some grievous bodily harm, or being unlawfully imprisoned (sometimes called menace, or duress per minas). Duress also includes threatening, beating or imprisonment of the wife, parent or child of a person. " The compulsion in this sense is a physical objective act and not the state of mind of the person making the statement, except where the mind has been so conditioned by some extraneous process as to render the making of the statement involuntary and, therefore, extorted. Hence, the mere asking by a police officer investigating a crime against a certain individual to do a certain thing is not compulsion within the meaning of article 20 (3). Hence, the mere fact that the accused person, when he made the statement in question was in police custody would not, by itself, be the foundation for an inference of law that the accused was compelled to make the statement. Of course, it is open to an accused person to show that while he was in police custody at the relevant time, he was subjected to treatment which, in the circumstances of the case, 36 would lend itself to the inference that corapulsion was, in fact, exercised. In other words, it will be a question of fact in each case to ' determined by the Court on weighing the facts and circumstances disclosed in the evidence before it '. In view of these considerations, we have come to the following conclusions : (1) An accused person cannot be said to have been compelled to be a witness against himself simply because he made a statement while in police custody, without anything more. ' In other words, the mere fact of being in police custody at the time when the statement in question was 'made would not., by itself, as a proposition of law, lend itself to the inference that the accused was compelled to make the statement, though that fact, in conjunction with other circumstances disclosed in evidence in a particular case, would be a relevant consideration in an enquiry whether or not the accused person had been compelled to make the impugned statement. (2) The mere questioning of an accused person by a police officer, resulting in a voluntary statement, which may ultimately turn out to be incriminatory, is not compulsion '. (3) To be a witness ' is not equivalent to garnishing evidence ' in its widest significance ; that is to say, as including not merely making of oral or written statements but also production of documents or giving materials which may be relevant at a trial to determine the guilt or innocence of the accused. (4) Giving thumb impressions or impressions of foot or palm or fingers or specimen writings or showing parts of the body by way of identification were not included in the expression to be a witness 37 (5) 'To be a witness ' means imparting knowledge in respect of relevant facts by an oral statement or a statement in writing, made or given in Court or otherwise. (6) 'To be a witness ' in its ordinary grammatical sense means giving oral testimony in Court. Case law has gone beyond this strict literal interpretation of the expression which may now bear a wider meaning, namely, bearing testimony in Court or out of Court by a person accused of an offence, orally or in writing. (7) To bring the statement in question within the prohibition of article 20(3), the person accused must have stood in the character of an accused person At the time he made the statement. It is not enough that he should become an accused, any time after the statement has been made. The appeals will now be listed for hearing on merits in accordance with the above principles. The Judgment of section K. Das, Sarkar and Das Gupta, JJ.was delivered by DAS GUPTA, J. Is a person compelled "to be a witness" against himself within the meaning of Art.20(3) of the Constitution when he is compelled to give his specimen handwriting or signature, or impressions of his fingers, palm or foot to the investing officer? Is he compelled "to be a witness" against himself within the meaning of the same constitutional provisions when he is compelled to give his specimen handwriting and signature for the purpose of comparison under the provisions of section 73 of the Indian Evidence Act? These Are the main questions canvassed before us and they have both been answered in the negative in the judgment just pronounced by my Lord the Chief Justice. We agree with these answers; but as we have reached the same conclusion, by a 38 somewhat different approach, and for different reasons, these have to be briefly indicated. The question as regards the meaning to be attached to the words "to be a witness" as used in Art.20(3) of the Constitution ' came up for consideration in M.P. Sharma 's Case (1). It was heard by all the eight Judges who constituted the Court at the time, and they came to a unanimous decision. The Court in that case had to decide whether search and seizure of documents under ss.94 and 96 of the Code of Criminal Procedure is a compelled production of the same so as to infringe the provisions of Art.20(3) of the Constitution. After pointing out that the guarantee in Art.20(3) was against, "testimonial compulsion", Jagannadhadas J. speaking for the Court said "The phrase used in Art.20(3) is "to be a witness". A person can "be a witness" not merely by giving oral evidence but also by producing documents or making intelligible gestures as in the case of a dumb witness (see section 119 of the Evidence Act) or the like. "To be a witness" is nothing more than " 'to furnish evidence" and such evidence can be furnished through the lips or by production of a thing or of a document or in other modes. " He next observed that s.139 of the Evidence Act which says that a person producing a document on summons is not a witness, is really meant to regulate the right of cross examination and cannot be "la guide to the connotation of the word "witness in Art.20(3), which must be understood in its natural sense, i.e., as. referring to a person who furnishes evidence", and then proceeded : "Indeed, every positive volitional act which furnishes evidence is testimony (1) ; 39 and testimonial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the negative attitude of silence or submission on his part". It was further stated that there was no reason to think that the protection in respect of the evidence so procured was confined to what transpired at the trial in the court room. If the learned Judges had hoped that by their exhaustive judgment they would end all disputes about the limits of the protection granted by article 20 (3), these hopes were soon, shattered. Questions were before long raised before the different High Courts, as to whether on the interpretation of the words "to be a witnes" given by this Court in Sharma 's Case, compelling an accused person to give his finger prints or impressions of palm or foot or a specimen handwriting in the course of investigation, amounted to an infringement of article 20(3). The conclusions reached by the different High Courts, and in one case at least, by two Benches of the same High Court were different. That is why it has become necessary to examine the question again, and see how far, if at all. the interpretation given in Sharma 's Case(1) requires modification. The complaint against the interpretation given in Sharma 's Case(1) is that it does not solve the problem as to what the words "to be a witness mean; but merely postpones the difficulty, of solving it by substituting the words "to furnish evidence" for the words, "to be a witness". It throws no light. it is said, on what is "furnishing evidence", and unless that is clear, little is gained by saying that "to be a witness" is to "furnish evidence". Rival interpretations were suggested before us which it was claimed on behalf of the protagonists will solve the problem once for all. (1) ; 40 One of the propositions put forward was that "to be a witness" as used in article 20(3) cannot refer to anything said or done at the stage of investigation of an offence. We agree with our learned brethren that this is an unduly narrow construction. As was pointed out in Sharma 's Case(1) the phrase used in article 20(3) is "to be a witness" and not "to appear as a witness". That by itself justifies the conclusion "that the protection afforded to an accused in so far as it is related to the phrase "to be a witness" is not merely in respect of testimonial compulsion in the court room but may well extend to compelled testimony previously obtained from him". If the protection was intended to be confined to being a witness in Court then really it would have been an idle protection. It would be completely defeated by compelling a person to give all the evidence outside court and then, having what he was so compelled to do, proved in court through other witnesses. An interpretation which so completely defeats the constitutional guarantee cannot, of course, be correct. The contention that the protection afforded by article 20(3) is limited to the stage of trial must therefore be rejected. That brings us to the suggestion that the expression "to be a witness" must be limited to a statement whether oral or in writing by an accused person imparting knowledge of relevant facts; but that mere production of some material evidence, whether docum entary or otherwise would not come within the ambit of this expression. This suggestion has found favour with the majority of the Bench; we think however that this. is an unduly narrow interpretation. We have to remind ourselves that while on the one hand we 'should bear in mind that the Constitution makers could not have intended to stifle legitimate modes of investigation we have to remember further that quite clearly they thought that certain things should not be (1) ; 41 allowed to be clone, during the investigation, or trial, however helpful they might seem to be to the unfolding of truth and an unnecessary apprehension of disaster to, the police system A and the administration of justice, should not deter us from giving the words their proper meaning. appears to us that to limit the meaning of the words "to be a witness" in article 20(3) in the manner suggested would result in allowing compulsion to be used in procuring the production from the accused of a large number of documents, which are of evidentiary value, sometimes even more so than any oral statement of a witness might be. Suppose, for example, an accused person has in his possession, a letter written to him by an alleged co conspirator in reference to their common intention in connection with the conspiracy for committing a particular offence. Under section 10 of the Evidence Act this document is the relevant fact as against the accused himself for the purpose of proving the existence of the conspiracy and also for the purpose of showing that any such person was a party to it. By producing this, the accused will not be imparting, any personal knowledge of facts; yet it would certainly be giving evidence of a relevant fact. Again, the possession by an accused of the plan of a house where burglary has taken place would be a relevant fact under s.8 of the Evidence Act as showing preparation for committing theft. By producing this plan is he not giving evidence against himself ? To a person not overburdened with technical learning, the giving of evidence, would appear to be the real function of a witness. Indeed English literature is replete with instances of the use of the word "witness" as meaning " 'evidence." To give one example ; Shakespeare 's Horatio speaking to Hamlet says: 42 "Season your admiration for a while with an attent ear, till I may deliver, Upon the witness of these gentlemen, This marvel to you" (Hamlet, Act I, Scene, III) There can be no doubt that to the ordinary user of English words, the word ,,witness" is always associated with evidence, so that to say that to be a witness is to furnish evidence is really to keep to the natural meaning of the words. But, what is the purpose of evidence ? Section 3 of the Indian Evidence Act defines evidence thus "Evidence means and includes (1) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry; such statements are called oral evidence; (2) all documents produced for the inspection of the Court; such documents are called documentary evidence. " Section 5 states that evidence may be given in any, suit or proceeding of the existence or non existence of every fact in issue and of such other facts as are "hereinafter declared to be relevant and of no others." Then follow several sections laying down what are relevant facts. It is clear from the scheme of the various provisions, dealing with the matter that the governing idea is that to be evidence, the oral statement or a statement contained in a document, shall have a tendency to prove a fact whether it be a fact in issue or a relevant fact which is sought to be proved. Though this definition of evidence is in respect of proceedings in Court it will be proper, once we have come to the conclusion, that the protection of article 20(3) is available even at the stage of investigation, to hold that at that 43 stage also the purpose of having a witness is to obtain evidence and the purpose of evidence is to prove a fact. The illustrations we have given above show clearly that it is not only by imparting of his knowledge that an accused person assists the proving of a fact; he can do so even by other means. , such as the production of documents which though not containing his own knowledge would have a tendency to make probable the existence of a fact in issue or a relevant fact. Much has been written and discussed in England and America as regards the historical origin and development of the rules against '. 'testimonial compulsion". These matters of history, however, interesting they be, need not detain us and we must also resist the temptation of referring to the numerous cases especially in America where the concept of " 'testimonial compulsion" has been analysed. It is sufficient to remember that long before our Constitution came to be framed the wisdom of the policy underlying these rules had been well recognised. Not that there was no view to the contrary; but for long it has been generally agreed among those who have devoted serious thought to these problems that few things could be more harmful to the detection of crime or conviction of the real culprit, few things more likely to hamper the disclosure of truth than to ' allow investigators or prosecutors to slide down the easy path of producing by compulsion, evidence, whether oral or documentary, from an accused person. It has been felt that the existence of such an easy way would tend to dissuade persons in charge of investigation or prosecution from conducting diligent search for reliable independent evidence and from sifting of available materials with the care necessary ascertainment of truth. If it is permissible in law to obtain evidence from the 44 accused person by compulsion, why tread the bard path of laborious investigation and prolonged examination of other men, materials and documents? It has been well said that an abolition of this privilege would be an incentive for those in charge of enforcement of law "to sit comfortably in the shade rubbing red pepper into a poor devil 's eyes rather than to go about in the sun hunt ' up evidence". (Stephen., History of Criminal Law, p. 442). , No less serious is the danger that some accused persons at least, may be induced to furnish evidence against themselves which is totally false out of sheer despair and an anxiety to avoid an unpleasant present. Of all these dangers the Constitution makers were clearly well aware and it was to avoid them that article 20 (3) was put in the Constitution, It is obvious however that these dangers remain the same whether the evidence which the accused is compelled to furnish is in the form of statements, oral or written about his own knowledge or in the shape of documents or things, which though not trans mitting knowledge of the accused person directly helps the Court to come to a conclusion against him. If production of such documents, or things is giving evidence, then the person producing it is being a witness, on what principle or reason can it be said that, this does not amount to ' being a witness" within the meaning of article 20 (3) ? We find none. We can therefore find no justification for thinking that ",to be a witness" in article 20 (3) means to. impart personal knowledge and find no reason for departing from what this Court said in Sharma 's Case(1) that "to be a witness" is nothing more than "to furnish evidence", and such evidence be furnished through lips or by production of a thing or of a document or in other modes. The question then is :. Is an accused person furnishing evidence when he. is giving his specimen (1) ; 45 handwriting or impressions of his fingers, or palm or foot ? It appears to us that he is : For, these are relevent. facts, within the meaning of section 9 and a. 11 of the Evidence Act. Just as an accused person is furnishing evidence and by doing so, is being a witness, when he makes a statement that he did something, or saw something, so also he is giving evidence and so is being a "witness", when he produces a letter the contents of which are relevant under s.10., or is, producing the plan of a house where a burglary has been committed or is giving his specimen handwriting or impressions of his finger, palm or foot. It has to be noticed however that article 20 (3) does not say that an accused person shall not be compelled to be a witness. It says that such a person shall not be, compelled to be a witness against himself. The question that arises therefore is : Is an accused person furnishing evidence against himself, when he gives his specimen handwriting, or impressions of his fingers, palm or foot 9 The answer to this must, in our opinion, be in the negative. The matter becomes clear, when we contrast the giving of such handwriting or impressions, with say, the production of a letter admissible in evidence under section 10, or the production of the plan of a burgled house. In either of these two latter cases, the evidence given tends by. itself to incriminate the accused person. But the evidence of specimen handwriting or the impressions of the accused person 's fingers, palm or foot, will incriminate him, only if on comparison of these with certain other handwritings or certain other impressions. , identity between the two sets is established. By themselves, these impressions or the handwritings do not incriminate the accused person., or even tend to do so. That is why it must be held that by giving these impressions or specimen handwriting, the accused person does not furnish evidence against himself, So when an 46 accused person is compelled to give a specimen handwriting or impressions of his finger,pahm or foot, it may be said that he has been compelled to be a witness ; it cannot however be said that he has been compelled to be a witness against himself. This view, it may be pointed out, does not in any way militate against the policy underlying the rule against "testimonial compulsion" we have already discussed above. There is little risk, if at all, in the investigator or the prosecutor being induced to lethargy or inaction because he can get such handwriting or impressions from an accused person. For, by themselves they are of little or of no assistance to bring home the guilt of an accused. Nor is there any chance of the accused to mislead the investigator into wrong channels by furnishing false evidence. For, it is beyond his power to alter the ridges or other characteristics of his hand, palm or finger or to alter the characteristics of his handwriting. We agree therefore with the conclusion reached by the majority of the Bench that there is no infringement of Art.20(3) of the Constitution by compelling an accused person to give his specimen handwriting or signature; or impressions of his fingers, palm or foot to the investigating officer or under orders of a court for the purpose of comparison under the provisions of s.73 of the Indian Evidence Act; though we have not been able to agree with the view of our learned brethren that ,to be a witness" in Art.20(3) should be 'equated with the imparting of personal knowledge or that an accused does not become a witness when he produces some document not in his own hand writing even though it may tend to prove facts in issue or relevant facts against him. In Criminal Appeals Nos. 110 & Ill of 1958 a further question as regards the validity of s.27 of 47 the Evidence Act was raised. It was said that the receipt of information from an accused person in the custody of a police officer which can be proved under s.27 is an infringement of Art.20(3). Section 27 provides that when any fact is deposed to as discovered in consequence of Information received from a person accused of any offence, in the custody, of a police officer, so much of the information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered, may be proved. It cannot be disputed that by giving such information the accused furnishes evidence and therefore is a "witness" during the investigation. Unless however he is " 'compelled" to give the information he cannot be said to be "compelled" to be a witness; and so article 20(3) is not infringed. Compulsion is not however inherent in the receipt of information from an accused person in the custody of a police officer. There may be cases where an accused in custody is compelled to give the information later on sought to be proved under s.27. There will be other cases where the accused gives the information without any compulsion. Where the accused is compelled to give information it will be an infringement of article 20(3); but there is no such infringement where he gives the information without any compulsion. Therefore, compulsion not being inherent or implicit in the fact of the information having been received from a person in custody, the contention that section 27 necessarily infringes Art.20(3) cannot be accepted. A question was raised in the course of the discussion as to when a person can be said to have been " 'compelled" within the meaning of Art.20(3). One view is that there must be an element of constraint or coercion in the physical sense before it can be said that an accused person has been "compelled". The other view is that in addition to cases where there has been such constraint or coercion an accused should be said to have been 48 ",compelled" to be a witness whenever there has been inducement or promise which persuaded the accused to be a witness, even though there has been no such coercion or constraints In Criminal Appeals Nos. 110 and 111 the information proved under s.27 of the Evidence Act was that Pokhar Singh had buried certain fire arms in village Badesra under Toori and these were recovered when he pointed these out to the investigating police officer. This information was proved under s.27. But it does not appear to have been suggested that the accused was made to give this information by inducement or threat or promise. On the facts therefore there is no question of the information having been received by compulsion. The question whether any inducement or promise which leads an accused person to give information amounts to compulsion or not, does not therefor fall to be decided. It may be pointed out that in the other appeals, viz., Criminal Appeal No. 146 of ' 1958 and Criminal Appeal No. 174 of 1959, also, this question does not arise for consideration in view of our conclusion that in any case the accused does not become a " 'witness against himself by giving his Specimen signatures or impressions of his fingers or Palms. It appears to us to be equally unnecessary to decide another question which was mooted in the course of the hearing, viz., whether the prohibition of Art.20(3) operates only after a person has been accused of an offence or even before that stage. Admittedly, in all these cases the person on whose behalf the protection under article 20(3) is claimed gave the specimen signatures or impressions of fingers or palms after he had been actually accused of an offence. We think it right therefore not to express any opinion on any of these questions.

Section 73 of the Indian Evidence Act empowers the court to, obtain specimen writing or signature and finger impressions of an accused person for purposes of Comparison. 11 Sections 5 and 6 of the Identification of Prisoners Act empower a Magistrate to obtain the photograph or measurements of an accused person. Section 27 of the Indian Evidence Act permits the reception in evidence of statements made by an accused person in police custody which lead to a discovery. It was contended by the accused persons that the obtaining of evidence in any of these ways amounted to compelling the person accused of an offence "to be a witness against himself" in contravention of article 20(3) of the Constitution. It was further contended that it 'was implicitly the fact that the accused was in police custody when ' the specimen signatures or thumb impressions etc. were obtained that compulsion was used. Held, that there was no infringement of article 20(3) of the Constitution in compelling an accused person to give his specimen handwriting or signature, or impressions of his thumb, fingers, palm or foot to the investigating officer or under orders of a court for the purposes of comparison. Held, further, that the provisions of section 27 of the Indian Evidence Act did not offend article 20(3) unless compulsion was used in obtaining the information. Compulsion was not inherent in the receipt of information from an accused person in the custody of a lice officer; it will be a question of fact in each case to be determined by the court on the evidence before it whether compulsion had been used in obtaining the information. M.P. Sharma vs Satish Chandra, ; , reconsidered. Per Sinha, C.J., Imam, Gajendragadkar, Subba Rao, Wanchoo, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar, jj. The correct position with respect to the guarantee under article 20(3) is that (i) the guarantee includes not only oral testimony given in court or out of court but also statements in writing which incriminate the maker when figuring as an accused person; (ii) the words "to be a witness" in article 20(3) do not include the giving of thumb impression or impression of palm, foot or fingers or specimen writing or exposing a part of the body by an accused person for identification; (iii) "self incrimination" means conveying information based upon the personal knowledge of the given and does not include the mere mechanical process of 12 producing documents in court which do not contain ' any statement of the accused based on his personal knowledge; (iv) in order to come within the prohibition of article 20(3) the testimony must be of such a character that by itself it should have the, tendency to incriminate the accused; and (V) to avail of the protection of article 20(3) the person must have stood in the character of an accused person at the time he made the statement. Per section K. Das, Sarkar and Das Gupta, JJ. (i) The protection afforded by article 20(3) is not merely in respect of testimonial compulsion in the court room but extends also to compelled testimony previously obtained from the accused. (ii) The words "to be a witness" in article 20(3) mean,, to furnish evidence" and cannot be confined to imparting personal knowledge; such evidence can be furnished through lips or by production of a thing or of a document or in other modes. (iii) An accused person furnishes evidence when he gives his specimen handwriting or impressions of his fingers or palm or foot. (iv) But in doing so the accused does not furnish evidence against himself as by themselves these specimens or impressions do not incriminate or even tend to incriminate the accused and he cannot be said to be compelled "to be a witness against himself " when he is compelled to give the specimen or impression.

During the pendency of a civil writ petition in the Allahabad High Court, one N moved an application under section 476, Code of criminal Procedure, for making a complaint under section 93, Indian Penal Code, against T. A single judge who was seized of the case rejected the application. Thereupon N presented an appeal against the order of rejection of his application before the Supreme Court under section 476 B, Code of Criminal Procedure. Held, that the appeal did not lie to the Supreme Court but that it lay to the Appellate Bench of the High Court. The decrees of a single judge of the High Court exercising civil jurisdiction were ordinarily appealable to the High Court under cl. 1o of the Letters Patent of the Allahabad High Court read with cl. 13 of the U. P. High Courts (Amalgamation) Order, 1948, and as such the Court constituted by the single judge was a court subordinate to the Appellate Bench of the High Court within the meaning of section 195(3) of the Code. M. section Sheriff vs The State of Madras, [1954] S.C.R. 1144, distinguished.

Mr. A, an Advocate on Record of this Court, wrote letters soliciting clients. One of such letters, a post card was addressed to the Law Minister of Maharashtra and ended as follows, "You might have got an Advocate on Record in this Court but I would like to place my services at your disposal is you so wish and agree". To the Registrar of this Court he admitted having written the post card, but before the Tribunal stoutly denied having done so. The Tribunal found on evidence that the Advocate had written the post card. When the matter came up before the court, the Advocate at first denied having written the post card but on being pressed by the court to make a true statement admitted that he had written the postcard and had admitted that before the Registrar. ^ Held, that it is against the etiquette of the Bar and its professional ethics to solicit briefs from clients and an Advocate who does so must be guilty of grossly unprofessional conduct. There can be no doubt in the instant case that the Advocate concerned had written the post card soliciting briefs. It makes no difference whether he did so in ignorance of this elementary rule of the profession or in disregard of it, since his conduct in court showed that he had no regard for truth and, consequently, he deserved no sympathy of the court and must be suspended.

The petitioners in these three writ petitions challenged the operative provisions of the Orissa Private Lands of Rulers (Assessment of Rent) Act, 1958 and the, Rules framed thereunder. These petitioners possess 302 private lands in the State of Orissa, which before the impugned Act were not subjected to the payment of rent, but which were assessed by the Revenue Officers in conformity with the Rules framed under the Act. The petitioners claims a writ in the nature of certiorari quashing the said orders of assessment. The Act was passed by the Orissa Legislature because it was thought expedient to provide for assessment of rent with respert to the private lands of Rulers in the State of Orissa. The main object of the Act is to authorise the levy of rent in respect of the private lands of persons included in the definition of the word "Ruler" prescribed by section 2(h) of the Act. Section 2(h) defines a "Ruler" as meaning the Ruler of a merged territory in the State of Orissa and includes his relatives and dependants. The petitioners attacked the pro visions of the Act mainly on the ground that they contravened article 14 of the Constitution. Held:(i) that section 6 of the Act does not contravene article 14 of the Constitution for the reason that fair and equitable tests have been laid down under section 6 of the Act for determining the rent which should be assessed in respect of the private lands of the Rulers. In the present case the legislature had prescribed the method of determining the rent payable on the private lands; and the relevant factors specified by section 6 appear to be just and substantially similar to the considerations which are generally taken into account at the time of survey settlement for determining the proper revenue assessment on ryotwari lands. The problem posed by the requirement to levy assessment on these private lands had to be dealt with by the legislature on an ad hoc basis. The settlement of rent and assessment introduced by the Act had been made applicable to these lands for the first time, and so, these lands could not be treated as comparable in every respect with the lands which were governed by the rates prescribed under the previous settlement. (ii)In considering the validity of a statute under article 14 the wellestablished principle is that the legislature can make class legislation, provided the classification on which it purports to be based is rational and has a reasonable nexus with the object intended to be achieved by it. If the party fails to show that the said classification is irrational, or has no nexus with the object intended to be achieved by the impugned Act, the initial presumption of constitutionality would help the State to urge that the failure of the party challenging the validity to rebut the initial presumption goes against his claim that the Act is invalid. In all cases where the material adduced before the court in matters relating to article 14 is unsatisfactory, the court may have to allow the State to lean on the initial presumption of constitutionality. (iii)There is no substance in the contention that the impugned Act is void because the definition of the word "Ruler" is inconsistent with Art, 366(22) of the Constitution. There is no doubt that the definition of the word "Ruler" prescribed by section 2(h) of the Act is wider than that prescribed by article 366(22) of the Constitution. 303 The definitions prescribed by article 366 are intended for the purpose of interpreting the articles in the Constitution itself, unless the context otherwise requires. The whole object of defining the word "Ruler" in the Act is to specify and describe the lands in respect of which the operative provisions of the Act would come into play. It is in that connection that the word "Ruler" has been broadly defined in an inclusive manner. (iv) The impugned Act is entirely outside the purview of article 31 of the Constitution as it has not purported either to deprive the Rulers of their property, or to acquire or requisition the said property. It is a simple measure authorising the levy of a tax in respect of agricultural lands. Pratap Kesari Deo vs The State of Orissa, A.I.R. 1961 Orissa 131, relied on.

The appellant a Patwari wrote a letter to the Tehsildar under whom he was working that he had been robbed of certain official papers and money. The police reported that on investigation, the allegations were found to be false. The Tehsildar asked the police that a "calendar" be drawn up. The police launched a prosecution under section 182 of the Indian Penal Code. No complaint in writing as required by section 195 of the Code of Criminal Procedure was made by the Tehsildar 813 as the public servant concerned in the case, but a charge sheet was put in by the police attaching the letter of the Tehsildar asking them to draw up a "calendar" against the appellant. ^ Held, that in a prosecution to be launched under section 195 of the Code of Criminal Procedure, it is incumbent that a complaint in writing should be made by the public servant concerned for only on such complaint can the court take cognizance of the offence otherwise the trial is without jurisdiction ab initio. Held, further, that section 182 does not require that an action must always be taken on the report made to the public servant, the offence is complete as soon as the report is made and the person who made the report believed that some action would be taken.

A truck was seized with its content of contraband goods for foreign make, on which no duty had been paid. The appellant who was in charge of the goods, was arrested while escaping from the truck and Rs. 2000/ were seized from him. His statement was recorded under section 108, . The appellant and the driver of the truck. were convicted by the Trial Court under Ss. 135 (a) and 135 (b) of the , and section 5 of the Imports & Exports (Control) Act, 1947. The High Court upheld their conviction under section 135 (a) of the , and acquitted them of the other charges. In appeal by leave granted under article 134(1) (c) of the Constitution, the appellant contended before this Court that his statement taken under section 108, , could not be used against him; firstly, as it was hit by article 20(3) of the Constitution on account of its having been taken while he was already an `accused ' under section 124, Bombay Police Act, and secondly. it was barred under section 24, Evidence Act, the same being a confession obtained under compulsion of law. It was also contended that in the absence of the requisite notification under section 123(2), , the statutory presumption under section 123 could not be invoked by the prosecution, and without the same, the facts of the case were insufficient to establish an offence against the appellant under section 135, . Dismissing the appeal, the Court, ^ HELD: (1) To claim the benefit of the guarantee against testimonial compulsion embodied in clause (3) of article 20, it must be shown, firstly, that the person who made the statement was `accused of any offence ', secondly, that he made this statement under compulsion. Only a person against whom a formal accusation relating to the commission of an offence has been levelled would fall within its ambit. [674C D] R.C. Mehta vs State of West Bengal, [1969] 2 S.C.R. 461, applied. (2) To attract the prohibition enacted in section 24 Evidence Act, these facts must be established. (i) that the statement in question is a confession; (ii) that such confession has been made by an accused person; (iii)that it has been made to a person in authority; (iv) that the confession has been obtained by reason of any inducement threat or promise proceeding from a person in authority. (v) Such inducement, threat or promise, must have reference to the charge against the accused person; (vi) The inducement, threat or promise must in the opinion of the Court be sufficient to give the accused person ground, which would appear to him reasonable, for supposing that by making it he would gain any advantage or avoid any evil of temporal nature in reference to the proceedings against him. [676F H, 677A] 673 (3) A statement in order to amount to a `confession ' must either admit in terms the offence, or at any rate substantially all the facts which constitute the offence. An admission of an incriminating fact, however grave, is not by itself a confession. A statement which contains an exculpatory assertion of some fact, which if true, would negative the offence alleged, cannot amount to a `confession '. [677A C] Pakala Narayana vs R. 66 I. A. 66 Palvinder kaur vs State of Punjab , Om Prakash vs State, A.I.R. 1960 S.C. 409, 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.

The two petitioners were apprehended while attempting to smuggle a huge amount of Indian and foreign currency and other contraband goods out of India and the Collector of Central Excise and Land Customs passed orders confiscating the seized goods and imposing heavy personal penalties on both of them under 275 section 167(8) of the Sea Customs Act. On a subsequent complaint made by the Customs Authorities on the same facts, the petitioners were convicted and sentenced by the Additional District Magistrate to various terms of imprisonment under section 23, read with section 23B, of the Foreign Exchange Regulation Act, section i67(8I) of the Sea Customs Act and section 120B of the Indian Penal Code. The Additional Sessions judge in appeal affirmed the said orders of conviction and sentences and the High Court refused to interfere in revision. It was contended on behalf of the petitioners, who had, at an earlier stage, made an unsuccessful attempt to move this Court under article 32 and have the prosecutions quashed, that the orders of conviction and sentences passed on them by the Courts below infringed the constitutional protection against double jeopardy afforded by article 20(2) Of the Constitution. Held, (Per Das, C. J., Bhagwati, B. P. Sinha and Wanchoo, Jj., Subba Rao, J., dissenting) that the contention was without substance and must be negatived. In order to sustain a plea of double jeopardy and to avail of the protection of article 20(2) of the Constitution it was incumbent to show that (1) there was a previous prosecution, (2) a punishment and (3) that for the same offence, and unless all the three conditions were fulfilled the Article did not come into operation. The word 'prosecution ' as used in that Article contemplated a proceeding of a criminal nature either before a court or a judicial tribunal. Maqbool Hussain vs The State of Bombay, ; , relied on. The insertion of section 187A into the Sea Customs Act by the amending Act of 1955, left no scope for doubt that the hierarchy of Authorities under that Act functioned not as Courts or judicial tribunals but as administrative bodies, even though in recording evidence or hearing arguments they acted judicially. The words " offences " and " penalties " used by the Act could not have the same meaning as in Criminal Law and a penalty or confiscation ordered under section 167(8) of the Act could not be a punishment such as is inflicted by a Criminal Court for a criminal offence. Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs and others; , , referred to. Nor were the Customs Authorities invested with the powers of a Criminal Court under the Schedule to section 167 and the procedure laid down by Ch. XVII of the Act, and any orders passed by them either in rem or in personal, by way of confiscation of the goods or imposition of penalties on the person, could only be in the nature of administrative ones made in the interest of revenue and could not bar a criminal prosecution. Morgan vs Devine, ; and United States of America vs Anthony La Franca, ; , considered. 276 The proceedings against the petitioners before the Collector of Customs under section 167(8) of the Sea Customs Act could. not therefore, be a prosecution within the meaning of article 20(2) Of the Constitution and the petitioners were not put to double jeopardy. Per Subba Rao, J. The prosecution of 'the petitioners before the Magistrate and the punishment inflicted on them directly infringed article 20(2) of the Constitution. There can be no inconsistency in an authority under an Act functioning in an administrative capacity in respect of certain specified duties while it acts as a judicial tribunal in respect of others, and the question as to which of them it discharges in a judicial capacity has to be decided on the facts of each case and in the light of well settled characteristics of a judicial tribunal. Cooper vs Wilson, and Venkataraman vs Union of India; , , relied on. Although this Court has held that the Sea Customs Autho rities in adjudging confiscation do not function as judicial tribunals but as mere administrative authorities, the question as to whether imposing personal penalties they act as judicial tribunals still remains open. Maqbool Hussain vs The State. of Bombay, ; and Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs, ; , explained. An examination of the entire scheme of the Sea Customs Act leaves no manner of doubt that the Customs Authorities act as judicial tribunals so far as offences under section 167 Of the Act are concerned. The word 'prosecuted ' used in article 20(2) of the Constitution is comprehensive enough to include a prosecution before an authority other than a Magistrate or a Criminal Court, and the offences described in section 167 Of the Sea Customs Act are offences within the meaning of the General Clauses Act and the Indian Penal Code and the penalties prescribed therefor are nothing but punishments inflicted for those offences either by the Customs Authorities or the Magistrate. The question of the identity of an offence has to be deter mined on the facts of each particular case and the real test is whether the previous prosecution and punishment were based on the same facts on which rested the subsequent prosecution and punishments

Appeal No. 86 of 1959. Appeal by special leave from the judgment and order dated March 27, 1957, of the Patna High Court in Appeal from Original Decree No. 359 of 1948. A. V. Viswanatha Sastri and section P. Varma, for the appellant. 882 H. N. Sanyal, Additional Solicitor General of India, R. Ganapathy Iyer and T. M. Sen, for the respondent. July, 24. The Judgment of the Court was delivered by SHAH, J. Bikhraj Jaipuria hereinafter called the appellant is the sole proprietor of a grocery business conducted in the name and style of "Rajaram Vijai Kumar" in the town of Arrah in the State of Bihar. In the months of July and August, 1943, the, Divisional Superintendent, East Indian Railway under three " 'purchase orders ' agreed to buy and the appellant agreed to sell certain quantities of food grains for the employees of the East Indian Railway. The 'following table sets out the purchase prices, the commodities, the dates of purchase orders, the quantities and the rates and the method of supply. Purchase Date of Kinds Quantity Rates. Order purchase of of No. orders. commo commo dity. dities. (1) (2) (3) (4) (5) 69. 20 7 1943. Gram 1st 1000 mds. @ Rs. 15/ quality. per md. (plus cost of new bags not exceeding Rs. 75/ per 100 bags) F.O.R. any E.I.Rly. sta tion in Bihar. :4 7 1943. Rice 1000 mds. @ Rs. 22 8 0 Dhenki (plus cost of Medium bags not ex quality. ceeding Rs.75 883 (1) (2) (3) (4) (5) per cent) per md. F.O.R. any station on the division. Wheat 5000 mds. @ Rs. 20 8 0 white per md. with as per bags F.O.R. sample. any station on E.I.R. on the Division. 24 8 1943. Rice 15000 mds. @ Rs. 24/ medium per md. with quality. out bags F.O.R. E.I. Rly. station in Bihar. Purchase orders Nos. 69 and 76 were signed by S.C. Ribbins, Personal Assistant to the Division at Superintendent and purchase order No. 106 was signed by the Divisional Superintendent. Under the purchase orders delivery of grains was to commence within seven days ' of acceptance and was to ' be completed within one month. The appellant delivered diverse quantities of foodgrains from time to time but was unable fully to perform the contracts within, the period stipulated. Between July.), 20, 1943 and August of 4, 1943, he supplied 3465 maunds of rice and between September 1, 1943 and September 19, 1943 he supplied 1152 maunds 35 seers of wheat. In exercise of the powers conferred by cl.(b) of Sub r. (2) of r.81 of the Defence of India Rules, the Government of Bihar by notification No. 12691 P.C. dated September 16, 1943 directed that commodities named in column I of the schedule shall not, from and including September 20, 1943 and until further notice, be sold at any primary source of supply or by the proprietor, manager or employee of any mill in the Province of Bihar at prices exceeding those 884 specified in the second column of the schedule. The controlled rat . of rice (medium) was Rs. 18/ per standard maund, of wheat (red) Rs. 17/ , of wheat (white) Rs. 18/ and of gram Rs. 12 8 0. The Sub Divisional Magistrate, District Arrah issued on September 21, 1943, a price list of controlled articles fixing the same prices as were fixed for wheat, rice and gram by the notification issued by the Government of Bihar. By cl. (2) of the notification, a warning was issued that in the event of the dealers selling controlled articles at rates exceeding those fixed or with holding stocks of such articles from sale, "they will be liable to prosecution under r.81 (1) of the Defence of India Rules. " By a telegraphic communication dated Sep. tember 28, 1943, the Divisional Superintendent informed the appellant that under the purchase orders, foodgrains tendered for delivery will not, unless despatched before October 1, 1943, be accepted, and barring a consignment of 637 maunds 20 seers accepted on October 7, 1943, the Railway Administration declined to accept,delivery of food grains offered to be supplied by the appellant after October 1, 1943. The appellant served a notice upon the Divisional Superintendent coraplaining of breach of contract and sold between February la and February 23, 1944 the balance of foodgrains under the purchase orders which were lying either at the various railway stations or in his own godowns. The appellant then called upon the Railway Administration to pay the difference between the price realised by sale and the contract price and failing to obtain satisfaction, commenced an action (Suit No. 359/48A) in the court of the First Additional Subordinate Judge, Patna for a decree for Rs. 2,89,995 15 3 against the Dominion of India. The appellant claimed Rs. 2,32,665 12 0 being the difference between the contract price and the price realised, Rs.42,709 10 3 as interest and Rs. 14,620 9 0 as freight, wharf. 885 age, cartage, price of packing material, labour charges and costs incurred in holding the sale. The appellant submitted that under the terms of the purchase orders, supply was to commence within seven days of the date of receipt of the orders and was to be completed within one month, but it was not intended that time should be of the essence of the contract, and in the alternative that the Railway Administration had waived the stipulation as to time in the performance of the contracts and therefore he was entitled, the Railway Administration having committed breach of ,the contracts, to recover as compensation the difference between the contract price and the price for which the grains were sold. The suit was resisted by the Dominion of India contending inter alia that the appellant had no cause of action for the claim in the suit, that the contracts between the appellant and the Divisional Superintendent Dinapur were not valid and binding upon the Government of India and that the contracts were liable to be avoided by the Government, that time was of the essence of the contracts, that stipulations as to time were not waived, and that no breach of contract was committed by the East Indian Railway Administration and in any event, the appellant had not suffered any loss as a result of such breach. By the written statement, it wag admitted that the East Indian Railway through the Divisional Superintendent, Dinapur had by three orders set out in the plaint agreed to buy and the appellant had agreed to sell the commodities specified therein, but it was denied that the Divisional Superintendent had been ""given complete authority to enter into contracts for the supply of foodgrains. " The trial court held that time was not of the essence of the contracts and even if it was, breach of the stipulation in that behalf was waived. It further_held that the plea that the contracts were void because they were not in accordance with the 886 provisions of section 175 (3) of the Government of India Act, 1935, could not be.permitted to be urged, no such plea having been raised by the written statement. Holding that the Divisional Superintendent was authorised to enter into the contracts for purchase of foodgrains, and that he had committed breach of contracts the trial Judge awarded to the appellant Rs. 1,29,460 7 0 with interest thereon at the rate of 6% per annum from October 1, 1943, to the date of the institution of the suit and further interest at 6% on judgment. Against that decree, an appeal was preferred by the Union of India to the High Court of Judicature at Patna and the appellant filed cross objections to the decree appealed from. The High Court held that time was of the essence of the contracts, but the Railway Administration having a accepted the goods tendered after the expiration of the period prescribed thereby, the stipulation as to time was waived. The High Court further held that by the notification under r. 81 of the Defence of India Rules, performance of the contracts had not been rendered illegal but the Divisional Superintendent had no authority to enter into contracts to purchase food grains on behalf of the Railway Administration and that in any event, the contracts not having been expressed to be made by the Governor General and not having been executed on behalf of the Governor General by an officer daily appointed in that behalf and in manner prescribed, the contracts were unenforceable. The High Court also held that the appellant was not entitled to a decree for compensation because he had failed to prove the ruling market rate on the date of breach viz, October 1, 1943. The High Court also observed that the trial court erred in awarding interest prior to the date of the suit and in so holding, relied upon the judgment of the Privy Council in Bengal Nagpur Railway Co., Ltd. vs Ruttanji Ramji and others (1). (1) L. R. (1938) 65 J. A. 66. 887 In this appeal by the appellant, two questions fall to be determined, (1) whether relying upon the purchase orders signed by the Divisional Superintendent which were not made and executed in the manner prescribed by s.175 (3) of the, Government of India Act 1935, the appellant could sue the Dominion of India for compensation for breach of contract, and (2) whether the appellant has proved the ruling market rate on October 1, 1943 for the commodities in question. , The finding that the Railway Administration had waived the stipulation as to the performance of the contracts within the time prescribed though time was under the agreement of the essence, is not challenged before us on behalf of the Union of India. If the finding as to waiver is correct, manifestly by his telegraphic intimation dated September 28, 1943, that the foodgrains not despatched before October 1, 1943, will not be accepted the Divisional Superintendent committed a breach of the contract. Section 175 (3) of the Government of India Act as in force at the material time provided : "Subject to the provisions of this Act, with respect to the Federal Railway Authority, all contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made by the Governor General, or by the Governor of the Province, as the case may be, and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the Governor General or Governor by such persons and in such manner as he may direct or authorise. " The Federal Railway Authority had not come. into being in the year 1943: it was in fact never set up. The contracts for the supply of foodgrains were undoubtedly_ made in the exercise of executive 888 authority of the Federation. The contracts had therefore under section 175(3), (a) to be expressed to be made by the Governor General, (b) to be executed on behalf of the Governor General, and (e) to be execrated by officers duly appointed in that behalf and in such manner as the Governor General may direct or authorise. But no formal contracts were executed for the supply of foodgrains by the appellant : he had merely offered to supply foodgrains by letters addressed to the Divisional Superintendent and that officer had by what are called "purchase orders" accepted those offers. These purchase orders were not expressed to be made in the name of the Governor General and were not executed on behalf of the Governor General. The purchase orders were signed by the Divisional Superintendent either in his own hand or in the hand of his Personal Assistant. In the first instance it has to be considered whether the Divisional Superintendent had authority to contract on behalf of the Railway Administration for buying foodgrains required by the Railway Administration. By Ex. M 2 which was in operation at the material time, all instruments relating to purchase or hire, supply and conveyance of materials, stores, machinery, plant, telephone lines and connections, coal etc. could be executed amongst others by the Divisional Superintendent; but contracts relating to purchase of foodgrains are not covered by that authority. Under item 34 which is the residuary item, all deeds and instruments relating to railway matters other than those specified in items 1 to 33 may be executed by the Secretary of the Railway Board. It is common ground that there is no other item which specifically authorises the making and execution of contracts relating to purchase of foodgrains; deeds and instruments relating to purchase of food grains therefore fall within item 34. The Secretary to the Railway Board had not executed these purchase orders : but the trial Court held 889 that the Divisional Superintendent was authorised to enter into contracts with the appellant for the supply of foodgrains. In so holding, the trial judge relied upon the evidence of Ribbins, Grain Supply Officer and Personal Assistant to the Divisional Superintendent, Dinapur. The High Court disagreed with that view. The High Court observed that the authority of the officer acting on behalf of the Governor General "must be deduced from the express words of the Governor General himself expressed by rules framed or by notification issued, under section 175(3). No notification has been produced in this case showing that the Divisional Superintendent had been authorised by the Governor General to execute such contracts on his behalf, nor has any rule been produced which conferred authority upon the Divisional Superintendent to make such contracts. " After referring to paragraph 10 of the notification, exhibit M 2 items 1 to 34, the High Court observed: "Therefore this notification rather shows that the Divisional Superintendent had no authority to execute the contracts for the purchase of food grains." In our view, the High Court was in error in holding that the authority under section 175(3) of the Government of India Act, 1935 to execute the contract could only be granted by the Governor General by rules expressly promulgated in that behalf or by formal notifications. This court has recently held that special authority may validly be given in respect of a particular contract or contracts by the Governor to an officer other than the officer notified under the rules made under section 175(3). In The State of Bihar vs M/s. Karam Chand Thapar and Brothers Ltd.(,), Venkatarama Aiyar J. speaking for the court observed : (1) ; 890 It was further argued for the appellant that there being a Government notification of a formal character we should not travel outside it and find authority in a person who is not authorised thereunder. But section 175 (3) does not prescribe any particular mode id which authority must be conferred. Normally, no doubt, such conferment will be by notification in the Official Gazette, but there is nothing in the section itself to preclude authorisation being conferred ad hoc on any person, and when that is established, the requirements of the section must be held to be satisfied." In that case, an agreement to refer to arbitration on behalf of the Government of Bihar was executed by the Executive Engineer whereas by the notification issued by the Government of Bihar under s.175 (3) all instruments in that behalf had to be executed by the Secretary or the Joint Secretary to the Government. This Court on a consideration of the correspondence produced in the case agreed with the High Court that the Executive Engineer had been specially authorised by the Governor acting through his Secretary to execute the agreement for reference to arbitration. Section 175 (3) in terms does not provide that the direction or authority given by the Governor General or the Governor to a person to execute contracts shall be given only by rules or by notifications, and the High Court was in our judgment in error in assuming that such authority can be given only by rules expressly framed or by formal notifications issued in that behalf. In para 5 of the plaint, the appellant pleaded: " 'That for the purposes and under the authority conferred as noted in the para 3 above in July and August, 1943 the said E. 1. through its then Divisional Superintendent, Dinapur, by three diverse orders agreed to buy and the plaintiff agreed to sell the following commodities at the rates mentioned against them, 891 By para 3 of the written statement, the Dominion of India accepted the allegations made in para 5 of the plaint. It is true that by paragraph 1, the authority of the Divisional Superintendent to enter into contract with, trading firms dealing in foodgrains for the supply of foodgrains was denied and it was further denied that the Divisional Superintendent "was invested with complete authority to enter into contracts for the purchase of food supplies and to do all that was necessary in that connection. " There was some inconsistency between the averments made in paragraphs 1 and 3 of the written statement, but there is no dispute that the purchase orders were issued by the Divisional Superintendent for and on behalf of the East Indian Railway Administration. Pursuant to these purchase orders, a large quantity of foodgrains was tendered by the appellant: these were accepted by the Railway Administration and, payments were made to the appellant for the grains supplied. Employees of the Railway Administration wrote letters to the appellant calling upon him to intimate the names of the railway stations where grains will be delivered and about the date when the supply. will commence. They fixed programmes for inspection of the goods, kept 'wagons ready for accepting delivery, held meetings on diverse occasions for settling programmes for the supply of grains, rejected grains which were not according to the contract, entered into correspondence with the appellant about the return of empty bags accepted bills and railway receipts and made pay ments, returned certain bills in respect of the grains tendered beyond the period of contract and did diverse other acts in respect of the goods which could only be consistent with the contracts having been made with the authority of the Railway Administration granted to the Divisional Superintendent. There is also the evidence of Ribbins which clearly supports the vie* that the agreements to purchase foodgrains by the Divisional 892 Superintendent were part of a. scheme devised by the Railway Administration at the time of the, serious famine in 1943 in Bengal. In cross examination, Ribbins stated: "When the Bengal famine arose in April May 1943, the (necessity for a scheme of) arrangement of supplying foodgrains to E. I. Railway employees arose . A scheme was drawn up for carrying out this work in writing. In other words orders were received from Head Office Calcutta about it. The Deputy General Manager, Grains, Calcutta issued the necessary orders . The agent or General Manager as he is called appropriated the above functionary. He must have done so presumably under orders . The entire scheme did subsequently get the assent of the Railway Board. From time to time order came with instruction from Head Office. All such directions should be in the office of D. Supdt., Dinapur. Some posts had to be created for carrying out this scheme. Originally one post of Asstt. Grain Supply Officer was created. Subsequently, two posts were created one on a senior scale and the other as Asstt. in Dinapur Dv. staff had to be appointed to be in charge of the grain shops. They were exclusively appointed to work the grain shop Organisation. The Railway made some arrangement in some places for accommodation and additional storage. Grain shops were located At these places when accommodation was made for additional storage. " Ribbins was for some time a Grain Supply Officer under the East Indian Railway and he admitted that orders similar.to the purchase orders in question in this litigation were drawn up in cyclostyled forms "as per orders from the Head Office. " The witness stated that the instructions of the Head Office were "in the office file". None of these documents were, however, produced or tendered in evidence by the Railway Administration. 893 The evidence on the whole establishes that with a view to effectuate the scheme devised by the Railway Board for distributing foodgrains to their employees at concessional rates, arrangements were made for procuring foodgrains. This scheme received the approval of the Railway Board and Railway Officers were authorised to purchase, transport and distribute foodgrains. If, in the implementation of the scheme, the foodgrains were received by the Railway Administration, special wagons were provided and goods were carried to different places and distributed and payments were made for the foodgrains received by the Railway Administration after testing the supplies, the inference is inevitable that the Divisional Superintendent who issued the purchase orders acted with authority specially granted to him. The evidence of Ribbins supported by abundant docu mentary evidence establishes beyond doubt that the Divisional Superintendent though not expressly authorised by the notification exhibit M 2 to contract for the purchase of foodgrains, was specially authorised to enter into these contracts for the purchase of foodgrains. The question still remains whether the purchase orders executed by the Divisional Superintendent but which were not expressed to be made by the Governor General and were not executed on behalf of the Governor General, were binding on the Government of India. Section 175(3) plainly requires that contracts on behalf of the Government of India shall be executed in the form prescribed thereby ; the section however does not set out the consequences of non compliance. Where a statute requires that a thing shall be done in the prescribed manner or form but does not set out the consequences of non compliance, the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legislature as disclosed by the 894 object, put pose and scope of the statute. If the statute is mandatory, the thing done not in the manner or form prescribed can have no effect or validity : if it is directory, penalty may be incurred for non compliance, but the act or thing done is regarded as good. As observed in Maxwell on Interpretation of Statutes 10th Edition p. 376 : "It has been said that no, rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequences in its disregard, or as imperative, with an implied nullification for disobedience, beyond the fundamental one that it depends on the scope. and object of the enactment. It may perhaps be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is, in the main governed by considerations of convenience and justice, and when that result would involve general inconvenience or injustice to innocent persons, or advantage to those guilty of the neglect, without promoting the real aim and object of the enactment such an intention is not to be attributed to the legislature. The whole scope and purpose of the statute under consideration must be regarded. " Lord Campbell in Liverpool Borough Bank vs Turner(1) observed "No universal rule 'can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Court of justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed. " It is clear that the Parliament intended in enacting the provision contained in section 175(3) that (1) ; 895 the State should not be saddled with liability for unauthorised contracts and with that object provided that the contracts must show on their face that they are made on behalf of the State, i. e., by the Head of the State and executed on his behalf and in the manner prescribed by the person authorised. The provision, it appears, is enacted in the public interest, and invests public servants with authority to bind the State by contractual obligations incurred for the purposes of the State. It is in the interest of the public that the question whether a binding contract has been made between the State and a private individual should not be left open to dispute and litigation ; and that is why the legislature appears to have made a provision that the contract must be in writing and must on its face show that it is executed for and on behalf of the head of the State and in the manner prescribed. The whole aim and object of the legislature in conferring powers upon the head of the State would be defeated if in the case of t contract which is in form ambiguous, disputes are permitted to be raised whether the contract was intended to be made for and on behalf of the State or on behalf of the person making the contract. This consideration by itself would be sufficient to imply a prohibition against a contract being effectively made otherwise than in the manner prescribed. Itm is true that in some cases, hardship may result to a person not conversant with the law who enters into a contract in a form other than the one prescribed by law. It also happens that the Government contracts ,ire sometimes made in disregard of the forms prescribed ; but that would not in our judgment be a ground for holding that departure from a provision which is mandatory and at the same time, salutary may be permitted. There is a large body of judicial opinion in the High Courts in India on the question whether 896 contracts not ill form prescribed by the Constitution Acts are binding upon the State. The view has been consistently expressed that the provisions, under the successive Constitution Acts relating to the form of contract between the Government and the private individual are mandatory and not merely directory. In Municipal Corporation of Bombay vs Secretary of State (1), the true effect of section 1 of Si. 22 and 23 Vic. c. 41 fell to be determined. The Governor General of India in Council and the Governors in Council and officers for the time being entrusted with the Government were, subject to restrictions prescribed by the Secretary of State in Council, empowered to sell and dispose of real and personal estate vested in Her Majesty and to raise money on such estate and also to enter into contracts within. the respective limits for the purposes of the Act. it was provided that the Secretary of State in Council. may be named as a party to such deed, contract, or instrument and the same must be expressed to be made on behalf of the Secretary of State in Council by or by the order. of the Governor General in Council or Governor in Council, but may be executed in other respects in like manner as other, instruments executed by or on behalf of him or them respectively in his or their official capacity, and may be enforced by or against the Secretary of State in Council for the time being. In a suit between the Government of Bombay and the Municipal Corporation of Bombay, the latter claimed that it was entitled to remain in occupation on payment of a nominal rent, of an extensive piece of land because of a resolution passed by the Government of Bombay sanctioning such user. Jenkins C. J. in delivering the judgement of the Court observed. "I think that a disposition in 1865 of Crown ' (1) I. L. R. 897 lands by the Governor in Council was dependent for its validity on an adherence to the forms prescribed, and that therefore the Resolution was not a valid disposition of the property for the interest claimed. " In Kessoram Poddar and Co. vs Secretary of State for India (1), it was held that in order that a contract may be binding on the Secretary of State in Council., it must be made in strict conformity with the provisions laid down in the statute governing the matter and if it is not so made, it is not valid as against him. The same view was expressed in section C. Mitra and Co. vs Governor General of India in Council (2), Secretary of State vs Yadavgir Dharamgir(3), Secretary. of State and another vs G. T. Sarin and, Company U. P. Government vs Lala Nanhoo Mal Gupta Devi Prasad Sri Krishna Prasad Ltd. vs Secretary of State (6), and in section K. Sen vs Provincial P. Way D. State of Bihar(7). But Mr. Viswanatha Sastri on behalf of the appellant contended that this court in Chatturbhuj Vithaldas Jasanth vs Moreshwar Parashram (8) has held that a contract for the supply of goods to the Government which is not in the form prescribed by article 299 (1) of the Constitution which is substantially the same form as section 175 (3) of the Government of India Act, 1935) is not void and unenforceable. In that case, the election of Chatturbhuj Jasani to the Parliament was challenged on the ground that he had a share or interest in a contract for the supply of goods to the Union Government. It was found that Jasani was partner of a firm, which had entered into contracts with the Union Government for the supply of goods and these contracts subsisted on November 15, 1951 and (1) I.L.R. I.L.R. , (3) I.L.R. I.L.R. (1930) 11 Lah.375. (5) A.I.R. (1960) All. (6) I.L.R. (1941) All. 741 (7) (7) A.I.R. (1960) Pat. (8) ; 898 February 14, 1952 respectively the last date for filing nominations and the date of declaration of the results of the election. This court held that Jasani was disqualified from being elected by virtue of the disqualification set out in section 7 (b) of the Representation of the People Act 43 of 1951. The contracts in that case were admittedly not in the form Prescribed by article 299 (1) of the Constitution, and relying upon that circumstance, it was urged that the contracts were void and had in law no existence. In dealing with this plea, Bose J. speaking for the court observed : "We feel that some reasonable meaning must be attached to article 299(1). We do not think the provisions were inserted for the sake of mere form. We feel they are there to safeguard Government against unauthorised contracts. If in fact a contract is unauthorised or in excess of authority it is right that Government should be safeguarded. On the other hand, an officer entering into a contract on behalf of the Government can always safeguard himself by having recourse to the proper form. In between is a large class of contracts, probably by far the greatest in numbers, which though authorised, are for one reason or other not in proper form. It is only right that an innocent contracting party should not suffer because of this and if there is no other defect or objection we have no doubt Government will always accept the responsibility. If not, its interests are safeguarded as we think the Constitution intended that they should be. " The learned Judge also observed: "It would, in our opinion, be disastrous to hold that the hundreds of Government officers who have daily to enter into a variety of contracts, often of a petty nature, and sometimes in an emergency, cannot contract orally or through correspondence and that every petty contract must be effect ed by a ponderous legal document couched in a particular form." 899 The rationale of the case in our judgment does not support the contention that a contract on behalf of a State not in the form prescribed is enforceable against 'the State. Bose J. expressly stated that the "Government may not be bound by the contract, but that is a very different thing from saying that the contract ",as void and of no effect, and that it only meant the principal (Government) could not be sued; but there will be nothing to prevent ratification if it was for the benefit of the Government. " The facts proved in that case clearly establish that even though the contract was not in the form prescribed, the Government had accepted performance of the contract by the firm of which Jasani was a partner, and that in fact there subsisted a relation between the Government and the firm under which the goods were being supplied and accepted by the Government. The agreement between the parties could not in the case of dispute have been.enforced at law, but it was still being carried out according to its terms : and the Court held that for the purpose of the Representation of the People Act, the existence of such an agreement which was being carried out in which Jasani was interested disqualified him. It was clearly so stated when Bose J. observed: "Now section 7 (d) of the Representation of the People Act does not require that the contracts at 'which it strikes should be enforceable against the Government ; all it requires is that the contracts should be for the supply of goods to the Government. The contracts in question are just that and so are hit by the section". Reliance was also placed by counsel for the appellant upon cases decided under s.40 of the Government of India Act, 1915, which was continued in operation. even after the repeal of the Act, 1915, by the 9th schedule to the Government of India Section 40 prescribed the manner in which the business of the Governor General in Council was to be conducted. It provided that all orders and other proceedings of the Governor General in Council shall be expressed to be made by the Governor General in Council and shall be signed by a Secretary to the Government of India or otherwise as the Governor General in Council may direct and shall not be called in question in any legal proceeding on the ground that they were not duly made by the Governor General in Council. In J.K. Gas Plant Manufacturing Co., (Rampur) Ltd., vs King Emperor (1), certain persons were accused of offences committed by them in contravention of cls. (5) and (8) of the Iron and Steel (Control of Distribution) Order, 1941, which order was not expressed to be made by the Governor General in Council as required by section 40(1) of the 9th schedule to the Constitution Act. The Federal Court held that the scope and purpose of the Act did not demand a construction giving a mandatory rather than a directory effect to the words in section 40: for, in the first instance, the provision that all orders of the Governor General in Council shall be expressed to be made by the Governor General in Council did not define how orders were to be made but only how they are to be expressed; it implied that the process of making an order preceded and was something different from the expression of it. Secondly, it was observed, the provision, was not confined to orders only and included proceedings and in the case of proceedings, it was still clearly a method of recording proceedings which had already taken place in the manner prescribed rather than any form in which the proceedings, must take place if they are valid. Thirdly, it was observed, that the provision relating to the signature by a Secretary to the Government of India or other person indicated that it was a provision as (1) 901 to the manner in which a previously made order should be embodied in publishable form, and it indicated that if the previous directions as to the expression of the order and proceedings and as to the signature were complied with, the order and proceedings shall not be called in question in a court of law on one ground only. The rule contained in section 40 (1) was in the view of the court one of evidence which dispensed with proof of the authority granted by the GovernorGeneral in respect of orders or proceedings which complied with the requirements prescribed : the making of the order or the proceedings was independent of the form of the order or proceedings expressing it. But it cannot be s aid that the making of the contract is independent of the form in which it is executed. The document evidencing the contract is the sole repository of its terms and it is by the execution of the contract that the liability ex contracti of either party arises. The principle of J. K. Gas Plant Manufacturing Co. 's case has therefore no application in the interpretation of section 175 (3) of the Government of India Act, 1935. Reliance was also placed upon Dattatreya Moreshwar Pangarkar vs The State of Bombay (1) and The State of Bombay vs Purshottam Jog Naik(2). In both these cases, orders made by the Government of Bombay under the Preventive Detention Act were challenged on the ground that the orders did not comply with the requirements of article 166 of the Constitution. Article. 166 substantially prescribes the same rules for authentication of the orders of the Governor of a State as section 40 to the 9th schedule of the Government of India Act, 1935 prescribed for the authentication of the orders of the Governor General and the Governors. In the former case, this court observed that (1) ; (2) ; 902 the Preventive Detention Act contemplates and requires the taking of an executive decision for confirming a detention order under section 11 (1) and omission to make and authenticate that decision in the form set out in article 166 will not make the decision itself illegal,for the provisions in that arti cle are merely directory and not mandatory. In the latter case, an order which purported to have been made in the name of the Government of Bombay instead of the Governor of Bombay as required by article 166 was not regarded as defective and it was observed that in any event, it was open to the State Government to prove that such an order was validly made. The court in those cases therefore held that the provisions of article 166 are directory and not mandatory. , These cases proceed on substantially the same grounds on which the decision in J. k. Gas Plant and Manufacturing Co. 's case , proceeded, and have no bearing on the interpretation of section 175 (3) of the Government of India Act, 1935. Reliance was also placed upon the State of U.P. vs Manbodhan Lal Srivastava(1) in which case this court held that the provisions of article 320 el. (3) (e) of the Constitution relating to the consultation with the Public Service Commission before discharging at public servant are merely directory. The fact that certain other provisions in the Constitution are regarded as merely directory and not mandatory, is no ground for holding that the provisions relating to the form of contracts are not mandatory. It maybe said that the view that the provisions in the Constitution relating to the form of contracts on behalf of the Government are mandatory may involve hardship to the unwary. But a person who seeks to contract with the Government must be deemed to be fully aware of (1) ; 903 statutory requirements as to the form in which the contract is to be made. In any event, inadvertence of an officer of the State executing A contract in manner violative of the express statutory provision, the other contracting party acquiescing in such violation out of ignorance or negligence will not justify the court in not giving effect to the intention of the legislature, the provision having been made in the interest of the public. It must therefore be held that as the contract was not in the form required by the Government of India Act, 1935, it could not be enforced at the instance of the appellant and therefore the Dominion of India could not be sued by the appellant for compensation for breach of contracts. We are also of the view that the High Court was right in holding that the appellant failed to prove that he was entitled to compensation assuming that there was a valid and enforceable contract. The appellant claimed that he was entitled to the difference between the contract price and the price realised by sale of the foodgrains offered after October 1,1943 but not accepted by the Railway Administration. The High Court rightly pointed out that the appellant was, if at all, entitled only to compensation for loss suffered by him by reason of the wrongful breach of contract committed by the State, such compensation being the difference between the contract price and the ruling market rate on October 1,1943, and that the appellant had failed to lead evidence about the ruling market rate on October 1,1943. The trial judge held that the "control price list xxx was reliable for ascertaining the measure of damages in the case". This document was a notification relating to the controlled rates in operation in the district of Arrah, by which the sale of foodgrains at prices exceeding the rates prescribed was made an offence. The appellant had obviously the option of delivering foodgrains at an railway station F. O. R. in the Province of 904 Bihar, and there is no evidence on the record whether orders similar to exhibit M 2 were issued by the authorities in other districts of the Bihar State. But if the grains were supplied in the district of Arrah, the appellant could evidently not seek to recover price for the goods supplied and accepted on and after October 1, 1943, at rates exceeding those fixed by the notification; for, by the issue of the control orders, on the contracts must be deemed to be superimposed the condition that foodgrains shall be sold only at rates specified therein. If the grains were to be supplied outside the district of Arrah, the case of the appellant suffers from complete lack of evidence as to the ruling rates of the foodgrains in dispute on October 1, 1943. The High Court was therefore right in declining to award damages. On the view taken by us, this appeal must stand dismissed with costs. Appeal dismissed.

In the year 1943 the Divisional Superintendent, East Indian Railway placed certain purchase orders with the appellant for the supply of foodgrains for the employees of the East Indian Railway. The orders were not expressed to be made in the name of the Governor General and were not "executed on behalf of the Governor General as required by section 175 (3) of the Government of India Act, 1935. They were signed by the Divisional Superintendent either in his own hand or in the hand of his Personal Assistant. Some deliveries of foodgrain s were made under these orders and were accepted and paid for by the Railway Administration. But the Railway Administration declined to accept further deliveries of foodgrains. The appellant sold the balance of foodgrains under the purchase orders and filed a suit to recover the difference between the price realised by sale and the contract price. The respondent resisted the suit inter alia on the ground that the contracts were not binding on it. Held, that the contracts were not binding on the respondent and it was not liable for damages for breach of the contracts. Under s 175 (3) of the Government of India Act, 1935, as it stood at the relevant time, the contracts had: (a) to be expressed to be made by the Governor General, (b) to be executed on behalf of the Governor General and (F) to be executed by officers duly appointed in that behalf and in such mariner as the Governor General directed or authorised. The 881 authority to a person to execute contracts may be conferred not only by rules expressly trained and by formal notifications issued in this behalf but may also be specially conferred. The evidence in the case showed that such authority was specially conferred upon the Divisional Superintendent. But the contracts were not expressed to be made by the Governor General and were not executed on his behalf The provisions of section 175(3) were mandatory. The object of enacting these provisions was that the State should not be saddled with liability for unauthorised contracts and hence it was provided that the contracts trust show on their face that they were made by the Governor General and executed on his behalf in the manner prescribed by the person authorised. State of Bihar vs M/s. Karam Chand Thapar and Bros., Ltd. ; , followed. Liverpool Borough Bank vs Turner, ; , Municipal Corporation of Bombay vs Secretary of State, I. L. R. , Kessoram Poddar and Co., vs Secretary of State for India, I. L. R. section C. Mitra and Co., vs Governor General of India in Council, I.L.R. , Secretary of State vs Yadavgir Dharamgir, I. L. R. , Secretary of State vs G.T. Sarin and Co., 1. L. R. , U. I '. Government vs Lal Nanhoo Mal Gupta, A. 1. R. (1960) All. 420, and Devi Prasad Sri Krishna Prasad Ltd. vs Secretary of State, I. L. R. (1941) All. 741, referred to. section K. Sen vs Provincial P. W. D., State of Bihar, A. 1. R. (1960) Pat., Chatturbhui Vithaldas Jasani vs Moreshwar Prashram, ; ,J. K. Gas Plant Mfg., Co. (Rampur) Ltd. vs King Emperor, , Moreshwar Pangarkar vs State of Bombay, ; , State of Bombay vs Purshottam Jog Naik, ; and State of U.P. vs Manbodhan Lal Srivastava, (1958) section C. R. 533, distinguished.

The petitioners were dealers carrying on business in the City of Madras in the sale and purchase of yarn. The dealers in the State of Andhra used to place orders for the purchase of yarn with the petitioners in Madras, where the contracts were concluded and the goods were delivered ex godown at Madras and thereafter despatched to the purchasers who would take delivery of them within their State. The present dispute related to sales in which property in the goods sold passed outside the State of 1423 Andhra, but the goods themselves were actually delivered as a result of the sale for consumption within that State. After the coming into force of the Constitution of India the President in the exercise of the powers conferred by article 372(2) made Adaptation Orders with reference to the Sales Tax Laws of all the States, and as regards the Madras General Sales Tax Act, 1939, he issued an Amendment inserting a new section, section 22 in that Act, which was a verbatim reproduction of the Explanation to article 286 (i)(a) of the Constitution. Oil July 13, 1954, the Board of Revenue (Commercial Taxes) in the State of Andhra, acting on the decision in The State of Bombay and another vs The United Motors (India) Ltd., and others; , , called upon dealers in the State of Madras to submit returns of their turnover of sales in which goods were delivered in the State of Andhra for consumption. Thereupon they filed the present petitions under article 32 Of the Constitution challenging the demand on the grounds, inter alia, that the sales proposed to be taxed were inter State sales and that they were immune from taxation under article 286(2) Of the Constitution. While the petitions were pending the Supreme Court pronounced on September 6, 1955, its judgment in The Be gal Immunity Company Limited vs The State of Bihar and others, [1055] 2 S.C.R. 603, according to which the petitioners were not liable to be taxed. But before final orders were passed on the petitions Parliament passed Sales Tax Laws Validation Act, 1956, section 2 whereof provided that no law of a State imposing or authorising the imposition of tax on inter State sales during the period between April 1, 1951, and September 6, 1955, shall be deeme to be invalid or ever to have been invalid merely by reason of the fact that the sales took place in the course of the inter State trade. That section further provided that taxes levied or collected on such sales during the aforesaid period shall be deemed to have been validly levied or collected. It was the con tention of the State of Andhra that by reason of the aforesaid provision it had the right to impose tax on inter State sales during the aforesaid period. On the other hand the petitioners contended, inter alia, that (I) section 22 Of the Madras General Sales Tax Laws Validation Act, 1956, which gave validity to laws which imposed a tax, did not authorise the imposition, (2) the Sales Tax Laws Validation Act was ultra vires article 286(2), (3) section 22 of the Madras Act was not a "law of a State" within article 286(2) and section 2 of the impugned Act, (4) the impugned Act only validated levies already made and did not authorise the initiation of fresh proceedings for imposing tax, (5) section 22 having been unconstitutional when it was enacted and therefore void, no proceedings could be taken thereunder on the basis of the Validation Act, as the effect of unconstitutionality of the law was to efface it out of the statute book, and (6) the proposed levy was bad as infringing the Rule which provided that the sale of yarn could be taxed only at one point. It was also contended that under the Constitution it was only the Parliament that has the competence to impose tax on inter State sales and that the Sales Tax Laws Validation Act 1424 was bad in that it gave validity, to the laws of the State to impose the tax : Held (Sarkar J. dissenting), that section 22 of the Madras General Sales Tax Act, 1939, did in fact impose a tax on the class of sales covered by the Explanation to article 286(1)(a) but that it was conditional on the ban enacted on article 286(2) being lifted by law of Parliament as provided therein, and that it was therefore validated by section 2 of the Sales Tax Laws Validation Act, 1956. The construction put upon the Explanation to article 286(1)(a) of the Constitution in The Bengal Immunity Company case that it merely prohibited the outside States from imposing a tax on the class of sales falling within the Explanation and did not confer on the delivery State any power to impose a tax on such sales has no application to a taxing statute of a State the object of which was primarily to confer power on the State to levy and collect tax. Section 22 and section 2(h) of the Madras General Sales Tax Act must be read together as ' defining the sales which are taxable under the Act. Mettur Industries Ltd. vs State of Madras, A.I.R. 1957 Mad. 362, The Mysore Spinning and Manufacturing Co. Ltd. vs Deputy Commercial Tax Officer, Madras, A.I.R. 1957 Mad. 368 and Dial Das vs P. section Talwalkay, A.I.R. 1957 Bom. 71, approved. Mathew vs Travancore Cochin Board of Revenue, A.I.R. 1957 T. C. 300, Cochin Coal Co. Ltd. vs The State of Travancore Cochin, (1956) 7 Sales Tax Cases 731 and The Government of Andhra vs Nooney Govin arajulu, (1957) 8 Sales Tax Cases 297, disapproved. Queen vs Burah, (1878) 5 I.A. 178 and In Ye The , etc. ; , relied on : Held (Per section R. Das, C. J., Venkatarama Aiyar, section K. Das and Vivian Bose, JJ.) that (i) the Sales Tax Laws Validation Act, 1956, is in substance one lifting the ban on taxation of interState sales and is within the authority conferred on Parliament tinder article 2 6(2) and further that under that provision it was competent to Parliament to enact a law with retrospective operation. Punjab Province vs Daulat Singh, (1946) L.R. 73 I.A. 59, distinguished. The United Province vs Atiqa Bcgum, , (2) the Adaptation Order made by the President under article 372(2) is valid and is not open to attack on the ground that it goes beyond the limits contemplated by that Article. (3)the expression " law of a State " in article 286(2) and section 2 of the Sales Tax Laws Validation Act means whatever operates as law in the State, and that section 22 of the Madras General Sales Tax Act is a law within those enactments. 1425 (4) section 2 of the Sales Tax Laws Validation Act validates not only the levies already collected but also authorises the imposition of tax on sales falling within the Explanation which had taken place during the period specified in section 2. The Act is not a temporary Act though its operation is limited to sales taking place within a specified period. Dial Das vs P. section Talwalkay, A.I.R. 1937 Bom. 71, in so far as it held that it was not competent to the State to start fresh proceedings for assessment, disapproved. (5) though section 22 of the Madras General Sales Tax Act was unconstitutional when enacted the effect of the unconstitu tionality was not to efface it out of the statute book. Unconstitutionality might arise either because the law is in respect of a matter not within the competence of the legislature or because the matter itself being within the competence, its provisions offend some constitutional restrictions. Which a law which is not within the competence of the legislature is a nullity a law on a topic within its competence but repugnant to any constitutional prohibition is only unenforceable. In the latter class of legislation when once the constitutional prohibition is removed the law becomes enforceable without re enactment. Where an enactment is unconstitutional in part but valid as to the rest, assuming that the two portions are severable, it cannot be held to have been wiped out of the statute book, as admittedly it must remain there for the purpose of enforcement of the valid portion. Moreover in the view that the impugned law is conditional legislation it cannot be held to have become non est. Behram Khurshed Pesikaka vs The State of Bombay, [1955] I S.C.R. 6I3 and A. V. Fernandez vs State of Kerala, ; , distinguished. Bhikaji Narayan Dhakras and others vs The State of Madhya Pradesh and a other; , , relied on. (6) under Entry 42 in List 1, Sch. VII of the Constitution, legislation with respect to inter State trade and commerce is exclusively within the competence of Parliament. Under Entry 54, List 11, taxes on sale of goods is within the exclusive competence of the State Legislature, and reading the two Entries together Entry 42 must be construed as excluding the power to tax sale of goods. The scheme of the Entries in the Lists is that taxation is regarded as a distinct matter and is separately set out. Entry 42, List 1, must therefore be construed as not including the power to impose tax on inter State sales. (7) the proposed imposition does not infringe the rule that the sales of yarns should be subject to taxation at a single point because the proposed levy is by the State of Andhra and the rule in question prohibits only multiple taxation in the same State. Per Sarkar J. The Sales Tax Act does not authorise the taxation of a sale under which goods are delivered in the State of 1426 Andhra but the property in them passes outside that State. The Explanation in section 22 of the Act only contemplates a State other than Andhra as the State inside which a sale shall be deemed to have taken place. The words " for the purposes of clause (a)(i) " have the same meaning in the Explanation in article 286(1) as in the Explanation in section 22 of the Act, and the present case is not distinguishable from the decision in The Bengal Immunity Company Limited vs The State of Bihar and others,

The appellant, carrying on business as a manufacturer of jute goods with its factory at Guntur, used to send jute bags by railway to the cement factories of the A.C.C. outside the State of Andhra. For securing a regular supply of jute bags, the A.C.C. entered into a contract with the appellant and under the despatch instructions from that company, the appellant loaded the goods in the railway wagons, obtained railway receipts in the name of the A.C.C. as consignee and against payment of the price, delivered the receipts to the Krishna Cement Works, Tadepalli, which was for the purpose of receiving the railway receipt and making payment, the agent of the A.C.C. From the amounts shown as gross turnover in the return for the assessment year 1954 55, the appellant claimed reduction of certain amounts in respect of the goods supplied by rail to the A.C.C. outside the State of Andhra Pradesh under its despatch instructions. The Commercial Tax Officer and the Deputy Commissioner of Commercial Taxes disallowed the claim and held that as the railway receipts were delivered to the agent of the buyer within the State of Andhra, and price was also realized from the agent of the buyer within the State, goods must be deemed to have been delivered to the buyer in the State of Andhra Pradesh, and the appellant was liable to pay tax on the sales. On appeal, this order was reversed by the Appellate Tribunal. In revision the High Court restored the order of the Deputy Commissioner of Commercial Taxes. The question for determination in this appeal was whether the sales to the A.C.C. by the appellant may be regarded as "non Explanation sales", i.e. falling outside the Explanation to article 286(1). Held:(i) If the goods were delivered pursuant to the contracts of sale outside the State of Andhra for the purpose of consumption in the State into which the goods were delivered, the State of Andhra could have no right to tax those sales by virtue of the restriction imposed by article 286(1)(a) read with Explanation. To attract the Explanation, the goods had to be actually delivered as a direct result of the sale, for the purpose of consumption in the State in which they were delivered. The expression "actually delivered ' in the context in which it occurs, can only mean physical delivery of 692 the goods, or such action as puts the goods in the possession of the purchaser; it does not contemplate mere symbolical or notional delivery. C.Govindarajulu Naidu & Co. vs State of Madras, A.I.R. 1953 Mad. 116, M/s. Capco Ltd. vs Sales Tax Officer, A.I.R. 1960 All. 62 and Khaitan Minerals vs Sales Tax Appellate Tribunal for Mysore, A.I.R. followed. Poppat Lal Shah vs State of Madras, ; , Tata Iron & Steel Co. Ltd. vs State of Bihar, ; , Tobacco Manufacturers(India) Ltd. vs Commissioner of Sales Tax, Bihar, [1961] 2 S.C.R.106, Indian Copper Corporation Ltd. vs State of Bihar, [1961] 2 S.C.R.276 and State of Kerala vs Cochin Coal Co. Ltd., [1961] 2 S.C.R. 219, referred to. (ii)Section 39 of the Indian will not make mere delivery of the railway receipts representing title to the goods, actual delivery of goods for the purpose of article 286. The rule contained is section 39(1) has no application in dealing with a constitutional provision which while imposing a restriction upon the legislative power of the States entrusts exclusive power to levy sales tax to the State in which the goods, have been actually delivered for the purpose of consumption.

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.

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 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 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 was elected as a member of the Bihar Legis lative Assembly in a bye election from the Dhanbad constituency by a majority of votes while the nomination paper of the respondent was rejected by the Returning Officer on the ground that the respondent 's proposer had nominated him for election from the Bihar and not Dhanbad assembly constituency inasmuch as in the nomination paper he wrote the word "Bihar" before the words "assembly constituency" instead of the word "Dhanbad". This defect arose out of a mistake in the Hindi printed form of the nomination paper which did not exactly conform to the form prescribed by the Rules. In an election petition by the respondent the Election Tribunal held that his nomination paper was rightly rejected but on appeal the High Court held that it was improperly rejected. On appeal by special leave, Held, that in view of the mistake that occurred in the 402 printing of the form and in view of the fact that the name of the constituency for which the election was being held was already in the heading, the defect in the filling up of the form which resulted from a mistake of the proposer in putting the word "Bihar" instead of the word "Dhanbad" was not of a substantial character as contemplated under s 33 of the Representation of the People Act, 1951. Held, further, that the defect arising out of the fact that columns nos. 2 and 5 were not properly filled was not of a substantial character as the Returning Officer bad no difficulty in checking that the proposer and the candidate were voters on the electoral rolls. Karnail Singh vs Election Tribunal, Hissay, [1954] 10 E.L.R. 189, relied on.

als Nos. 56 and 57 of 1949. Appeals from the orders of the High Court of Judica ture at Madras (Wadsworth and Patanjali Sastri JJ.) dated 24th October, 1945, in A.A.O. Nos. 372 of 1943 and 634 of 1944 which were appeals from the orders of the Subordinate Judge of Ellore in E.A. No. 440 of 1937 and C.M.P. No. 152 of 1943 in O.S. No. 87 of 1923. P. Somasundaram (V. V. Choudhry, with him) for the appellant. V. Rangachari (K. Mangachari, with him) for the respond ents. 1950. October 17. The Court delivered judgment as follows. FAZL ALI J. These appeals arise out of an execution proceeding, and the main point to be decided in them is what is the effect of certain provisions of the Madras Agricul turists ' Relief Act (Madras Act IV of 1938, which will hereinafter be referred to as "the Madras Act"), on the rights of the parties. How this point arises will be clear from a brief statement of the facts of the case. It appears that in 1908, one Veeresalingam, the husband of the first respondent, borrowed a sum of Rs. 9,000 from one Sitharamayya, and executed a mortgage bond in his fa vour. Subsequently a suit was 808 instituted by the mortgagee to enforce the mortgage and a final decree in that suit was passed on the 19th August, 1926. Thereafter, on the 28th October, 1931,the decree holder applied for the execution of the decree by the sale of the mortgaged property. In 193a, the decree holder transferred the decree to one Sobhanadri, after whose death his son, the appellant before us, was brought on the record as his legal representative in the execution proceedings. Several years before the assignment of the decree, Veeresa lingam, the defendant, had died and his widow, the first respondent. was therefore brought on the record as his legal representative. On the 6th July, 1935, two items of proper ty were sold in execution of the decree and purchased by the decree holder, these being : (1) a village called Tedlam in in West Godavari District; and (2) 4 acres and 64 cents of land in Madepalli village. The first property was sold for Rs. 21,000 and the second for ' Rs. 1,025. As, however, the amount due under the decree was only about Rs. 17,860 and odd, the sale of the second property was subsequently set aside and the decree holder deposited into Court the excess amount of about Rs. 3,000 and odd after setting off the decretal amount against the price of the first item of property. On the 5th August, 1935, the first respondent filed an application under Order XXI, rule 90, and section 47 of the Code of Civil Procedure, to set aside the sale held in July, 1935, alleging certain irregularities in the conduct of the sale. That application was after several years heard by the Subordinate Judge of Ellore, who by his order dated the 6th March, 1943, dismissed it and directed the sale of the first property to be confirmed and full satisfaction of the decree to be entered. After about 12 days, i.e., on the 18th March, 1943, the first respondent and the second respondent, who had been adopted by the former on the 12th March, 1936, under the will of her hus band and was subsequently brought on record, filed an appli cation under section 19 of the Madras Act praying for cer tain reliefs under that Act. This application ' was dismissed on the 22nd March, 1943. Subsequently, two appeals were filed on behalf 809 of the respondents (who will hereinafter be sometimes re ferred to as judgment debtors), one against the order refus ing to set aside the sale under Order XXI, rule 90 of the Civil Procedure Code, and the other against the order dis missing the application under the Madras Act. These appeals were heard together by two learned Judges of the Madras High Court and they took the view that the judgment debtors ' application under the Madras Act was maintainable notwith standing the fact that the sale had been confirmed and full satisfaction of the decree recorded, and remitted the case to the trial Court for a finding on the following questions, namely (1) whether the applicants were agriculturists; and (2) if so, what would be the result of applying the provisions of Madras Act IV of 1938 to the decretal debt against them ? So far as regards the judgment debtors ' appeal against the order dismissing their application under Order XXI, rule 90, the Learned Judges were inclined to agree with the trial Court that the sale should stand but declined to pass final orders in the appeal on the ground that "it would seriously prejudice the judgment debtors in the connected application for relief under section 19 of the Madras Act IV of 1938. " The Subordinate Judge answered the questions referred to him by the High Court on remand as follows : (1) The judgment debtors were not agriculturists and were not therefore entitled to the benefits of the Madras Act;and (2) If they were agriculturists, they were not liable to pay anything under the decree, as, in view of the provisions of the Act, the debt stood discharged on the date of sale. When however the matter came up before the learned Judges of the High Court, they reversed the first finding of the trial Court and held that the judgmentdebtors were agriculturists within the meaning of the 810 Act, and that the debt stood discharged in view of section 8 (2) of the Act. At the same time, they held that the sale was not liable to be set aside, and in this view dismissed one of the appeals and allowed the other. Then followed certain proceedings to which it would have been unnecessary to refer but for the fact that the judgment debtors have attempted to rely on "them in support of one of their preliminary objections to the maintainability of these appeals. It appears that on the next day after the judgment of the High Court was delivered in the two appeals, counsel for the respondents wrote a letter to the Registrar of the High Court to direct the posting of the two cases 'for being mentioned ' before the Court in order to obtain necessary directions consequent on the orders passed by it in the appeals. This letter was not placed before the learned Judges until the judgment had been signed by them and ac cordingly the judgment debtors filed two petitions, one being a review petition to the High Court and the other being a petition to the trial Court praying "that the de creeholder may be ordered to pay to the petitioners the purchase money of Rs. 21,000 with interest thereon at 6 per cent. per annum from the date of sale till the date of payment. " The trial Court dismissed the latter petition on the ground that it was not maintainable, and the judgment debtors filed an appeal against the order. The appeal as well as the review petition of the judgment debtors were heard together by the learned Judges who directed the decree holder 's counsel to elect whether his client would deposit the purchase money into Court or have the sale set aside. The decree holder applied for a short adjournment and ultimately on the 15th November, 1946, his counsel stated that his client wished to retain the property which he had purchased and to pay the purchase money into Court. Thereupon, he was directed to pay the sum of Rs. 21,000 together with interest within a months from that date. Subsequently, the appellant (decree holder) having obtained leave to appeal from the High Court preferred 811 these appeals before us. It may be stated here that along with the application for leave to appeal, the appellant had filed an application for excusing the delay in filing the former application which he accounted for mainly by refer ring to the proceedings for the review of the judgments in the previous appeals to the High Court. This application was granted and the delay was condoned. As has been already stated, the main point arising in these appeals relates to the effect of the Madras Act upon this litigation. That Act was passed and came into effect in 1938, while the execution proceedings were still continu ing. It will be recalled that the sale took place on the 6th July, 1935; and the application for setting it aside was not disposed of until the 6th March, 1943. But, strangely enough, the judgmentdebtors did not apply for any relief under the Madras Act during this period, and they made their application only after the sale had been confirmed and satisfaction of the decree had been entered. How far this belated application affects the right claimed by the judg ment debtors under the Act is one of the questions raised in these appeals, and I shall deal with it after referring to the material provisions of the Act and the findings of the High Court which have given rise to several debatable points. The sections of the Act which are material for the purpose of these appeals are sections 3, 8 and 19. Section 3 defines an agriculturist and has a proviso stating that in certain cases a person shall not be deemed to be an agricul turist. The relevant clause of this proviso, to which I shall also have to advert later, is clause (D) which runs thus : "Provided that a person shall not be deemed to be an 'agriculturist ' if he (D) is a landholder of an estate under the Madras Es tates Land Act, 1908, or of a share or portion thereof in respect of which estate, share or portion any sum exceeding Rs. 500 is paid as peshkash or any sum exceeding Rs. 100 is paid as quit rent, jodi, kattubadi, 812 poruppu or the like or is a janmi under the Malabar Tenancy Act, 1929, who pays any sum exceeding Rs. 500 as land reve nue to the Provincial Government. ' ' The precise question which is said to arise with refer ence to this provision is whether by reason of being the owners of village Tedlam, the judgment debtors should be held to be not entitled to relief under the Act. The other material sections 8 and 19 run as follows : "8. Debts incurred before the 1st October, 1932, shall be scaled down in the manner mentioned hereunder, namely: (1) All interest outstanding on the 1st October, 1937, in favour of any creditor of an agriculturist whether the same be payable under law, custom or contract or under a decree of Court and whether the debt or other obligation has ripened into a decree or not, shall be deemed to be dis charged, and only the principal or such portion thereof as may be outstanding shall be deemed to be the amount repay able by the agriculturist on that date. (2) Where an agriculturist has paid to any creditor twice the amount of the principal whether by way of princi pal or interest or both, such debt including the principal, shall be deemed to be wholly discharged. (3) Where the sums repaid by way of principal or inter est or both fall short of twice the amount of the principal, such amount only as would make up this shortage, or the principal amount or such portion of the principal amount as is outstanding, whichever is smaller, shall be repayable. (4) Subject to the provisions of sections 22 to 25, nothing contained in sub sections (1), (2) and (8) shall be deemed to require the creditor to refund any sum which has been paid to him, or to increase the liability of a debtor to pay any sum in excess of the amount which would have been payable by him if this Act had not been passed. 813 Explanation. Where a debt has been renewed or included in a fresh document in favour of the same creditor, the principal originally advanced by the creditor together with such sums, if any, as have been subsequently advanced as principal shall alone be treated as the principal sum repay able by the agriculturist under this section. Where ' before the commencement of this Act, a Court has passed a decree for the repayment of a debt, it shall, on the application of any judgmentdebtor who is an agricul turist or in respect of a Hindu joint family debt, on the application of any member of the family whether or not he is the judgment debtor or on the application of the decree holder, apply the provisions of this Act to such decree and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, amend the decree accordingly or enter satisfaction, as the case may be: Provided that all payments made or amounts recovered, whether before or after the commencement of this Act, in respect of any such decree shall first be applied in payment of all costs as originally decreed to the creditor. " These sections are material, because in the present case the judgment debtors asked the decree to be amended under section 19 of the Act and they were held to be entitled to relief under section 8. Having referred to the relevant provisions of the Act, it becomes necessary now to state the main findings of the High Court upon which the decision of this appeal will turn. These findings are (1) that the sale of Tedlam village, which was held on the 6th July, 1935, and confirmed on the 6th March, 19 13, was a good sale; (2) that by this sale. the title to the Tedlain village passed to the decree hoMer. and in hearing the appeal the High Court was justified in proceeding on the footing that the judgment debtors having ceased to be the owners of Tedlam village after its sale, were not 104 814 hit by clause (D) of the proviso to section a of the Act; and (3) that the decree had been satisfied at the date of the sale and the decree holder was liable to repay to the judg ment debtors the full price of the property which was sold. The main contentions directed against the conclusions arrived at by the High Court are :firstly, that they are self contradictory, because if the sale was an effective sale on the date it was held or confirmed, the decree was also satisfied on that date and the judgmentdebtors were no longer entitled to invoke the provisions of the Madras Act; and secondly, that the view taken by the learned Judges of the High Court that notwithstanding the appeal against the order refusing to set aside the sale they could proceed on the footing that the judgment debtors had ceased to be the owners of Tedlarn village on the date of the sale was un sound in law. It will first deal with the second point which appears to me to require serious consideration. The High Court has in my opinion rightly proceeded on the footing that the ownership of Tedlam village would bring the judgment debtors within the mischief of clause (D) of the proviso to section 3 of the Act, and would disentitle them to any relief thereunder. This view was contested before us on behalf of the judgment debtors on two grounds : (1) that the grant in favour of the ancestor of the judgment debtors did not comprise a whole inam village and what they owned was therefore not an estate under the Madras Estates Land Act (Madras Act I of 1908); (2) that on the date of the application, the judg ment debtxrs were not landholders of village Tedlam because the village was in the possession of a receiver since 1st February, 1937, and the latter was in law the landholder on the crucial date. None of these contentions however appears to me to have any force. The first contention was sought to be supported by Exhibit P 1 which is a register of inams and which shows that poramboke or waste lands to the extent of 596 acres had to be deducted from the area 815 of the inam. The point however has been dealt with very fully and clearly by the learned Subordinate Judge, who has rightly pointed out that it has no force in view of the Madras Estates Land (Amendment) Act, 1945 [Madras Act No. II of 1945]. The second point is equally unsubstantial, be cause it is well settled that the owner of a property does not cease to be its owner merely because it is placed in the hands of a receiver. The true position is that the receiver represents the real owner whoever he may be, and the true owner does not by the mere appointment of a receiver cease to be a landholder under the Madras Estates Land Act. I will now revert to the crucial question in the case, viz., whether the learned Judges of the High Court were justified in law in deciding the appeal on the footing that the judgment debtors had ceased to be the owners of Tedlain village and on that account they were not hit by clause (D). of the proviso to section 3 of the Madras Act. At this stage, it will be useful to refer to certain provisions of the Civil Procedure Code which directly bear on the question as to when title to immovable property which is sold in execution of a decree is deemed to pass to the purchaser. One of the provisions is Order XXI, rule 92, which provides that "where no application is made under rule 89, rule 90 or rule 91, or where such application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute. " The second rele vant provision is section 65 which runs thus : "Where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute. " In Bhawani Kunwar vs Mathurn Prasad Singh(1) the ques tion as to when a mortgagee who has purchased certain vil lages in execution of the decree acquired title to the properties purchased by him directly arose for considera tion, and the Privy Council rightly pointed (1) T.L.R. 816 out that "the sale in execution of the mortgage decree took effect from the actual date of the sale and not from its confirmation." In a simple case, the provisions cited above should settle the controversy, but, in the present case, the matter has been complicated on account of the appeal against the order refusing to set aside the sale under Order XXI, rule 90. In such a case, generally speaking, the true position seems to be that there is no finality until the litigation is finally determined by the appellate Court. This principle has been recognized in a number of cases, but it will be enough to cite Chandramani Shaha vs Anarjan Bibi(1). The headnote of that case runs as follows : "Where a Subordinate Judge has disallowed an applica tion under Order XXI, rule 90, to set aside a sale in execu tion, and has made an order under rule (1) confirming the sale, and an appeal from disallowance has been dismissed by the High Court, the three years ' period provided by the Indian Limitation Act, 1908, Schedule I, article 180, for an application under Order XXI, rule 95. by the purchaser for delivery of possession runs from the date of the order on appeal; the High Court having under the Code of Civil Proce dure, 1908, the same powers as the Subordinate Judge, the 'time when the sale becomes absolute ', for the purpose of article 180 is when the High Court disposes of the appeal." Under article 180 of the Indian Limitation Act, the period of limitation runs "from the date when the sale becomes absolute. " If we give a narrow and literal meaning to these words, the period of limitation should be held to run from the date when the original Court of execution confirms the sale. But, as was pointed out by the Privy Council, the High Court as an appellate Court had the same powers as the trial Court and it is only when the appeal was dismissed by the High Court that the order of the trial Court confirming the sale became absolute. Till the deci sion of the appellate Court, no finality was attached to the order confirming the sale. (1) I.L.R. 61 Cal. g45. 817 It is clear that in this case the same rule would apply to the order recording satisfaction of the decree and to the order confirming the sale. If the order recording satisfac tion of the decree was not final and remained an inchoate order until the appeal was decided, the order confirming the sale would have the same inchoate character. This position seems to have been fully conceded in the statement of their case filed on behalf of the respondents in this Court. It is quite clear that in this case the learned Judges of the High Court have taken up an inconsistent position. As I have already stated, they have held, for the purpose of allowing one of the appeals, that the judgment debtors were not hit by clause (D)of the proviso to section 3 of the Act because they ceased to be the owners of Tedlain village at the date of the sale in 1935. If this conclusion is cor rect, it must follow as a matter of logic that the decree was completely satisfied on the date of the sale, because the sale fetched a larger amount than what was payable under the decree and the excess amount was deposited by the de cree holder in Court. The sale and satisfaction must go together and if finality is to be attached to the sale it should have been held to attach also to the order recording satisfaction of the decree. It seems clear to me that if the decree had ceased to exist, no relief could be claimed by the judgment debtors under the Madras Act. On the other hand, if the appeal had to be decided on the footing that the order recording satisfaction of the decree was not final, the same approach should have been made in regard to the effect of the sale. It is also clear that if the decree was satisfied on the date of sale by the application of the provisions of the Act, the sale could not stand, because how could the property be sold in execution of a decree which had been already satisfied. Yet, notwithstanding the fact that nothing was due under the decree, the High Court has held that the sale was a good sale and was to stand. The correct approach to the case would have been to assume for the purpose of the appeals that neither of the orders passed by the 818 Subordinate Judge was final. On that view, the appeals to the High Court could not have been decided on the footing that the judgment debtors had ceased to be the owners of Tedlain property and were therefore not hit by clause (D) of the proviso to section 3 of the Madras Act. In my opinion, the judgment of the High Court cannot be sustained, and the appeal s will have to be allowed. I will now deal very briefly with two preliminary objec tions raised on behalf of the respondents. The first objec tion is that the application for leave to appeal to his Majesty in Council against the order of the High Court was barred by limitation, inasmuch as the reasons stated in the affidavit filed by the appellant in the High Court in sup port of his application for excusing delay do not consti tute sufficient reason within the meaning of section 5 of the Limitation Act. The answer to this objection will be found in the facts which have been already narrated. The delay was caused mainly by reason of the review of the order of the High Court and the High Court considered that there as sufficient reason for condoning the delay. This Court cannot override the discretion exercised by the High Court and the matter cannot be reopened in these appeals. The second objection is based on the fact that the decree holder was given a choice by the High Court to elect wheth er he would deposit the purchase money or have the sale set aside, and his counsel told the learned Judges on the 15th November, 1946 that his client wished to retain the property which he had purchased and pay the purchase money in cash. It is contended that in view of this statement it was not open to the appellant to contend that he need not pay any amount to the judgment debtors. This objection also is entirely devoid of any substance,because there is nothing on record to show that the appellant has consented to be bound by the order of the High Court and waived his right to appeal against it by reason of the election. The learned counsel for the respondents also contended that the sale should have been set aside by the 819 High Court because the permission given to the decreeholder on the 16th February, 1934, to bid and set off the decretal amount against the purchase price was confined to an earlier sale and did not extend to the sate which took place on the 16th March, 1935, after the upset price which had been originally fixed was reduced. Personally, I am inclined to hold that the permission covered the sale in question, but in any case it is difficult to hold on the facts stated that there was any such material irregularity as would vitiate the sale. The precise argument which is put forward here was advanced in the Courts below but it did not find favour either with the Subordinate Judge or with the High Court. Besides, the respondents cannot raise the point in these appeals because they have filed no appeal against the order of the High Court upholding the sale. In these circumstances, I would allow the appeals, set aside the orders of the High Court and restore the order of the learned Subordinate Judge. There will however be no order as to costs in these appeals. MUKHERJEA J. I concur in the judgment just now deliv ered by ray learned brother, Fazl Ali J., and there is nothing further which I can usefully add. CHANDRASEKHARA AIYAR J. The facts which have cha given rise to these appeals and the questions for decision have been stated in the judgment just now pronounced by my learned brother Fazl Ali J. I wish to add only a few words on the main contention advanced for the respondents by their learned Advocate, Mr. V. Rangachari. If by reason of the confirmation of sale and satisfac tion of the decree having been entered up, the title to the village had passed indefeasibly to the decreeholder, there was no longer any decree or decree debt to be scaled down. If, however, the title did not pass, because it was still open to the respondents to attack the Court sale under Order XXI, rule 90, they were landholders of the village and, as such, they would 820 come within the scope of proviso (D) to section 3 of the Madras Agriculturists ' Relief Act, 1938, which enacts that a landholder who holds a village paying more than Rs. 100 as quit rent or jodi is not an agriculturist within the meaning of the Act. The apparent inconsistency in the view taken by the High Court was recognised, if not conceded, by the learned coun sel. In one view, there ,,as no longer any decree in respect of which the Agriculturists ' Relief Act could operate; and in the other view, the respondents could not take advantage of the Act, as their ownership of the village precluded them. Faced with this dilemma, Mr. Rangachari urged a some what ingenious argument. He contended that though the. title passed to the decree holder on the confirmation of sale and became vested in him from the date of the sale, the respo dents could still be regarded as having an interest in the village, as the sale was open or liable to challenge and the title 'of the decree holder was inchoate or incomplete. There is, however, really no support for this position. On confir mation, the title of the decree holder became absolute or complete. If the sale was set aside, the title would revest in the judgment debtor. There is nothing like an equitable title in the decree holder which could be recognised for certain purposes and not recognised for others. Under the Madras Act, "agriculturist" means "a person who has a saleable interest in any agricultural or horticul tural land or one who holds interest in such land under a landholder as a tenant, ryot or undertenure holder." Section 10, sub clause (i) of the Act provides that the right conferred on an agriculturist to have a debt scaled down will not apply to any person who, though an "agriculturist" as defined in the Act, did not on 1 10 1937 hold an interest in or a lease or sub lease of any land. After the sale in 1935, the only interest which the judgment debtors had in the village was to have the sale set aside, under the rele vant provisions of the Civil Procedure Code. This interest is not the interest contemplated by section 3, sub clause (ii) (a) & (b) of the Act which speaks of a 821 saleable interest or interest as a tenant, ryot or underten ure holder. I agree in the conclusion reached by my learned broth er. Appeals allowed.

In execution of a decree obtained on a mortgage a vil lage owned by the mortgagor which was included in the mort gage was sold by the court on the 6th July 1935 and it was purhased by the mortgagee. An application by the mortgagor under 0 .XXI,.r. 90, C.P.C., for setting aside the sale for irregulrities was dismissed, the sale was confirmed and full satisifiction of the decree was recorded, on the 6th March 1943. A few days afterwards the mortgagor and his adopted son made an application under section 19 of the Madras Agricul turists ' Relief Act, 1938, praying for relief under the Act, and, as this application also was dismissed they preferred two appeals, one from the order dismissing this application and the other against the order of 6th March 1943 refusing to set aside the sale. The High Court of Madras held that, as the mortgagor 's village had been sold he did not come within the purview of el. (i)) of the proviso to 6. 3 of the Madras Agriculturists ' Relief Act and so he was entitled to claim relief under the Act and the debt stood discharged under the provision of the Act, but the Bale was not liable to be set aside; and in accordance with this judgment the decree holder was directed to pay the amount for which the property had been sold with interest thereon: ' Held per FAZL ALl and MUKHERJEA JJ. (i)that the conclu sions arrived at by the High Court were self contradictory because if the sale was effective on the date it was held or confirmed, the decree was also satisfied on that date and the judgementdebtors were no longer entitled to invoke the provisions of the Act; (ii) that the High Court was not justified in law in deciding the appeal on the footing that the judgment debtors ceased to be owners of the village from the date of sale and on that account were not hit by cl. (D) of the proviso to section 3 of the Act inasmuch as when an appeal is preferred from an order rejecting an application under O.XXI, r. 90, C.P.C., to set aside an execution sale, the sale does not become absolute until the matter is finally decided by the appellate court. 807 Per CHANDRASEKHARA AIYAR J. After the execution sale in 1935 the only interest which the judgment debtors had in the village was to have the sale set aside under the relevant provisions of the Civil Procedure Code and this interest, not being an interest contemplated by section 3 (ii) (a) & (b) and section 19 (1) of the Act, they were not "agriculturists" and were not entitled to any relief under the Act. Held also, per FAlL ALl and MUKHERJEA JJ. A person does not cease to be a land holder of an estate within the mean ing of cl. (D) to the proviso to section 3 of the Act merely because the estate is placed in the hands of a receiver. Bhawani Kunwar vs Mathura Prasad Singh (I.L.R. 40 Cal. 89) and Chandramani Shaha vs Anarjan Bibi (I.L.R. 61 Cal. 945) referred Judgment of the Madras High Court reversed.

'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 appellants ' father had obtained sale of the property in question during the minority of the respondent through his widowed mother, who was acting as his guardian. The respondent, on attaining majority, filed a suit for declara tion that the said sale deed was invalid and not binding upon him and for recovery of possession of the property. The judgment and decree of the trial Court dismissing the suit was affirmed by the Appellate Court. In Second Appeal, the High Court set aside the judgments of the Court below, allowed the appeal and decreed the suit, directing recovery of possession of properties on payment of Rs.4,700 being the sale consideration and a sum of Rs.4,164 being the compensa tion for improvement. The Special Leave Petition filed by the appellants was dismissed. The respondent filed execution, which was resisted by the appellants on the ground that the properties could not be ordered to be delivered without payment of the value of improvements effected by them subsequent to the year 1952. They also filed an application for the issue of a commission to revalue the improvements, claiming that they had effected improvements to the tune of Rs.gO,O00. The respondent con tested this application denying that the appellants had made any improvements and contended that the question of improve ments had been concluded by the judgment of the High Court in the Second Appeal. The executing Court dismissed this petition. The District Judge allowed the appeal filed by the appellants and set aside the order of the executing Court. The High Court set aside the judgment of the District Judge and restored the order of the executing Court and directed recovery of the property. The High Court observed that "the sum of Rs.4,164.8.0 was directed to be paid not because the respondents were entitled to it, but because the appellant agreed to pay it. ' ' In the appeal to this Court, on behalf of the appellants it was 701 contended: (1) that the judgment of the High Court was wrong and that the conclusion arrived at by the High Court was as a result of confusion regarding the pleadings in the case and the question of law involved; (2) that at the trial stage an issue was struck as issue No. 8 regarding the value of improvements which was adjudicated and the value of improvements was adjudged; (3) that the appellants were tenants within the meaning of section 2(d) of the Kerala Compen sation for Tenants Improvements Act, 1958 (Act 29 of 1958) and that their claim for value of improvements was made on the strength of section 5 of the Act and, therefore, they are entitled to the value of improvements; and (4) that the value of improvements has to be ascertained under the Act on the execution side and their claim cannot be defeated by flourishing the judgment of the High Court and the dismissal of the S.L.P. Dismissing the Appeal, HELD: 1. The suit was filed in 1952. At that time there was no enactment available for the defendant to claim value of improvements. Neither in the original written statement nor in the additional written statement dated 15.11.1954, did the defendants claim the value of improvements under the Act. Though at the execution stage a plea was raised under section 5 of Act 29 of 1958, but in the Judgment in the Second Appeal No. 464 of 1964 dated 27.11.1969, the Division Bench decided that no claim for improvements was made either under section 51 of the Transfer of Property Act or under section 4 of Act 29 of 1958. Moreover, the High Court also found that no objection was taken by the appellants in the lower Appellate Court or before the High Court to the finding that in case of eviction the defendant would be entitled to Rs.4,164.8.0. as compensation. This judgment was rendered when Act 29 of 1958 had already come into force. Against this judgment a special leave petition was filed and dismissed. Thus, there is a concluded finding against the appellants that they were not entitled to anything more than the value of improvements decreed by the trial Court. [706H; 707A C] 2. Section 5 comes into operation only when a defendant against whom a suit for eviction is instituted establishes a claim for compensation under the Act. The Judgment of the High Court rendered in 1969 has clearly held that the value of improvement awarded was not under section 4 of the Act but was an amount agreed by the plaintiff. The appellants cannot succeed and have not succeeded in satisfying this Court that they ever made a claim for compensation under section 4 of the Act and succeeded in such a claim. Therefore, their further claim for getting the improvements revalued cannot be ac cepted. [707E G] 702 3. The question whether a person who came into posses sion of the properties of a minor could be brought within the definition of 'tenant ' in section 2(d)(iii) will have to be considered in an appropriate case. [707G H] 4. Purely on an equitable basis, the respondent shall pay to the appellants a sum of Rs.30,000 in addition to the amount decreed. On such payment the appellants shall deliver the property to the respondent. The respondent shall be at liberty to withdraw the amounts deposited by the appellants in the trial court pursuant to the order of this Court, if not already withdrawn. [709B C]

The parties to the litigation leading to this appeal are governed by the Aliyasantana law prevalent in the district of South Kanara. They were members of a Kutumba descended from a common ancestress by name Manjekke. One Parameshwari and her son and daughter instituted original suit No. 91 of 1950 before the Court of the Subordinate Judge South Kanara for partition of properties in accordance with the provisions of Madras Aliyasantana Act, 1949. The suit was dismissed, but on appeal the High Court reversed it. The High Court passed a preliminary decree on 28 6 1961 and remanded the suit for further proceedings. In the trial a joint memo was filed by the parties on 25th September 1963 accepting the shares as per the memo. Defendants 22 to 24 in the suit were allotted 85176 shares out of a total of 6,15,264 shares. Defendants 22,23,24 were all male members of the 'Kutumba ' and were 'Nissanthathi kavaru '. On the death of the 23rd and 24th defendants their legal Representatives who were brought on record filed R.I.A. No. 2266/66 and R.I.A. 2259/66 respectively claiming that out of the share allotted to the Kavarus of defendants 22 to 24, one third representing the share or interest of the 23rd and 24th defendants be allotted to them. The petition was opposed on the ground that each one of the defendants 22, 23, and 24 was a separate 'Nissanthathi Kavaru ' and on the death of each of the defendants 24 and 23, his share or interest devolved upon the 'Santhathi Kavaru ' nearest to him to which defendants 11, 12 and 16 belonged. The plea of the 22nd defendant was that all the three defendants 22, 23 and 24 constituted one single Nissanthathi Kavaru to which, under the preliminary decree one single or joint share was allotted and, therefore, the said share survived to the last surviving member thereof (22nd defendant) and that no devolution on a 'Santhathi Kavaru ' under sub section (5) of Section 36 is possible until the last member of 'Nissanthathi Kavaru ' viz. the 22nd defendant dies. The trial court found that in the High Court decree dated 20 6 1961 defendants 22 to 24 were allotted shares jointly. It further held that defendants 22, 23 and 24 formed three 'Nissanthathi Kavarus ' as their mother was dead at the time of the filling of the suit and partition was effected and there was no undivided interest in the property when they died so as to attract the provisions of section 7(2) of the . The High Court on appeal held that when the 24th defendant died he had an undivided interest in the properties of the Kavaru of himself and defendants 405 22 and 23 and that the said undivided interest quantified as provided by the explanation to sub section (2) of section 7 of the and would devolve by intestate succession under the Succession Act. Similarly when the 23rd defendant died he had an undivided interest in the property jointly belonging to himself and the 22nd defendant. That undivided interest also get quantified under Section 7(2) of the . The High Court allowed the appeals holding that the property descended according to the rule of intestate succession contained in . Dismissing the appeal by special leave the Court, ^ HELD: 1. The three defendants were allotted jointly a share in the partition. In the suit filed by one Parameshwari defendants 22, 23 and 24 were made parties as they belonged to the Kavaru of their mother. They pleaded in the written statement for the allotment of their share in the event of partition. Moreover in the joint memo their joint share was shown as 85, 176 out of the total share of 615,264. [409E, 410C D] 2. The three defendants have enjoyed the interest as Nissanthathi Kavaru, and on partition are entitled only to life interest in the properties allotted to them under section 36(3) of the Madras Aliyasantana Act, 1949. [411 C D] 3. In view of the over riding provision in Section 4 of the , it is clear that the provisions of Aliyasantana Act, whether customary or statutory will cease to apply, in so far as they are inconsistent with the provisions of the , which came into force on 17th June 1956. Therefore, the devolution by testamentary or intestate succession is under the . [411G H] The explanation to Section 7(2) of the Act provides that the interest in the property of the Kutumba or Kavaru of a Hindu shall be deemed to be the share in the property of the Kutumba or Kavaru, as the case may be, that would have fallen to him or her if a partition of that property per capita had been made immediately before his or her death among all the members of the Kutumba or Kavaru, as the case may be, then living whether he or she was entitled to claim such partition or not under the Aliyasantana law and such share shall be deemed to have been allotted to him or her absolutely. The result of the Explanation is that the undivided interest in the property of the Hindu in the Aliyasantana Kutumba or Kavaru shall devolve as provided for under the and that the share of the Hindu shall be deemed to have been allotted to him absolutely. [412G H, 413A] The Explanation to section 30 of the provides that a member of an Aliyasantana Kutumba or Kavaru can dispose of his interest in Kutumba properties by a will, while under the Aliyasantana law the individual cannot do so. Explanation to section 30(1) enables the male Hindu in a Kutumba or Kavaru which is deemed to be property capable of being disposed of by him Sections 7(2) and 30(1) would relate to undivided interest in the property of the Kutumba or Kavaru. [413B D] Section 17 of the deals with the intestate succession to the separate property of a Hindu male under the Aliyasantana law. It provides that section 8, 10, 15 and 23 shall have effect with certain modifica 406 tions in relation to persons who would have been governed by the Aliyasantana law. Section 8 provides that the property of a male Hindu dying intestate shall devolve as specified in the section. The succession to the property of a male Hindu belonging to a Kutumba or Kavaru of Aliyasantana law dying intestate would be governed by the provisions of section 8 as modified by section 17, the effect being that the succession as provided for under the Aliyasantana law would not be applicable to Hindu females under section 10 which provides for the distribution of property among heirs in class 1 of the Schedule. Section 15 provides the general rule of succession in the case of Hindu females. The rule as to the succession is also made applicable to Hindu female under the Aliyasantana law which provides for succession of the separate property of a Hindu male and a female. Section 14 of the Act enlarges the property possessed by a female Hindu (and not a Hindu male) whether acquired before or after the commencement of the by providing that she will hold the property as a full owner and not as a limited owner. The Hindu male will be entitled only to the limited rights as provided for under the law applicable to him. According to the provisions of section 36(5) of the Aliyasantana law, the property allotted to Nissanthathi Kavaru at a partition is enjoyed by it only as a life interest and at the time of the death of the last of its members shall devolve upon the Kutumba. But when a Hindu governed by the Aliyasantana law dies possessed of a life interest, after his death the property devolves under the to the heirs as provided for under the said Act and not under the Aliyasantana Act and therefore would not revert back to the Kutumba. [413H, 414A C, 418D E] 4. The effect of the Provisions of the is that after the coming into force of the an undivided interest of a Hindu would devolve as provided by section 7(2), while in the case of separate property it would devolve on his heirs as provided for in the . Even though a Nissanthathi Kavaru might have a limited interest which would in turn devolve upon a Kutumba or the nearest Santhathi Kavaru under Section 36(5) of the Aliyasantana Act, the devolution will be under the , as the mode of devolution prescribed under section 36(5) of the Aliyasantana Act, has to give way to the provisions of section 8 of the , which prescribed a different mode of succession. [414G H, 415 A] In this case, the property has been found to be undivided as between defendants 22, 23 and 24 and therefore, the position is that on the death of each one of the defendants his undivided interest would devolve on his heirs. [415B] The contention that there was a division in status on the filing of suit for partition or that as the mother was dead there were separate Kavarus is not correct. In the case of defendants 22, 23 and 24 who are male the Kavaru would mean the Kavaru of the mother of that male under section 3(b) (ii) of the Aliyasantana Act. The male by himself cannot be a Kavaru under the definition. By virtue of the Explanation to Section 35(2) a male member of a Kutumba is deemed to be a Kavaru for the purpose of Chapter VI, which deals with partition of Kutumba. In this case, the suit was filed by Parameshwari and her two children for the partition and separate possession of their share of the Kutumba property. When the suit is not filed by a male member the provisions of Chapter VI will not be applicable. The deemed provision is only applicable in considering the right to claim partition. Further 407 when the plaintiff filed the suit, there is no presumption that there was a division in status of all the Kavarus that constituted the Kutumba. The filing of the suit will no doubt result in the disruption of the joint status of the plaintiff/Kavaru, but the other Kavarus may continue to be joint in the Kutumba. Whether the other Kavarus continued to be joint in the Kavaru or not is a question of fact. [415E H, 416A] Jalaja Shedthi and Ors. vs Lakshmi Shedthi and Ors., ; , and Sundara Adappa and Ors. vs Girija and Ors. A.I.R. 1962 Mys. 72, explained and distinguished.

The appellant obtained a preliminary and then a final mort gage decree against the respondent and thereafter a personal decree for the debt remaining due to him 'after sale of the property mortgaged. The appellant applied for execution of the personal decree and thereupon the respondent sued for relief under section 36 of the Bengal Money lenders Act, 1940, by reopening the personal decree. In the suit relief for reopening the preliminary decree and final decree was not claimed. The personal decree was reopened in that suit and an instalment decree for a smaller amount passed instead, which was ultimately upheld by the High Court. The respondent failed to pay the instalments and the appellant applied for executing the decree. The respondent then filed another suit under section 36 of the Act for reopening the preliminary and final decrees. The Subordinate judge dismissed the suit holding that it wag barred as res judicata and the District judge on appeal affirmed that decision. But the 881 High Court in second appeal reversed those decisions and directed the preliminary and the final decrees be reopened and remanded the case to the trial court for passing a fresh preliminary decree. Hence this appeal with special leave. Held (per Kapur and Shah, JJ.), that section 36 of the Bengal Money lenders Act, 1940, contemplated the filing of one and not successive suits for the reopening of transactions including decrees and obtaining relief under the Act. If in such a suit, the borrower failed to seek the entire relief he was entitled to and abandoned his right to a part of the relief, he would be precluded from seeking that relief in another suit. The principle underlying r. 2 of 0. 2 of the Code of Civil Procedure as also the principle of res judicata applied to a suit under section 36 of the Act. Per Hidayatullah, J. When the respondent moved the executing court under section 36 of the Act he had not filed a suit but only an application. It was the duty of the court thereunder to give him full relief although he might not have asked for it. If the court failed in its duty and he filed a suit no question of waiver or constructive res judicata could at all arise. This was made clear by the non obstante words of sub sections (1) and (6) Of section 36 and the question that arose under the section was not s? much of the right of a party as of the duty of the court to give entire relief under the Act. The remedies enjoined by the Act were not exclusive of one another, either expressly or by necessary intendment, and were intended to give the widest possible relief to the borrowers. jadhunath Roy vs Kshitish Chandra Achariya Choudhury (1949) L.R. 76 I.A. I79 and joy Chand Lal Babu vs Kamalaksha Choudhury, (1949) L.R. 76 I.A. 131, referred to. Since the Act required that the decrees passed against the respondent had to be reopened, no provision of the Code of Civil Procedure or of equity could bar the suit, the former being expressly excluded and the latter made inapplicable by the substantive provisions of the Act.

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.

On 17.4.1962, 'A ' and his mother `B ' sold their agricultural lands measuring 3 acres and 25 acres respectively by executing two sale deeds in favour of Respondent No.1 and his father for Rs.10,000 and Rs.75,000 respectively. On the same day, the respondents vendees, taking Rs.500 back, executed two separate agreements in favour of 'A ' and 'B ' giving them the right of repurchase at any time after 17.4.1969 but before 16.4.1972. On 4.1.1963, 'A ' and 'B ' executed agreements of sale in favour of the appellant for a consideration of Rs.1,30,000 in all. The appellant paid Rs. 30,000 till April, 1963 to 'A ' and 'B '. The appellant latter paid Rs. 12,500 to 'A ' and Rs.87,500 to 'B ' and the registered deeds of agreement of sale were executed by 'A ' and 'B '. Again a sum of Rs.1,000 was paid to 'A ' and Rs. 4,000 was paid to 'B ' by the appellant. 'A ' and 'B ' handed over the agreements executed by the respondent No.1 and his father in favour of 'A ' and `B ', to the appellant. Respondent No. 1 's father died leaving behind his widow and son, respondent No.1. They refused to execute the reconveyance deed. The appellant in the Court of Subordinate Judge filed two suits for specific performance of the agreements of re conveyance, delivery of possession and mesne profits one suit against the respondent No.1, his 889 mother and 'A ' and the other one against the respondent No.1, his mother and 'B '. In the first suit the appellant deposited the amount of Rs.9,900 in the Court for payment to respondent No.1 and his mother and Rs.1,600 for payment to 'A ' and in the other suit he deposited Rs.74,500 for payment to respondent No.1 and his mother and Rs.9,000 to 'B '. The suits were decreed ex parte. As IV and `B ' did not rile any application for setting aside the ex parte decree, the decree passed against them became final. Respondent No.1 and his mother filed an application to set aside the ex parte decree and the Court set aside the decree and allowed them to contest the suits. The suits were decreed against the respondent No.1 and his mother against which they riled appeals in the High Court. The High Court setting aside the decree and judgments of the trial Court allowed the appeals riled by the respondent No.1 and his mother. The plaintiff aggrieved against the judgments of the High Court preferred the present appeals by special leave before this Court. Allowing the appeals, this Court, HELD:1.01. A combined reading of the documents Exhibits A.3, A.4, A.10 and A.11, leaves no manner of doubt that 'A ' and 'B ' had made an agreement to sell the properties in favour of the plaintiff and had also given a right to make the payment of such amount to respondent No.1 and his father which they were entitled under the terms and conditions of Exhibits A.3 and A.4, the agreements of resale made in favour of 'A ' and `B ' respectively. The plaintiff had filed a suit for specific performance of the agreement for sale impleading 'B ' and respondent No.1 and his father as defendants in one case and 'A ' and respondent No.1 and his father in another case and had also deposited the amount of consideration in the Court which clearly proved that the plaintiff was always ready and willing to perform his part of the contract. There was no ground or justification for the High Court to dismiss the suits filed by the plaintiff. [894 E G] 890 1.02.The High Court was wrong, in taking the view that it was only IV and 'B ' who were entitled to get reconveyance from respondent No.1 and his father and the plaintiff was not entitled to enforce such right by a suit for specific performance against respondent No.1 and his father. [894 H] 1.03.The High Court further erred in holding that the restriction of the period during which the plaintiff could have got the sale deeds executed in his favour was two years while 'A ' and 'B ' under Exhibits A.3 and A.4 could have exercised such rights within a period of three years and such difference in the period deprived the plaintiff of his right to enforce the agreement of specific performance. [895 B] 1.04.The plaintiff was exercising the right of specific performance of agreement of sale within the stipulated period of two years and it is unable to accept the reasoning of the High Court as to how the period of three years granted in favour of 'Al and `B ' in any manner affected or took away the right of the plaintiff to bring a suit for specific performance. [895 C] 1.05.Under the terms and conditions laid down in Exhibits A.3 and A.4 the right of repurchase was not given as personal to 'Al and `B ' and they were entitled to assign such right and the plaintiff having got such right under Exhibits A.10 and A.11 was entitled to enforce such contract by riling a suit for specific performance. The plaintiff in the present case also falls within the meaning of representative in interest as contemplated under Clause (b) of Section 15 of the . On such assignment, the plaintiff appellant acquired a valid title to claim specific performance. [896 C] Sakalaguna vs Munnuswami, AIR 1928 PC 174; VisHweshwar vs Durgappa, AIR 1940 Bombay 339 and Sinnakaruppa vs Karuppuswami, AIR 1965 Madras 506, approved. [895 F]

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.

Appeal No. 134 of 1951. Appeal from the Judgment and Order dated 20th November, 1950, of the Labour Appellate Tribunal, Lucknow, in Appeal No. 10 of 1950. Bakshi Tek Chand and Veda Vyasa (section B. Kapur, with them) for the appellants. Shaukat Hussain for the respondent. Bishen Singh for the intervener. December 17. The Judgment of the Court was delivered by DAS J. This appeal has been filed with the special leave granted by this Court on May 10, 1951. By the order granting such leave the appeal has been restricted to one point only, namely, " whether the Government of Uttar Pradesh had the power to extend the time for making the award ex post facto, i.e. after the time limit originally fixed therefore had expired. There is no dispute as to the facts. An industrial dispute having arisen between the appellant company and its employees, by Labour Department Notification No. 637 (ST)/XVIII 53 (ST)/50 dated February 18, 1950, the Governor of Uttar Pradesh was pleased, in exercise of the powers conferred by section 3 read with section 4 of the U. P. (U. P. Act No. XXVIII of 1947), to refer the said dispute to the Labour Commissioner. U. P., or a Conciliation Officer of the State Government nominated by him for adjudication on seven several issues specified therein and to direct the adjudicator to conclude the adjudication proceedings and submit his award to the Government not later than April 5, 1950. The Labour Commissioner by his letter No. I.M.R. 14 A nominated Shri M. P. Vidyarthi, Regional Conciliation Officer, U. P., as the adjudicator in the above dispute with a direction that be should submit his, award by March 25, 1950, and that if the proceeding, were not likely to be 441 completed within that time he should move the Government for extension of time at least a week before the specified date. By Notification No. 897 (ST)/XVIII 53 (ST)/50 dated March 20, 1950, the Governor was pleased to order that the adjudicator should also adjudicate on an additional issue formulated therein. By a further Notification No. 950 ' (ST)/XVIII 53 (ST)/60 dated March 24, 1950, the ,Governor was pleased to refer another additional issue for the decision of the adjudicator. The adjudicator did not make his award on or before April 55 1950, as directed by the first order of reference but made his award on April 13, 1950, that is to say, 8 days after the expiry of the time originally fixed for the making of the award. About thirteen days after. the I delivery of the award Labour Department Notification No. 1247 (ST)/XVIII 53 (ST)/50 was issued on April 26, 1950, whereby the Governor was pleased, in exercise of powers conferred by section 3 read with section 4 of the 'Act, to allow the adjudicator in the said dispute to submit his award by April 30, 1950. Thereafter by Notification No. 1447 (ST)/XVIII 53(ST)/50 dated August 1, 1950. , the Governor was pleased, in exercise of powers conferred by section 6 (2) read with sections 3 and 4 of the Act, to order that the award be enforced for a period of six months from the date of that order in the first instance and thereafter for such further period as might be prescribed. On August 17, 1950, the appellant company preferred an appeal against the award to the Labour Appellate Tribunal contending, inter alia, as follows: That the award dated April 13, 1950, is vitiated, having been given after the expiry of the time limit. (a) In its order dated February 18, 1950, para. (5), Government directed the adjudicator to conclude the proceedings and submit his award not later than the 5th April, 1950. The award is dated 13th April, 1950. The Government, however, tried to remedy 442 this defect by the issue of G.O. No. 1247 (ST) XVIII 53 (ST)/50 dated April 26, 1950, but under the law this is of no avail. To be a valid extension of date granted to the adjudicator, Government ,.,order should have been issued before the 5th April, 1950, to keep the authority of the adjudicator alive. "On the date the adjudicator made the award, i.e., 13th April, 1950, he had no power to make an award. " The Appellate Tribunal by its decision given on November 20, 1950, dismissed the appeal with the following observations on the point mentioned above. " With regard to the last point our view is that as the Government had the authority under section 6 of the Act to fix time limit for submitting an award it had also the necessary and incidental power to extend the time limit originally fixed, if it considered it necessary. The first proviso to section 3 empowers the Provincial Government to add more matters for adjudication. It is obvious that additions to the matters already referred to would or may take more time than what had been originally estimated, and so ,it may lead to an impossible position if the Government had no power to extend the time originally fixed by it, and it makes no difference, in our opinion, whether the time is extended before or after the expiry of the time originally limited. " The present appeal is against that decision of the Appellate Tribunal but limited to the question hareinbefore mentioned. Dr. Tek Chand appearing in support of this appeal urges that the adjudicator derived his authority under the order made by Notification No. 637, dated February 18, 1950. Section 6 (1) provides that the adjudicator " shall, within such time as may be specified, submit its award to the State Government. " The time specified by the order was " not later than April 5, 1950. " On the expiry of that time the adjudicator became functus officio and bad no power or authority to make the award. It is true that two 448 more issues were, by the two subsequent orders, added to the list of issues to be determined by the adjudicator but those issues, Dr. Tek Chand submits, did not involve any detailed investigation into facts necessitating any further time for making the award. Learned counsel contends that the U.P. Act under consideration has no provision empowering the State Government to enlarge the time for the making of ' the award by the adjudicator. 'In the circumstances, if the State Government took the view that the addition of those two issues would render the time ' specified in the original order inadequate for the purpose it should have cancelled the previous notification and issued a fresh notification referring all the issues to the adjudicator and specifying a fresh period of time within which he was to make his award. ' The State Government did not adopt that course. What it purported to do was to extend the time for making the award not only after the time originally fixed had expired but also after the award had, actually been submitted. The argument is that even assuming but not admitting that the State Government had the power to extend the time before the time had expired it certainly had no power to do so after the award had been made, for it was meaningless, urges Dr. Tek Chand, to extend the time to do an act which bad already been done. He refers us to the decision of the Judicial Committee in Baja Har Narain Singh vs Chaudhrain Bhagwant Kuar(1) where it was held that under the Code of Civil Procedure of 1882 the Court had no power to extend the time for making the award after the award had been filed. Section 514 of that Code enabled the Court to grant a further time and from time to time to enlarge the period for the delivery of the award but section 521 provided that no award shall be valid unless made within the period allowed by the Court. Their Lordships of the Privy Council took the view that it would not have been competent for the Court to extend the time after the award had been made, for once the award was made (1) L.R. 18 I.A. 55; 13 All. 300 444 and delivered the power of the Court under section 514 was spent and that although the Court had the fullest power to enlarge the time under that section as long as the award was not completed it no longer possessed any such power when once the award was made. in order to give full effect to section 521 the Judicial Committee had to confine the exercise of the power to extend the time given to the Court by section 514 to a point of time before the award had been made. This decision was relied upon by Mr. Justice Harring ton sitting singly on the Original Side of the Calcutta High Court in Shib Krishna Dawn & Co. vs Satish Chander Dutt(1) which was a case governed by the Code of 1908. The learned Judge overlooked the fact that paragraph 8 of the Second Schedule to the Code of 1908 which corresponded to section 514 of the Code of 1882 expressly conferred power on the Court to allow further time and from time to time, either before or after the expiration of the period fixed for the making of the award, to enlarge such period and that paragraph 15 which corresponded to section 521 of the Code of 1882 contained no provision that an award made out of time was ipso facto invalid and that consequently the reasoning underlying the decision of the Judicial Committee in the case of Raja Narain Singh vs Chaudhrain Bhagwant Kuar (2) had no application to the case before him, which was governed by the Code of 1908. Having regard to the difference in the language of the relevant provisions of the two Codes, the correctness of the decision of Harrington J. was doubted by Mr. Justice Chitty also sitting singly on the Original Side of the Calcutta High Court in Sri Lal vs Arjun Das(3). Eventually the, decision of Mr. Justice Harrington was dissented from by a Division Bench of the same High Court sitting in appeal from the Original Side in Jetha Lal Laxmi Chand Shah vs Amrita Lal Ojha(4), which held that the Court had power to enlarge the time for making the award even after the award had (1) I.L.R.38 Cal. (3) (2) 18 I.A. 55. (4) I.L R. ;42 C.W.N. 833. 445 actually been made. The learned Judges in the last mentioned case referred to and relied on the case of Lord vs Lee(1). Reference has also been made by learned counsel for the respondents to Dentron vs Strong (2) and toMay vs Harcourt (3). It will be noticed that all those English cases were decided under section 15 of the Common Law Procedure Act, 1854 (17 & 18 Vic , c. 125). It is true that in that English statute there was no provision similar to section 521 of our Code of 1882 which was noticed by the Privy Council in the case cited by Dr. Tek Chand; nevertheless section 15 of the English statute like section 514 of the Code of Civil Procedure of 1882 corresponding to paragraph 8 of the Second Schedule to the Civil Procedure Code of 1908 and like section 9 of the English Arbitration Act, 1889, corresponding to section 12 of the Indian Arbitration Act, 1899, empowered the Court, from time to time, to enlarge the time for making the award. There is a similar provision for enlargement of time in section 148 of our Civil Procedure Code of 1908. There is, however, no similar provision in the U. P. Section 6(1) of that Act peremptorily requires the adjudicator to submit his award to the State Government " within such time as may be specified " and not "within such time as may from time to time be specified. " It is significant that the only occasion when the State Government can, under the U. P. Act, specify a fresh period of time is when it remits the award for reconsideration under sub section (2) of section 6, for under subsection (3) the adjudicator is enjoined to submit his award, after reconsideration, within such period as may be specified by the State Government. Even in this case, under section 6(2) and (3) the State Government may in the order remitting the award specify a time within which the award, after reconsideration, must be filed. This gives power to the State Government to fix a fresh period of time to do a fresh (1) (2) (1874) L. R. 9 Q.B. 11 7, (3) I.P.R. 13 Q. B.D. 688, 446 act, namely, to reconsider and file the reconsidered award. It does not give the State Government any power to enlarge the time fixed originally for the initial making of the award. Therefore, except where ,the State Government under section 6 (2)remits the 'award for reconsideration it has no power even to specify a fresh period of time and much less a power to extend the time for the initial making of the award under section 6 (1). In exercise of the powers conferred by clauses (b), (c), (d) and (g) of section 3 and section 8 of the U. P. , the Governor was pleased to make an order embodied in Notification No. 615 (LL)/XVIII 7 (LL) 1951, dated March 15, 1951. The proviso to rule 16 of that order authorised the State Government to extend from time to time the period within which the Tribunal or the adjudicator was to pronounce the decision. These rules were, however, not in force at the time material to the case before us. Learned counsel appearing for the respondent and for the State of Uttar Pradesh have not referred us to any similar rule which, was in force in 1950. In view of the language of section 6 of the U. P. Act and in the absence of a rule like the proviso to rule 16 referred to above it must follow that the State Government had no authority whatever to extend the time and the adjudicator became functus officio on the expiry of the time specified in the original order of reference and, therefore, the award which had not been made within that time must be held to be without jurisdiction and a nullity as contended by Dr. Tek Chand. Learned counsel for the respondents refers us to the provisions of section 14 of the U. P. General Clauses Act, 1904, which provides that where by any Uttar Pradesh Act any power is conferred on the State Government then that power may be exercised from time to time as occasion requires. Sections 3 and 4 of the U. P. , certainly confer power on the State Government to refer disputes to an adjudicator for decision 447 and section 6 (1) may be read as empowering the State Government to specify the time within which the adjudicator to whom an industrial dispute is referred for adjudication is to submit his award. The combined effect of section 14 of the U. P. General Clauses Act and section 6(1) of the U. P. , it is contended, is that the adjudicator is enjoined to submit his report "within such time as may from time to time be specified " and that this being the position, the principles laid down in the English decisions referred to above must be held to be applicable to the present case. We are unable to accept this line of reasoning. Under section 14 of the U. P. General Clauses Act the State Government may exercise the power conferred on it by sections 3, 4 and 6, that is to say, it can from time to time make orders referring disputes to an adjudicator and, whenever such an order of reference is made, to specify the time within which the award is to be made. This power to specify the time does not and indeed cannot include a power to extend the time already specified in an earlier order. The legislative practice, as evidenced by the provisions of the different statutes referred to above, is to expressly confer the power of extension of time, if and when the legislature thinks fit to do so. There is no question of any inherent power of the Court and much less of the Executive Government in this behalf. Section 14 of the U. P. General Clauses Act does not in terms, or by necessary implication, give any such power of extension of time to the State Government and, therefore, the Respondents can derive no support from that section. Learned advocate for the Intervener, the State of Uttar Pradesh, draws our attention to section 21 of the U. P. General Clauses Act, 1904, and contends that the order of April 26, 1950, should be taken as an amendment or modification, within the meaning of that section, of the first order of February 18, 1950. It is true that the order of April 26, 1950, does ex facie purport to rectify, the order of 448 February 18, 1950, but, in view of the absence of any distinct provision in section 21 that the power of amendment and modification conferred on the Government may be so exercised as to have retrospective operation the order of April 26, 1950, viewed merely as an order of amendment or modification, cannot, by virtue of section 21, have that effect. If, therefore, the amending order operates prospectively, i.e., only as from the date of the order, it cannot validate the award which bad been made after the expiry of the time specified in the original order and before the date, of the amending order, during which period the adjudicator was functus officio and had no jurisdiction to act at all. We do not think the respondents can derive any support from section 21 of the U. P. General Clauses Act. The result, therefore is that this appeal must be allowed and the award must be declared to be null .and void and we order accordingly. In the circumstances of this case we make no order as to costs. Appeal allowed. Agent for the intervener: C. P. Lal.

On February 18,1950, the Governor of Uttar Pradesh referred an industrial dispute to the Labour Commissioner or a person nominated by him with the direction that the award should be submitted not later than April 5, 1950. The award, however, was made on April 13, and on April 26, the Governor issued a notification extending the time for making the award up to April 30: Held, (i) in view of the language of section 6 of the U. P. , and in the absence of a provision like that contained in the proviso to r. 16 of the Governor 's notification dated in March 15, 1951, the State Government had no authority whatever to extend the time, and the adjudicator became functus officio on the expiry of the time fixed in the original order of reference and the award was therefore one made without jurisdiction and a nullity. (ii)Section 14 of the U. P. General Clauses Act, 1904, did not in terms or by necessary implication give any such power of extension of time to the State Government. (iii)Though the order of April 26 did exfacie purport to modify the order of February 18, in view of the absence of any distinct provision in section 21 of the U. P. General Clauses Act, 1904, that the power of amendment and modification conferred on the State Government may be so exercised as to have retrospective operation, the order of April 26, viewed merely as an order of amendment or modification, cannot, by virtue of section 21, have retrospective effect. Raja Har Narain Singh vs Chaudhrain Bhagwant Kuar (L.R. 18 I.A. 55) applied. Jetha Lal Lakshmi Chand Shah vs Amrita Lal Ojha (I.L.R. , Lord vs Lee (L.R. 3 Q.B. 404), Dentron vs Strong (L.R. 9 Q.B. 117), May vs Harcourt (L.R. 13 Q.B.D, 688) distinguished. 57 440

Through this petition filed under Article 32 of the Constitution the petitioner prayed for the issue of a writ in the nature of quo worranto to the respondent K.P. Tewari who had been appointed in November, 1984 as a Minister of the Government of Uttar Pradesh under Article 164(1) of the Constitution by the Governor of the State of Uttar Pradesh even though Shri Tewari was not a member of either House of the State Legislature. The petitioner contended (i) that in the judgment of Har Sharan Verma vs Shri Tribhuvan Narain Singh, Chief Minister of U.P. and Anr., (AIR where it had been held that the appointment of a person as Chief Minister could not be challenged on the ground that he was not a member of the Legislature of a State at the time of appointment, this Court had not considered the effect of the amendment of Article 173 (a) of the Constitution by the Constitution (Sixteenth) Amendment Act, 1963; (ii) that after the amendment of Article 173 of the Constitution by the Constitution (Sixteenth) Amendment Act, 1963 it was not open to the Governor to appoint a person who was not a member of the Legislature of the State as a Minister and that Article 164(4) of the Constitution would only be applicable to a person who had been a Minister but who ceased to be a member of the Legislature for some reason such as the setting aside of his election in any election petition; and (iii) that the debates of the Constituent Assembly suggested that a person should be a member of the Legislature at the time of his being chosen as a Minister. Dismissing the petition, ^ HELD: (I) By the Sixteenth Amendment clause (a) of Article 173 of the Constitution is amended by the addition of a clause which requires a candidate at an election to the Legislature to make and subscribe before some person authorised in that behalf by the Election Commission an oath or affirmation 548 according to the form set out for the purpose in the Third Schedule to the Constitution. Earlier it was only after a person was elected or nominated as a member of the Legislature of a State that he was required by Article 188 of the Constitution to make and subscribe an oath or affirmation before taking his seat as such member in the form mentioned in the Third Schedule to the Constitution. The above requirement has to be complied with by an elected or nominated member of the State Legislature even after the Sixteenth Amendment. [550H; 551A; E;H] (2) The object of introducing the amendment in clause (a) of Article 173 of the Constitution was to provide that not only before taking his seat shall a member of the Legislature take the oath prescribed by the Third Schedule as required by Article 188 of the Constitution but that even before standing for election, a candidate must take the same oath. This is to ensure that only a person having allegiance to India shall be eligible for membership of the Legislature. [552C D] (3) Article 177, ensures the implementation of the constitutional principle contained in clause (2) of Article 164 of the Constitution which provides that the Council of Ministers shall be collectively responsible to the Legislative Assembly of the State. A Minister in a State under our Constitution discharges that responsibility by virtue of the provisions contained in Article 177 of the Constitution which enables him to participate in the proceedings of the Legislative Assembly even though he may not be its member with the right to vote.[553F;G] (4) It does not appear that the debates of the constituent Assembly suggest that a person shall be a member of the Legislature at the time of his being chosen as a Minister. An amendment was proposed to that effect in the Constituent Assembly to the draft Constitution but was not accepted: [553H; 554A C] (5) The fear expressed by the petitioner that a person who does not owe his allegiance to the Constitution and is not willing to uphold the sovereignty and integrity of India would have an opportunity to become a Minister if he is not required to become a member of the Legislature after having made and subscribed an oath or affirmation as prescribed by Article 173(a) of the Constitution is not well founded because under clause (3) of Article 164 of the Constitution a Minister for a State is required to take an oath of allegiance to the Constitution and to undertake to uphold his office in the from prescribed in the Third Schedule. [554C E] (6) No material change has been brought about by reason of the amendment of Article 173(a) of the Constitution in the legal position that a person who is not a member of the State Legislature may be appointed as a Minister subject, of course, to clause (4) of Article 164 of the Constitution according to which a Minister who for any period of six consecutive months is not a member of the Legislature of the State shall at the expiration of that period cease to be a Minister. [554H; 555A] (7) By enacting Article 164(4) of the Constitution the makers of the Constitution provided for a situation where a Minister may lose a seat in the 549 Legislature after appointment as the result of an election petition for example A Or may not be a member when he is appointed.[555B C] Har Sharan Verma vs Shri Tribhuvan Narain Singh, Chief Minister of U.P. and Anr., ; , Constitution Assembly Debates dated June 1 1949, Vol. VIII at p. 521 and Har Sharan Verma vs Chandra Bhan Gupta & Ors. , A.l.R. 1962 Allahabad 30], 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]

The appellant Board passed a special resolution on September 28, 1956, imposing water tax in Hapur and a notification by the Uttar Pradesh Government was published in the Uttar Pradesh Gazette under section 135(2) of the U.P. Municipalities Act (2 of 1916) notifying the resolution. Fifteen house owners of Hapur who received notices from the appellant Board for the payment of the tax petitioned to the High Court under article 226 ,of the Constitution and asked for a writ or order preventing the appellant Board from realising the tax. The main objections were (a) that the resolution of the appellant Board framing the proposal was not pub lished in a local paper of Hapur published in Hindi and (b) that the rules framed for the imposition of the tax did not accompany the resolution which was affixed on the notice board at the office of the appellant Board in purported compliance with the requirements for publication. The imposition was also challenged on the ground that articles 14 and 19 of the Constitution were violated. A single judge of the High Court held that the tax was illegal inasmuch as the mandatory requirements of the Municipalities Act were not complied with by the appellant Board while imposing the tax and that section 135(3) of the Act (which cures all defects in the imposition of the tax by making the notification of Government conclusive evidence of the legality of the imposition) was ultra vires article 14 of the Constitution because it created a bar against proof and left no remedy to the tax payers thereby making a discrimination between them and other litigants. He further held that the sub section by making Government the sole judge of compliance with the Act conferred judicial power on Government contrary to the intendment of the Constitution. The appellant Board appealed under the Letters Patent. The Divisional Bench upheld the order of the single judge. The case was however certified as fit for appeal under article 133 and the Board appealed to this Court. The contentions raised in appeal were: (i) s.135(3) shuts out all ,enquiry into the procedure by which a tax had been imposed and therefore suffered from excessive delegation of legislative function. (ii) The tax had not been validly imposed a there had been non observance of mandatory provisions; (iii) section 135(3) was discriminatory; and (iv) the sub section was also bad because it conferred judicial functions on the State Government. HELD : Per Gajendragadkar, C.J., Hidayatullah, Shah and Sikri. JJ. (i) The rule of conclusive evidence in s.135(3) does not shut out all enquiry by courts. There are certain matters which cannot be established by a notification under s.135(3). For example no notification can issue unless there is a special resolution under section 134. The special resolu 951 tion is a sine qua non for the notification. Again the notification cannot authorise the imposition of a tax not included in section 128 of the Municipalities Act. Neither the Municipal Board nor the State Government can exercise such power. What the section does is to put beyond question the procedure by which the tax is imposed, that is to say the various steps taken to impose it. A tax not authorised, can never be within the protection afforded to the procedure for imposing taxes. Such a tax may be challenged, not with reference to the manner of imposition but as an illegal impost. [958 A D] (ii) There can be no doubt that some of the provisions of sections 131 to 134 of the Act are mandatory. But all of them are not of the same character. In the present case, as in Raza Buland Sugar Co. Ltd. and in Berar Swadeshi Vanaspati, the provisions not observed were of a directory character and therefore the imposition had the protection of section 135(3). [958 H] Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur. ; and Berar Swadeshi Vanaspati vs Municipal Committe, Committee Sheogaon & Anr. , relied on. (iii) Mandatory provisions must be fully complied with, and directory provisions should be substantially complied with. In either case the agency for seeing to this compliance is the State Government. It is hardly to be expected that the State Government would not do its duty or that it would allow breaches of the provisions to go unrectified. In cases of minor departure from the letter of the law especially in matters not fundamental, it is for the Government to see whether there has been substantial or reasonable compliance. Once Government condones the departure, the decision of the Government is rightly made final by making the notification conclusive evidence of the compliance with the requirements of the Act. [959 H 960 D] (iv) The power to tax belongs to the State Legislature but is exercised by the local authority under the control of the State Government. It is impossible for the State Legislature to impose taxes in local areas because local conditions and needs must very. The power must be delegated. The taxes however are predetermined and a procedure for consulting the wishes of the people is devised. But the matter is not left entirely in the hands of the Municipal Boards. As the State Legislature cannot supervise the due observance of its laws by the municipal Boards power is given to the State Government to check their actions. The proceedings for the imposition of the tax must come to a conclusion at some stage after which it can be said that the tax has been imposed. That stage is reached, not when the special resolution of the Municipal Board is passed but when the notification by Government is issued. After the notification all enquiry must cease. This is not a case of excessive delegation unless one starts with the notion that the State Government may collude with the Municipal Board to disregard deliberately the provisions for The imposition of the tax. There is no warrant for such a supposition. The provision making the notification conclusive evidence of the proper imposition of the tax is conceived in the best interest of compliance of the provisions by the Board and not to facilitate their breach. [960 F 961 E] Excessive delegation is most often found when the legislature does not perform all the essential legislative functions and leaves them to some other agency. The Legislature here performs all essential functions in the imposition of the tax. The selection of the tax for imposition in a municipal area is by the legislative will expressed in section 128. Neither the Municipal Board, nor the Government can go outside the list of taxes therein included. The procedure for the imposition of the tax is also, laid down 952 by the Legislature for the Municipal Board to follow and the State Government is there to ensure due observance of that procedure. in view of all this there was no excessive delegation or conferral or legislative functions on the appellant Board or the State Government. [961 F 962 C] (v) There are numerous statutes including the Evidence Act, in which a fact is taken to be conclusively proved from the existence of some other fact. The law is full of fictions and irrebuttable presumptions which also involve proof of facts. The tax payers in the Municipality are allowed to object to the proposal for the tax and the rules and to, have their objections considered. They cannot be allowed to keep on agitating. Section 135(3) which only concludes objections against the procedure followed in the imposition of the tax cannot be said to be discriminatory and viola tive of article 14. [962 D H] (vi) The objection that the impugned sub section involves the exercise of judicial functions not open to the legislature is wholly erroneous. The subsection only shuts out further enquiry and makes the notification final. [962 H] Per Wanchoo, J. (dissenting) (i) Section 135(3) bars enquiry by courts into all procedural provisions relating to imposition of taxes and therefore it bars enquiry into any matter covered by section 131 to section 135(1) of the Act. It cannot be read down as barring enquiry only into some procedural provisions i.e. from section 131 to section 133 and not into the other procedural provisions i.e. section 134 and section 135(1). [968 D] Section 135(3) is not a rule of evidence; it is a substantive provision which lays down in effect that once a notification under section 135(2) is issued it will be conclusively presumed that the tax is in accordance with all the procedural provisions with respect to the imposition thereof. [969 E] Ishar Ahmad Khan vs Union of India, [1962] Supp. 3 S.C.R. 235, referred to. The effect of section 135(3) is that the procedural provisions are given the go by in the matter of imposition of tax and as soon as a notification under section 135(2) is shown to the court, the court is helpless, in the matter even though none of the provisions of section 131 to section 135(1) may have been complied with. [969 H] (ii) In the field of local taxation relating to municipal boards and district boards and similar other bodies there are reasons for delegating :fixation of rate to such bodies subject to proper safeguards. This is exactly what has been done under the Act subject to the safeguards contained in sections 131 to section 135(1). If those safeguards are followed the delegation would be proper delegation and could not be challenged as ultra vires on the ground of excessive delegation. But if the legislature after laying down with great care safeguards as to the imposition of tax including its rate makes a blanket provision like section 135(3), which at one stroke does away with all those safeguards and this is what section 135(3) has done in the present case the position that results is that there is delegation of even the essential function of fixing the rate to the subordinate authority without any safeguard. Such a delegation would be excessive delegation and would be ultra vires. [972 D F] (iii) Section 135(3) inasmuch as it makes the delegation contained in sections 128 to 135(2) excessive must be severed from the rest of the sections which are otherwise a proper delegation of legislative authority and should be struck down on the ground of excessive delegation. [973 B] 953

% 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.

A combined reading of sections 42(4), 78(1)(A)(a)(i), 79(1) and (3) of the Bombay Industrial Relations Act, 1946, and r. 53 of the Rules made under the Act, shows that an application under section 79(1) to the Labour Court, in respect of a dispute falling under section 78(1)(A)(a)(i) must be made within 3 months of the arising of the dispute; and that the dispute would be deemed to have arisen if, within a period of 15 days from the receipt of a letter of approach under section 42(4) by the employer, or within such further period as may be mutually fixed by the employer and the employee, no agreement is arrived at in respect of the change desired by the employee. In the present case, the letter of approach under section 42(4) claiming that his age was only 56 years and so he should not be retired, was sent by the employee (respondent) to the employer (appellant) on February 13, 1973. Since there was no response, the respondent requested the Labour Commissioner on March 17, 1973, to intervene. The Labour Officer of the appellant appeared before the Labour Commissioner and took adjournment in order to compromise the dispute. As no compromise was arrived at, the respondent filed his application under section 78(1)(A)(a)(i) read with section 79(1) before the Labour Court on June 7, 1973. The Labour Court and on appeal the Industrial Court, held, that the period of 15 days from the date of the receipt of the letter of approach expired on February 28, 1973; that the dispute between the parties should be deemed to have arisen at the latest on March 1, 1973; that the application under section 79(1) to the Labour Court should have been filed within 3 months of that date, that is, on or before June 1, 1973; and that, therefore, the application filed on June 7, 1973, was barred under section 79(3)(a). The High Court, however took the view that by reason of the Labour Officer of the appellant asking for adjournment for compromising the matter on or after March 17, 1973, there was an extension of the period to some date beyond March 17, 1973 by mutual agreement between the parties, and that therefore. the application filed on June 7, 1973, was within 3 months of the arising of the dispute. In appeal to this Court, the appellant contended that (1) there was no valid extension of the period for settlement as such extension should have been fixed before the expiry of the initial period of 15 days, and (2) no period was mutually fixed between the parties. Allowing the appeal on the second ground, ^ HELD: (1) The further period for arriving at a settlement under r. 53(2) can be mutually fixed between the parties even after the expiration of the initial period of 15 days; and in such a case, the dispute would be deemed to have arisen only on the expiration of the extended period if within that time no settlement is arrived at. [824 G] (a) There is nothing in the rule which provides that the further period should be fixed before the expiration of the initial period. The words in the rule "within 15 days of the receipt of the application by the employer or within such further period as may be mutually fixed between the employer and the employee" are sufficiently wide to cover a situation where the further period is fixed after the expiration of the initial period. [824 B.C.]. 819 (h) The object of the rule is that, as far as possible, the employer and the employee should arrive at an agreement by negotiation in respect of the change desired by the employee and it is only where such an agreement is not possible that the employee should approach the Labour Court for adjudication. It is possible that even after the expiry of the initial period, the parties may arrive at a settlement and such settlement should not be discouraged by compelling the employee to apply to the Labour Court within 3 months of the expiration of the initial period of 15 days. [824 D F] [Obiter: The further period cannot, however, be fixed after 3 months have elapsed from the expiration of the initial period of 15 days and the application has become barred under section 79(3)(a).] [825 B] (2) But, it cannot be said in the present case that the further period was mutually fixed by the appellant and the respondent before the Labour Commissioner. [825 C] (a) There must be a specific period agreed upon between the parties but there is no reference to any specific period in the present case. [825 E] (b) Even on a liberal view that the Labour Commissioner granted the adjournment to the Labour Officer of the appellant for arriving at a settlement up to a specific date implying a specific period, there is no averment in the application under section 79 to the Labour Court, that such specific period was mutually fixed between the parties, nor even a remote suggestion to that effect. It is not even stated that the respondent consented to the adjournment as to enable an inference of mutual agreement to be made. [825 EF] (c) In fact, it was not the case of the respondent that any further period was mutually fixed to save the application from the bar of limitation. On the contrary, he prayed for condonation of delay, but the Labour Court has no power to condone the delay.

The appellants were appointed under an agreement in writing by the Governor General as agents for purchasing and supplying ghee required for the Army personnel with effect from October 1, 1937. After the outbreak of the World War 11 there was an enormous increase in the demand of ghee by the Government and the agreement was revised by mutual consent on June 20, 1942, and the original rates of payment were scaled down. On December 6, 1943, the appellants made a representation to the Government for enhancing the rates as conditions had become 794 abnormal. According to the appellants they were given assu rances that their, claims would be favourably considered by the Government and relying on these assurances they continued to supply ghee in quantities demanded by the Government incurring heavy extra expenditure. The Government did not enhance the rates and the matter was referred to arbitration under the agreement of 1937. Before the arbitrators the appellants contended that the agreement Of 1942 was not binding upon them and claimed payment on the basis of the agreement Of 1937; and in the alternative claimed payment on the basis of increased rates of mandi charges, additional buying remuneration and contingency charges. These claims were resisted by the Government and it was denied that any assurances were given by the Government to enhance the rates. The arbitrators incorporated the points of contest in the form of issues. By an award dated May 2, 1954, the arbitrators rejected the primary claim of the appellant holding that the agreement of 1942 was binding. On the alternative claim they awarded a sum of money for loss suffered by the appellants on account of establishment and contingencies, and another sum for mandi and financing charges. The award was filled in the Court of the Commercial Sub judge, Delhi, and the Government applied to have it set aside. The Sub judge held that though there was an error on the face of the award in ordering the payment of additional remuneration and financing and overhead charges the award could not set aside as specific questions had been expressly referred for adjudication to the arbitrators and the award was binding on the parties. On appeal the High Court held that no specific questions of law had been referred to the arbitrators and that the award was vitiated by errors apparent on the face of the award. Held, that the award was liable to be set aside because of an error apparent on the face of the award. An arbitration award may be set aside on tile ground of an error on the face of it when the reasons given for the decision, either in the award or in any document incorporated with it, are based upon a legal proposition which is erroneous. But where a specific question is referred, the award is not liable to be set aside oil the ground of an error on the face of the award even if the answer to the question involves an erroneous decision on a point of law. In the present case there was a general reference and not a specific reference on any question of law. Champsey Bhara and Co. vs Jivraj Balloo Spinning & Weaving Co., Ltd., L. R. 50 1. A. 324, In the matter of a arbitration between King and Duveen L.R. 1913 2 K.B.1). 32, and Government of Kelantan vs Duff Development Co., Ltd., L. R. , relied on. The contract provided for payment of charges at rates specified therein and the arbitrators could not ignore the express covenants between the parties and award amounts not agreed to be 795 paid. A contract is not frustrated merely because the circumstances in which it was made are altered. The courts have no general power to absolve a party from the performance of his part of the contract merely because its performance has become onerous on account of an unforseen turn of events. Constantine 's case , Hirji Mulji vs Cinemas Ltd. Steamship Co., Ltd., , British Movietonews Ltd. vs London and District Cinemas, L. R. and Parki son &Co., Ltd. vs Commissioners of Works. (1949) 2 K. B. D. 632, referred to. British Movietonews Ltd. vs London and District Cinemas Ltd. (1951) 1 K.B.D. 190, disapproved. The award which ignored the express terms of the contract prescribing the remuneration payable could not be justified as proceeding upon the basis of quantum meruit. Compensation quantum meruit may be awarded for work done or services rendered only when the price thereof is not fixed by a contract. For work done or service rendered pursuant to the terms of a contract, compensation quantum meruit cannot be awarded where the contract provides for the consideration payable in that behalf.

The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly. The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government. The Government appealed against the said award to the High Court. During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated. Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal. If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it. Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed. The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly. When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated. In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed.

No. 1 of 1960. Under article 32 of the Constitution of India for the enforcement of Fundamental Rights. A. V. Viswanatha Sastri, 'K.K. Jain and Ganpat Raj, for the Petitioners. C. K.Daphtary, Solicitor General of India, V.A. Saiyed Mohamad and T. M. Sen, for the Respondents. August 8. The Judgment of the Court was delivered by SHAH, J. Controls on exports and imports imposed as an emergency measure during the last war in respect of certain commodities were kept alive after the lapse of the Defence of India Rules by the Emergency Provisions (Continuance) Ordinance, 1946 which was later replaced by the Imports and Exports (Control) Act,. 1947 ( 18 of 1947), by s.(3) of the Act, the Central Government was authorised by order published in the Official Gazette, to provide for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions if any, as may be made by or under the order, inter alia the import, export, carriage xxx xxx of goods of any specified description. By sub sec(2) of s.3. , it was provided that all goods to which an order under sub s.(1) applied shall be deemed to be goods of which the import or export has been prohibited or restricted under s.19 of the Sea Customs Act. Exercising authority under s.3 of the Imports and Exports (Control) Act, 1947, the Central Government issued notifications from time to time prohibiting, restricting or otherwise controlling the export and import of diverse commodities. By a consolidated order dated 75 December 7, 1955, known as the Imports (Control) Order, 1955, restrictions on the import of certain goods were imposed by el. 3 of the said order. By el. 3, it was provided that save as otherwise, provided in the order, no person shall import any goods of the description specified in Schedule I, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government, or by an officer specified in Schedule II. For implementing the scheme of controlling imports, diverse provisions were made in cls. 3 to 11 of the Imports (Control) Order. The Government of India makes known its import policy every six months by issuing in the Government Gazette the procedure and the conditions for eligibility of licences and for the grant of import licences. This policy is published for the use of the public in a hand book called the "Import Trade Control Policy". The policy is obviously framed having regard to requirements for home consumption of commo dities to be imported, the foreign currency situation and the economy of the country as a whole. By para 51 of the Import Trade Control Policy for the licensing period October 1958 to March 1959, a scheme of "Export Promotion" permitting imports depending upon the value of specified varieties of goods exported by the impro per was devised. It was recited in that paragraph that in certain items, the inter relation between imports and exports was direct and intimate and the ability to export some manufactured goods depended largely on the facility with which the exporter or the manufacturer could procure the basic raw materials required in the manufacture. With a view to promoting the export of such goods, a scheme was therefore devised for the grant of special import licences to 76 replace the imported raw material component of the product exported or to provide an incentive for larger exports. Artsilk yarn and artsilk fabrics were covered by the Export Promotion Scheme. In Appendix 42, cl.2 of the Import Trade Control Policy. for October 1958 to March 1959, it was stated: "With a view to stimulate exports of Indian artsilk fabrics, sarees, garments, hosiery and other artsilk manufactures, it has been decided to grant import licences at the ports under the Export Promotion Scheme for the import of permissible varieties of artsilk yarn to actual exporters upto the following percentage of the rupee equivalent of foreign exchange earned on the basis of the f. o. b. value of The artsilk goods exported, or the value assessed by customs, whichever is less. (i) 66 2/3 per cent in the case of Indian artsilk sarees, (ii) 100 per cent in the case of other Indian artsilk fabrics including Indian artsilk hosiery goods. " The petitioners, M/s. Ram Chand Jagadish Chand are a firm engaged in. business as exporters and importers. In the period October 1958 to March 1959, the petitioners exported to Singapore, Bush Shirt Cloth, Glass Nylon, Art silk Piece Goods and Superior Class Nylon of the total C.I.F. value of Rs. 7,10,817/ , and relying upon cl. (2) of the Export Promotion Scheme as outlined in the Import Trade Control Policy, called upon the Controller of Imports to issue licences for artsilk yarn for Rs. 4,04,218.62 np. and Rs. 3,03,490.93 np. respectively for the months of February and 77 March 1959. The petitioners claimed that they had, pursuant to the Export Promotion Scheme, exported artsilk goods to Singapore and had earned net foreign exchange of the value of Rs. 7,07,709.55 np. and that they were entitled to import licences for artsilk yarn of that amount. In September 1959, the petitioners were informed by the Assistant Controller of Imports and Exports that a consolidated licence for the months of February and March, 1959 was granted to them for import of artsilk goods of the value of Rs. 3,19,354/ . It appears that the Government of India, having come to learn of certain malpractice by the importers of artsilk yarn, while suspending the Export Promotion Scheme as from March 9, 1959, announced that applications which were pending with the port licensing authorities will be scrutinised by a Committee and in May 1959, the Government of India appointed a Committee for verification of the value of good exported. The petitioners appeared before the Committee and furnished documentary evidence in support of their claim for 100% of the rupee equivalent of the cloth exported. The Committee accepted as reasonable the rates at which the exported " 'Flock Printed Nylon Dyed" cloth was exported by the petitioners, but in their view, the rates at which ",Bush Shirt Cloth" was exported could not be accepted as reasonable and for the purpose of the Export Promotion Scheme, the value of that cloth should be computed at the rate of Re. 1.50 np. per yard of 36" width. The Controller of licences accepted the recommendation of the Committee and issued to the petitioners an import licence for Rs. 3,19,354/ only. The petitioners after making, an in fructuous demand for a licence for the value of the goods exported, filed this petition under article 32 of the Constitution for a writ or direction in the nature of mandamus directing the Chief Controller of Imports and ,Exports to Avant to the petitioners an import. 78 licence for the months of February and March 1959 equivalent to 100% of the goods exported by them in relevant previous months and in the alternative, to issue a writ of certiorari calling for the records and proceedings resulting in the issue of a licence of the value of Rs. 3,19,354/ and for an order quashing the same and granting to the petitioners a licence for the full amount claimed by them. The petitioners submitted that the Controller of licences had arbitrarily reduced the value of their import licence under the Export Promotion Scheme and had thereby unlawfully infringed their fundamental right to carry on business. They also claimed that the Controller was bound to grant licence to import artsilk yarn under the Export Promotion Scheme for the full value of the goods exported by them, and in failing to do so, had practiced discrimination against the petitioners, because several other importers of artsilk yarn who were the petitioners ' rivals in trade during the identical period were given licences for amounts "ranging between 85 and 100 per cent of their exports". In paragraph 22 of their petition, the petitioners submitted a table setting out the names of eight such exporters, the amount and the percentages granted to such exporters. The fundamental right of a citizen to carry on any occupation, trade or business under article 19 (1)(g) of the Constitution is not absolute : it is subject to reasonable restrictions which may be imposed by the state in the interests of the general public. The right of the State to impose controls in the larger interest of the general public on imports has accordingly not been denied: nor has the authority of the 'State to issue the Imports (Control) Order, 1955 in exercise of the powers conferred by the Imports and Exports (Control) Act providing for imposition of restrictions by permitting import of certain goods only in accordance with,,licences or customs permits granted by the 79 Central Government,, been challenged. It was suggested. somewhat faintly by Mr. Viswanatha Sastri on behalf of the petitioners that the power granted under c 1. (3) of the Imports (Control) Order, 1955 was uncanalised power in the matter of fixing percentages and to that extent, the authority imposed an unreasonable restriction on the freedom to carry on business. But the authority to grant or refuse to grant licences is conferred upon high officers of the State and the grant of licences is governed by the Import Trade Control Policy which is issued from time to time and detailed provisions are made in the Imports (Control) Order getting 'out the grounds on which licences may be refused, amended, suspended or cancelled (see cls. 6 to 9 of the Order). Provision to afford a bearing to the licence before action is taken under cls. 6 to 9 is also made. It cannot therefore be said that the power conferred is uncanalised or arbitrary. The argument seriously canvassed by counsel for the petitioners was that relying upon cl. 2 of appendix 42 of the Import Trade Control Policy, the petitioners had exported artsilk fabrics, and had earned foreign currency, and they could not, except for good and adequate reasons, be deprived of import licence to the full extent of 100% of the value of the artsilk fabrics exported. The petitioners say that they purchased the goods from various merchants and by exporting those goods earned foreign exchange which was duly credited to their account by their bankers, and in reducing the import licence to approximately 45% of the value of the goods exported, the State has, by executive order, imposed an unreasonable restriction upon their right to carry on business. But under el. 2 of the Export Promotion Scheme as outlined in appendix 42 in so far as it related to licences for import of artsilk yarn, the Controller of Imports is authorised to grant licences upto the percentages specified in that clause : there is no right thereby 80 created to the exporter to obtain a licence for the full value of the commodity exported. Under el. 2 of the, scheme the Controller has the power to grant a licence for any amount upto 100% of the rupee equivalent of the foreign exchange earned on the basis of the F.O.B. value of the goods exported. By that clause, the exporter is not given the option to claim an import licence for any amount not exceeding the value of the foreign exchange earned by export of goods. The clause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed. claimed by the exporter. The power is plainly discretionary. It is true that the discretion has to be exercised reasonably and not arbitrarily. The, licensing authority would normally issue an import licence for 100% of the value of the goods exported, but having regard to special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State, import licences for a smaller percentage may be granted to the exporters. But by the use of the expression "upto the following percentage of the rupee equivalent" power to fix arbitrarily a percentage of the value of the goods exported for awarding an import licence is not granted. In granting a licence to the petitioners for Rs. 3,19,354/ , has the authority been exercised arbitrarily or is it supported by some reasonbly discernible principle? Ram Murth Sharma, Deputy Chief Controller of Imports and Exports in his affidavit stated that of the Export Promotion Scheme wrongful advantage was taken by some exporters of artsilk fabrics : it was found by the Government of India that invoice values or artificial silk fabrics were inflated. by the exporters by more than 100% of the value with the object of exporting "speculative" commodities like artificial 81 silk yarn. , Sharma stated that ",as against 381 thousand yards of artificial silk fabrics exported during the period January June, 1957 at a value of about Rs. 456 thousand i.e., at about Rs.2 0 L. per yard the merchants sought to show the rise in price for the export of such goods during October March 1959 at Rs. 2 9 0 per yard so that for 986 thousand yards exported, the invoice value shown was 28,799 thousand rupees, even though the actual price of the goods in the wholesale market had not at all risen to that extent between those two periods. The index number of wholesale price in India in respect of "silk and rayon" fabrics during the month of June 1957 was 85 and during the month of March 1959 it rose to 95.7 only thus showing a rise of about 11%. Against this rise, the rise in the price invoiced by the exporters showed a rise of over 125% during the span of the same period. This will clearly show that the aforesaid rise was shown by merchants merely with a view to get licences for higher value for the import of speculative item like "Art Silk Yarn. " Relying upon this evidence, counsel for the Union contended that this perversion of the Export Promotion Scheme had serious repercussions on the foreign exchange position, and the scheme was suspended by notification dated March 6, 195 , and government directed that the pending applications for import licences for artsilk yarn be scrutinised by a Committee appointed in that behalf. The Committee scrutinised the cases of 1106 parties including the petitioners, and the petitioners were given a, licence for Rs. 3,19,354/ , and by reducing the value of ' the import licence, no fundamental right of the petitioners under article 19 of the Constitution was infringed. A scrutiny of the applications for licences in view of the misuse of. the Export Promotion Scheme and granting of licences on the result of such scrutiny cannot be regarded as imposing an 82 unreasonable restriction. The State is as much concerned with earning foreign exchange as maintaining and consolidating its export trade. if a large quantity of goods be dumped at excessive prices foreign markets to meet a temporary demand in the ultimate result the export trade of the State may suffer. If taking advantage of temporary demands in the foreign market, the exporters charge excessive prices which axe not commensurate with reasonable profits on the real value of the goods and seek to invest the profits earned, in speculative commodities thereby endangering the internal economy of the country, the State may be justified in taking steps to prevent the exporters from obtaining advantage of such excessive profits by refusing to afford facilities for importing goods to the exporters who seek to rely upon the export Value of the goods at inflated rates. , The affidavit of Sharma shows that in a number of cases,, the importing firm in the foreign country was only a " 'sister concerns of the exporting house, and the exporters adopted the expedient of inflating the price with the object of adjusting the excess value received by them. It appears therefore that some exporters under cover of the Export Promotion Scheme by inflating the prices were found not only to import speculative varieties of goods for very much larger values than the real prices justified, but were suspected by the authorities even to repatriate foreign assets without disclosing the same to the State as required by law. It cannot therefore be said that the power granted to the licensing authorities to grant licences only upto the maximum spec ified in el. 2 of the Scheme is by itself an unreasonable restriction; nor will the notification directing scrutiny of all applications amount to imposing an unreasonable restriction. Counsel for the petitioners however submitted that the Controller had placed no evidence on the record that the petitioners have, for the goods 83 purchased by them in the Indian market, not paid M. 7,67,709.55 np. or that any part thereof represented foreign assets intended to be repatriated contrary to law. Counsel submitted that M/s. V. M. section Abdul Razak & Company to whom the goods were consigned are not a " 'Sister concern" of the petitioners and that in the affidavit of the Deputy Chief Controller of Imports and Exports it is not denied bat the petitioners bad received the full value for which the goods were exported by them. But in considering the case of the petitioners, the Committee observed : "The party has purchased Bush Shirt Cloth from J. C. Vakaria & Sons, Govardhandas Iswardass International Trading Agency, Agwarwla Brothers and Calcutta Silk Manufacturing Co., Ltd. Rates vary from Rs. 3.87 to Rs. 3.92. x x x x neither the purchase vouchers nor the export invoices contain any description nor give any idea as to whether the material was Nylon, Rayon, Nynon, etc. " The committee also observed that the petitioners were "not able to produce adequate justification of the prices of Art Silk Bush Shirting Cloth. Samples cannot be linked with the relative purchase vouchers or export invoices. " They then pointed out that the correspondence with M/s. Abdul Razak & Company did not give any "justification nor contained ' any description to link the goods with the materials sent," and in the light of these findings, the Committee recommended that. the value of bush shirt ' cloth for the purposes of import licence be calculated at the rate of Re. 1. 50 nP. per 'Yard. It is somewhat unfortunate that the Committed have not stated in the reasons given by them that Re. 1. 50 nP. was the prevailing: market rate in respect of Bush Shirt Cloth at the time of the export in the Indian market. But in paragraph 22 of the respondents ' affidavit, it is stated that "the petitioner firm has behalf granted licence equal to 84 100% of the value which has been arrived at as reasonable value of the exports effected by the firm. " The petitioners alleged that the decision of the Committee was arbitrary the licensing authority contends that the decision was made after ascertaining the reasonable value in the Indian market at the material time of the goods exported by the petitioners. The petitioners have not placed before the court any independent evidence to show that the current market rate of "bush shirt cloth" which was exported, substantially exceeded the rate of Re. 1. 50 nP. per yard of 36" width. In the circumstances, we would not be justified in assuming that the Committee made an arbitrary decision in arriving at the value of the bush shirt cloth exported for the purpose of recommending the grant of import licence. The contention that the order passed by the Controller granting a licence only for 45% of the value of the goods exported infringes the fundamental right of the petitioners under article 19 (1) (g) by imposing an unreasonable restriction cannot therefore be sustained. Does the fact that the petitioners have been granted licence approximately for 45% of the total value of the goods exported amount to discrimination entitling them to protection of article 14 of the Constitution ? Under the Export Promotion Scheme, the petitioners have exported artsilk goods of the value of Rs. 7,07,709.55.nP. and may in the normal course have been entitled to import licence for 100% of the value of the goods exported unless there was a reduction in the value of the licence for imports on account of certain circumstances such as general deterioration of the foreign exchange position or necessity to conserve a particular currency or other circumstances justifying a departure from the maxima set opt in cl. 2 of 85 appendix 42 of the Export Promotion Scheme. The reduction may also be justified on grounds personal to the petitioners or to a, group to which they belonged, Any malpractice or tinder hand dealing may warrant such a reduction. It was the case of the respondents that many exporters were guilty of malpractices and with a view either to speculate in artsilk goods or to repatriate unlawfully foreign assets, the value of the goods exported was unduly inflated. In the order passed by the Committee appointed by the Government of India, dealing with the case of the petitioners, it was observed that the petitioners had business relations with certain firms and that the rates at which bush shirt cloth were purchased varied from Rs. 3.87 to Rs. 3.92 nP. The Committee was not satisfied that the documentary evidence produced by the petitioners related to the goods exported by them. These findings disclosed that, in the view of the Committee, there was reason to believe that the claim of the petitioners that they had purchased goods approximately for the prices at which they were exported, was not made out. The Committee accordingly recommended that the value of "bush shirt cloth" should be computed at the rate of Rs. 1.50 nP. per yard. It is true that there is no definite evidence on the record indicating that was the current market rate, but the court may be justified in holding that the members of the Committee who were vitally concerned with the trade in artsilk goods were conversant with the current market rates of the cloth which was exported by the petitioners. Counsel for the Union has placed before us in the course of the hearing the report of the Committee in respect of seven out of the eight exporters who the petitioners claimed had been given import licence for the full value of the exports. The report of the Committee with regard to M/s. Rajasthan Exporters I and Importers, Calcutta 86 is not placed before us on the plea that. , it is not immediately available. On a perusal '.of the report of the Committee with regard to, the other exporters, it may be stated that the claim of the petitioners that Raghunath Rai Piyarilal were given import licence for the full value of the goods exported is not correct. It appears from the record that only 40% of 'the F.O.B. value was to be taken for "Glass, Nylon dved" exported in respect of application No. 36. Similar larly, in respect of application No. 35, 40% (if the F.O.B. value was to be taken for the purpose of granting import licences. It is true that in the cases of the other importers Premsukhdass Sitaram, Indian Exporters and Importers Corporation, M/s. Universal Watch Emporium, M/s. Jawahar Knitting Hosiery, M/s. Vastralaya Ltd. and M/s. Agarwala Trading Co., Ltd., the Committee have recommended acceptance of the purchase prices submitted by the exporters in granting import licences. It may, therefore, be assumed that these importers were, given licence for 1000% of the export value of the goods. But the Committee have given reasons which appear to be prima facie good for accepting the claims of these exporters ' If, on the materials placed before. them, the Committee were satisfied that there, was some misconduct or under hand dealing on the part of the petitioners, or that the evidence led before them justified the Committee in holding that the goods exported were not of the value ' claimed by the petitioners in their invoices, an order recommending that import licence may be granted for the value of bush shirt cloth computed on the basis of Re.1.50 nP. per yard does not. amount to discriminatory treatment of the petitioners. Article 14 confers a guarantee of the equal protection of the law a guarantee against arbitrary discrimination between persons similarly circumstanced. On the materials placed before the Committee. .there. evidence to show that the record produced by the 87 petitioners was unsatisfactory ; they were not satisfied that the prices which the petitioners said they had paid for purchasing the goods were in truth paid. If there was evidence to show that in respect of other persons who were in the opinion of the Committee found also to have inflated the prices 'in the manner adopted by :,the petitioners and still the Controller had granted import licences to those persons for the full amount of the. export value or a percentage substantially in excess of the percentage for which import licence was granted to the petitioners, a case of discrimin ation could have been made out ; but in the absence of such evidence, we do not think that any case of discrimination is made out. The petition fails and is dismissed with costs. The application filed by M/s. M. Shaams and Company for intervention is dismissed, because Miscellaneous Application No. 264 of 1960 which was filed by the applicants in the High Court of Judicature at Bombay for a writ of mandamus, direction or order under article 226 of the Constitution has been dismissed by the High Court and the remedy applicants is to file an appeal to. this Court. Petition dismissed.

Government of India published a 'scheme known as the "Export Promotion Scheme" according to which the value of import licence for raw materials in an industry depended upon the value of specified varieties of goods exported by the applicant for an import licence. It also empowered the Controller of Imports and Exports under cl. 2 'of Appendix 42 of the Import (Control) order 1955 to issue a license up to 66 2/3 per cent of the export value in the case of Indian artsilk sarees and up to 100 per cent in the case of other Indian artsilk fabrics. The appellant firm R of exporters and importers relying upon cl.2 of the Export Promotion Scheme applied for an import licence equivalent to the value of the goods it had exported and earned foreign exchange. In view of certain malpractices the Government of India suspended the "Export Promotion" scheme and set up a committee for verification of the values of goods exported. The Committee after scrutinising the firm 's claim found that rates of some of the items could not be accepted as reasonable, and recommended an import licence approximately of the value of 45 per cent of the goods exported. The firm R after making an infructuous demand for a licence for the full value of the goods exported filed a writ petition. They submitted that the Controller of Licences had arbitrarily reduced the value of their import licence and had thereby unlawfully infringed their fundamental right. They also claimed that the Controller was bound to grant licence under the Export Promotion Scheme for the full value of the goods exported by them and in failing to do so had practised discrimination 73 against them, because several other importers during the identical period were given licences for the full value of goods exported. Held, that the fundamental right of a citizen to carry on any occupation, trade or business under article 19(1)(g) of the Constitution is not absolute; it is subject to reasonable restrictions which may be imposed by the State in the interest of the general public. The right of the State to impose control in the larger interest of the general public on imports has accordingly not been denied; nor is the authority of the State to issue the Imports (Control) Order, 1955 in exercise of the powers conferred by the Imports and Exports (Control) Act providing for imposition of restrictions by permitting import of certain goods only in accordance with the licences or customs permits granted by the Central Government, open to challenge. The authority to grant or refuse to grant the licence is conferred upon high officers of the State and the grant of licence is governed by the Import Trade Control Policy and detailed provisions are made setting out the grounds on which licences may be refused, suspended or cancelled and provision to afford a hearing before action is taken is also made; thus the powers conferred under cl.3 of the Imports (Control) Order, 1955 are not uncanalised or arbitrary. The power granted to the licensing authority to grant licences only up to the maximum specified in cl.2 of the appendix 42 is by itself not an unreasonable restriction, nor will the notification directing scrutiny of all applications amount to imposing an unreasonable restriction. The clause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed) claimed by the exporter. The power is plainly discretionary and the orderd by the Controller granting a licence only for 45% of the goods exported does not infringe the fundamental right of the petitioner under article 19(1)(g) of the Constitution by imposing an unreasonable restriction. Held, further that in the absence of evidence to show that discriminatory treatment was made between the aggrieved person and to persons similarly circumstanced, there can be no violation of article 14 of the Constitution which confers a guarantee against arbitrary discrimination between persons similarly circumstanced . Held, also that where an application for writ of mandamus, direction or order under article 226 of the 74 Constitution is dismissed by the High Court, the only remedy to the aggrieved person is to come up by appeal and he has no right to be heard as an intervener.

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 appellant carries on the business of carriage of goods and passengers by sea and owns a fleet of ships for that purpose. One of its ships named Eastern Saga arrived at Calcutta and was rummaged by the Calcutta Customs Officers. In the sailors ' accommodation, a hole measuring 2 1/2 x 5 1/2 was found in the wall panelling behind the back batton of a wooden seat which had been screwed to the wall. The hole was covered with a piece of wood and over painted. The hole opened into a space and in that space, Customs Officers found 1,458 bars of gold valued at more than Rs. 23 lacs. Notices were duly served and after hearing the parties, the Additional Collector of Customs came to the conclusion that the vessel had rendered itself liable to confiscation under section 167(12A) because it had infringed the provisions of section 52A. He ordered the confiscation of the ship but gave the owners thereof an option to pay a fine of Rs. 25 lacs in lieu of confiscation. The appellant went in appeal to the Central Board of Revenue but that appeal was rejected. The appellant went in revision to the Central Government but the revision petition was also dismissed. 'Me appellant then came to this Court for special leave and obtained the same. Dismissing the appeal Held: (i) The Customs authorities. were right in holding that the facts proved in the case showed that the "Eastern Saga" nor contravened the provisions of section 52A when it entered the port of Calcutta and hence had incurred the liability prescribed by section 167(12.A) of the Sea Customs Act. (ii) The fine of Rs. 25 lacs was not excessive. Illegal importation of gold had assumed the proportions of a major problem facing the country and it was open to the Customs authorities to take the view that the best way to check smuggling was to impose deterrent fines whenever those offences were discovered and proved. (iii) Section 52A was not ultra vires articles 14, 19 and 31(1) and hence was not unconstitutional or invalid. The appellant was not only 595 a company but also a foreign company and as such was not entitled to claim the benefits of article 19. The plea under article 31(1) as well as under section 14 could not be sustained for the simple reason that in supporting the said two pleas, the appellant had inevitably to fall back upon the fundamental right guaranteed by article 19(1)(f). Before an appeal can be entertained under article 136, two conditions have to be satisfied. The order impugned must be an order of a judicial or quasi judicial character and should not be purely an administrative or executive order. The said order should have been passed either by a Court or Tribunal in the territory of India. It is difficult to lay down any definite test to determine whether a body is a court/tribunal or not. Sometimes, courts enquire whether that body or authority is clothed with the trappings of a court, whether it can compel witnesses to appear before it and administer oath to them, whether it was required to follow certain rules of procedure, whether it was bound to comply with the rules of natural justice whether it was expected to deal the matters before it fairly, justly and on merits and not be subjective considerations and whether it was required to adopt or quasi judicial approach. If all or some of the important tests are satisfied the proceedings can be characterised as judicial proceedings and the test of "trappings" is satisfied. Likewise, if it appears that such a body or authority has been constituted by the legislature and on it has been conferred the inherent judicial power of the State, that is significant, if not a decisive indication, that the said body or authority is a Tribunal. The scheme of the , the nature of the proceeding brought before the appellate and revisional authorities, the extent of the claim involved, the nature of the penalties imposed and the kind of enquiry which the Act contemplates, all indicate that both the Central Board of Revenue and the Central Government, while acting as appellate or revisional authorities, constitute Tribunals under article 136 of the Constitution because they are invested with the judicial power of the State and are required to act judicially. In order to prove the offence of section 52A against a vessel, what is to be moved is that there has been a construction, adaptation, alteration of fitting and the said construction, adaptation, alteration or fitting had been made for the purpose of concealing goods. The section prohibits absolutely the entry of vessels which show that there has been construction, adaptation, alteration or fitting made in them for the purpose of concealing goods in them. It is not necessary for the purpose of section 52A to prove mens rea against the person responsible for the contravention of section 52A. It is impossible to prove such mens rea or guilty mind. The knowledge of the owners or even of the masters is entirely irrelevant. Section 167(12A) and section 183 have to be read together. Though confiscation is a statutory corollary of the contravention of section 52A, section 183 expressly requires the adjudicating officer to give an option to the owners of the offending vessel to pay fine in lieu of confiscation. Confiscation is 596 no doubt authorised and required by section 167 (12A) but the statutory obligation makes it necessary for the officer to give an option to the owner. The result is that the ultimate penalty which can be imposed on the owners falls to be determined by the adjudicating officer in his discretion. Shewpujanrai Indrasanrai Ltd. vs Collector of Customs ; , F. N. Roy vs Collector of Customs, Calcutta, ; , Leo Roy Frey vs Superintendent, District Jail, mritsar and Anr. ; , , Thomas Dana vs State of Punjab, [1959] Supp. (4) S.C.R. 274, Maqbool Hussain vs State of Bombay, ; , Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala and Ors., ; , Shivji Nathubhai vs Union of India, ; , Jaswant Sugar Mills Ltd., Meerut vs Lakshmi Chand, [1963] Supp. 1 S.C.R. 242, Engineering Mazdoor Sabha vs Hind Cycles Ltd. [1963] Supp. 1 S.C.R. 625, Ravula Hariprasada Rao vs The State, ; , Brend vs Wood, and Sherras vs De Rutzen, (1895) 9. referred to.

By treaty and by international convention, India allows transit facilities to Nepal, its neighbour and a land locked country. A company based in Kathmandu, Nepal imported a consignment of pre recorded cassettes from Singapore which was awaiting its despatch to Nepal at Calcutta Port. As the 665 appellant company suspected those cassettes to be unauthorised reproductions of its records and cassettes, the import of which into India was prohibited, the appellant company moved the Registrar of Copyrights for action under s.53 of the which enables the Registrar, after making such enquiries as he deemed fit, to order that copies made out of India of a work which if made in India would infringe copyright, shall not be imported. As the Registrar did not take expenditious action, the appellant company moved the High Court by a writ petition. A single Judge made an interim order permitting the appellant company to inspect the consignment and if any of the cassettes were found to have infringed the appellant 's copyright, they were to be kept apart until further orders of the Registrar. The Registrar was directed to deal with the application of the appellant company in accordance with law. The consignee preferred an appeal against this order of the single Judge. A Division Bench of the High Court allowed the appeal and dismissed the writ petition of the appellant company. The Division Bench held that there was no importation when the goods entered India en route to Nepal. The Division Bench was of the view that the word `import ' did not merely mean bringing the goods into India, but comprehended something more, that is, "incorporating and mixing, or mixing up of the goods imported with the mass of the property in the local area". The company obtained special leave to appeal. The questions which arose were : (i) whether international law is, of its own force, drawn into the law of the land without the aid of a municipal statute, (ii) whether, so drawn, it overrides municipal law in case of conflict; (iii) whether there is any well established rule of international law on the question of the right of land locked states to innocent passage of the goods across the soil of another state; and (iv) what is the meaning of the word `import ' used in s.53 of the . Allowing the appeal, ^ HELD : On questions (i) & (ii). There can be no question that nations must march with the international community and the municipal law must respect rules of international law even as nations respect international opinion. The comity of nations requires that rules of international law may be accommodated in the municipal law even without express legislative sanction provided they do not run into conflict with Acts of Parliament. But when they do run into such conflict, the sovereignty and the integrity of the republic and the supremacy of the constituted legislatures in 666 making the laws may not be subjected to external rules except to the extent legitimately accepted by the constituted legislatures themselves. The doctrine of incorporation also recognises the position that the rules of international law are incorporated into national law and considered to be part of the national law, unless they are in conflict with an Act of Parliament. Comity of nations or no, municipal law must prevail in case of conflict. National courts cannot say yes if Parliament has said no to a principle of international law. National courts will endorse international law but not if it conflicts will national law. National courts being organs of the national state and not organs of international law must perforce apply national law if international law conflicts with it. But the courts are under an obligation within legitimate limits, to so interpret the municipal statute as to avoid confrontation with the comity of nations or the well established principles of international law. But if conflict is inevitable, the letter must yield. [673 E H] Per Lord Danning MR in Trend text Trading Corpn. vs Central Bank, [1977] I All E.R. 881; West Rand Central Gold Mining Co. vs The King, [1905] 2KB 391; Lauterpacht in International Law (General Works); Latham CJ in Politics vs The Common wealth 70 Commonwealth Law Reports 60; Tractoro export, Mascow vs M/s. Tarapore & Company and Anr, ; referred to. On question (iii). As the leading authorities on international law expressed divergent views on the question of the transit rights of land locked countries, the result has been that the land locked countries have to rely on bilateral, regional or multi lateral agreements for the recognition of their rights. They very existence of innumerable bilateral treaties, while on the one hand it raises a presumption of the existence of a customary right of transit, on the other it indicates the dependence of the right on agreement. The most recent 1965 Convention on Transit Trade of Land Locked States, to which both Nepal and India are signatories, while providing for freedom of transit for the passage of goods between the land locked state and the sea, across the territory of a transit state emphasize the need for agreement between the land locked country and the transit country. The bilateral Treaty of Trade and Treaty of Transit entered into between India and Nepal in order to expand trade between the two countries in practice mean a guarantee to Nepal to permit free and unhampered flow of goods needed by Nepal from India and a guarantee of freedom of transit for goods originating from outside India across the territory of India to reach Nepal. But the Convention on Transit Trade of Land locked States and the Treaties between the two countries, leave either country free to impose necessary restrictions for the purpose of protecting industrial, 667 iterary or artistic property and preventing false marks, false indications of origin or other methods of unfair competition in order to further other general conventions. It is clear that for this purpose, it is not necessary that the land locked country should be a party to the general conventions along with the transit country. The interpretation placed by John H.B. Fried in the Indian Journal of international law that the provisions of the 1965 Convention permit the States of transit to enforce, say a Copyright or trade mark convention even if, for example, neither the country of origin nor of destination is party to it appears to be a correct interpretation. [675 B H] An artistic, literary or musical work is the brain child of its author, the fruit of his labour, and so, considered to be his property. So highly is it prized by all civilised nations that it is thought worthy of protection by national laws and international Conventions relating to Copyright. The International Convention for the protection of literary or artistic works first signed at Berne on 9th September, 1886 and finally revised at Paris in 1971 provided for protection to the authors of literary and artistic works. The Universal Copyright Convention first signed at Geneva on 6th September 1952 and revised in Paris in 1971 requires the contracting states to provide for the adequate and effective protection of the rights of authors and other copyright proprietors in literary, scientific and artistic works including writings, musical, dramatic and cinematograph works and paintings engraving and sculpture. [684 G H] On question No. (iv) The word `import ' is not defined in the though it is defined in the Customs Act. But the same word may mean different things in different enactments and in different contexts. It may even mean different things at different places in the same statute. It all depends on the sense of the provision where it occurs. Reference to dictionaries is hardly of any avail particularly in the case of words of ordinary parlance with a variety of well know meanings. Such word take colour from the context. Appeal to the Latin root won 't help. The appeal must be to the sense of the statute. [689 C D] The submission that where goods are brought into the country not for commerce, but for onward transmission to another country, there can, in law, be no importation, is not acceptable. In the first place, the language of section 53 does not justify reading the words `imported for commerce ' for the words `imported; Nor is there any reason to assume that such was the object of the legislature. While interpreting the words`import ' in the , one must take note that while the positive requirement of the Copyright Conventions is to protect copyright, negatively 668 also, the Transit Trade Convention and the bilateral Treaty make exceptions enabling the tranait state to take measure to protect Copyright. If this much is borne in mind, it becomes clear that the word `import ' in section 53 of the cannot bear the narrow interpretation sought to be placed upon it to limit it to import for commerce. It must be interpreted in a sense which will fit the into the setting of the International Conventions. [690 B E] The word `import ' in seces. 51 and 53 of the means bringing into India from outside India ', that it is not limited to importation for commerce only, but includes importation for transit across the country. This interpretation, far from being inconsistent with any principle of International Law, is entirely in accord with International Conventions and the Treaties between India and Nepal.[691 H, 692A] The High Court thought that goods may be said to be imported into the country only if there is an incorporation or mixing up of the goods imported with the mass of the property in the local area. In other words the High Court relied on the Original Package Doctrine ' as enunciated by Chief Justice Marshall in Brown vs State of Maryland Reliance was placed by the High Court upon the decision of this Court in the Central India Spinning and Weaving & Manufacturing Co. Ltd. The Empress Mills, Nagpur vs The Municipal Committee, Wardha ; That was a case which arose under the C.P. and Berar Municipalities Act and the question was whether the power to impose "a terminal tax goods or animals imported into or exported from the limits of a municipality" included the right to levy tax on goods which `were neither loaded or unloaded at Wardha but were merely carried across through the municipal area '. We are afraid the case is really not of any guidance to us since in the context of a `terminal tax ' the words `imported and exported ' could be construed in no other manner than was done by the Court. We must however say that the `original package doctrine ' on which reliance was placed was expressly disapproved first by the Federal Court in the Province of Madras vs Boddu Paidanna : and again by the Supreme Court in the State of Bombay vs F.N. Balsara, ; [690 G H, 691 A E] An order made under section 53 of the is quasi judicial. The Registrar is not bound to make an order under section 53 of the so soon as an application is presented to him by the owner of the Copyright. He has naturally to consider the context of the mischief sought to be prevented. He must consider whether the copies would infringe the Copyright if the copies were made in India. He must consider whether the applicant owns the copyright or the duly authorised agent of the Copyright. He must hear those claiming to be affected if an order is made and consider any contention that may be put forward as an excuse for the import. He may consider any other relevant circumstance. Since all legitimate defences are upon and the enquiry is quasi judicial, no one can seriously complain. [692 E G] 669

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.

Pursuant to the Indo Pakistan Agreement, 1958, and after this Court 'section Advisory opinion in In re the Berubari Union and Exchange and Enclaves, , Parliament enacted the Constitution (Ninth Amendment) Act, 1960 for cession of part of the territory of India to Pakistan. In order to implement the provisions of the Act a physical demarcation of the portion that had to be ceaded was necessary. The respondents filed a petition under article 226 of the Constitution before the High Court challenging the validity of the proposed demarcation principally on the ground that they would be deprived of their property without compensation. A single Judge of the High Court held that the cession of the territory involved transfer of ownership and other private property rights to Pakistan through the Union of India, which, though outside cl 2A of article 31 was compulsory acquisition within the meaning of article 31(2). The single Judge granted a certificate under article 132(1) for appeal to this Court. HELD:(i) No question of acquisition within the meaning of Article 31(2) is involved in the present case. The Constitution (Fourth Amendment) Act, 1955, makes it clear that mere deprivation of property unless it is acquisition or requisitioning within the meaning of cl. 2A will not attract cl. (2) and no obligation to pay compensation will arise thereunder and it is essential under clause (2) that in order to constitute acquisition or requisitioning there must be transfer of the ownership or right to possession of the property to the State or to a corporation owned or controlled by the State. Cession indisputably involves transference of sovereignty from one sovereign State to another. But, there is no transference of ownership or right to possession in the properties of the inhabitants of the territory ceded to the ceding State itself. The effect of the Constitution (Ninth Amendment) Act, 1960, can by no stretch of reasoning be regarded as transfer of the ownership or right to possession of any property of the respondents to the "State" within the meaning of Article 12 of the Constitution. [202C F, H] Charanjit Lal Chowdhury vs Union of India, [1950] S.C.R. 869, 902, State of West Bengal vs Subodh Gopal Bose & Ors. ; , Dwarkadas Shrinivas of Bombay vs Sholapur Spinning & Weaving Co. Ltd. & Ors. ; , Saghir Ahmed vs State of Uttar Pradesh, ; and Gullapalli Nageswara Rao & Ors. vs Andhra Pradesh State Road Transport Corporation & Anr. [1959] Supp. 1 S.C.R. 319, referred to. 245 (ii) This Court has on earlier occasions, observed that the practice of single Judge deciding the case and giving a certificate under Article 132 (1) for appeal to this Court, although technically correct, was an improper practice and that such a certificate should be given only in very exceptional cases where a direct appeal was necessary. The present case may be of an exceptional kind; but this Court has been deprived of the benefit of the judgment of a larger Bench of the High Court on points which are of substantial importance. [246B] R.D. Agarwala. & Anr. vs Union of India & Ors. C.A. Nos. 2634/69 etc. dt. 23 2 1970 and Union of India vs J. P. Mitter; , , referred to.

For the purpose of protecting the smaller manufacturers from the cometition of larger manufacturers, the Government of India, by a notification dated 21 July 1967, amended by notification dated 4 September, 1967, declared a concessional rate of duty to those manufacturers who had filed a declaration before 4 September 1967 that their estimated annual clearance would be less than 75 million match sticks. This Court in Union of India vs Parameswaran Match Works etc. ; setting aside the judgment of the High Court holding that classification was invalid, held the classification founded on a particular date to be reasonable; and the concessional rate would be availed of even by those manufacturers who came to the field after 4 September, 1967 if they satisfied the condition in clause (d) of the notification regarding quantity of matches and are recommended by the Khadi and Village Industries Commission for exemption. The respondent filed declarations on 22 December, 1967 that they would not produce more than 75 million match sticks during the year 1969 70 and claimed to be entitled to the concessional rate of excise duty. In appeal to this Court the respondents sought to support the judgment of the High Court on the grounds (i) that they were entitled to the exemption on the basis of clause (d) of the notification; and (ii) that the Khadi and Village Industries Commission was not competent to make any recommendation. Allowing the appeal, ^ HELD: (1) The appeals are covered by the decision of this Court in Parameswaran Match Works case and no case is made out by the respondents on the basis of exemption under cl. (d) of the notification. There is no allegation in the petition that the respondents came into the field after 4 September 1967 or that they started manufacturing the matches after 4 September, 1967 or that they were recommended by the Khadi and Villages Industries Commission mission. [871 D & B] (2) Under section 15(h) of the the Commission may take steps in ensuring the genuineness of, and for granting certificates to producers of, or dealers in, Khadi or the products of any village industry. Therefore, the Commission is competent to recommend for exemptions under cl. (d) of the Notification.

The respondent was detained by the appellant under sub section (I) of section 3 of the . The grounds for detention were that the respondent along with two others were members of the crew of a vessel that was engaged in smuggling of wrist watches and other contraband articles worth about Rs. 33 lakhs. The respondent moved the High Court which quashed the order of detention, holding that the order of detention clearly showed that the detaining athority had not applied his mind to the facts of the case and that the impugned order nowhere stated that the detaining authority on having received a proposal from the customs authorities, had applied his mind tc all the materials on record and had reached satisfaction that the facts of the case warranted detention. Allowing the State 's appeal to this Court, ^ HELD: 1, The order dated August 1, 1979 made under section S of the Act by the Government directed the detenu to be detained. On the same date another order was passed under sub section (1) of section 3 which in fact was the order of detention. It provided that the Government was satisfied that with a view to preventing the respondent from smuggling goods it was necessary to detain him. These two orders were accompanied by the grounds of detention which was also dated August 1,1979. A perusal of these three documents do not justify the finding of the High Court that the detaining authority had not applied its mind to the materials before it and that it had not "reached satisfaction that the facts of the case warranted the detention of the petitioner. " The finding of the High Court has been based on a presumption which is unjustified. [1016 F 1017 E] 1015 2. The High Court in its writ jurisdiction under Article 226 of the Constitution is to see whether the order of detention has been passed on the materials before it. If it is found that the order has been based by the detaining authority on materials on record, then the court cannot go further n examine whether the material was adequate or not which is the function of an appellate authority or Court. It can examine the material on record only for the purpose of seeing whether the order of detention has been based on no material. The satisfaction mentioned in section 3 of the Act is the satisfaction of the detaining authority and not of the Court. [1017 F] State of Gujarat vs Adam Kasam Bhaya, [1982] 1 S.C.R. 740, referred to. Once the order quashing the order of detention of the detenu is set aside by this Court rendering the order of detention non est itself becomes non es and the order of detention gets life. [1018 C] 4. The relevant authorities that can pass order of detention are mentioned in sub section (1) of section 3 of the Act. The authorities are the Central Government or the State Government or any officer of the Central Government, not below the rank of a Joint Secretary to that Government, specially empowered for the purposes of this section by that Government, or any officer of a State Government, specially empowered for the purposes of this section by that Government, or any officer of a State Government, not below the rank of a Secretary to that Government specially empowered for the purposes of this section by that Government. [1018 E F] In the instant case the order having been taken in the name of the Governor and validly authenticated by the Deputy Secretary concerned, the order tentamounts to an order by the State Government. It, therefore, cannot be said that the order of detention was not passed by the competent authority. [1019 A]

Appeal No. 517 of 1960. Appeal from the Judgment and order dated November 20, 1958, of the Mysore High Court in Civil Writ Petition No. 234 of 1957. Porus A. Mehta, J. R. Gagrat and G. Gopalakrishnan, for the appellants. N. C. Chatterjee, G. Channappa, R. Gopalakrishnan and T. M. Sen, for the respondent. August 8. The Judgement of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Mysore dismissing the petition of the appellants made under article 226 of the Constitution. The appellants. were conducting since the month of August 1948, what were called "prize competitions" in the State of Mysore with the permission of the Government of the erstwhile State of Mysore. An Act called the Mysore Lotteries and Prize Competitions Control and Tax Act, 1951 (Act 27 of 1951), hereinafter called the "Mysore Act" was passed by the Mysore Legislature and came into force as from June 21, 1951. The Rules made thereunder came, into force on February 1, 1952. Previous to that the Bombay Legislature had passed a similar Act called the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948, which was amended in November 1952. by the Bombay Act 30 of 1952. In December 1952 and January 1953 petitions under article 226 were filed in the High Court of Bombay challenging the Bombay Act. On January 12, 1955 233 the Bombay High Court held that the provisions of the Bombay Amendment Act above referred to were unconstitutional and that the taxes imposed under the provisions of that Act were hit by article 301 of the Constitution. The result of that judgment was that though prize competitions could be controlled by the States within their respective borders, their ramifications beyond those borders could only be dealt with by action under article 252(1) of the Constitution. It was for that reason that the States of Andhra, Bombay, Madras U. P., Hyderabad, Madhya, Bharat, Pepsu and Saurashtra passed resolutions under article 252(1) of the Constitution authorising Parliament to legislate for the control and regulation of prize competition% and in pursuance thereof Parliament passed the (Act 42 of 1955) hereinafter called the "Central Act" which Received the assent of the President on October 22, 1955, and came into force on April 1, 1956. On February 24, 1956, the Mysore Legislature passed a, resolution adopting the said Act. The resolutions passed by the various States and the resolution passed by the Mysore Legislature will be quoted in a later part of this judgment. On April 7, 1956, the appellants filed a petition under article 32 of the Constitution in the Supreme Court challenging the validity of the Central Act but that petition was dismissed and is reported as R.M.D.C. Chamarbaugwala vs The Union of India (1). The appeal against the Bombay judgment declaring the Bombay Act to be unconstitutional was brought in this court and, was allowed and that case is reported as State of Bombay vs R. M. D. Chamarbaugwala (2) . During the pendency of their petition under article 32 the appellants applied for and wore granted a stay of the operation of the Central Act pending the disposal of the said writ petition. This was on April; 16, 1956. The judgment of the Supreme Court in that petition was given. on April 9, 1957. On August 31, 1957, the (1) ; , 939. (2) ; , 929. 234 Mysore Lotteries & Prize Competitions Control and Tax (Amendment) Ordinance, 1957 (Ord. 6 of 1957) was issued by the Governor of Mysore and thus for the period of about 16 months the appellants carried on prize competitions as before. The Ordinance was enacted into an Act on September 28, 1957, which is Mysore Act 26 of 1957. Certain amendments were made by this in the Mysore Act as originally passed in 1951. As a result of this amendment the definition of prize competition was amended the definition as given in the Central Act was adopted and sections 8 & 9 of the Mysore Act. were omitted with retrospective effect from April 1, 1956; cl.(b) of sub section (1) of s.12 was amended and certain words referring to licences under s.8 were retrospectively omitted and retrospective effect was given to the Mysore Act as amended. By adding a proviso to s.15 of the Mysore Act all 'prize competitions conducted between March 31,1956, and August 31 1957, were brought within the purview of the amended Act. Thus the prize competitions which as a result of the stay of the operation of the Central Act were conducted by the appellants became subject to the operation of the Mysore Act as amended. The appellants on September 10, 1957, were called upon to file their returns but at their request for extension of time, they were given another 15 days in which to file their return. They filed their return but under protest. The gross collections were of a sum of Rs. 26,47,147 5 9 and on that the appellants were "called open to pay up provisionally" a sum of Rs. 3,30,893 7 0. As the money was not paid within the time specified proceedings were taken under section 6 (1) of the (Central Act 1 of 1890), and certain properties moveable and immoveable were attached 'and one of the properties was sold and the price so realised was deposited in the Government treasury. The Mysore amending Act was challenged in the High Court of Mysore by a petition under Art, 226 which was dismissed on November 20, 1958 235 and against that judgment and order this appeal has been brought pursuant to a certificate of the, High Court under article 132 (1) of the Constitution. The Certificate was confined to the interpretation of article 252 of the Constitution. The respondent in the present appeal is the State of Mysore. The challenge to the constitutionality of the Mysore Act was on the ground that (1) the Mysore Legislature by. adopting the Central Act was no longer competent to pass any law in regard to prize, competitions because the whole matter including the power of taxation was surrendered in favour of Parliament. (2) Even if the whole power had not been surrendered the impugned Act i.e. the, Mysore Act as amended violated Art.252(2) of the Constitution inasmuch as it indirectly amends the Central Act by adding a new method of control by imposition of penalties of a monetary nature. (3) The Mysore Legislature could not amend an Act which stood repealed as a result of the enactment of the Central Act. (4) The Mysore Act as amended was repugnant to the Central Act and is therefore, to the extent of repugnancy, void under article 254 (1) of the Constitution and (5) it was color able legislation in as much as the tax was imposed on the prize competitions with the object of controlling them. Certain other questions relating to the legality of the imposition of the tax and the proceedings for the recovery of the tax were also raised but on all these points the High Court found against the appellants The first question, raised before us is the effect of the; resolution passed by the, legislatures of the States above mentioned and of the resolution passed by the Mysore legislature adopting,the central Act. The resolution Passed by the States was in the following terms. "This Assembly do resolve that it is desirable that control and regulation of Prize 236 Puzzle competitions and all other matters consequential and incidental thereto insofar as these matters are matters with respect to which Parliament has no power to make laws for the States should be regulated by Parliament by law. " The two Houses of the Mysore Legislature passed the following resolution on February 23, 1956 *and February 21, 1956, respectively : Resolution passed by the Mysore Legislative Assembly on 23rd, February, 1956. "Whereas for the purpose of securing uniformity in legislation it is desirable that the control and regulation of Prize Compe titions and all other matters ancillary thereto should be regulated in the State of Mysore by the (Central Act 42 of 1955) passed by Parliament; Now, therefore, in pursuance of Clause, (1) of Article 252 of the Constitution, this Assembly resolves that the Act aforesaid be adopted by the State of Mysore. " It was contended that by these resolutions the legislatures of the various States had surrendered their power of legislation in regard to the "control and regulation of prize puzzle competitions and all other matters consequential and incidental thereto and had thus no legislative power left in regard to that matter including the power to tax. Article 252 provides article 252(1) "If it appears to the legislature of two or more, States, to be desirable that any of the matters with respect to which Parliament has no power to make laws for the States except as provided in articles 249 and 250 should be regulated in such States by Parliament by law, and if resolutions to that effect are passed by all the Houses of the legislatures of those States, it shall be lawful 237 for Parliament to pass an, Act for regulating that matter accordingly, and any Act so passed shall apply to such States and to any other State by which it is adopted afterwards by resolution passed in that behalf by the House or, where them are two Houses, by each of the Houses of the Legislature of that State. (2) Any Act so passed by Parliament maybe amended or repealed by an Act of Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by an Act of the Legislature of that State. " The result of the passing of a, resolution under article 952(1) is that any matter with respect to which Parliament has no power to enact laws becomes a matter for the regulation of which Parliament becomes empowered to pass any Act, and such Act, if passed by the Parliament, becomes applicable to the States passing the resolution or adopting that Act. Sub clause (2) of that Article provides that any such Act may be amended or repealed by an Act of Parliament in the like manner i.e. in the manner provided in cl. (1) and it cannot be amended or repealed by the Legislature of the State or States passing the resolution. The question then arises do the resolutions as passed and particularly the words "control and regulation of prize puzzle competitions and all other matters ancillary thereto" surrender the whole subject of prize competitions to the Central Parliament i.e. every matter and power connected therewith including the power to tax. The argument raised was that the language of the resolutions was wide enough to comprise the legislative power under entries 34 and 62 of List II the former dealing with betting and gambling" and the latter with taxation of luxuries including "betting and gambling". One of the methods of control and regulations, it was submitted, is by 238 taxation and as the power ; to control, and regulate and all powers ancillary to the subject were surrendered the power to 'tax, being included therein was also surrendered. In support of this Argument reliance was placed on. certain judgments of the American Supreme Court. The first case relied upon was. Rudolph Helen V. United States (1). In that ease the question was about the jurisdiction of the United States District Court which, depended upon the nature . of the, imposition of an, additional duty i.e. whether it was penalty or ' not. The imposition, was held to be a penalty as it was not imposed for the purpose of revenue but was based upon the particular act of the importer i.e. his undervaluation of the goods imported ; in other words this additional sum was a penalty for undervaluation whether innocently done or not and whether it was called a further sum or an additional duty 'the amount imposed was not a duty upon imported article but a penalty and nothing else. The next case relied upon was J. W. Bailey vs Dexel Furniture Company (2). That was a case of colorable exercise, of legislative power. .Under the Child Labour Tax Law a tax of 10% of the net profits of the year could be imposed upon an employer and knowingly during any portion of the taxable period employed children within certain age limits irrespective of whether only one child was employed or several, This was held not to be a valid exercise by Congress of power of taxation but an unconstitutional regulation by the use of the tax as a penalty for the employment of child labour in the States which was exclusively a State function. That case was one in which the Congress exercised its. power of regulation by imposing a tax by way of penalty in,order to prevent the employment of child. labour and thus by If the exercise of the power which it possessed i.e. of (1) (1903)188 U.S.605: ; (2) (1922)259 U.S.33: ; 239 taxation it tried to regulate a subject over which it had no jurisdiction and that really was the matter which was decided by the American Supreme Court. The next case relied upon was Gloucester Perry Th (company vs Commonwealth of Pennsylvania (1). That was a case of interstate commerce and it was hold that no State could impose a tax on that portion of interstate commerce which is involved in the transportation of persons and property what ever be the instrumentality by which it is carried on. The tax there was levied upon receiving and landing of passengers and freight which was held to be a tax on transportation i.e., upon commerce. between the two States involved in such transportation. The following passage in the judgment of Field, J., at p. 162 was relied upon by counsel for the appellants "The Power to regulate that commerce, as well as commerce with foreign nations, vested in Congress is the power to prescribe the rules by which it shall be governed that is, the conditions upon which it shall be conducted ; to determine when it shall be free, and when subject to duties or other exactions. " But these observations were made in a different context, i.e., whether the tax could be levied upon transportation made in ferry boats which passed between States every hour of the day and as this transportation was within the commerce clause no tax could be levied by the States. Reference was next made to certain observations made in the State of Bombay vs R.M.D. chamarbaugwala (2) which was an appeal against the judgment of the. Bombay High Court. Das, C. J., observed at p. 926 "The fact that regulatory provisions have been enacted to control gambling by issuing (1) ; (2) ; , 929. 240 licences and by imposing taxes does not in any way alter the nature, of gambling which is inherently vicious and pernicious. " In that case no question as to the meaning of the word "control and regulation" arose nor whether those words included the power 'of taxation. All that the Court was called upon to decide was whether prize competitions were trade, commerce or business or were anti social activities. It was then argued that it was because of the decision by the Bombay High 'Court in State of Bombay vs R. M. D. Chamarbaugwala (1) whereby the tax imposed on prize competitions was struck down as contravening article 304(b), that the various States combined together and passed the resolution under article 252(1) of the Constitution. The object of the resolutions, it was submitted, was to get over the unconstitutionality pointed out by the Bombay High Court and therefore the resolutions were passed in the language used therein, i.e., for the control and regulation of prize competitions which power was transferred and surrendered to Parliament along with the powers incidental and ancillary thereto which must include taxation. It was further argued that as Parliament had failed to impose any tax it implied that it had refused to do so. In support of this argument reliance was placed on Sabine Robbins vs Taxing District of Shelby County, Tennessee (2). It was there held that where the power of the Legislature is exclusive its failure to make express regulation indicated its will that the subject shall be left free from any restriction or imposition. The pivot of the appellants ' argument is that the words "control and regulation" and , 'incidental and ancillary thereto" included power of taxation but this argument is not well founded. The power in regard to betting and gambling is contained in entry 34 of the State List which as follows . Entry 34: "Betting and gambling". (1) I. L. R. (2) ; 241 The power of taxation is contained in entry 62 which is as under Entry 62 : "Taxes on luxuries including taxes on entertainments. , amusements, betting and gambling. " In the Indian Constitution as it was in the Government of India Act the power of legislation is distributed between the Union and the States and the subjects on which the respective Legislatures can legislate are enumerated in the three 'Lists and in the Articles of the Constitution, provision is made as to what is to happen if there is a conflict between the Statutes passed by Parliament and the Legislatures of the States. The peculiar nature of the Indian Constitution in regard to the enumeration of powers in the entries in the Lists was emphasised by Gwyer, C. J., in re The Central Provinces & Berar Act No. XIV of 1938 (1) at p. 38 and by Sulaiman, J., at pp. 73 and 74. Gwyer, C.J., said: "But there are few subjects on which the decision of other Courts require to be treated with greater caution than that of federal and provincial powers, for in the last analysis the decision must depend upon the words of the Constitution which the Court is interpreting ; and since no two Constitutions are in identical terms, it is extremely unsafe to assume that a decision on one of them can be applied without qualification to another. This may be so even where the words or expressions used are the same in both cases ; for, a word or a phrase may take a colour from its context and bear different senses accordingly." (1) [1939] F.C.R.18,38,73,74. 242 At p. 74 Sulaiman, J., observed: "The heads have been separately specified in great detail ; and a special head " 'taxes on the sale. of goods" has been assigned to the Provinces, which did not at all find a separate and distinct place in the State or Provincial List of any of the Dominions. This peculiarity is a unique feature of the Indian Constitution, having an important bearing on the present case, as taxes on Bales have been adopted as a post war measure in most countries. " The entries in the Lists have to be read in accordance with the words employed and it will be wholly unjustified in forcing into them a meaning which they cannot reasonably bear. See Brophy vs Att. Gen. of Manitoba (1) Similar observations were made by Lord Wright, M. R. in James vs Commonwealth of Australia (2) and both these oases were quoted with approval in re The Central Provinces and Berar Act No. XIV of 1938 (3) by Sulaiman, J. Thus the subject of "betting and gambling" given in entry 34 of List II and the taxes on betting and gambling as given in entry 62 of List II have to be read separately as separate powers and therefore when control and regulation of prize competitions was surrendered to Parliament by the resolutions above quoted the power to tax under entry 62 of List II which is a separate head, cannot be said to have been surrendered. See the observations of Das, C. J., in State of Bombay vs R. M. D. Chamarbaugwala quoted a little later in this judgment. The scheme of the Indian Constitution and distribution of powers under it are entirely different from what it is in America and therefore the construction of the entries in the manner contended for by the appellants would be erroneous. It was then contended that a tax must be (1) , 215. (2) , 613. 243 levied for the purpose of revenue and cannot be for purpose of control and that in the Mysore Act was really colourable legislation in that the impugned tax had been levied for the purpose of controlling prize competitions although it was given the form of a tax. It may be remarked that the Court in construing and interpreting the Constitution or provisions of an enactment has to ascertain the meaning and intention of Parliament from the language used in the statute itself and it is not concerned with the motives of Parliament. To use the language of Gwyer, C.J., in re, The Central Provinces and Berar Act No XIV of 1938 (1) : "It is not for the Court to express, or indeed to entertain, any opinion on the expediency of a particular piece of legislation, if it is satisfied that it was within the competence of the Legislature which enacted it ; nor will it allow itself to be influenced by any considerations of policy, for these lie wholly outside its sphere. " Similar observations in regard to the doctrine of colourable legislation were made by Mukherjea, J., (as he then was), in K. C. Gajapati Narayan Deo & Others vs The State of Orissa (2), where it was observed : "It may be made clear at the outset that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If 'the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. Whether a (1) , 38, 73, 74. (2) ; , 10. 244 statue is constitutional or not is thus. always a question of power. " Therefore if the Mysore Legislature had the power, which in our opinion, it had and it had not surrendered its power to Parliament which, in our opinion, it had not then it cannot be said that the imposition of the tax is a piece of colourable legislation and is on that ground unconstitutional. It will be opposite to quote at this stage the observations of Das, C.J., in the State of Bombay vs R.M.D. Chamarbaugwala (1): "For the reasons stated above, we have come to the conclusion that the impugned law is a law with respect to betting and gambling under entry 34 and the impugned taxing section is a law with respect to a tax on betting and gambling under entry 62 and that it was within the legislative competence of the State legislature to have enacted it. There is sufficient territorial nexus to entitle the State legislature to collect the tax from the petitioners who carry on the prize competition s through the medium of a newspaper printed and published outside the State of Bombay. " Thus the Central Act is with respect to betting and gambling under entry 34 of List II and the taxing sections of the Mysore Act are with respect to a tax on betting and gambling under entry 62. It is also instructive to note that Venkatarama Ayyar, J., in B. M.D. Chamarbaugwala vs The Union of India (2) in construing the language of the resolution was of the opinion that the use of the word "control and regulation" was requisite in the case of gambling and as regards regulation of competitions involving skill mere regulation would have been sufficient. In view of our finding that by passing the resolution the States did not surrender their power of taxation it cannot be said that al. (2) of article 252 (1) ; , 929. (2) ; , 939. 245 of the Constitution was violated by the amendment of the Mysore Act ; nor can it be said that in reality it was a piece of colourable legislation by an indirect attempt to amend the Central Act and a new method of control was devised by imposing a penalty under the name of tax. We have already held that the tax imposed under the Mysore Act was not by way of penalty but was the exercise of the power which the legislature possessed of imposing tax under entry 62. The next contention raised was that after the passing of the Central Act, s.12(1)(b) of the Mysore Act became, void because of the provisions of article 254(1) of the Constitution which provides : article 254(1) "If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2) the law made by Parliament whether passed before or after the law made by the Legislature of such State or as the case may be, the existing law shall prevail and the law made by the Legislature ' of the State shall, to the extent of the repugnancy, be void. " It was contended that because of the repugnancy between the Central Act and the Mysore Act in regard to licensing all provisions which had any reference to licensing became void under article 254(1) and if they were void they could not be amended. On behalf of the State it was submitted that article 252(1) was a complete code by itself and article 254 was inapplicable because the latter Article like its predecessor, s.107 of the Government of India Act, 1935, applied where the repugnancy arose under List III of the Constitution i.e., the 246 Concurrent List. It is not necessary to decide this latter contention or to refer to cases which have been relied upon i.e. Megh Raj vs Allah Rakhia (1) or Deep Chand vs The State of Uttar Pradesh & Others (2) The inconsistency would operate on that portion of the Mysore Act which became repugnant to sections 4 and 5 of the Central Act as to prohibition of prize competitions and licensing. of prize competitions e.g., s.8 of the Mysore Act and consequently that portion of s.12(1)(b) which deals with taxes in respect of prize competitions for which a licence had been .Obtained under s.8 might be said to have become void and not the rest. Therefore by the omission of words "for which a licence had been obtained", under s.8, the rest of the clause would be valid. The effect of the amending Act is that the above mentioned words were deemed to have been omitted as from April 1, 1956, and the rest of clause (b) is not repugnant to any of the provisions of the Central Act. Article 254(1) therefore did not make s.12(1)(b) wholly void. All that it did was that the portion which refers to licensing became repugnant but it did not affect the rest of the section. At the time when the Mysore Act was passed it was within the legislative power of the Mysore Legislature and it may be that it was rendered unconstitutional by reason of sections 4 and 5 in the Central Act but that portion which deals with taxation cannot be held to be void because as a result of the Amending Act the words which were repugnant to the provisions of the Central. Act were subsequently declared by. the Mysore Legislature to be deemed to have been omitted as from April 1, 1956, the day when the Central Act came into force. This is in accord with the view taken in Deep Chand vs The State of Uttar Pradesh and Others(2), i.e., the doctrine of eclipse could be invoked in the case of a 'law which was valid when made but was rendered invalid by a supervening constitutional inconsistency. This (1).(1947) L. R. 74 I.A. 12,19. (2) [1959] Supp. 2 section C. R. 8, 24,42. 247 disposes of the challenge to the constitutionality of the Mysore Act on the five points set out above. Therefore the law may be summed up as follows (1) By passing the resolutions as to control and regulation the power to tax had not been surrendered to Parliament. (2) The amending Act was not a new method of controlling prize competitions nor was it a piece of colourable legislation. (3) There was no amendment of an Act which stood repealed nor was the retroactive operation of the Amending Act affected by article 254(1) of the Constitution. The next three objections to the legality of the assessment were: (1) that the assessment was provisional which was not contemplated under the Act ; (2) there should have been a fresh notification after the amendment of the Mysore Act and (3) at the time when the recovery proceedings were taken the tax had not become due as it was payable within a week which had not expired. On September 10, 1957, the Deputy Commissioner, Bangalore, called upon the appellants to produce accounts in respect of prize competitions conducted as from April 1, 1956, up to the date of the closure of the competitions and three days were given to comply with that notice. Their reply was that the Ordinance under which the notice was issued was unconstitutional and illegal and they also asked for thirty days in which to prepare their statements but they were granted a period of fifteen days only. They agreed to file their statements within the time allowed though under protest. These statements were submitted on October 9, 1957, and at the end of the statements which showed a gross collection of Rs. 26,47,147 5 9, there was the following endorsement : "The above figures of collections are verified partly with available bank statements and partly with the books of accounts and are 248 subject to reconciliation between the amount as per ledger and that as above. The commis sion and expenses deducted by Collectors are accepted as per certificate of the Management and the State Account. Collections are verified only with. the Collection Register. (Sd.). . . . . . Chartered Accountants. " Under this the Deputy Commissioner wrote a letter on October 16,1957, in which it was said: "You are, hereby called upon to pay up provisionally a sum of Rs. 3,30,893 7 0 towards tax amount to the Reserve Bank of India and forward the challan in token of pay ment to this office within a week. " As the tax was not paid the provisions of the were resorted to. This cannot be said to be a provisional assessment. The return submitted by the appellants as far as it went was accepted and on that the tax was demanded which was not a case of provisional assessment at all but as was held by the High Court it must be taken to be a final assessment and if and when any further assessment or a revised assessment is made the question may become relevant. The next question As to the necessity of a fresh notification, the submission is equally unsubstantial. Its legality depends upon the constitutionality of amended s.12(1)(b) and if that is valid, as we have held it to be, the notification is equally valid. The notification was only in regard to the rate of taxation and had no reference to the obtaining or not obtaining of the licence. The last point raised was that the tax was payable within a week which had not expired. As we have pointed out the notice of demand called upon the appellants to pay the sum therein specified and to produce the challan in token of payment 249 within a week. It is not the case of the appellants that they had paid or were in a position to produce the challan within a week. It was not an order making the tax payable within a week. These objections, in our opinion, are without substance and are therefore overruled. In the result this appeal fails and is dismissed with costs. Appeal dismissed.

The Mysore Lotteries and Prize Competitions Control and Tax Act, 1951, was passed by the Mysore Legislature arid came into force on February 1, 1952. Some of the States comprising the Union of India passed resolutions under article 252(1) of the Constitution of India authorising Parliament to legislate for the control and regulation of Prize Competitions, and in pursuance thereof Parliament passed the , which came into force on April 1, 1956, On February 23, 1956, the Mysore Legislature adopted the said Act by passing a resolution under article 252(1) that "for the purpose of securing uniformity in legislation . the control and regulation of Prize Competitions and all other matters ancillary thereto should be regulated in the State of Mysore by the Prize Com petitions Act, 1955". The appellants who were conducting prize competitions in the State of Mysore since 1948 filed a petition under article 32 of the Constitution challenging the constitutional validity of the Act, and obtained a stay of the operation of the Act pending disposal of the petition. The judgment of the Supreme Court dismissing the petition was given on April 9, 1957, and on August 31, 1957, an Ordinance was issued, which later was enacted into an Act, Mysore Act 26 of 1957, by which the Mysore Act of 1951 was amended under which, inter alia, all prize competitions conducted between March 31, 1956, and August 31, 1957, were brought within the purview of the amended Act. As a result of this, the prize competitions which, as a result of the stay of the operation of the Central Act of 1955, were conducted by the appellants for the said period became liable for taxation. The appellants challenged the constitutional validity of the amendment on the grounds that (1) the Mysore Legislature by adopting the Central Act was no longer competent to pass any law in regard to prize competitions because the whole matter 231 including the power of taxation was surrendered in favour of Parliament; (2) even if the whole power had not been surren dered the impugned Act i.e., the Mysore Act as amended violated article 252(2) inasmuch as it indirectly amended the Central Act by adding a new method of control by imposition of penalties of a monetary nature; (3) the Mysore Legislature could not amend an Act which stood repealed as a result of the enactment of the Central Act; (4) the Mysore Act as amended was repugnant to the Central Act and was, therefore, to the extent of repugnancy, void under article 254(1) of the Constitution; and (5) it was colourable legislation inasmuch as the tax was imposed on the prize competitions with the object of controlling them. Held: (1) that by the adoption of the words "control and regulation of prize competitions and all other matters ancillary thereto" in the resolution dated February 23, 1956, the Mysore Legislature did not surrender every matter and power connected with prize competitions including the power to tax: B.R.M.D. Chamarbaugwala vs The Union of India, (1957) S.C.R. 930, relied on. (2) that the subject of "betting and gambling" in entry 34 of List II of the Seventh Schedule to the Constitution of India and that of II taxes on betting and gambling" in entry 62 of List II have to be read separately as separate powers, and, therefore, when control and regulation of prize competitions was surrendered to Parliament by the resolution dated February 23, 1956, the power to tax could not be said to have been surrendered; In re The Central Province8 & Berar Art No. XIV of and State of Bombay vs B.M.D. Chamarbaug wala; , , relied on. (3) that the tax imposed under the Mysore Lotteries and Prize Competitions Control and Tax Act, 1951, was not by way of penalty but was in the exercise of the power which the State Legislature possessed of imposing tax under entry 62, and, consequently, the amendment of the Mysore Act of 1951 could not be said to be a new method of controlling prize competitions nor was it a piece of colourable legislation. K. C. Gajapati Narayan Deo vs The State of Orissa, ; , relied on. (4) that the , dealt with "betting and gambling" in entry 34, whereas the taxing sections of the Mysore Act related to "tax on betting and gambling" under entry 62 and, therefore, article 252(2) was not contravened by the amendment of the Mysore Act, 232 State of Bombay vs R.M.D. Chamarbaugwala, (1957) S.C.R. 874,relied on. (5) that there was no amendment of the Mysore Act which stood repealed nor was the retroactive operation of the remending Act affected by article 254(1) of the Constitution. Deep Chand vs The State of Uttar Pradesh and others (1959) Supp. 2 S.C.R. 8, relied on.

The respondent landlord sought eviction of the appellants tenants under section 12 (1) of the Madhya Pradesh Accommodation Control Act, 1961 on the main ground that the landlord bonafide required the premises for locating his gold and silver ornaments factory after demolishing and reconstructing the building. The courts below found that the requirement of the landlord was bonafide and ordered eviction of the tenants under section 12 (l) (f) and (h) of the Act. In these appeals the tenants contended that since the eviction ordered was under section 12 (l) (h), section 18 of the Act was attracted and it was obligatory on the part of the landlord to provide accommodation of equal extent to the tenants in the new building to be constructed by him. Dismissing the appeals, ^ HELD: In Ramnilal P. Mehta vs Indradaman Amritlal this Court observed that once the landlord establishes that he bonafide requires the premises for his occupation, he is entitled to recover possession of it from the tenant under the provisions of sub clause (g) of section 13 (1) of the Bombay Rents, Hotel and Lodging House. Rates Control Act, 1947 irrespective of the fact whether he would occupy the premises without making any alterations or after making tho necessary alterations. [948B C] Ramnilal P. Mehta vs Indradaman Amritlal Sheth, ; , referred to. Section 13 (1) (g) of the Bombay Rents, Hotel and Lodging House, Rates Control Act, 1947 corresponds to section 12 (1) (f) of tho Madhya Pradesh Accommodation Control Act. [948A] Applying the above principle to the facts of the instant case, though the Courts below have passed the order of eviction under section 12 (1) (f) and (h) the Court is of the opinion that the order of eviction is based really and substan 946 tially only under section 12 (1) (f) of the Act. The fact that section 12 (1) (h) is also mentioned in the order of the Court below does not make the order of eviction purely one under that section, for the main ground of requirement of the landlord is bonafide personal requirement for locating his proposed factory for the manufacture of gold or silver ornaments. Therefore there is no case for the application of section 18 to the facts of the present case. [947F G]

One V. Krishna Reddy filed an election petition against Veera Reddy, respondent No. 1, a returned candidate in the elections held for the Andhra Pradesh Legislative Assembly in February, 1978 on the ground that the returned candidate was disqualified to be chosen to fill the post under Section 9A of the Representation of People Act, 1951 inasmuch as he has subsisting contracts with the Government of Andhra Pradesh. The appellant, Thammarna was impleaded as original respondent No. 5 though he is not a necessary party. He did not file any written statement. Neither did he lead any evidence nor did he cross examine the witnesses produced by respondent No. 1 and the election petitioner. In fact, he did not even participate in the arguments before the High Court. In the appeal filed by Thammanna against the Judgment dated April 24, 1979 of the High Court of Andhra Pradesh dismissing the election petition filed by Krishna Reddy, a preliminary objection was raised as to whether the appellant had the locus standi to maintain the appeal. Dismissing the appeal, the Court, ^ HELD: (1) The appellant cannot, by any reckoning, be said to be a 'person aggrieved ' by the decision of the High Court, dismissing the Election Petition. [84C] (2) Before a person is entitled to maintain an appeal under Section 116C of the Representation of the People Act, 1951 which is analogous to Section 96(1) of the Civil Procedure Code, all the following three conditions must be satisfied: (1) that the subject matter of the appeal is a conclusive determination by the High Court of the rights with regard to all or any of the matters in controversy, between the parties in the election petition. (2) that the person seeking to appeal has been a party in the election petition, and (3) that he is a "person aggrieved", that is a party who has been adversely affected by the determination. In the present case, these conditions, particularly Nos. (1) and (3) have not been fulfilled. [79B D] 74 (3) Just as the term "decree" in Section 96(1) of the Civil Procedure Code means an adjudication which "conclusively determines all or any of the matter in controversy in the suit", the expression "any final order" as used in Section 116C of the Representation of the People Act contemplates a conclusive determination of all or any of the matters in controversy in the election petition between the parties. [78F G] (4) The appellant was not a necessary party to be impleaded as there was no allegations or claims in the election petition which would attract section 82 of the Representation of the People Act. In this case, the question of the Court joining him as a party respondent under Section 86(4) of the Act also did not arise, as he was impleaded before the High Court as respondent No. 5 though it was not obligatory for the Election Petitioner to do so. Even so, respondent No. 5 did not join the controversy. He neither joined issue with the contesting respondent No. 1 nor did he do anything tangible to show that he had made a common cause with the Election Petitioner against respondent No. 1. In fact, the only parties between whom the matters in controversy, were at issue, were the Election Petitioner and Respondent No. 1. [79F H] (5) Although the meaning of the expression "person aggrieved" may vary according to the context of the statute and the facts of the case, nevertheless, normally a 'person aggrieved ' must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something. [80A B] Bar Council of Maharashtra vs M. V. Dabholkar, [1975] 2.S.C.C. 703 and J. N. Desai vs Roshan Kumar A.I.R. 1976 S.C. 576 at p. 534 referred to. (6) The principle that election petition is a representative action on behalf of the whole body of electors in the constituency has a very limited application to the extent it has been incorporated in Sections 109 to 116 of the Representation of the People Act and its application cannot be extended to appeals under the Act. Firstly, these provisions are to be found in Chapter IV, under the main caption: 'WITHDRAWAL AND ABATEMENT OF ELECTION PETITIONS '. Then, the provisions of these sections, also repeatedly refer to the withdrawal or abatement of 'election petitions ' and also to procedure in respect thereof before the 'High Court '. The provision relating to Appeals in Sections 116A, 116B and 116C, have been included separately, in Chapter 'IV A ', captioned "APPEALS". [81E G, 83G H, 84A] Secondly, Section 116C, enjoins upon the Supreme Court to hear and determine every appeal under this Act in accordance with the provisions of the Code of Civil Procedure and the Rules of the Court. No doubt this is, "subject to the provisions of the Act and the rules if any, made thereunder". But this clause only means that the provisions of the Code and the Rules of the Court in hearing an appeal to this Court will apply except to the extent their application has been excluded expressly or by necessary implication by any provision of the Act. There is no provision in Chapter IV A of the Act, analogous to Sections 109 to 116 of the Act, which curtails, restricts or fetters an appellants ' right to withdraw an appeal. Nor is there any such provision in the Code or the Rules of this Court which does so. If the intention of the Legislature was that the provision of Sections 109 to 116 which apply to the withdrawal of election petition, should also govern the withdrawal of appeals, there was no difficulty in inserting similar provisions in Section 116C or elsewhere in Chapter IV A. [81G H, 82A C] 75 Bijayananda Patnaik vs Satrughna Sahu, [1964] 2 S.C.R. 538 at p. 545, followed.

The appellant was doing business of construction as contractor under Public Works Department in Vindhya Pradesh, now Madhya Pradesh. He challenged the levy of Sales Tax on building materials supplied by him for the year 1953 54 to 1958 59. The contention of the Petitioner was that the tax was not leviable in view of the decision of the Supreme Court in Gannon Dunkerley 's case and Pandit Banarsi Das 's case. The respondents claimed that the tax was leviable because the case fell within the derision in Mithan Lal 's case. The Rajpramukh of the United State of Vindhya Pradesh promulgated the Vindhya Pradesh sales Tax Ordinance 2 of 1949. On Vindhya Pradesh becoming Part C State of India the said ordinance of Rajpramukh was applied to the whole of it with effect from April 1, 1950, by notification No. 7 of March 28, 1951. Under section 2 of the Part C States (Laws) Act, 1950, by notification No. S.R.O. 6 dated December 29, 1950, the Central Provinces & Berar Sales Tax Act 1947, was extended to Vindhya Pradesh. The notification also added section 29 to the Madhya Pradesh Act so extended, by which ordinance 2 of 1949 was repealed. By reason of the decision of this Court in the Delhi Laws Act case the addition of section 29 was unconstitutional. Parliament then enacted the Part C States (Misc. Laws) Repealing Act (66 of 1951). By section 2 of the Act the Vindhya Pradesh Sales Tax ordinance, 1949, was deemed to have been repealed from December 29, 1950. The Vindhya Pradesh Laws (Validity) Act, 1952, also provided and declared that Central Provinces & Berar Sales Tax Act, 1947, which was extended to Vindhya Pradesh under section 2 of the Part C States Laws Act, 1950, has been and shall be deemed to be in force in Vindhya Pradesh from April 1, 1951. The said C. P. & Berar Sales Tax Act defined contract, goods, sales etc, and by these definition the materials used or supplied by 258 a building contractor in the constructions etc, were made liable to Sales Tax in accordance with the schedule rates. The question is, whether C. P. been extended for the first time by the Vindhya Pradesh legislature in 1952, when it passed the Vindhya Pradesh Laws (Validating) Act, 1952, to the exclusion of the order contained in the notification No. S.R.O. 6 or whether the Act continued to be in force in Vindhya Pradesh even before and all that the Vindhya Pradesh Act did as to remove any doubts about its validity. The rival contentions of the appellant and the respondents are reduced to the proposition that if the State Legislature of Vindhya Pradesh extended the Central Province and Berar Sales Tax Act, the extended Act would suffer from disability pointed out in Gannon Dunkerley 's case, but if the said Act was extended by the notification under Part C States (Laws) Act, 1950, then it must be treated as incorporated in the Act and to have the authority of Parliament which, in relation to Part C States, had no limitation whatever. ^ Held, that the extended law in the C. P. & Berar Sales Tax Act, 1947, did not depend on the repeal of the earlier law for its validity. It would have been operative, even if the earlier law was not repealed, but the earlier law was in fact repealed from December 29, 1950, and no question of conflict between the new and the old law ever arose. Held, further, that the Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax. No doubt, that Act contained certain provisions under which sales of building materials are taxable, and if the authority to tax the so called sales emanated from a State Legislature, then the law would fail. The law was first extended to the Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State. Parliament and the Central Government were not subject to the disabilities pointed out in Gannon Dunkerley 's case, and the matter was covered by Mithan Lal 's case. Even if the notification S.R.O. No. 6 failed to repeal ordinance 2 of 1949 Parliament by its own law effaced that ordinance in Vindhya Pradesh from December 29, 1950, and enacted that ordinance shall be deemed to be repealed from that day. The ordinance 2 of 1949 did not continue in Vindhya Pradesh down to January 8, 1953 because by fiction the ordinance was repealed from December 29, 1950. Held, also, that the laws in different portions of new State of Madhya Pradesh were enacted by different legislatures and under section 119 of the States Reorganisation Act, all 259 laws in force in a state were to continue until repealed or altered by the appropriate Legislature. The different sales tax laws in different parts of Madhya Pradesh are valid on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons is not affected by article 14 of the Constitution. State of Madras vs Gannon Dunkerley & Co. ; , Pandit Banarsidas vs State of Madhya Pradesh, ; , Mithan Lal vs State of Delhi; , In re the ; , , Gannon Dunkerley vs State of Madras, , Behram Khurshed Pesikaka vs The State of Bombay, , Deepchand vs State of Uttar Pradesh, [1959] Supp. 2 S.C.R. S, John M. Wilkerson vs Charles A. Rahrer, (1891) 140 U. section 545, M. K. Prithi Rajji vs State of Rajasthan C. A. No. 327/56 decided on 2 11 60 and State of Madhya Pradesh vs The Gwalior Sugar Co. Ltd. C. A. Nos. 98 and 99 of 1957 decided on 30 11 1960, referred to.

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

After the poll the appellant was declared elected to the Madras Legislative Assembly. Respondent No. 1 filed an election petition praying that it be declared that the election of the appellant was void. In the petition it was alleged that two of the candidates at the election accepted money paid to them by the appellant and his election agent to induce them to abandon the contest and they actually abandoned the contest. These two candidates were not made parties to the petition. The appellant applied to the Election Tribunal to dismiss the petition under section 90(3) Of the Representation of the People Act, 1951, for non compliance with the provisions of section 82 of the Act on the ground that allegations of a corrupt practice were made against the two candidates and Respondent No. 1 had failed to make them parties to the petition as required by section 82: Held, that the acceptance of gratification is not a corrupt practice within the meaning of section 123(1) Of the Act and consequently it could not be said that allegations of corrupt practice had been made against the two candidates. There was thus no non compliance with the provisions of section 82 and the election petition was not liable to be dismissed under section 90(3).

The appellant, a Cotton Mill in Indore in Holkar State was taxed in respect of profits, gains and income under the Indore Industrial Tax Rules, 1927 by the then Ruler of Indore. The Holkar State merged into the State of Madhya Bharat which acceded to India. The Rajpramukh of the new State promulgated an Ordinance No. 1 of 1948 to provide for peace and good Government of the State. This Ordinance was superseded by Act 1 of 1948. Thereafter on December 28, 1949, me Government issued a Notification under r. 18 of the Tax Rules purporting to make rules under r. 17 thereof. These rules made certain amendments in the Tax Rules. The State of Madhya Bharat became one of the Part B States on January 26, 1950. From April 1, 1950, Finance Act No. 25 of 1950 came into force and applied to Madhya Bharat also. According to its provision, the Tax Rules came to be repealed from after the accounting year ending on March 31, 1949 and assessments could only be made under the Tax Rules upto the end of the accounting period ending on or before March 31, 1949. It further provided that even the assessments for the years previous to the accounting year ending on March 31, 1949 could only be made by the corresponding authorities under the Income tax Act, and that appeals would lie to the corresponding authorities under the Income tax Act; no levy and assessment could be made by the authorities under the repealed law and no appeal would lie to the authorities or Court under that law. This provision as to the authorities competent to make assessments was lost sight of with the result that assessments were made for the years in dispute which were all before the accounting year ending on March 31, 1949 by the authorities under the Tax Rules, as they were before their repeal. When this mistake was discovered, Parliament passed the Madhya Bharat Taxes on Income (Validation) Act, No. 38 of 1954. The appellant then challenged the validity of the assessments under the Tax Rules, on the grounds: (1) that the amendments of the Tax Rules on December 28, 1949 were invalid as such amendments could not be made under r. 17 of the Tax Rules, as was purported to be done; (2) even if the amendments were good, they could not have retroactive effect and could not take away the vested right of appeal; (3) as after the Finance Act, 1950, assessments were made by the old officers appointed tinder the Tax Rules and not by the corresponding officers under the Income tax Act, the assessments were invalid and the Validating Act could not validate them because, (i) the Validating Act itself was discriminatory and was hit by article 14, and (ii) because in any case it did not apply to the present assessments. The High Court repelled all these contentions and dismissed the writ petition. On appeal by certificate this Court, Held: (i) The amendments which were made in the Tax Rules on December 28, 1948, could be justified on the basis of Act 1 of 1948. All that section 5 of Act 1 of 1948 requires is the publication of the 859 regulation made thereunder and their being made by Government, and that has been complied with in this case. There is no other formality required for making regulations and therefore, even though there was a mistake in the opening part of the Notification of December 28, 1949, the amendments made in the Tax Rules can be upheld under section 5 of Act 1 of 1948 as regulations. (ii) Even a vested right of appeal can be taken away by express legislation or by legislation which, though it may not expressly repeal the vested right of appeal, has the effect of such repeal by necessary implication. Though the right of second appeal on facts is taken away by the new rule 13 inserted in the Tax Rules, such right is taken away by legislation by necessary intendment. Therefore, the right of second appeal after the amendment must be confined in all cases by necessary intendment to questions of law only. (iii) The Validating Act is not hit by article 14. The present cases are with reference to years 1940 48, that is before the accounting year ending on March 31, 1949. The assessments in these cases were carried on by the old officers under the old law and the Validating Act specifically validates such assessments. In these circumstances it cannot be said that these assessments have not been validated by the Validating Act.

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.

Appeal No. 529 of 1958. Appeal from the judgment and decree dated March 6,1956, of the Allahabad High Court in Civil Misc. Writ No. 464 of 1954. C. B. Agwarwala, K. B. Asthana and C. P. Lal, for the appellants. M. C. Setalvad, Attorney General of India, A. V. Viswanatha Sastri and section P. Varma, for the respondent. August 22. The Judgment of the Court was delivered by SHAH, J. Under a treaty between the East India Company and Nawab Asafuddaula, the Province of Banaras was ceded about the year 1775 to the East India Company. The Company then granted a sanad to Raja Chet Singh, the former ruler of Banaras, and under that sanad, the rights and powers previously held by Raja Chet Singh were conferred afresh. Raja Chet Singh granted in jagir, pargana "Syudpore Bhettree" in perpetuity to his Diwan Ousan Singh as remuneration for services rendered to his family. Raja Chet Singh having renounced his gadi, the East India Company confirmed the grant made by the Raja in favour of Ousan Singh. Raja Chet Singh was succeeded by Raja Mahip Narain Singh who executed a sanad in favour of Ousan Singh affirming the grant. Land revenue settlements were made in the Province of Banaras about the year 1789 90, but the jagirs including "Syudpore Bhettree" were excluded from that settlement. Ousan Singh died in or 216 about the year 1800, and his son Sheo Narain Singh succeeded to the jagir. In the enquiry held by the Collector of Ghazipore into the proprietary right claimed by the jagirdar under Regulation 11 of 1819, it was declared that the grant to Ousan Singh was for life only and did not confer a heritable or transferable tenure in the parganas. The decision of the Collector was confirmed by the Commissioner of Bihar and Banaras, subject to the recommendation that Sheo Narain Singh should be maintained in possession of the parganas for life. The Government then directed in 1828 that a detailed settlement be made with the village zamindars, and offered Sheo Narain Singh allowance for life of one half of the revenue to be assessed on the pargana. Sheo Narain Singh declined to accept the offer and commenced an action in the civil court contesting the validity of the order resuming the jagir. The Government considered the question afresh, and resolved to revise the order of resumption and in July 1830, ordered that Sheo Narain Singh be considered Tahsildar of parganas "Syudpore Bhettree," and that the office be treated as hereditary devolving upon the descendants of the jagirdar and held so long as the incum bent did not infringe the privileges found to belong to other classes at the time of formation of the settlement. Sheo Narain Singh died before the resolution of the Government was communicated to him and he was succeeded by his son Harnarain Singh who withdrew the suit and signed a compromise incorporating the terms of the resolution. On August 19, 1831, the Secretary to the Government addressed to the Agent of the Governor General at Banaras a letter requesting the Secretary to the Governor General in the Pension department to prepare the necessary documents relating to the grant of a sanad specifying, that parganas "Syudpore Bhettree" were granted on an "istmrar" tenure to Harnarain Singh for his own benefit and of his heirs and successors in perpetuity_on condition of their 217 paying to Government 3/4ths of the Jamma which the revenue officers may in a resettlement of the parganas assess thereon, and that all claims to proprietary right to any village or villages situate in the Raid parganas shall be fully enquired into and in the event of any such claims being established to the satisfaction of the Government, the village or villages forming the subject of the claim shall be considered distinct from and independent of the grant and that a settlement shall be made with the proprietors as in other cases, that the office of Tahsildar shall belong to Harnarain Singh and be hereditary in his family so long as the conditions prescribed for the duties of that office be not infringed, and that in virtue of such office, the separate proprietors shall continue to pay the Jamma which may be assessed on their villages through Harnarain Singh or such other member of the family as the Government may appoint, provided that 1/4th of the Jamma of such separated villages shall be deducted from the payment to be made to the Government in lieu of all remuneration for discharging the duties of Tahsildar, and provided further that until the settlement shall be completed, Harnarain Singh shall continue to pay Jamma to Government. This proposal calling upon Harnarain Singh to bear all the expenses of the administration and any loss in collection which may occur, departed from the terms of the compromise. Harnarain Singh refused to accept the offer of a sanad on the terms set out in that letter and also the office of Tahsildar. In the meanwhile, proceedings for settlement were commenced and on November 16, 1832, the Settlement Officer reported on the conclusion of a summary settlement of the parganas that in 166 mahals, the village zamindars established proprietary rights and the revenue. assessed upon them was Rs. 1,28.1960. He further reported that 12 mahals of which the gross revenue was Rs. 22,840 were settled with the jagirdar at a reduced revenue of Rs. 17,130. Harnarain Singh having refused to undertake 218 the office of Tahsildar on the terms offered by the Government, the Board of Revenue suggested that Harnarain Singh should receive 1/4th of the net collections after deducting from the gross collection the cost of Tahsil establishment thereby giving him an income of Rs. 36,322 8 0. The Board of Revenue recommended that a sanad be issued under the authority of the Lt. Governor conferring "the pension of Rs. 36,322 8 0 on Babu Harnarain Singh and his heirs in perpetuity". In a letter dated September 13, 1837, it was recorded that the Lt. Governor of N.W.F. Province was of the view that it would be more conformable with the terms of the agreement if the allowance on Harnarain Singh 's villages (12 mahals) were given in the form of a remission of revenue to the amount of one fourth, the Jamma being fixed at Rs. 17,130 instead of Rs. 22,940 and in the villages settled with zamindars (166 mahals) Harnarain Singh be paid annually a pension of 1/4th of the collections after deducting the Tahsildari charge, and on that footing Rs. 30,612 8 0 be granted to Harnarain Singh. By letter dated October 19, 1837, from the Secretary to the Lt. Governor, N.W.F. Province, the Secretary to the Board of Revenue was informed that the Lt. Governor had resolved to adopt the Board 's recommendation made in their letter dated September 26, 1837, and to allow Harnarain Singh 1/4th of the not collections after deducting the, expenses of the Tahsildari establishment i. e., Rs. 30, 612 8 0 out of a net Jamma of the villages amounting to Rs. 1,28,960. About the 12 mahals settled with Hamarain Singh, the allowance was directed to be made in the form of a remission of 1/4th of revenue assessed. Finally, by letter dated September 14, 1838, from the Secretary to the Sadar Board of Revenue to the Officiating Commissioner 5th Division, Banaras, it was stated that " 'what the Government intended to give is a clear fourth of the net revenue of the Pargana to the Muqurrureedar as pension". The letter further stated. 219 "2. The arrangement of paying a portion of that pension by a remission of revenue on certain mauzas settled, as was supposed, directly with the muqurrureedar was proposed by the Board and allowed by Government as a mere matter of convenience to the parties. Neither Government nor Board intended to alienate any part of the 'muqurrureedar 's pen sion to his son or to any other person. If the mauzas supposed to have been settled with the muqurrureedar for his own use and behalf, turn out to be held by another person on a distinct interest, it will be necessary, the Board observe to modify the arrangement previously allowed and to collect the, whole assessed revenue of those mauzas as of all others ; and when the same shall have been collected to pay the Muqurrureedar his clear fourth of the net collections. As however, these mauzas were settled by the Government with the Muqurrureedar his responsibility for the Jumma any portion of revenue which may fall in arrear by person or the arrangement made by him, or of the domes tic differences of his family, must be made good from his pension, before the assignment of the fourth share of the net collections can have effect. The Board must consider the Muqurrureedar as the owner of these villages during his life. With his family arrangements they have no concern. But if it will be his wish that the whole revenue be collected from these villages, and one fourth be returned to him from the treasury instead of receiving tha t fourth in the shape of a remission, he is at liberty to make the election. He is also the Board remark of course at liberty to cause those mauzas to be 220 transferred or sold in the case of arrear, but his responsibility for the assessed Jumma as fixed by the act of settlement will remain the same. It is manifest that the recommendations made by the Board of Revenue and the Secretary to the Government in the lengthy correspondence varied from time to time, but in the final letter it appears to have been made clear that an amount equivalent to 1/4th of the net revenue of the 166 mahals be given as pension annually to the jagirdar. A formal sanad, though contemplated, was, it appears, never issued, but it is common ground that the allowance was paid through the Treasury Office of the Collector of Ghazipor year after year since the year 1838 to Harnarain Singh and his descendants. This allowance to the jagirdar of "Syudpore Bhettree" was called sometimes in the revenue papers "malikana" sometimes pension" and sometimes a "share in the revenue of the entire pargana '. In 1951, the U. P. Legislature enacted the Uttar Pradesh Zamindari Abolition and Land Reforms Act 1 of 1951, and relying upon section 6(b) of the Act, the revenue authorities stopped payment of the allowance to the descendants of Harnarain Singh. The respondent who is a descendant of Harnarain Singh then presented Writ Petition No. 464 of 1954 in the High Court of Judicature at Allahabad for a writ in the nature of mandamus calling upon the State of Uttar Pradesh to forbear from interfering with his right to regular payment of the "pension, allowance or malikana" payable in. lieu of the hereditary estate of Harnarain Singh in respect of parganas "Syudpore Bhettree" and for an order for payment of the "pension, allowance or malikana" as it fell due. The respondent claimed inter alia that by virtue of the notification issued under section 4 of the Act, his right to receive the pension did not cease, especially when the scheme of the Act and the principle of assessment did not contemplate payment 221 of compensation in respect of extinction of his right to the allowance, and that in any event, there was no nexus between the pension and the estates sought to be acquired under Act 1 of 1951 or the zamindari: system so tight to be abolished, because the pension was neither land nor Immovable property nor an estate within the meaning of the Act and being merely compensation payable to him in lieu of the rights of his ancestors over the estates comprised within the pargana "Syndpore Bhettree", it was not liable to vest in the State. The High Court rejected certain preliminary objections to the maintainability of the petition (which objections are riot canvassed in this appeal) and held that the right of .the respondent to receive Rs. 36,330 per annum was not an "estate" within the meaning of the Act and that the right was not acquired under the Act nor did compensation fall to be paid for the same. In the view of the High Court, under section 6 of the Act, only the rights of the intermediaries in respect of land revenue of the lands comprised in the estate were extinguished and that the rights of third parties under a contract with the State not relating to the rights and privileges of intermediaries, tenants or other persons having interest in land were not effected, and the predecessors in interest of the respondent having been granted an allowance. annually in lieu of abandonment of the right to realise land revenue, the arrangement did not come to an .end because of the "abolition of the zamindari" under the Act. The question which falls to be determined in ,this appeal by the State of Uttar Pradesh, is whether the right of the respondent to receive the allowance under the arrangement of the year 1838 was extinguished as a consequence ensuing from the vesting of the "Sudpore Bhettree" parganas in the State of Uttar Pradesh under section 4 of the Act. By the preamble. it was recited that the Act was enacted to provide for the abolition of the 222 zamindari system which involved intermediaries between the tiller of the soil and the State 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. By s.3 (8) which was retrospectively are ended by Act 14 of 1958, , 'estate" was defined as meaning the area included under one entry in any of the registers described in cls. (a) to (d) and in so far as it relates to a permanent tenure holder in any register described in el. (e) of section 32 of the U. P. Land Revenue Act 1901 as it stood immediately prior to the coming into force of the Act or subject to the restrictions mentioned with respect to the register described in el. (e) in any of the registers maintained under any other Act, Rule, Regulation or Order relating to the preparation or maintenance of record of rights in force at any time and included share in or of an estate. " 'Intermediary" was defined as meaning with reference to any estate, a proprietor, under proprie tor, sub proprietor, the kadar, permanent lessees in Avadh and permanent tenure holder of such estate or part thereof. "Land" was defined as meaning,, except in sections 143 and 144, as land held or occupied for purposes connected with agriculture, horticulture or animal husbandry which included pisciculture and poultry farming. By s.4, provision was made for vesting of estates in the State of Uttar Pradesh. By sub s.(1), it was enacted, insofar as it is material, that the State Government may by notification declare that as from a date to. be specified, all estates situate in Uttar Pradesh shall vest in the State and from the date so specified, all such estates shall stand transferred to and vest, except as provided in the Act, in the State free from all encumbrances. Section 6 provided for the consequences of an estate in the State. On the publication of a notification under section 4 of the Act, notwithstanding anything contained in any contract or document or in any other law for the time being in force and, nave as 223 otherwise provided in the Act, the consequences set forth in cls.(a) to (j) of section 6 were to ensue in the area to which the notification related. By cl.(a), all rights, title and interest of intermediaries in every estate in such area and in the sub soil in such estate including rights, if any, in mines and minerals ceased and vested in the State. Clause (b) on which the dispute primarily turns, provided : "All grants and confirmations of title of or to land in any estate so acquired, or of or to any right or privilege in respect of such land or its land revenue shall, whether liable to resumption or not determine." By cl. (c), all rents, local rates and sayar in respect of any estate or holding therein for any period after the date of vesting and which, but for the acquisition, would be payable to an intermediary, vested in and became payable to the State Government and not to the intermediary ; and where under an agreement or contract made before the date of vesting any rent, cess, local rate or sayar for any period after that date had been paid to or compounded or released by an intermediary, the same, notwithstanding the agreement or the contract, became recoverable by the State Government from the intermediary. By cls. (d) and (e), liability of intermediaries in respect of any estate incurred for any period prior to the date of vesting remained enforceable. By cl. (f), the interest of intermediaries in any estate was exempt, from attachment or sale in execution of any decree or other process of any court and any attachment existing at the date of vesting or any order for Attachment passed before such date, subject to the provisions of section 73 of the , ceased to be in force. By cl. (a), mortgages with possession on any estate or part of an estate on the date immediately preceding the date of vesting were to be deemed to have been substituted by simple mortgages without prejudice to the rights 224 of the State Government '. By el. (h), no claim or liability enforceable or incurred before the date of vesting by or against an intermediary for any money charged on or secured by a mortgage of an estate or part thereof was, except as provided in 73 of the , to be enforceable against his interest, in the estate. By el. (i), all suits and proceedings of the nature to be prescribed pending in any court at the date of vesting and. ' all proceedings upto any, decree or order passed in any such suitor proceeding previous to the, date of vesting were stayed. By cl. (j), all mahals and their subdivisions existing on the date immediately preceding the date of vesting and all engagements for the payment of land revenue or rent by a proprietor, under proprietor, sub proprietor co sharer, or lambardar as such determined and ceased to be in force. Section 37 to 40 of the Act provided for the preparation of the Compensation Assessment Roll of intermediaries as respects mahals and for preparation of gross assets of mahals. It was on this Compensation Assessment Roll that the compensation payable for loss of interest of the intermediaries was to be computed and paid. Section 42 provided for computation of gross assets of an intermediary and section 44 for computation of the net assets of an intermediary. Section 45 provided that in the case of proprietors to whom section 78 of the U.P. Land Revenue Act, 1901 applied or who were as. signers of land revenue whose. names were recorded in the record of rights, maintained under cls. (a) to (d) of section 32 of the said Act, under proprietors, sub proprietors, permanent tenure holders and, permanent lessees in Avadh, the provisions of sections 39 to 44 were to apply subject to such incidental changes and modifications as may he Prescribed and the gross assets and net assets of such intermediaries were to be computed accordingly. ' 225 By the definition, in section 3 (8) of the Act an "estate" is an area included under one entry in the registers described in cls.(a) to (d) of the Land Revenue Act. The High Court upheld the contention of the respondent that allowance paid to him could not be regarded as an "estate". That view is not challenged before this Court by counsel for the State of Uttar Pradesh. The right to receive the allowance of Rs. 30,612 8 0 from the Government under the arrangement cannot, in the absence of an express provision to that effect, be called "an area included under one entry in any of the registers" described in the various clauses. The first part of section 6(b) does not therefore assist the claim made by the State. But of the 12 mahals the respondent was a proprietor : the land of the mahals was "estate" within the meaning of section 3(8) of the Act and by section 4, the right of the respondent in that estate stood vested in and transferred to the State. It is true that by the arrangement of the year 1838, confirming the earlier compromise, remission of 25% as granted to the respondent 's predecessors in respect of payment of land revenue. If the right of the respondent in the 12 mahals ceased, the right to remission could not be converted into a positive right to receive the amount thereof, notwithstanding the extinction of his right in those 12 mahals. The right to remission of land revenue was a right in respect of land revenue in the estate which stood vested in the State. The letters dated September 13, 1837, October 19, 1837 and June 15, 1838 make it abundantly clear that the difference of Rs. 5710 between the amount originally assessed and the Jamma recoverable was to be remission of revenue. The right of the respondent to the 12 mahals was transferred to the State by virtue of the notification under section 4, and the consequences set out in sub section (b) of section 6 relating to those 12 mahals ensued. We are therefore unable to agree with the 226 High Court that for the amount of Rs. 6710 which was treated as remissions the respondent was entitled to obtain relief on the footing that right was not affected by the issue of the notification under section 4 of the Act. The claim of the respondent in respect of the allowance granted as consideration for abandonment of the right to 166 mahals rests on a firmer ground. It is true that this allowance ",as computed as 1/4th share of the revenue assessed on the 166 mahals. But the respondent under the arrangement has no interest in the land of the 166 mahals or in the land revenue payable in respect thereof. By the order of the Government, the right of Sheo Narain Singh to the entire pargana "Syudpore Bhettree" was resumed. Sheo Narain Singh challenged the authority of the Government to resume his interest in the Jagir and dispute pending in the civil court was compromised on the terms which were finalised in the year 1838 whereby Harnaram Singh and his descendants were given an allowance in amount equal to 1/4th of the net revenue of the 166 mahals. Because the annual allowance is equal to a fourth share of the net revenue of the mahals, the right of the respondent does not acquire the character of an interest in land or in land revenue. Under the arrangement, the entire land revenue was to be collected by the Government and in the collection Harnarain Singh and his descendants had no interest or obligation. As a consideration for relinquishing the right to the land and the revenue thereof, the respondent and his ancestors were given an allowance of Rs. 30,612 13 0. The allowance was in a sense related to the land revenue assessed on the land, i.e., it was fixed as a percentage of the land revenue : but the percentage was merely a measure, and indicated the source of the right in lieu of which the allowance was given. The amount is described as "pension" in the letters dated September 14, 1838, July 7, 1837 and June 15,1838. The words used in el. (b) are undoubtedly wide 227 any right to a grant which has relation to land or land revenue would be determined by the operation of that clause. But the allowance to Harnarain Singh was not in respect of land or its revenue; it was granted as consideration for settlement of a claim litigated in a civil court relating to that land. The primary object of the legislature, as set out in the preamble of the Act, was to abolish the zamindari system and to acquire the rights of the intermediaries and to pay compensation for acquisition of those rights. By section 4, estates in the area for which a notification was issued, vest in the State free from all encumbrances and as a consequence of vesting, the rights of intermediaries, but not their preexisting liabilities are extinguished as from the date of vesting. Clauses (a),(c) to (f) and (b) expressly deal with the rights and obligations of interme diaries, and the interaction thereon of the notification of vesting. Clause (g) deals with the derivative rights of mortgagees of estates. By el. (i), the mahals and sub divisions are obliterated, and the engagements for payment of land revenue or rent by proprietors, under proprietors, sub proprietors, co sharers and sub sharers cease. There is no express reference in section 6 (b) to the right of intermediaries ; by the first part of that clause, the grant and confirmation of title to land in an estate are determined and by the second part, the rights and privileges in land or in the land revenue in the estates are determined. The key words of the second part of the clause are "in respect of" indicating a direct connection between a right or privilege and land in an estate or its revenue. The intention of the legislature is manifestly to extinguish estates and all derivative rights in estates and to extinguish the interest of intermediaries between the State and the tiller of the soil. If the grant or confirmation of title is in respect of a right or privilege to land in an estate or its revenue, it must determine under cl. (b) ; but a right to receive an allowance which is 228 granted in consideration of extinction of a right to land or land revenue does not, by the force of cl. (b) determine. The allowance has not the quality of land or land revenue : its quantum only was measured by equating it with a fourth share in the net revenue of a part of land which was the subject matter of the suit in which the arrangement for payment of the allowance was made. Absence of a provision in the Act for payment of compensation for a right such as the one claimed by the respondent strongly supports the plea that the right is not intended to be acquired or extinguished. Section 37 to 44 deal with the assessment of compensation to be paid to intermediaries. Compensation Assessment Roll of intermediaries in respect of the mahals has to be prepared and detailed instructions in that behalf are contained in sections 39 to 44. By section 45, in computing the gross assets and net assets of proprietors who are assignees of land revenue and of under proprietors, sub proprietors, permanent tenure holders and permanent lessees in Avadh sections 39 to 44 of the Act are applicable subject to such modifications and incidental changes as may be prescribed. It is common ground that s.78 of the U. P. Land Revenue Act has no application to "Syudpore Bhettree" pargana. To proprietors who are assignees of land revenue and whose names are recorded in the record of rights maintained under s.32 cls. (a) to (d), the provisions of ss 39 to 44 may undoubtedly apply subject to modifications as may be prescribed, and computation of their gross and net assets may be made accordingly. But the respondent is not an assignee of land revenue whose name is so recorded in the record of rights nor is he qua the allowance an under proprietor, sub proprietor, permanent tenure holder or permanent lessee. Section 45 is a machinery provision : it does not purport to extend the field of s.6 by prescribing consequences which are not incorporated in that section. There is in s.45 nothing to warrant the submission of counsel for the State that rights of a 229 land holder to receive allowances from the Government are extinguished even without compensation, merely because he was an assignee of land revenue of some land or was a proprietor, sub proprietor, permanent tenure holder or permanent lessee in respect of other land in Avadh. The scheme for payment of compensation prescribed by sections 39 to 44 is extended to amongst others, proprietors of land who are assignees of land revenue whose names are recorded in the record of rights maintained under cls. (a) to (d) of s.32 : but, a person receiving an allowance from the State of the character received by the respondent is not a proprietor who is an assignee of land revenue, and in any event, if his name is not entered in the revenue record under cls. (a) to (d) of s.32, the provisions relating to computation of gross and net assets will not apply to him. Absence of a provision in the Act for awarding compensation to persons holding interest such as the respondent has strongly supports the view that such interest was not to be extinguished by the operation of s.6(b) of Act 1 of 1951. We accordingly hold that the High Court was right in granting the application preferred by the respondent insofar as it related to the allowance of Rs. 30,612 13 0 granted as a consideration for extinction of the right of Harnarain Singh to 166 mahals : but for reasons already stated, we are unable to agree with the High Court that the respondent was entitled to receive in respect of the 12 mahals the land revenue which was remitted. The order passed by the High Court will therefore be modified and the petition of the respondent in so far as it deals with remission of land revenue in respect of the 12 mahals of "Syudpore Bhettree" will stand dismissed. The order of the High Court in respect of the allowance of Rs. 30,612 13 0 will stand confirmed. Subject to the above modifications, the appeal will stand dismissed with costs. Appeal dismissed.

By the order of the then Government the right of S, an ancestor of the respondent, to the entire parganas "Syudpore Bhettree" was resumed. S challenged in a civil court the authority of the Government to resume his interest in the jagir. During the pendency of the dispute, settlement proceedings were commenced and in 1832 the Settlement Officer reported that to 166 mahals of the "Syudpore Bhettree" pargana, the village zamindars had established their proprietary rights and only on 12 mahals the proprietary right of S had been established. The dispute pending in the Civil Court was compromised, and the terms were finalised in 1838 with H, son of S (who had died in the meantime). The terms, inter alia, were that for 214 166 mahals settled with the Zamindars, H, and his heirs in perpetuity, be paid annually a pension of 1/4th of the collections after deducting the Tehsildari charges and for 12 mahals settled with H allowance be made in the form of remission of 1/4th of the revenue assessed. The Government under the settlement intended to give a clear fourth of the net revenue of the parganas as pension. The allowance and/ or pension was paid through Treasury Office year after year from 1838 to H and his descendants. In 1951 the U.P. Legislature enacted the Uttar Pradesh Zamindari Abolition and Land Reforms Act 1 of 1951, and under s.6(b) of the Act the revenue authorities stopped payment of the allowance to the respondent. The respondent claimed that by virtue of the notification issued under s.4 of the Act his right to receive pension did not cease because the pension was neither land nor immovable property nor an estate within the meaning of the Act and being merely compensation payable to him in lieu of the rights of his ancestors over the estates comprised within the pargana "Syudpore Bhettree", it was not liable to vest in the State. Held, that the right to receive the allowance of Rs.30,612 8 0 for 166 mahals from the Government under the, arrangement was not in respect of land or its revenue; it was granted as consideration for settlement of a claim litigated in a civil court relating to that land, and could not in the absence of an express provision to that effect be called "an area included under one entry in any of the registers" described in various clauses, (a) to (d) of s.32 of the U.P. Land Revenue Act, 1901. The intention of the Legislature was to extinguish estates and all derivative rights in estates and to extinguish the interest of intermediaries between the State and the tiller of the soil. The grant of confirmation of title which is in respect of a right or privilege to land in an estate or its revenue; it must determine under cl.(b) of s.6 of the Act; but a right to receive an allowance granted in consideration of extinction of a right to land or land revenue does not by the force of cl. (b) determine. The allowance has not the quality of land or land revenue; its quantum only was measured by equating it with a fourth share in the net revenue of a part of land which was the subject matter of the suit in which arrangement for payment of the allowance was made. A person receiving an allowance from the State in consideration "of extinction of a right to land or land revenue is not a proprietor who is an assignee of land revenue," and in particular if his name is not entered in the revenue record under cls.(a) to (d) of s.32 of the U.P. Land Revenue Act, 1901, the provisions relating to computation of gross and net assets will not apply to him. The Act does not intend to extinguish the right to receive allowance granted in 21 considerations of extinction of right to land or land revenue by the operation of s.6(b) of the Act 1 of 1951. Held, further, that the respondent was a proprietor of the 12 mahals, of the "Syudpore Bhettree" Parganas. The said 12 mahals were an "estate" within the meaning of s.3(8) of the Act and by section 4 the right of the respondent in that estate stood vested in and transferred to the State. The right of the respondent in the 12 mahals having ceased, the right of remission could not be converted into a positive right to receive the amount thereof.

In respect of a dispute between the appellant company and the respondent company which was referred to the arbitration of the Bengal Chamber of Commerce in terms of the arbitration clause contained in the contract entered into on April 6, 1951, an award was made on February 29, 1952, allowing the claim of the appellant. The respondent made an application in the High Court for having the award set aside on the ground, inter alia, that the contract was void under the provisions of the Raw jute (Central jute Board and Miscellaneous Provisions) Act, 1951, inasmuch as it had not been entered into in the manner specified in sections 5, 6 and 7 of the Act as required therein. On December 14, 1950, the Government of West Bengal had promulgated an Ordinance called the Raw jute (Central jute Board and Miscellaneous Provisions) Ordinance, 1950, for the better regulation of the trade, and on December 29,1950, a notification was issued specifying December 30, 1950, as " the appointed day for the purposes of sections 5, 6 and 7 Of the said Ordinance." Subsequently the Ordinance was replaced by the Act which by section 16, provided:. . . any notification issued. . under the Raw Jute (Central jute Board and Miscellaneons Provisions) Ordinance, 1950, shall, on the said Ordinance ceasing to operate, be deemed to have been issued under this Act as if this Act had commenced on the 14th day of December 1950. " It was contended for the appellant that the notification dated December 29, 1950, could not be read as having brought sections 5, 6 and 7 Of the Act into force, because, on a plain reading of it, the notification did not purport to bring any of the sections of the Act into force, but expressly brought sections 5, 6 and 7 of the Ordinance into force and that the said sections of the Act not having been brought into force, the contract in question was valid and, consequently, the award was binding and enforceable. Held, that in order to give full effect to the two legal fictions created in section 16 of the Act that the Act shall be deemed to have commenced on December 14, 195o, and that the notification issued under the Ordinance shall be deemed to have 80 been issued under the Act, the principle of mutatis mutandis has to be adopted and the word " Act " substituted for the word " Ordinance " used in the notification dated December 29, 1950. Consequently, the provisions of sections 5, 6 and 7 Of the Act were applicable to the contract in question.

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 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.

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.

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.

The appellants belonging to the Revenue Department of Gujarat State were allocated to the Panchayat Service when the Gujarat Panchayats Act, 1961 came into force and their allocation became final under section 206A(2) of the Act. Thereafter they went on deputation as Circle Inspectors in the State service but were later reverted back to their parent cadre in the Panchayat Service. The appellants challenged their reversion before the High Court which dismissed the petition. Hence this appeal. Dismissing the appeal, this Court, HELD: 1. It is clear from section 206A(2) of the Gujarat Panchayats Act, 1961 that a Panchayat servant who is not reallocated within a period of four years from the coming into force of the Act would be deemed to be finally allocat ed to the Panchayat Service. The High Court has held that the appellants have not been able to show that they made any such options before the specified date. Even if the appel lant gave some sort of option the same having not been accepted before the expiry of specified date, the appellants stood finally allocated to the Panchayat Service. [416B C] 2. The appellants being on deputation they could be reverted to their parent cadre at any time and they do not get any right to be absorbed on the deputation post. There is no infirmity In the judgment of the High Court. [416D]

The assessee is a Hindu undivided family and the assessment years are 1955 56 and 1957 58 to 1961 62. The assessee addressed on October 10, 1960 to the Income tax Officer in connection with a notice received under section 18A(1) of the Act in respect of the assessment year 1961 62 stating that all the movable and immovable properties of the assessee had been partitioned by metes and bounds under partition deeds and that the Hindu undivided family was no longer receiving any income as such and there was therefore no question of payment of any advance tax by it. A specific request to record the factum of the partition for that purpose of the Act effective from July 10, 1960 was also prayed for. This was followed by another letter on June 16, 1961 by M/s. S.G. Dastagir and Co. On behalf of the assessee in connection with advance tax demanded for the assessment year 1962 63 with a similar request. Before fresh assessments were completed for the years 1955 56, 1957 58 and 1958 59 as per the orders of the Appellate Assistant Commissioner dated February 24, 1962 a third letter dated March 11, 1962 was addressed to the same Income tax Officer with a similar request for recording the factum of partition. Another letter dated March 21, 1962 was addressed by M/s. S.G. Dastagir & Co. reminding the Income tax Officer of the earlier letters of October 10, 1960 and June 16, 1961. The assessment for the years 1955 56 to 1958 59 were, however, completed between August 21, 1962 and March 27, 1963 without holding any inquiry as contemplated by section 25A of the 1922 Act regarding the factum of partition. The Income tax Officer thereafter started an inquiry under section 25A and by his order dated March 30, 1965 refused to record the partition. On appeal against the refusal the Appellate Assistant Commissioner by his order dated November 8, 1967 set aside the said order and directed the Income tax Officer to record the partition under section 25A as on July 10, 1960. That order became final as an appeal was filed against it by the Revenue. In the appeals filed before the Assistant Appellate Commissioner against the assessment orders for the years in question, that is, 1955 56 and 1957 58 to 1961 62 the assessee con 506 tended that the assessments were liable to be set aside on the ground that the inquiry into the claim of partition which was a condition precedent for making an order of assessment on the Hindu undivided family had not been made as required by section 25A of the Act. The Appellate Assistant Commissioner rejected the said contention, but the appeals preferred before the Tribunal were allowed. The Tribunal cancelled the assessments without any directions to make fresh assessments. At the instance of the Revenue a reference was made by the Tribunal to the High Court of Andhra Pradesh under section 66(1) of the Act. The High Court answered the reference in favour of the Revenue and hence the appeals. Allowing the appeals, the Court ^ HELD: (1) Under section 25A of the 1922 Act the Income tax Officer was bound to hold an inquiry into the claim of partition if it is made by or on behalf of any member of the Hindu undivided family which is being assessed hitherto as such and record a finding thereon. If no such finding is recorded sub section (3) of section 25A of the Act becomes clearly attracted. When a claim is made in time and the assessment is made on the Hindu undivided family without holding an inquiry as contemplated by section 25A(1), the assessment is liable to be set aside in appeal as it is in clear violation of the procedure prescribed for that purpose, [517 A C] Kalwa Devadattam and two Ors. vs The Union of India and Ors., ; ; Additional Income tax Officer, Cuddapah vs A. Thimmayya & Anr., and Karri Ramkrishna Reddy vs Tax Recovery Officer, Vijayawada, , discussed and distinguished. (2) The duty of the Tribunal does not end with making declaration that the assessments are illegal and it is duty bound to issue further directions. The appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute. The statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature. [517 D E] In the instant case, however, since it is not established that the claim was a belated one the proper order to be passed is to set aside the assessments and to direct the Income tax Officer to make fresh assessments in accordance with the procedure prescribed by law. The Tribunal, therefore, erred in merely cancelling the assessment orders and in not issuing further directions. [517 G H]

Appeal No. 397 of 1960. Appeal from the judgment and order dated. ' November 24, 1958, of the Kerala High Court ill I. T. R. No. 23 of 1957. K. N. Rajagopala Sastri and I P.C. Menon, for the appellant. A. V. Viswanatha Sastri Narayanaswami and R. Gopalakrishnan, for the respondent. August 14. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by certificate ' granted by the High Court of Kerala raises the question of the application of a. 41(1) of the Indian Income tax Act (hereinafter called.the Act) to the fact of the case. 139 One P. B. Umbichi and his wife executed a deed dated December 20 191.5 creating thereunder a wakf of their properties. It was provided therein. , inter alia that the income from the properties mentioned therein should be utilised for the maintenance of their two daughters and their children on the female side. For 40 years upto and inclusive of the assessment year 1954 55, the income tax assessments were made on the wakf through its manager under section 41 of the Act in the status of an individual. But, for the assessment year 1955 56, the Income tax Officer treated the assessee as an association of persons, and, on the ground that the shares of the beneficiaries are indeterminate, levied tax at the maximum rate under the first proviso to section 41 of the Act. On appeal, the Appellate Assistant Commissioner of Income tax held that the Income tax Officer was not right in holding that the members of the family were indeterminate, but he confirmed the assessment for the reason that, the shares were not specified among the individual members of the family and also between the members of the family on the one hand and the charitable and religious purposes on the other, the first proviso to section 41 would be applicable to the assessee. On further appeal, the Income tax Appellate Tribunal took the View that the proprietary rights in the property in question vested in the Almighty and that the Mutawalli was only to look after ant administer the properties as a manager and, therefore, the proper person in whose hands the income from the properties should be assessed was the Mutawalli in his status as an "individual" at the rates applicable to an individual. ID that, view, the appeal was allowed. At the instance of the Commissioner of Income tax, the 'Appellate Tribunal referred to the High Court of Kerala the following question for its determination : "Whether in the facts and circumstances of the case, the first proviso to section 41 is applicable". 140 The High Court held that the said proviso was not applicable, as under the wakf deed the beneficiaries and their shares were ascertainable. Aggrieved by the said order, the Commissioner of Income tax has preferred the present appeal. Mr. Rajagopala Sastri, learned counsel for the Commissioner of Income tax, contended that on a fair reading of the terms of the wakf deed it would be clear that the Mutawalli was only directed to maintain the members of the family, that none of the members of the family had any ascertainable &hare in the income, and that, therefore, the case squarely fell within the first proviso to section 41 of the Act. Mr. Viswanatha Sastri, learned counsel. for the respondent, in addition to his attempt to sustain the construction put upon the wakf deed by the High Court, contended that the instant case fell outside the scope of section 41(1) of the Act, as the Mutawalli was only receiving the income, on behalf of the Almighty, that the Almighty was not a "Person", and that, therefore, as the main, section (lid not apply, the proviso also would not be attracted, with the result that the Muta award would have to be assessed as an "individual". As the argument turns upon the construction of section 41 of the Act, it will be convenient at"the outset to read the relevant parts thereof. "Section 41 : (1) In the case of income, profits or gains chargeable under this Act which. any trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise, including the trustee or trustees under any Wakf deed which is valid. under the , are entitled to receive on: behalf of any person, the 'tax shall be levied upon and recoverable from such. trustee trustees, 141 in the like manner and to the same amount as it would be leviable upon and recoverable from the pers on on whose behalf such income. profits or gains are receivable, and all the provisions of this Act shall apply accordingly : Provided that where any such income, profits or gains or any part thereof are not specifically receivable on behalf of any one person, or where the individual shares of the persons on whose behalf they are receivable are indeterminate or unknown, the tax shall be levied and recoverable at the maximum rate, but, where such persons have no other personal income chargeable under this Act and none of them is an artificial juridical person, as if such income, profits or gains or such part thereof were the, total income of an association of persons. " This section in term s applies to a trustee under a wakf deed which is valid under the . Under the substantive part of. the section, tax is leviable on the trustee of the wakf in the like manner and to the same amount as it would be leviable upon and recoverable from the beneficiary,that is,the assessment would be at the individual rates of tax applicable to the beneficiary. But, under the first proviso to that section, there are two exceptions to the general rule, viz., (1) where the income is not specifically receivable on behalf of anyone person; and (ii) where the individual shares of the persons on whose behalf the income is receivable are indeterminate or unknown. In those two circumstances tax shall be levied and recoverable at the maximum rate. It is agreed that the first exception does not apply to the instant case. But the question that falls to be decided is whether the individual shares of the persons on whose behalf the income is receivable are indeterminate or unknown. The answer to the question depends upon the construction of the 142 provisions of the Wakf deed. The Wakf deed was executed on December 20, 1950 by Umbichi and his wife dedicating their entire property, moveable and immoveable, of total value of rupees one lakh for the objects mentioned therein. The Mutawalli appointed thereunder was directed to manage the properties in such a way as "to do acts necessary for charitable purposes and, to meet the maintenance expenses of their children and grand children and the female children that might be born to them in future, and to the male children born to the said female children". The document proceeded to give further specific directions in the management of the properties. After payment of taxes and meeting the expenses incurred for repairs and maintenance of the properties, the balance of the income should be utilised for the "daily necessary expenses of the house and food expenses as we are doing now", and for purchasing "dresses and other necessities for the then male and female members of the tarwad" and for conducting "nerchas (ceremonies) ,such as Yasin, Moulooth, etc., charitable ceremonies for feeding the poor and such other necessary expenses , and out of the balance, if any, the Mutawalli was directed to acquire properties yielding good income. The rest of the recitals in the document are not relevant for the present purpose. Can it be said that, under the document, the individual shares of the beneficiaries are specified ? The document does not expressly specify the shares of the beneficiaries; nor does it do so by necessary implication. Indeed, ' the individual shares of the beneficiaries Are not germane to the objects of the document. The Mutawalli was directed to bear, out of the income the expenses necessary for maintaining the members of the tarwad and to conduct the necessary religious ceremonies. The distribution of the family income and: family expenses was left to the discretion of the 143 Mutawalli, the document also further contemplated that the Mutawalli by his prudent and efficient management would save sufficient amounts for purchasing properties. The 'directions indicate beyond any reasonable doubt that no specified share of the income was given to any of the benefit series, and their right was nothing more, than to be maintained having regard to their reasonable requirements which were left to the discretion of Mutawalli. While it is true that the number of beneficiaries would be ascertainable at any given point of time, it is not possible , to hold, as the High Court held, that under the document the beneficiaries had equal shares in the income. The beneficiaries had no specified share in the income, but only had the right to be, maintained. The construction put upon the document by the High Court cannot, therefore, be sustained on the plain wording of the document. 'We, therefore bold that under the terms of the document the individual shares of the beneficiaries are indeterminate within the meaning of the first proviso to section 41(1) of the 'Act. If so, under the said proviso, the assessee is ,liable to pay income tax, at the maximum rate. The alternative contention of learned counsel 'for the respondent remains to be considered. The argument is that 'under the Wakf deed the properties vest in the Almighty and, therefore, the Mutawalli receives the income 'only on behalf of the Almighty and not on behalf of any person within the ' meaning of section 41(1) of the Act, with the result that section 41(1) is not applicable to the assessment in question. The argument is rather subtle, but it has no force. There are three effective answers to this contention Firstly, it was not raised before the High Court the only question argued before the High Court was whether the beneficiaries of the trust and their individual shares of the income of the trust were ascertainable. 144 Secondly, though under the Mahomedan Law the properties dedicated under a Wakf deed belong to the Almighty, it is only in the ideal sense, for the Mutawalli in the name of the Almighty utilises the income for the purposes and for the benefit of the beneficiaries mentioned therein. Under the Mahomedan Law, the moment a Wakf is created all rights of property pass out of the wakf and vest in the Almighty. 'The property does not vest,in the, Mutawalli, for he is merely a manager and not a trustee in the technical sense. 'Though Wakf property belongs to the Almighty, the practical significance of that concept is explained ill Jeuwun Dass Sahoo vs Shah Kubeer ood deen (1) thus : ". . . . Wakf signifies the appropriation of a particular article in. such a manner as subjects it to the rules of divine property, whence the appropriator 's right in it is extinguished, and it becomes a property of God, by the advantage of it resulting to his creatures . " That is, though in an ideal sense the property yet in the Almighty, the property is held for the benefit of His creatures, that is, the beneflciaries. 'Though at one time it was considered that to constitute a valid Wakf there must be dedication of property solely to tbe Worship of God or for regious or charitable, purposes, the Wakf Validating ,Act, 1913, discarded that view and enacted by section 3 that a Mussalman can create a wakf for the maintenance and support, wholly or partially, of his family, children or descendants,provided the ultimate benefit is expressly or impliedly reserved for the poor or for any other purpose recognised by the Mussalman law as a religious, pious or charitable purpose of a permanent character. Section 4 of the said Act, goes further and says that a wakf shall not be invalid by the mere ' circumstance that tile benefit (1) (1840)2. M.I.A. 390, 421. 145 reserved for the poor or for religious purposes is postponed until the extinction of the family It is, therefore, manifest that under the Mahomedan Law, the property vests only in the Almighty, but the Mutawalli, acting in ' His name, utilises the income for the advantage of the beneficiaries. Therefore, the words ,,on behalf of any person" in section 41 of the Act , can only mean on behalf of the beneficiaries and not on behalf of the Almighty. The third and more effective answer to the argument is that section 41(1) of the Act provides for a vicarious assessment in order to facilitate the levy and collection of income tax ' from a trustee in respect of income of the ' beneficiarios. In express terms it equates the Mutawalli of a wakf to a trustee. For the purpose of section 41 the Mutawalli is treated as a trustee and, on the analogy of a trustee, he holds the property for the benefit of the beneficiaries. There is no scope for importing the Mahomedan Law of Wakf in section 41 when the section in express terms treats the Mutawalli as a trustee, though he is not one in the technical sense 'under the Mahome 'dan Law. If the argument of learned counsel for the respondent be accepted, it would make section 41 of the Act otiose so far as wakfs are concerned, for in every case of wakf the property I would be held for the Almighty and not for any person. We, therefore, reject this contention and answer the question in the affirmative. In the result, we set aside the order of the High Court and hold that the, respondent was rightly assessed by the Income tax Officer at the maximum rate. The appeal is allowed with costs. Appeal Allowed.

The question for determination in the appeal was whether the wakf in question should be assessed to tax under s.41 (1) of the Indian Income tax Act. 1922, through the manager as individual or as an association of persons at the maximum rate under the first proviso to that section on the ground that the individual shares of the beneficiaries were indeterminate and unknown. The wakf deed directed the mutawalli to do acts necessary for charitable purposes and to meet the maintenance expenses of the wakif 's children, grand children, the female children born in the future and the male children born to the said female children and after payment of taxes and meeting of expenses for repairs,and maintenance of properties, to utilise the balance of the income for daily necessary expenses of the house and for food for purchasing dresses and other necessities for the and female members of the tarwad. for conducting specified ceremonies, for feeding the poor and for. meeting such. other then necessary expenses and thereafter to utilise the balance, if any, in acquiring properties yielding good income. 138 Held that under the terms of the wakf deed the individual shares of the beneficiaries were indeterminate within the meaning of the first proviso to s.41 (1) of the Indian Income tax Act, 1922, and as such the assessee was liable to pay income tax thereunder at the maximum rate. It was not correct in view of ss.3 and 4 of the , to say that under the wakf deed the property vested in the Almighty and the Mutawalli did not therefore, receive the income on behalf of any person within the meaning of s.41 (1) of the Indian Income Tax Act and as such the proviso could not come into operation. Under the Mahomedan law wakf property vests in the Almighty only in an ideal sense and the Mutawalli, acting in his name, utilises the income for the advantage of the beneficiaries. The words "on behalf of any person" in s.41 of ' the Act, therefore, could only mean on behalf of the beneficiaries and not on behalf of the Almighty. Jewun Doss Sahoo vs Shah Kubeer ood deen, (1 841) 2 M.I. A. 390, referred to. Held, further, that there was no scope for importing the Mahomedan Law of wakf in s.41 of the Act since that section in express terms treated the Mutawalli as a trustee though he is not one in the technical sense under the Mohamedan Law.

The assessee, a public limited company, in the assess ment year 1964 65 was in the second year of its new project going into production. The Income tax Officer computed the assessment under section 143(3) of the Income tax Act, 1961 after determining the rebate admissible under sections 84 and 101 at Rs.2,72,372. He re opened the assessment under section 147(b) and re computed the rebate at Rs.2,51,222. The appeal by the assessee to the Appellate Assistant Commissioner was dis missed. The Appellate Tribunal accepted the plea of the assessee that to the figure of capital as worked out under Rule 19(1) is to be added the average profit as worked out under sub rule (5) of Rule 19 and held that the average capital has to be taken at Rs.45,39,557 and not at Rs.41,87,034. In the Reference, the High Court agreed with the conclusion reached by the Appellate Tribunal. Dismissing the Appeal of the Revenue, HELD: 1. Admissibility of exemption under section 84 of the Incometax Act, 1961 which has been repealed with effect from 1.4.1968 has never been in dispute. What has been deputed is the manner of its computation. Rule 19 of the Income tax Rules, 1962 prescribes the method of computation and on a proper interpretation of sub rule (1), (3) and (5) of this Rule would depend the ultimate conclusion to be reached. [590F G] 2. The High Court is right in saying that the dispute has to be resolved by referring to sub rules (1), (3), (5) and (6) of Rule 19. The High Court found that the value of assets entitled to depreciation under Rule 19(1)(a) worked out to Rs.40,10,947. To this figure was added a sum of Rs.1,39,764 on account of depreciation as on 1.1.63 as also on account of the average value of additions. The other assets were valued under Rule 19(1)(b) at Rs.44,38,126 as on 1.1.63. All put together the 589 aggregate valuation came to Rs.85,38,837. From this aggre gate, deduction of sum of Rs.44,01,803 representing loans, other liabilities including provision for tax as authorised by Rule 19 was made leaving the valuation of the capital at Rs.41,87,034. To this figure the sum of Rs.3,52,503 being half of the profit from the New Project was added to compute the value at Rs.45,39,537. Following the provision of section 84, entitlement to exemption was determined at Rs.2,72,372 representing 6% of the capital employed in the new industri al undertaking. [592C E] 3. Re assessment was made by deleting the addition of Rs.3,52,503 ' which represented half the profit of the year. According to the Revenue, profits earned during the year had already been taken into account in the process of computa tion and there was no warrent for its addition over again to the extent of a moiety. In fact, that is the only dispute that fell to be resolved. The High Court took note of the fact that profits had necessarily been reflected in the average valuation of the assets but in its view the deeming provision of Rule 19(5) was the special procedure laid down for computation for the purpose of calculation and could not be over looked for the reasons advanced by the Revenue. There is sufficient force in the reasoning of the High Court and the conclusion reached by it is accepted. [592E G]

The appellant assessee, in his income tax return for the assessment year 1962 63 (for which the previous year was the calendar year 1961) recited that the annual value of the building derequisitioned by the Govt. on 26 12 1960 was Rs. 1,23,672/ . However on the ground that the building had remained vacant throughout the previous year, the assessee claimed a remission in the computation of the income of the entire annual value. The assessee also claimed a deduction on account of insurance premium and municipal taxes relating to the property. The Income Tax Officer took the view that the property was not in a habitable condition and did not admit of letting and therefore no question arose of applying the provisions of the Income Tax Act relating to the computation of income from property. Accordingly, he held that the annual value as well as the vacancy claim had to be ignored. The assessee appealed to the Appellate Assistant Commissioner who held that although the property had remained vacant, it possessed an annual value and should be considered for assessment. On that view, he allowed the deductions claimed by the assessee. In second appeal, the Income Tax Appellate Tribunal favoured the view taken by the Income Tax Officer and accordingly held that the claim to deductions made by the assessee must fail. The Tribunal, in other words, affirmed that the property fell outside the scope of section 22 of the Act and, consequently, denied the deductions. The Revenue appeared satisfied with the order of Appellate Tribunal. But, at the instance of the assessee a reference was made to the High Court. The High Court was of the opinion that the Appellate Tribunal had misconceived the law in holding that because the property was in a state of disrepair it did not possess an annual value. As regards the assessee 's claim to the specified deduction, it held that while the insurance premium paid by it could be allowed, there was no merit in the claim on account of vacancy remission and payments of municipal taxes. Hence the appeal by special leave to this Court. Dismissing the appeal, the Court, ^ HELD : 1. Whether the High Court was right in including a direction to the Appellate Tribunal to take into account the annual value of the property 429 will depend on the appreciation of the true scope of the reference taken to the High Court. The question referred to the High Court was rooted in the fundamental submission of the assessee that the property possessed an annual value for the purpose of Section 22 and it was, therefore, entitled to the vacancy remission and other deductions claimed by it. The frame of the question indicates that it has two parts, whether the Appellate Tribunal was right in holding that in computing the income from property the premises 3, Gun Foundry, possessed an annual value and whether the Appellate Tribunal was right in disallowing the vacancy remission and other deductions in respect of that property. [434C E] Unless the property fall within the scope of Section 22 there was no occasion for considering the assessee 's claim to the deductions. The High Court also, when considering the reference, examined the question in its bifurcated character. But although bifurcated, the thrust of the question was directed to the consideration of the deductions claimed by the assessee. Whether the property possessed an annual value was necessary to determine solely for the purpose of considering the claim to deductions. Unless the assessee was interested in those deductions it would not have asked for a finding that the property possessed an annual value. The High Court, was, therefore, right in examining both parts of the question and in determining whether the property had an annual value and the deductions claimed were permissible. [434E G] The High Court had to consider the first part of the question because that was the very case of the assessee throughout from the earliest stage of the proceeding. The need for the determination whether the property has an annual value arises only if it is found that on the terms of the statute the assessee is otherwise entitled to the deductions claimed by him. If those deductions are not permissible under the relevant section, no question arises of examining whether the property has an annual value. Viewed in that light, the determination of the question whether the property has an annual value falls into its proper place. [434G H, 435A] 2. It is not open to the Revenue to contend that even though the claim to deduction must otherwise fail, the question whether the property has an annual value must still be considered. If the Revenue intended that the High Court should determine whether the property had an annual value as a question independent of its finding on the admissibility of the deductions, the Revenue should have applied to the Appellate Tribunal for a reference to the High Court accordingly. It did not ask for a reference and, therefore it is not entitled to raise that contention now. [435A C] However, the only way of looking at the case, is whether on the assumption that the property has an annual value and falls within the scope of Section 22, the assessee is entitled to the deductions under Sections 23 and 24. If he is entitled to any of those deductions, then in order to establish the foundation in which the deductions can be rooted it will be necessary to determine whether the property possesses an annual value. That is what the High Court did, and the observations made by it must be construed accordingly. It may be that the deduction to which the assessee is found entitled runs to a far smaller figure than the annual value property attributable to the property. In that event the consequence will be a net annual value of some significance. And this will be the consequence notwithstanding that 430 the reference is at the assessee 's instance and no reference at all has been brought by the Revenue. The result appears anomalous, but after all it is for the assessee to choose whether or not he wishes to take a reference to the High Court, and if he is found entitled to even one of the deductions claimed by him and effect cannot be given to that claim without the annual value of the property being computed he has only to thank himself. [435C F] 3. The High Court, on a reference before it, does not act as a court of appeal. The jurisdiction is advisory and no more. The High Court is empowered to decide the question of law referred to it, and to return its answer to the Appellate Tribunal. The Appellate Tribunal then takes up the appeal and disposes it of conformably with the answer returned by the High Court. It is not part of the jurisdiction of the High Court to interfere and modify or set aside the appellate order of the Tribunal. [435F H] 4. The proviso to Section 23 (1) of the Income Tax Act, 1961 can be availed of only if the property is in the occupation of a tenant. It would seem so on the language of the proviso. The assessee does not rest his claim on any other provision of law. In the circumstances, the High Court is right in denying the claim in respect of municipal taxes. [436G H] 5. The provisions of the Income Tax Act relating to the charge on income apply in relation to a specific assessment year and the provisions of the Act providing for the computation of the chargeable income (which includes taking into account permissible deductions in the computation of the income chargeable under different heads) apply, in the absence of anything to the contrary, in relation to the relevant previous year. The total income of the previous year needs to the computed, and the different provisions relating to the computation of income must be read and applied in the context of the facts and circumstances obtaining during that year, unless the context suggests the contrary. Consequently, when reading s.24(2) (ix) of the Income Tax Act, 1961 which speaks of property which is let and which was vacant during a part of the year, the Court must read it to mean property which was let during the previous year and was vacant during a part of the year. It cannot refer to property which was not let at all during the previous year. [437D E] In the present case, there is no evidence to show that it was ever given out by the assessee that the property was available for letting. The assessee is not entitled to the deductions claimed by it in respect of municipal taxes and a vacancy remission. [437F] Maharajadhiraja of Darbhanga vs Commissioner of Income Tax, Bihar and Orissa, ; distinguished.

An uncle of the two respondents made a will in December, 1908 by which certain properties were endowed by him in favour of an idol which certain properties were endowed by him in favour of an idol will that he had two wives and no son had been born to either of them. He nominated his two wives and his sister as "Mutawallies, managers and executives" to administer the endowment during their life time and also provided that in consultation with his Guru they should appoint a successor to themselves. Upon the coming into force of the Bihar Hindu Religious Trusts Act, 1950, a notice was sent to the respondents by the Board constituted under the Act calling upon them to file certain particulars as required under the provisions of the Act on the view that the properties constituted a Public Hindu Religious Trust. The respondents thereafter filed a suit against the Board for a declaration that the said properties were not subject to the Act and were private endowments. After considering substantial oral and documentary evidence, the Trial Court held that the endowment was private to which the Act was not applicable. An appeal to the High Court was dismissed. In the appeal to this Court it was contended that it could easily be inferred from the facts and circumstances that the endowment was a public one. The testator was childless and, therefore, there was no need for. him to preserve the property for his family; that he had dedicated large properties for the upkeep of the idol, and the largeness of the properties indicated that it must have been for the benefit of the worshippers drawn from the public and not from the family; that on the extinction of the line of shebaits consisting of the two wives and the sister of the testator, the shebaitship was to go to a person of a different community ,on the advice of a stranger and that there was no mention in any of the ,deeds that the public were not to be admitted to the worship of the idol. HELD: Dismissing the appeal, (i) On the facts, it was clear that the idol had been in the family for a number of years and only the family was doing its regular worship; there was nothing to show that the public ever looked after this idol or were allowed a share in the worship as of right. Nor did the author of the dedication by his will make it clear that the public were to be admitted as of right. The whole arrangement showed that the further looking after of the idol was to be the concern of the family, and it was only under the nomination of the family that a particular person of the Vaishavnava belief was to be in charge after the demise of the members of the family who were to become mutawallis after the death of the testator. , It was ,obvious that in this family as there was no male issue and, therefore,, there was nobody to carry on worship and make arrangements for the seba puja 651 of the idol, as had been done in the family for a long time, some other kind of arrangement had to be made and this arrangement was made by the will. No more can be read into it than what was said there. [654 C] (ii) There was no force in the contention that merely because an exemption was claimed in regard to the income of the endowment as being for charitable and religious purposes, this would make the endowment a public one. What a person does with a view to claiming exemption from income tax or agricultural income tax, is not decisive of the nature of the endowment. The nature of the endowment is to be discovered only from the tenor of the document by which the endowment is created, the dealings of the public and the conduct and habits of the people who visit such a temple or Thakur Dwara. The claim to exemption was with a view to saving some income of the endowed property. It might have been motivated from other considerations and not that it was a public endowment. [655 A C] Babu Bhagwan Din and others vs Gir Har Saroop and others, referred to. Deoki Nandan vs Murlidhar ; ; Sivami Saligrama. charya vs Raghavacharya and others, Civil Appeal 645 of 1964 decided on 4 11 65; distinguished.

The respondent was an assessee under the Kerala General Sales Tax Act, 1963. In determining the taxable turnover for the assessment year 1973 74, it claimed exemptions in respect of a 'service discount ' under r. 9(a) and an amount of Rs. 982.83 in respect of 'sales returns ' under r. 9(b)(i) of the Kerala General Sales Tax Rules, 1963. The Assistant Commissioner disallowed the claim on both the counts stating that while the 'service discount ' had not been allowed as a discount in accordance with the terms of the sale but as an overriding commission and incentive to promote trade, the 'sales returns ' related to the sales completed in the assessment year 1972 73. In appeal, the Deputy Commissioner allowed the assessee 's claim in respect of 'service discount ' in full and that in respect of 'sales returns ' to the extent of Rs. 552.70. The Department 's appeal before the Appellate Tribunal and the revision filed by it before the High Court were dismissed. The appellant contended that the 'service discount ' could not strictly be termed as discount as it was in lieu of services rendered by the respondent 's main distributors by way of popularisation of the sales and consumption of the products sold by the assessee and that it was either in the nature of a set off on account of reciprocal promises or it amounted to consideration for an agreement styled as "trading in"; and That the deduction claimed in respect of 'sales returns ' could not be allowed from the taxable turnover for the year 1973 74 as any deduction under r. 9(b)(i) could only be made from the total turnover or the assessment year in which the goods were actually sold. Dismissing the appeal in so far as it concerned the 'service discount ', and allowing the same in respect of 'sales returns ', ^ HELD: Rule 9 (a) says that all amounts allowed as discount either in accordance with regular practice or in accordance with agreement would be deductible from the total turnover provided they are duly supported by the entries in the accounts of the assessee. Ordinarily, any concession shown in 385 the price of goods for any commercial reason would be a trade discount which can legitimately be claimed as a deduction under r.9(a). Such a concession is usually allowed with the object of improving prospects of one 's own business. It is common experience that when goods are marketed through reputed concerns, the demand for such goods increases and correspondingly the business of the manufacturer or the wholesale dealer would become more and more prosperous. Hence any concession in price shown in such circumstances by way of an additional incentive with a view to promote one 's own trade does qualify for deduction as a trade discount. It cannot be termed as a service charge. [389A D] In the instant case, the 'service discount ' in respect of which the deduction was claimed was the additional trade discount allowed by the assessee to its main distributors over and above the normal trade discount in consideration of the extra benefit derived by the assessee by reason of the marketing of its goods through them. It is not disputed that there were such agreements between the assessee and the purchasers and the accounts of the assessee truly reflected the actual discount allowed to the purchasers. Apart from buying the products of the assessee, no other service was rendered by the dealers to the assessee. The additional discount or 'service discount ' is no other than the discount referred to in r.9 (a). [388 E H; 389 D E] (b) 'Trade in ' contracts are those where goods ale transferred by the seller for consideration partly in money and partly in exchange of some other goods to be sold by the buyer to the seller. In such cases there may be one contract of sale only of the principal goods coupled with a subsidiary agreement that if the buyer delivers to the seller the other goods, an agreed allowance will be made. There may also be cases where the buyer may become entitled to an extra allowance for some service unconnected with the sale of the goods in question being rendered to the seller. In such cases the allowance in the price of the goods sold given by the seller to the buyer either by way of consideration for the goods supplied by the buyer to the seller or for services rendered by the buyer to the seller would not be a trade discount as such which would qualify or deduction in the determination of the taxable turnover. [389 P H; 390 A] In the instant case. the service said to have been rendered by the buyers for securing the 'service discount ' is an integral part of the transaction of sale itself which incidentally confers on the assessee the benefit of popularisation of the assessee 's goods in the market. The discount so allowed is merely a percentage of the price of the Goods sold which has nothing to do with any other goods supplied or other service rendered by the buyers to the assessee. The fact that the discount is not allowed at the time of sale but on a later date at the end of the month would not make it any the less a trade discount. The High Court rightly upheld the deduction of the 'service discount ' claimed in this case.[390A.C] 2. The two important conditions which have to be satisfied for claiming the deduction under r. 9(b)(i) are that the goods in question must have been returned within three months from the date of delivery and that necessary entries are made in the accounts of the assessee If these conditions are satisfied, the amount allowed to the purchaser for the returned goods would be deductible from the total turnover. Any deduction that can be made under 386 this rule can only be made from the total turnover of the assessment year in which the goods that are returned within three months of the date of delivery were actually sold. Such deduction cannot be claimed from the total turnover of the succeeding financial year. If The assessment for the relevant year is completed, the department has to comply with the demand for adjustment or refund by making necessary rectification in the order of assessment. [390 E H. 391 F G] Jay Engineering Works vs State of Kerala, 43 S.T.C. 492, overruled.

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.

The appellant executed a deed of trust settling some of his lands for the maintenance of certain temples and Thakoorbaries. He was to be the trustee of the institutions and was to get 15% of the net income of those lands as trustee 's remuneration. Before the income tax authorities the appellant claimed that as the income received from agricultural properties of the trust by him as trustee was agricultural income in his hands and was by virtue of section 4(3)(viii) of the Indian Income tax Act, 1922, exempt from liability to pay tax, the remuneration which by the covenant contained in the deed of trust he received was also exempt under that section because, when he appropriated a fraction of the rent or revenue of agricultural lands towards his remuneration, the original character of the income was not altered. Held, that the source of the right in which a fraction of the net income of the trust was to be appropriated by the appellant as his remuneration was not in the right to receive rent or revenue of agricultural lands, but rested in the covenant in the deed to receive remuneration for management of the trust, and the character of the income appropriated as remuneration was not the same as the character in which it was received by the appellant as trustee. Consequently, the remuneration not being received as rent or revenue of agricultural lands under a title, legal or beneficial in the property from which the income was received, it was not agricultural income within the meaning of section 2(1) of the Indian Income tax Act, 1922, and was not exempt from taxation under section 4(3)(viii) of the Act. Nawab Habibulla vs Commissioner of Income tax, Bengal, (1943) L.R. 7,D I.A. 14 and Premier Construction Co. Ltd. vs Commissioner of Income tax, Bombay City, (1948) L.R. 75 I.A, 246, relied on. Commissioner of Income tax, Bihar and Orissa vs Kameshwar Singh, (1935) L.R. 62 I.A. 215, distinguished.

The appellant is the Mahant of Emhar Math of Puri which is an ancient Public Hindu Religious Trust. Being a trustee, the appellant has been assessed in the status of an "individual" under the Orissa Agricultural Income Tax Act, 1947 for the assessment years 1948 49 to 1967 68 in respect of the income derived from agricultural lands owned by the trust. These assessments were made after granting the exemption under section 8(1) of the Act which provides that "any sum derived from land held under such trust and actually spent for the said purpose (charitable or religious purposes) shall not be included in the total agricultural income of such assessee. " The appellant challenged the constitutional validity of section 8 (1) of the Act under which the assessments were made principally on the ground that section 8(1) was discriminatory and hit by article 14 of the Constitution, in as much as under the said provision, in respect of non public muslim trusts created for religious or charitable purposes the exemption contemplated therein was con fined to such agricultural income or was actually spent for the public purposes of charitable or religious nature, while in the case of muslim trusts (Waqfs) the entire agricultural income whether spent for charitable or religious purpose or not, was exempt from the operation of the Act under section 9 of the Act. The Orissa High Court, negatived the said contention on an examination of the provisions of Sections 8 and 9 in the context of the scheme of the Act and dismissed the Writ Petition. Dismissing the appeal by special leave the Court. ^ HELD: ( 1 ) section 8 ( 1 ) of the Orissa Agricultural Income tax Act, 1 947 is free from the vice of discrimination under article 14 of the Constitution and the said provision is perfectly valid and constitutional. [663 G Hl (2) The scheme of the Act is that under the charging provision agricultural income tax is levied on the total agricultural income of the previous year of every assessee subject to the exemption which have been provided for under Sections 8, 9 and 16. [661 C D] The legislative intent of granting of limited exemption is brought out by Sections 8(1) and 16 of the Act. Whereas exemption in regard to the amount actually spent for charitable purposes under section 8(1) is in relation to the agricultural income of a public charitable trust, the exemption of similar nature and extent contemplated by section 16 is in regard to the agricultural income of any assessee who may not be a trustee owning lands under a public charitable trust, in other words, in either case, the exemption is confined to such part of the agricultural income which is actually spent. by the assessee f. charitable purposes. [661 D E] 657 (3) Section 9 of the Act, in terms, says that the exemption thereunder is confined to Muslim Trusts "referred to in section 3 of the Musalman Waqf Validating Act, 1913". section 3 of the Validating Act refers only to muslim trusts which are in the nature of Waqf alal aulad. The exemption in section 9 of the Act, therefore clearly applies only to Muslim Trusts which are in the nature of Waqf alal aulad. The marginal note to section 9 as well as the proviso to the section make this clear. [662 B, 633 B C] If that be so, then all muslim trusts other than Waqf alal aulad squarely fall under section 8 ( I ) and to all such waqfs the limited exemption contemplated therein would apply. If that be so, the gravamen of complaint that all waqfs (Muslim Trusts) other than waqf alal aulad are receiving favourable treatment as against non Muslim public charitable trusts must fall to the ground. [663 C, E] As regards Muslim trusts which are in the nature of waqf alal aulad which alone are covered by section 9 the proviso clearly shows that the share of the beneficiary under such a trust far from being exempted is brought tb tax and the tax is made realisable from the mutawali and read with the proviso the main provision really confines the benefit of exemption only to ultimate illusory or remote public charitable or religious purpose an(l is thus completely consistent with the object and scheme of the Act. [663 F G] Fazlul Rabbi Pradhan vs State of West Bengal & ors ; , applied.

Appeal No. 328,of 1958. Appeals from the judgment and order dated September 12, 1956, of the Calcutta High Court in Appeal from Original Order No. 15 of 1955. B. Sen P. K. Chatterjee and P.K. Bose, for the appellants. Dipak Datta Choudhri and P. D. Menon., for respondent No. 2. 1961. August 16. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal raises the question of construction of the expression ,,telegraph line" in section 34(2)(b) of the (Act 9 'of 1910), (hereinafter called the ' Act). The first respondent, Laxmi Narayan Chopra, carries on business, as motor coach builder;, under the name and style of "Chopra Motors" having, his factory at 139, Regent Park, Tollygunge in the suburbs of Calcutta., In the said factory a number of "Universal Electric Motors" are operated for the purpose of working electric drills. Within a distance of 100 feet of the said factory, there is a Post and Telegraph Wireless Station, which, besides functioning as a coast station communicating with ships at sea, handles public messages in large volume from Darjeeling, Shillong, Gauhati, Agartala and New Delhi. In or about Aril, 1953 severe electrical interference was observed in the said station and experts attributed the same. to local induction from the first respondent 's factory. On October 13, 1953, the Senior Electric Inspector issued a notice to the first respondent to show cause writing as to why an order under section 34(2)(b) of the Act, read with notification No. 4193 COM, dated August 1 14, 1929 requiring discontinuation of the operation of the Universal Electric Motors in the 149 said factory premises should ' not be made. After some correspondence: on: December 1, 1953, the Senior Electric Inspector made an order under a. 34(2)(b) of the Act requiring the first respondent to remedy the injuries affecting the lines used for wireless telegraphic communications at the Wireless Receiving Centre. On January 12, 1954, the first respondent filed a petition in the High Court at Calcutta under article 226 of the Constitution pray for a writ of mandamus or any other appropriate mug writ directing the appellants to withdraw and cancel the said order and to forbear from giving effect to the same. The petition came up for hearing, in the first instance, before Sinha J., of that Court. It was contended, interalia, that there was no "telegraph line" in the Post and Telegraph Wireless Station within the meaning of s.34(2)(b) of the Act, and, therefore, the notice issued by the Senior Electric Inspector was without jurisdiction. Sinha J., rejected the contention and dismissed the petition. But on appeal, a division bench of that High Court, consisting of Mookerjee, A. C, J., and H. K. Bose J., accepted the contention of the first respondent and issued a writ as prayed for. The present appeal is directed against the said order. Learned counsel for the appellants contends that the definition of ", 'telegraph line" in the , (Act 13 of 1885), which is included by reference in the Act, is wide, enough to take in electric lines used for the purpose of wire. less telegraph and that the Appellate Bench of the High Court went wrong in invoking the old maxim contemporanea expositio est optima et fortissima in lege in construing the provisions of a modern state. The first respondent is ex parte; but in this case hisviewpoint is forcibly expressed in the judgment of the High Court under appeal. To appreciate the rival contentions, it is necessary at the outset. to read I the relevant provisions of the Act and the Telegraph Act. 150 The Section 34. (2) If at any time it is estab lished to the satisfaction of the appropriate Government (b)that any electric supply lines or other works for the generation, transmission, supply or use of energy are attended with danger to the public safety or to 'human life or injuriously affect any telegraph line, the appropriate Government may, by order in writing, specify the matter complained of and require the owner or user of such electric supply lines or other works to remedy it in such manner as shall be specified in the order, and may also in like manner forbid the use of, and the supply of energy to, any electric supply line or works 'until the order is complied with or for such time as is speci fied in the order. Section 2. In this Act, expression,. ; defined in the , or in the , have the meanings assigned to them in either of those Acts. . The Section 3. (1) "telegraph" means an electric, galvanic or magnetic telegraph, and includes appliances and apparatus for making, transmitting or receiving telegraphic telephonic or other communications means of electricity, galvanism or magnetism. (4)"telegraph line" means a wire or wires used for the purpose of a telegraph with any casing, coating, tube or pipe enclosing the same and any appliances and apparatus con nected therewith the purpose of fixing or insulating the same. A combined reading of the relevant provisions of 151 the two Acts may be expressed thus: " 'Telegraph line" means a wire or wires used for the purpose of an appliance or apparatus for receiving telegraphic or other communications by means of electricity. If it is established to the satisfaction of the appropriate Government that any works for the generation transmission supply, or use of electrical energy injuriously affects such a telegraph line the said Government is authorized to take appropriate action under.s. 34 of the Act. It is not disputed that in the said factory a number of Universal Electric Motors are operated for the purpose of working electric drills and it is also established that the interference with the reception of messages at the Telegraph Wireless Station is, attributable to local induction from the said factory. But the, dispute between the parties centers round the question whether the said interference with the reception of messages at the said Station injuriously affects any telegraph line within the meaning of section 34 of the Act. The Telegraph Wireless Receiving Station clearly comes within the definition of "telegraph" in the Telegraph Act. The Telegraph Act was passed in 1885. "Telegraph" then meant "an electric, galvanic or magnetic telegraph and appliance, and apparatus for telegraphic, telephonic or other communications by means of electricity, galvanism or magnetism". At that time wireless telegraphy or radio had not been developed. In the year 1914,s. 3(1) of the said Act was amended and the following words were inserted after the words "apparatus for" : " 'making transmitting or receiving". With the result that, after the amendment, receiving of communications by means of electricity was included in the definition. A wireles. receiving station certainly receives communications by means of electricity, and therefore, it. is "telegraph" within the meaning of said definition. Though the., said station may be within the definition of "telegraph", the question still remains 152 whether there is a "telegraph line", for, under the definition, to be a ',,telegraph line" there shall.be a wire or wires used for the purpose of an apparatus receiving communications by means of electricity Under the heading "wireless telegraphy" in. the Encyclopedia Britannica, Vol. 28, a brief but adequate description of a wireless telegraphy is given thus "A wireless transmitter is a device for producing rapid oscillatory motion of electri city which is the origin of electric waves. Such electric waves are detected at a wireless receiving station b 'the effects of the rapidly varying electric and magnetic forces Which constitute the electric wave motion. " Are any wires used for the purpose of the apparatus receiving the said communications ? In the Encyclopedia Britannica some of the receiving stations ate described and 'it shows that wires are invariably used as aerials for receiving the said communications. In the present case , the Senior Electric Inspector filed an affidavit wherein he stated "it was established to my satisfaction that the operation and use of the 'Universal drills during the working hours of the factory caused serious interference by induction to the existing lines as well as to the receiving apparatus containing wires which are/were expressly used for telegraphic communication at the said centre. " It is there fore manifest that wires are used for the purpose of the apparatus receiving communications that is, wires are used not only for the aerial but &ISO inside the apparatus. A 'wireless transmitter transmits sound as electromagnetic waves and the said waves are detected by the. aerial and fed into the receiving apparatus by wires. To put it shortly the wires of the aerial as well as of the apparatus are used for the purpose of the apparatus receiving communications. If so, it follows Chit the receiving 153 appartus employs "telegraph lines" within the meaning of section 3(4) of the Telegraph Act. The High Court gave two reasons for rejecting the appellants ' contention. The first reason is that the word line ' in the expression 'telegraph line ' connotes the existence of a defined channel of communication which has got a physical existence and that wireless telegraphy is dependent upon transmission through space of electric waves and that is not a defined physical channel. We cannot accept this reasoning, for a telegraph line is not defined to mean a defined continuous physical channel from the point of transmission to the point of reception. The definition, as we have pointed out, is comprehensive enough to take in any wire used for the purpose of an apparatus for receiving communications by means of electricity. The second reason given by the learned Judges is that the expression " 'telegraph line", as used in section 34(2)(b) of the , has, in the absence of any new definition in that Act., to be given the same sense as the Legislature had intended in 1885 by the definition of that expression in the earlier Act. This reason is based upon the maxim contemporanea expositio est optima et fortissima in lege (contemporaneous exposition is the best and strongest in law). To state it differently, in the year 1885 the Legislature could not have dreamt of the future discovery of wireless telegraphy and, therefore, could not have intended to use the expression "telegraph line" in a comprehensive sense so as to take in electric wires of a receiving station of wireless telegraphy. It is necessary to consider the scope of the said maxim in its application to the interpretation of modem statutes. In Craies on Statute Law, 5th edn., the said rule is explained in the words of Coke thus at p. 77. 154 "This and the like were the forms of ancient Acts and graunts, and,, the. ancient Acts and graunts must. be ' 'construed and taken as the law was holden at that time when they were, made.", The discussion ended with the following words at p. 79 "In Assheton Smith vs Owen(1), Cozens Hardy, L. J. said do not think that the doctrine of contenporanea exposition can be applied in construing Acts which are, comparatively modern and the Court declined to apply the rule 1 to the interpretation of local Acts of 1793 and 1800. " In Halsbury 's Laws of England, 2nd edn., Vol., 32, it is stated in the context of telegraph legislation thus at p. 4 The fact that new methods of telegraphy have been invented since the date of passing of the Acts containing the definition does not prevent the application of the Acts to such methods, provided that they answer the requirements and fall within the terms of the definition." In Sutherland 's Statutory Construction, 3rd. edn., Vol. 2, dealing with the said maxim, the learned author states at p. 508 as follows "As a general rule it may be stated that legislative intent should be determined as of the time the legislation goes into effect. But surrounding circumstances and situations occurring after the enactment of the statute may be of great or even conclusive assistance in determining a meaning which was intended to be conveyed. Legislative standards are generally couched ill terms which have, considerable breadth. Therefore a. status may be interpreted to include. , circumstances or (1) , 213. 155 situations which were unknown or did not exist at the time of the enactment of the statute. " Decided cases accepted the said liberal approach in construing modern statutes. In The Attorney General vs The Edison Telephone Company of London (1),a telephone was held to be a "telegraph" within the meaning of the Telegraphs Acts, 1863 and 1869, although the telephone was not invented or contemplated in 1869. Stephen, T., observed at p. 254 : "Of course no one supposes that the legislature intended to refer specifically to telephones many years before they were invented, but it is highly probable that they would, and it seems to us clear that they actually did, use language embracing future discoveries as to the use of electricity for the purpose of conveying intelligence." The Privy Council in re Regulation and Control of Radio Communication in Canada ( 2) held that broadcasting fell within the m eaning of the expression in s.92 of British North America Act,1867, though at the time when that Act was made broadcasting was not in vogue. In The King V. Brislan ; ex parte Williams(3) the question was whether a law of the Commonwealth Parliament with respect to radio broadcasting was one with respect to "Postal, telegraphic telephonic and other like services" under section 1(5) of the Australian Commonwealth Act, and the Court held that the words were wide enough to take in radio broadcasting. In James vs Commonwealth of Australia(4),Lord Wright has state the principle in felicitous language thus (1) (2) (3) ; (4) , 641. 156 ". the meaning of the words changes, but the changing circumstances illustrate and illuminate the full import of that meaning. " This Court in construing the words "sale of goods" in Entry 48, List II of the Seventh Schedule to the Government of India Act, 1935, accepted the aforesaid principle in The State of Madras V. Gannon Dunkerley and Co., (Madras) Ltd. (1),and restated it at p. 416 thus "The principle of these decisions. is that when, after the enactment of a legislation, new facts and situations arise which could not have been in its contemplation, the statutory provisions could properly be applied to them if the words thereof are in a broad sense capable of containing them." The legal position may be summarized thus: The maxim contemporanea expositio as laid down by Coke was applied to construing ancient statutes but not to interpreting Acts which are comparatively modern. There is a good reason for this change in the mode of interpretation. The fundamental rule of construction is the same whether the Court is asked to construe a provision of an ancient statute or that of a modern one, namely, what is the expressed intention of the Legislature. It is perhaps difficult to attribute to a legislative body functioning in static society that its intention was couched in terms of considerable breadth so as to take within its sweep the future developments comprehended by the phraseology used. It is more reasonable to confine its intention only to the circumstances obtaining at the time the law was made. But in a modem progressive society it would be unreasonable to confine the intention of a Legislature to the meaning attributable to the word used at the time the law was made, for a modern Legislature making laws to govern a society which is fast moving must be presumed to be aware (1) ; 157 of an enlarged meaning the same concept might attract with the march of time and with the revolutionary changes brought about in social, economic, political and scientific and other fields of human. activity. Indeed, unless a contrary intention appears, an interpretation should be given to the words used to take in new facts and situations, if the words are capable of comprehending them. We cannot, therefore, agree with the learned Judges of the High Court that the maxim contemporanea expositio could be invoked in construing the word "telegraph line" in the Act. For the said reasons, we hold that the expression " 'telegraph line" is sufficiently comprehensive to take in the wires used for the purpose of the apparatus of the Post and Telegraph Wireless Station. In the result, we set aside the order of the High Court and dismiss the petition filed by the first respondent. The appeal is allowed, but, in the circumstances of the case, without costs. Appeal allowed.

Severe electrical interference was observed in a Post and Telegraphs Wireless Station which was traced to the respondent No. 1 's factory where a number of motors, were operated for the purpose of working electric drills. The Senior Electric Inspector issued a notice to the first res pondent to show cause as to why an order under s.34(2) (b) of the Indian Electricity Act requiring discontinuance of the operation of the electric motors in the said factory should not be made. The first respondent challenged the said order by a writ petition contending inter alia that there was no "Telegraph Line" in the Posts and Telegraphs Wireless Station within the meaning of s.34(2)(b) of the Act. The High Court held, firstly, that the word 'line ' in the expression telegraph line ' connotes the existence of a defined channel of communication which has got a physical existence and that wireless telegraphy is dependent upon transmission through space of electric waves and that is not a defined physical channel. Secondly, the expression "telegraph line", as used in section 34 2)(b) of the Indian Elec tricity Act, has, in the absence of any new definition in that Act, to be given the same sense as the Legislature had intended in 1885 by the definition of that expression in the earlier Act. This reason is based upon the maxim contemporaries exposition west optima et fortissima in lege (contemporaneous exposition is the best and strongest in law). The appellants contended that the definition of "telegraph line" in the , was wide enough to take in electric lines used for the purpose of 147 wireless telegraph and the High Court went wrong in invoking the old maxim contemporanea expositio est optima et fortisima in lege in construing the provisions of a modern statute. Held, that the combined reading of the relevant, provisions of the , and the , a "Telegraph line" is comprehensive enough and means a wire or wires used for the purpose of an appliance or apparatus for receiving telegraphic or other communications by means of electricity, and it need not be a continuous physical channel from the point of transmission to the point of reception. A wireless transmitter transmits sound as electro magnetic waves and the said waves are detected by the aerial and fed into the receiving apparatus by wires. So the wires of the aerials well as of the apparatus are used for the purpose of the apparatus receiving communications. Thus, the receivingapparatus employs "telegraph lines" within the meaning ofs.3 (4) of the Telegraph Act, 1885. Held, further, that the maxim contemporanea expositio as laid down by Coke was applied to construing ancient statutes, but not to interpreting Acts which were comparatively modem: The fundamental rule of construction is the same whether the court is asked to construe a provision of an ancient statute or that of a modern one, namely what is the expressed, intention of the Legislature. In a modern progressive society it would be unreasonable to confine the intention of a Legislature to the meaning attributable to the word used at the time the law was made, and unless a contrary intention appeared, an interpretation should be given to the words used to take in new facts and situations, if the words are capable of comprehending them. The maxim "contemporanea expositio" could not be invoked in construing the word "telegraph line" in the . Assheton Smith vs Owen, (1906)1 Ch. 179, Attorney General vs Edison Telephone Co. of London, (1880)6 Q. B. D. 244 In re Regulation and Control of Radio Communication in Canada, , The King vs Brislan,. Ex parte Williams, ; and James vs Commonwealth ,of Austratia, , referred to. State of Madras vs Gannon Dunkerley & Go. (Madras) Ltd. ; , relied on., 148

The appellant, Parshotam Lal Dhingra, was appointed to the Indian Railway Service as a Signaller (Telegraphist) in 1924 and was promoted to the post of Chief Controller in 1950, both the posts being in class III Service. On July 2, 1951, he was appointed to officiate in class II Service as Asst. Superintendent Railway Telegraphs. On certain adverse remarks made against him in his Confidential Report for the year ending March 31, 1953, the General Manager on June 21. 1953, remarked as follows "I am disappointed to read these reports. He should revert as a subordinate till he makes good the short coming noticed in this chance of his as an officer. Portions underlined to be communicated to him. " Thereupon the appellant made a representation, but on (I) ; 829 August 19, 1953, the General Manager issued a notice as follows: "Shri Bishambar Nath Chopra, Instructor Railway Training School, Saharnpur, is transferred to Headquarters office and appointed to officiate in Class II service as Assistant Signal and Tele Communication Engineer (Telegraphs) vice Shri Parshotam Lal Dhingra who on relief reverts to Class III T appointment. " Against this order the appellant moved the High Court under article 226 of the Constitution. The single judge who heard the matter held that the order was invalid as the provisions of article 311(2) of the Constitution had not admittedly been complied with. The Division Bench on appeal, however, set aside the order of the Single judge and dismissed the appellant 's writ application. The question for decision was whether the order of the General Manager amounted to a reduction in rank within the meaning of article 311(2) of the Constitution and the appellant was entitled to a reasonable opportunity of showing cause against the order. Held (per Das, C. J., Venkatarama Aiyar, section K. Das, A. K. Sarkar jj., Vivian Bose J., dissenting) that the order of reversion made against the petitioner did not amount to a reduction in rank within the meaning of article 311(2) Of the Constitution and he was not entitled to the protection of that Article. Like article 31O of the Constitution, which makes no distinction between persons holding permanent or temporary posts in the matter of their tenure being dependent on the pleasure of the President or the Governor, article 311 which is in the nature of a proviso to article 310, also makes no distinction between permanent and temporary posts and extends its protection equally to all Government servants holding permanent or temporary posts or officiating in any of them. Laxminarayan Chiranjilal Bhargava vs The Union of India, I.L.R. ; Engineer in Chief, Army Head Quarters vs C. A. Gupta Ram, A.I.R. (1957) Punj. 42 ; State of Punjab vs section Sukhbans Singh, A.I.R. (1957) Punj. 191 and Chironjilal vs Union of India, A.I.R. (1957) Raj. 81, overruled. But the protection of article 31I can be available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise. These were the major punishments evolved by the Service Rules and Rules of the Railway Code, and well understood as such, against which protection was sought to be provided by the Rules. These protections were in due course incorporated in section 240 of the Government of India Act, 1935, and reproduced in article 311 of the Constitution, thus qualifying the principle embodied in article 310(1). Venkataraman vs The Union of India, ; , referred to. jayanti Prasad vs The State of Uttar Pradesh, A.I.R. (1951) All. 793 ; Shrinvas Ganesh vs Union of India, A.I.R. (1956) Bom. 455; Jatindra Nath Biszwas vs R. Gupta, A.I.R. (1954) 830 Cal. 383 ; Rabindra Nath Das vs The General Manager, Eastern Railway, ; jatindra Nath Mukherjee vs The Government of the Union of India, ; Ahmad Sheikh vs Ghulam Hassan, A.I.R. (1957) J. & K. 11; Ganesh Balkrishna Deshmukh vs The State of Madhya Bharat, A.I.R. (1956) M.B. 172; D. P. Ragunath vs The State of Coorg, A.I.R. (1957) Mys. 8; M. V. Vichoray vs The State of Madhya Pradesh, A.I.R. (1952) Nag. 288; Kanta Charan Srivastava vs Post Master General, A.I.R. (1955) Pat. 381 and Sebastian vs State, A.I.R. (1955) Tr. CO. 12, approved. One test for determining whether the termination of service was by way of punishment or otherwise is to ascertain whether under the Service Rules, but for such termination, the servant has the right to hold the post. In the three cases of (1) substantive appointment to a permanent post, (2) temporary appointment for a fixed term and (3) a temporary appointment which has ripened into a quasi permanent status under the Temporary Service Rules, where such a right exists, the servant will be entitled to the protection of article 311. Conversely, where no such right can exist, as in the case of a probationary or officiating appointment to a permanent or temporary post or where the service has not ripened into a quasi permanent status, and under the general law the service can be terminated on reasonable notice, the termination of service cannot amount to a punishment and attract the Article. Broadly speaking, article 311(2) can apply to those cases where the Government servant, if in private employment, could maintain an action for wrongful dismissal, removal or reduction in rank. So where the Government has, by contract, express or implied, or under the Rules, the right to terminate the service at any time, such termination, in the manner provided in the contract or under the Rules, cannot attract the provisions of article 311. That does not, however, mean that the termination of service of a servant who has no right to the post can never be a dismissal or removal by way of punishment. Although in such a termination the actual motive of the Government must be wholly irrelevant, where it expressly chooses to penalise the servant for misconduct, negligence, inefficiency or the like by inflicting on him the punishment of dismissal, removal or reduction, the requirements of article 311 must be complied with. Satish Chander Anand vs The Union of India, (1953) S.C.R. 655 Shyam Lal vs The State of Uttar Pradesh, (1955) 1 S.C.R. 26 and Shrinivas Ganesh vs Union of India, L.R. 58 Bom. 673, referred to. A reduction in rank must, similarly, be a punishment if it carries penal consequences with it and the two tests to be applied are (1) whether the servant has a right to the post or the rank or (2) whether evil consequences such as forfeiture of pay or allowances, loss of seniority in his substantive rank, stoppage or postponement of future chances of promotion, follow as a result of the order. Where either of these tests applies, the reduction in 831 rank mast be one within the meaning of article 311 (2) of the Constitution and attract its protection. In the instant case, the appellant was holding an officiating post and had no right under the rules of the Railway Code to continue in it. Under the general law such appointment was terminable at, any time on reasonable notice, and the reduction could not operate ' as a forfeiture of any right. The order of the General Manager visited him with no evil consequences. Consequently, he was not reduced in rank by way of punishment. Per Bose J. While there can be no doubt that article 311 applies to all classes of Government Servants whether permanent, quasipermanent, officiating, temporary or on probation and that the words dismissal, removal and reduction in rank used therein have a special meaning, that Article, properly construed, cannot be confined to the penalties prescribed by the Service Rules. The gist of it is neither the form of the action nor the procedure nor what operated in the mind of the competent authority. The real test is whether evil consequences over and above those that would ensue from a "contractual termination" are likely to ensue. If they are, article 311 is attracted even though such evil consequences are not prescribed as "penalties" under the Rules. Though the conditions of service prescribed by the Rules can be varied unilaterally in some cases because of the "pleasure" of the President, they cannot be ignored as long as they stand, and if they are infringed while in force, article 311 will be attracted in an appropriate case. Satish Chandya Anand vs Union of India, ; and Shyam Lal vs State of Uttar Pradesh, ; , referred to. Nor can the protections afforded by article 311 be nullified by a splitting up of the order. In the present case the General Manager 's remarks in the confidential file, which formed a part of the operative order and was its real foundation, clearly indicated the mischief, that the appellant was not to be promoted to a like post until in the opinion of some competent Officer he had made good his previous short comings. That was an evil consequence, over and above that which would follow from a mere "contractual termination" of his engagement in the higher post, and so was sufficient to attract the protection of article 311.

The first respondent instituted a suit for mandatory injunction to enforce a contract alleged to have been entered into between him and the appellant, officers of the second respondent Corporation, for appointment to the post of Instrumentation Foreman in the appellants ' company, and for consequential reliefs. He contended that he had been sponsored by the Chairman and Managing Director of the second respondent Corporation, which was the holding company of the appellants 'company by his two letters for appointment as an Apprentice Engineer in terms of a scheme formulated by the Government of India. The appellants and the second respondent denied the existence of any contract. The trial court dismissed the suit. However, on appeal, the first appellate court decreed the suit and directed the first appellant to appoint the first respondent to the post of Apprentice Engineer under the scheme sponsored by the Government of India. This was confirmed, in appeal, by the High Court, which held the first respondent was entitled to be appointed to the post of Instrumentation Foreman with effect from the date on which the former incumbent of that post had resigned. In the appeal before this Court, on behalf of the appellants it was contended that there was no evidence of the contract having been entered into by the appellant with the first respondent; nor was there any evidence of a scheme of the Government of India, which entitled him to be appointed to any post in the appellants ' company, and that, in any view, he was not qualified for appointment as an Apprentice, much less to the higher post of Instrumentation Foreman. 469 On behalf of the first respondent it was contended that the letters addressed by the second respondent in his capacity as Chairman, and Managing Director of the holding company, to the appellants, the officers of the subsidiary company, made it obligatory on the part of the latter to appoint him in terms of the Government of India scheme, as so found by both the first Appellate court and the high Court. Allowing the appeal, this Court, HELD: 1.1 A contract of employment cannot ordinarily be enforced by or against an employer. The remedy is to sue for damages. The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice. Such relief can be granted only on sound legal principles. In the absence of any statutory requirement, courts do not ordinarily force an employer to recruit or retain in service an employee not required by the employer. There are, of course, certain exceptions to this rule, such as in the case of a public servant dismissed from service in contravention of Article 311 of the Constitution; reinstatement of a dismissed worker under the Industrial Law; a statutory body acting in breach of statutory obligations, and the like. [475 E] B.N. Tiwari vs District Board, Agra, ; ; U.P. State Warehousing Corporation vs C.K. Tyagi, ; and Executive Committee of Vaish Degree College, Shamli and Ors. vs Lakshmi Narain and Ors., ; , referred to. Indian Contract and Specific Relief Acts, by Polock & Mulla, Tenth Edn., page 983 and Halsbury 's Laws of England. Fourth Edn., Volume 44, paragraphs 405 to 420, referred to. 1.2 In the instant case, neither from the plaint nor from the evidence is it possible to identify and concluded contract to which the first respondent is a party or which he can enforce. There is no specific plea or evidence as regards the particulars of the scheme of the Government of India in terms of which he seeks relief whether it is a statutory scheme, and if so, what are the provision relied on by him and whether a duty is cast on the appellants and a benefit is conferred on persons like the first respondent. Assuming that such a scheme existed or any such contract bound the parties, it would be violative of all basic norms of law to decree a suit for specific performance of a contract of personal service.[472E G] 470 1.3 Courts do not ordinarily enforce performance of contracts of a personal character, such as a contract of employment. Subject to certain well defined categories of exceptions, law does not permit, and the does not contemplate, the enforcement of a contract of a personal nature by a decree for specific performance. The facts of the instant case do not fall within the exceptions. [472A, 474D] Rigby vs Connol, , 487 and Executive Committee of Vaish Degree College, Shamli and Others vs Lakshmi Narain and Ors., ; at 1020, referred to. Cheshire, fifoot and Furmston 's Law of Contract, 11th ed., p. 614 and Halsbury 's Laws of England Fourth Edition, Volume 44, at page 407, referred to. 1.4 Even if there was a contract in terms of which the first respondent was entitled to seek relief, the only which was available in law was damages and not specific performance. Breach of contract must ordinarily sound in damages, and particularly so in the case of personal contracts. Assuming that a contractual relationship arose consequent upon the letters addressed by the second respondent to the first appellant, the first respondent was a total stranger to any such relationship, for no relationship of a fiduciary character existed between the first respondent and the second respondent or the appellants. Neither on principles of law or equity nor under any statute did the first respondent acquire an enforceable right by reason of the letters exchanged between the appellant and second respondent, nor did he have private of any kind to their relationship. No collateral contract to which he was a party did arise on the facts of this case and at no time was the second respondent acting as his agent. There is no express or implied contract which is enforceable by him. [475 H, 476 B] In the circumstances, the decrees of the High Court and the first appellate Court are set aside and that of the trial court is restored.[476D]

The appellant firm had a number of factories including one at Kamptee in Vidharba. Its head office was also situated there,. The factory at Kamptee and the head office were treated as separate establishment. the factory being registered under the Factories Act and the Head Office under the C.P. and Berar Shops and Establishments Act, 1947. Respondent No. 1 was originally employed at the aforesaid factory but later he was directed to work at the head office. When the Head Office dismissed him from service he challenged the order of dismissal by an application under section 16 of the C.P. & Berar Industrial Disputes settlement Act. The Assistant Commissioner dismissed the application holding that Respondent No. 1 at the material time was not an employee of the factory but was employed in the Head Office. The Industrial Court refused, in revision, to interfere with the Assistant Commissioner 's order. Respondent No. 1 filed a writ petition under article 226 of the Constitution. The High Court observed that unless it was established that the employment of Respondent No. 1 in the factory was legally terminated it could be assumed merely because he was direct to work in the head office, that his employment was changed and the head office was substituted as his. employer in place of the said factory. , As the order passed by the Assistant Commissioner was not clear on this question the High Court remanded the case for disposal according to law. The firm appealed to this Court. HELD: (i) A contract for service is incapable of transfer unilaterally. Such a transfer of service from one employer to another can only be effected by a tripartite agreement between the employer, the employee and the third party, the effect of which would be to terminate the original contract of service by mutual consent and to. make a new contract between the employee and the third party. So long as the contract of service is not terminated, a new contract is not made as aforesaid, and the employee continues to be in the employment of the employer. Therefore, when an employer orders him to: do certain work for another person the employee still continues to be i.n his employment. The only thing that happens in such a case is that he carries out the orders of his master. employee has the right to claim his wages from the employer and not from the third party to whom his services are lent or hired. It may be that such a third party may pay his wages during the time that he has hired his services, but that is because of his agreement with the employer. that does not preclude the employee from claiming his wages from the employer. the hirer may also. exercise control and direction in the doing of the thing for which he is hired or even the manner in which it is to be done. But if the employee fails to. carry out his direction he cannot 273 dismiss him and can only complain to the employee. The 'right of dismissal vests with the employer. [279 &F] Such being the position in law, in the present case the High Court was right in setting aside the order of the Assistant Commissioner and the Industrial Court on the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory came to an end and a fresh contract with the head office came into being, Respondent No. 1 continued to be in the employment of the factory and the head office therefore was not competent to dismiss him. [281 F] Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd. ; at 17, Century Insurance Co. Ltd. vs Northern Ireland Road Transport Board, [1942] A.C. 509, Quarman vs Burnett, ; , Jones vs Scullard, , Nokes vs Doncaster Amalgamated Collieries, Ltd. [1940] 3 All England Law Reports 549 and Denham vs Midland Employees Mutual Assurance Ltd., , referred to. Jestamani Gulabrai Dholkia vs The Scindia Steam Navigation Company ; , distinguished.

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).]

The Delhi Electricity Supply Undertaking disconnected the supply of electricity to the respondent company during the pendency of the suit for a prohibitory injunction with out serving notice on the consumer. The trial court dis missed the amended suit for mandatory injunction to restore the supply. The First Appellate Court decreed the suit on the sole ground of non service of notice as required under condition No. 36 in regard to supply of electricity by the appellant. It did not go into the allegation of theft of electricity by the plaintiff. The High Court dismissed the appeal. Dismissing the appeal by special leave, this Court, HELD: 1. The licensee undertaking is performing a public duty and is governed by a special statute. The law also contemplates service of a notice before disconnection of supply of electricity. The appellant cannot also be allowed to go back upon its words and refuse the consumer the bene fit of notice as contemplated by the agreement. The suit was, therefore, rightly decreed by the First Appellate Court. [735B C, A B] 2. The plaintiff is seriously denying the allegation of theft. It is not possible to assume the accusation as cor rect without a full fledged trial on this issue. The courts below have not examined the case on merits. The question whether the allegations are true or not has to be examined and decided in an appropriate proceeding. The appellant will not, therefore, be prejudiced in its claim by dismissal of the appeal. [734G H, 735C] Jagarnath Singh vs B.S. Ramaswamy; , , distinguished.

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 appellant (holder of an inam in Madhya Pradesh) served a notice an his tenant, the respondent, terminating to tenancy on the ground that he wanted the land for personal cultivation and filed a suit for ejectment. The trial court decreed the suit. During the pendency of the appeal in the District Court, article 32 of 1954 was enacted, and pursuant to its provisions the hearing of the appeal was stayed. After the Madhya Pradesh Land Revenue Code came into force in 1959, the District Court held that by virtue of section 185 of that Code the respondent acquired the rights, of an occupancy tenant and dismissed the suit. The High Court confirmed the judgment of the District Court. In appeal to this Court, it was contended that : (i) the rights of an occupancy tenant arise in favour of a personl under section 185(1) (i) (a) only if there was between him and the landlord a subsisting tenancy at the date when the Code came into force and since under the law in force before the commencement of the Code, the respondent had ceased to be a tenant because of the notice terminating the contract of tenancy the respondent was not invested with the rights of an occupany tenant; and (ii) bi virtue of sections 261 and 262(2), the operation of section 185 is expressly excluded when a person, against whom ejectment proceedings have been instituted prior to the commencement of the Code in enforcement of a right then acquired, claims the status of an occupancy tenant. HELD : (i) The respondent acquired the right of an occupancy tenant under the Code, because the expression "tenant" in section 185 (1) (ii) (a) includes a person whose tenancy was terminated before the commencement of the Code. The definition of the expression "tenant" in the Code postulates a subsisting tenancy, but the position of a tenant prior to the date on which the Code was brought into force is not dealt with in the definition. In the context in which the expression "tenant" occurs in section 185(1), that definition could not be intended to apply in deter ining the conditions which invest a holder of land with the status of an occupancy tenant at the commencement of, the Code. Therefore having regard to the object of the enactment the expression should be ascribed the meaning it 'has in Act 32 of 1954. Under sections 3 & 4 of that Act a person who was inducted into the land as a tenant and who continued 'to hold the land at the commencement of the Act was entitled to protection against eviction and continue as tenant, notwithstanding that under the law in force prior to the commencement of the Act. the contractual relationship of landlord and tenant was determined. [432 D; 432 14 433 C] 428 There is no reason to think that the Legislature sought to make a A distinction between tenants of Inam land in section 185 (1) (ii) (a) and ryotwari sub lessees of other lands in section 185(1)(ii)(b). Therefore, if the expression "ryotwari sub lessee ' in section 185(1)(ii)(b) includes a sub lessee whose tenaure was terminated before the commencement of the Code, a tenant of inam land, whose tenancy has been terminated would also be included in the protection, provided at some time prior to the date on which the Code was brought into force, he was in possession of the land as a tenant, and he continued to hold the land till the date of the commencement of the Code. [434 E H] (ii) The provisions of the Code appeal to tenants in proceedings for ejectment pending at the commencement of the Code. The proviso to section 261 protects a right which had been acquired under a law repeated by the Code and the right could be enforced as if the code had not been passed. But the right to evict a tenant was governed by the general law of landlord and tenant and was not acquired under any repealed law. The proviso had no operation and a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law enacted in the Code. Therefore, the tenant could not ' be evicted otherwise than in the manner and for reasons mentioned in a. 193 of the Code but, personal requirement for cultivation of land is not a ground on which a claim for ejectment could be maintained. [435 G436 A] Section 262(2) is only procedural it provides that a civil court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, Which, if it had been instituted after the Code was passed would have been tried by a revenue court; and in the disposal of such a suit, the civil court will be governed by the procedural law applicable there to prior to the commencement of the Code. It does not nullify the statutory conferment of occupancy right upon persons in the position of tenants against whom proceedings were taken at the date when the Code was brought into force. [436 B D]

Appeals Nos. 474 to 501, 503 to 505, 508 to 512, 514 and 515 of 1959. Appeals from the judgment and orders dated November, 28, 1956, in O. J. C. No. 213 of 1955 and dated December 4, 1956, of the Orissa High Court in O. J. C. Nos. 214 to 216, 218, 236 to 241, 244 to 248, 251, 261 to 264, 268, 269, 271, 279 to 282, 304 to 306, 318, 323, 324, 353, 357, 363 and 372 of 1955. A. V. Viswanatha Sastri and M. section K. Sastri, for the appellants (in C. As. 474 487, 489 501 503 505 and 508 510 of 1959). M. section K. Sastri, for the appellant ( In C. A. No. 488/1959). G. C. Mathur, for the appellants (In C. As. Nos. ,111, 512, 514 and 515 of 1959.) C. K. Daphtary, Solicitor General of India B. R. L. Iyengar and P.M. Sen, for the respondents. August 22. The Judgment of the Court was delivered by HIDAYATULLAH, J. These are 38 appeals against the judgment and orders of the High Court of Orissa dated November 28, 1956, by which 42 petitions under article 226 of the Constitution filed by the present appellants and some others were dismissed. The High Court certified the cases as fit for appeal to this Court under article 132(1) of the Constitution. The appellants are holders of pre settlement minor inams in the State of Orissa. Their grants art, different both in regard to the time when they were made and the lands involved in them. They were made for performance of services of deities and were classed as Devadayam grants in the revenue papers. The grants in all these cases were not of whole villages but of certain lands and hence their classification as minor inams, and they comprised both the melwaram and kudiwaram rights 252 in the lands. It is not necessary to refer to these cases separately, since a single argument was addressed before us involving the consideration whether Notification No.4971 XV 9154 E.A. dated July 15, 1955, issued by the Orissa State Government, and the Orissa Estates Abolition Act, 1951 (Act 1 of 1952) as amended by the Orissa Estate Abolition (Amendment) Act, 1954 (Act XXVII of 1954) were respectively beyond the competence of the State and the Orissa State Legislature. By the original Act, all estates of the intermediaries were abolished, and on a notification by the Government, such,estates vested in Government. By the amending, Act, the definition of ' "estate" was widened to cover even such;, minor inams, and then the impugned notification was issued. The appellant contend that the original Act and the amending Act were, jointly or severally beyond the competence ,of the State Legislature and that the notification above mentioned was void without any effect. The Bill resulting in the original Act was introduced on January 17, 1950, and the Act was passed by the Legislative Assembly September 28, 1951 It was reserved for the consideration of the president, Who gave his assent on January 23, 1952. In; the Act, before its amendment in 1954, "estate" was defined as follows "2(g) 'Estate ' means any and held by an intermediary and included under; one entry in any of the general registers of revenue paying lands and revenue free lands prepared and maintained under the law for the time being in force by the collector of district , and includes revenue free lands not entered in any register and all classes of tenures or under tenures or an inam estate or part of an estate" By the amending act of 1954 this definition was substituted by another which, read: 253 "2(g) 'Estate ' includes apart of an estate and means any land held by or vested in an intermediary and included under one entry in any revenue roll or any of the general registers of revenue paying lands and revenue free lands, prepared and maintained under the law relating to land revenue for the time be ing in force or under any rule, order, custom or usage having the force of law, and includes revenue free lands not entered in any register or revenue roll and all classes of tenures or under tenures and any jagir, inam, or muafi or other similar grant. " In the original Act as well as in the Act as amended, there was a general provision in s.2(q) which may be read here : "(q) All words and expressions used in this Act but not defined in it, shall have, with reference to any part of the State of Orissa, the same meaning as defined in the tenancy laws and rules for the time being in force and in the absence of written laws and rules, as recognised in the custom for the time being obtaining in that part of the State of Orissa. " In the original Act, a provision was inserted by s.3 of the amending Act to the following effect "3. For the purpose of removal of all doubts it is declared that such lands and such rights in relation thereto and such persons who hold such lands and such rights as were heretofore covered by the definitions of the words 'estate ' and 'Intermediary ' in the Orissa Estates Abolition Act, 1951, shall not cease "to be so covered merely on the ground that by virtue of the provisions of this Act the said definitions have been amended and widened in scope. " The meaning of the last provision is clear. It takes away nothing from the ambit of the old definition, 254 but only adds thereto, as indeed the new definition of "estate" introduced by the amending Act shows only too plainly in its terms. To complete the survey of the provisions which we way have to refer to in this judgment, we first set down the definition of "estate" as given in the Madras Estates Land Act, 1908, which was applied to Orissa. Section 3(2)(d) of that Act defined " 'estate" as: "Any inam village, of which the grant has been made, confirmed or recognised by the Government, notwithstanding that subsequent to the grant the village has been partitioned amongst the grantees or the successors in title of the grantee or grantees. " The argument in this case is based upon this definition, because in defining an estate ', whole villages which were inam were contemplated and not minor inams of lands only. We shall refer to this later. The amending Act was also reserved for the consideration of the President and was assented to by him. When the Constitution was brought into force, the Bill of the Original Act had already been introduced in the Assembly. On June 18, 1951, before the Act was passed by the Legislative Assembly, the Constitution (First Amendment) Act, 1951 bad been enacted, and article 31A inserted with retrospective operation in the Constitution. Article 31A provided: "31A.(1) Notwithstanding anything contained in article 13, no law providing for (a) 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 sbridges any of the rights 255 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. (2) In this article (a) the expression "estate ' shall, in relation to any local area. , have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam, or muafi or other similar grant. . Article 31, before it was amended, by the constitution (Fourth Amendment) Act, 1955, provided inter alia that no property shall be acquired for a public purpose unless the law provided for compensation, and either fixed the compensation or specified the principles on which the compensation was to be determined and given. (Cl.2). By cl. (3), it was provided that no law such as was referred, to in cl. (2) was to have effect unless such law having been reserved for the consideration of the President had received his assent. Clause (4) then provided : "(4) If any Bill pending at the commencement of this constitution in the Legislature of a State has, after it has been passed by such Legislature, been reserved for the consideration of the President and has received his assent, then, notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2)." The combined effect of these provisions of the Constitution was that there could be no compulsory acquisition of property for public purposes, unless the law provided for payment of compensation; 256 but the law could not be called in question on this ground if it had been reserved for the consideration of the President and had been assented to by him. The assent, of the President was a condition precedent to the effectiveness of the law. By the amendment of the Constitution and the addition of article 31A., no such law was to be deemed to be void on the ground that it was inconsistent with or took away or abridged any of the rights conferred by Art.14, Art.19 or Art.31 , provided that it had been reserved for the consideration of the President and had received his assent. By the definition clause, article 31A(2)(a), the expression " 'estate" was to have the same meaning in any local area, which it or its equivalent had in the existing law relating to land tenures in force in that area but was to include among others any. "inam '. The contention of the appellants is really twofold. The first argument is that the benefit of article 31A might have been available to the original Act,. as it was a law for the compulsory acquisition of property for public purposes but? not to the amending Act, which was not such, a law but only amended a previous law by, enlarging the definition of estate". The second argument is that the word "estate" as. defined in s.2(g) before its amendment did. not apply to pre ,settlement minor inams of lands as it applied only to an "inam estate", and an "inam estate" bad the meaning which the definition of "estate" had in the, Madras Estates Land Act. , viz., only whole "inam villages". This, it is urged, follows from the provisions of s.2(q) of the Estates Abolition Act quoted earlier. The first argument is clearly untenable. It assumes that the benefit of Art.31A is only available to those laws which by themselves provide for compulsory acquisition of property for public purposes and not to laws amending such laws, the assent of the President notwithstanding. This means that the whole of the law, original and amending, must be passed again, and be reserved for the 257 consideration of the President, and must be freshly assented to by him. This is against the legislative practice in this country. It is to be presumed that the President gave his assent to the amending Act in its relation to the Act it sought to amend, and this is more so, when by the amending law the provisions of the earlier law relating to compulsory acquisition of property for public purposes were sought to be extended to new kinds of properties. In assenting to such law, the President assented to new categories of properties being brought within the operation of the existing law, and he, in effect assented to a law for the compulsory acquisition for public purposes of these new categories of property. The assent of the President to the amending Act thus brought in the protection of article 31A as a necessary consequence. The amending Act must be considered in relation to the old law which it sought to extend and the President asserted to such an extension or, in other words, to a law for the compulsory acquisition of property for public purposes. The argument that this was not an acquisition of an inam estate comprising a. *hole village and thus outside the Abolition Act. itself has no substance. No doubt, these minor inams, were not of whole villages but of lands and the grant included both the warms and there were thus no inter mediaries. But they were inams nevertheless, and the Constitution defined and `estate ' an including any inam ', and the amending Act merely followed that definition. The extended definition in the Constitution and a similar extended definition in the Act thus exclude resort to 'the general definition clause in s.2(q), of the Abolition let and the definition of "estate" in the Madras, Estates Land Act. The definition of estate" introduced by the amending Act is sufficiently wide to cover such minor inams, and section 2(q) only applies, if a word or expression used in the Abolition Act is not defined therein. 258 If the minor inams are already within the definition of the word "estate", there is no need to go to s.2(q) or to any local law defining the word. There can be no doubt that if the new definition of "estate" applies to minor inams then they are affected by the Abolition Act. This, indeed, was conceded. Learned counsel for the appellants also urged, through somewhat faintly, that the ejusdem generis rule should be applied to the definition of ",estate" in article 31A(2)(a) as also to the corresponding new definition in the Abolition Act. This argument proceeds upon an assumption for which there is no foundation. The ejusdem generis rule is applicable where as wide or general term has to be cut down with reference to the genus of the particular terms which precede the general words. This rule has hardly any application where certain specific categories are 'included ' in the definition. The ejusdem generis rule may be applicable to the general. words "other similar grant", which would take their colour from the particular categories, "jagir, inam, or muafi", which precede them, but the word "inam" is not subject to the same rule. Once it is held that inams of any kind were included, it makes little difference if the inams were of lands and not of whole villages. So also the fact that the holders of such inams cannot be described as intermediaries, or that they comprised both the melwaram and the kudiwaram rights. Such a distinction would have significance, if the law abolished only intermediaries and not inams which it did. Section 3 of the Abolition Act says "3(1) The State Government may, from time to time by notification, declare that the estate specified in the notification has passed to and become vested in the State free from all encumbrances. " If the definition of the word "estate" was wide enough to include a minor inam and a notification was issued, the consequences of s.3 of the Abolition 259 Act must follow. Such a law is not capable of being called in question on the ground that it abridges any fundamental right conferred by articles 14, 19 and 31, if it has been assented to by the President. the notification was thus valid, if the law was valid. In the result, the appeals fail, and are dismissed with costs, one set only. Appeals dismissed.

The appellants were holders of pre settlement minor inams. The grants were not of whole villages but of certain lands and they comprised both the melwaram and kudiwaram rights in the lands. The definition of 'estate ' in the Orissa Estates Abolition Act, 1951, did not include a minor inam. But by the Orissa Estates Abolition (Amendment) Act, 1954, the definition was enlarged to cover minor inams also. Both the Acts had received the assent of the President. The appe llants contended (i) that the Amendment Act of 1954 was not a law for the compulsory acquisition of property for a public purpose and was not saved by article 31 A of the Constitution and (ii) that the minor inams were outside the scope of the Abolition Act and could not be resumed. Held, that the Amendment Act of 1954 was valid and was within the Protection of article 31A. In assenting to this Act, the President assented to new categories of properties being brought within the operation of the abolition Act of 1951, and he, in fact, assented to the law for the compulsory acquisition for public purpose of these new categories of property. Though the minor inams were not of whole villages and included both the warams, they were nevertheless inams" and the Constitution defined an "estate" as including "any" inam and fell within the scope of Abolition Act of 1951 as amended in 1954. The ejusdem generis rule cannot be applied to Inam in the definition of "estate" in article 31A(2)(a) because particular categories like "jagir, in am or muafi", are included in the definition expressly even though the rule may apply to "other similar grants" which expression may take its colour from the categories named. The ejusdem generis rule is applicable where a wide or general term has to be cut down with reference to the genus of the particular terms which precede the general words, 251

The ancestors of a former Zamindar dedicated their maufi interest in a village in favour of a deity. Acting on behalf of the deity the ex zamindar created a lease of thikadari rights in the village in favour of the appellant for ten years. The lease deed termed the appellant as "legal guardian of gaontia thikadari patta". While the lease was in force the Orissa Estates Abolition Act, 1951 which sought to abolish all intermediaries in land and vest their interest in the State came into force. The Act however protected certain intermediaries thereby carving out an exception to the scheme of the Act. Meanwhile the Managing Trustee of the Board of Trustees appointed under the Orissa Hindu Religious Endowments Act, 1951 to look after the affairs of the deity filed a petition under section 7 of the Abolition Act claiming that the deity was in Khas possession of certain lands including the land lease to the appellant and prayed that the same be settled on the Board of Trustees as an occupancy tenant. The question was eventually settled in favour of the Trustees and against the appellant. In the Managing Trustee 's application under section 145 Cr. P.C. asserting that the appellant was disturbing peaceful possession of the deity over the land, the Magistrate held that it was the appellant who was in possession of the land and directed that the land should be restored to him. The High Court in revision set aside the order of the Magistrate. In appeals to this Court the appellant contended that it was he and not the deity, who was the thikadar and therefore an intermediary within the meaning of the definition of that term in the Abolition Act and was in Khas possession of the land in dispute and so the land should be restored to him. Allowing the appeals, ^ HELD: 1. It was the appellant who had the Khas possession of the land, and therefore, the land must be deemed to have been vested in him, and not in the deity, as an occupancy tenant under the provisions of section 7 of the Abolition Act. [328 F] 2. Apart from the description of the appellant as gaontia thikadari patta, condition 8 contains a sure indication of the nature of the tenancy agreement. It states "that the cultivable lands cannot be utilised for any other purpose nor can they be transferred or sold or otherwise dealt with to the hardship of the villagers or the tenants." [328 B C] 321 3. The reference to tenants in this condition points to the land being under the cultivation of persons other than the appellant at the moment the lease was granted. This position was incompatible with the grant of an ordinary lease to him. The tenure granted in his favour was on the other hand one conferring on hint a right to collect the rents from the tenants of the deity and in lieu thereof pay a fixed sum to it. He was, therefore, correctly described as gaontia or thinkdar, both of which expressions describe an intermediary as distinguished from a raiyat or an actual tiller of the soil. [328 D E]

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 originally joined the service of the State of Junagadh in 1934 and was after the merger of that State in Saurashtra confirmed in September, 1956 as an executive engineer in the service of the latter State. Rule 3(i) of the Saurashtra Covenanting States Servants (Superannuation age) Rules 1955 provided : "A Govt. servant shall, unless for special reasons otherwise directed by Govt. retire from service on his completing 55 years of age. " After the merger of Saurashtra in the bilingual State of Bombay the old Bombay Civil Service Rules were applied to Saurashtra area with effect from January 7, 1957. On July 1, 1959 the Bombay Civil Service Rules, 1959 were promulgated. Accord ing to r. 161 (c) (2) (ii) (1) the age of retirement for class 1 Engineers in the State Service was fixed at 55 years but it was further laid down that they "may be required by the Government to retire on reaching the age of 50 years, if they have attained to the rank of Superintending Engine. " On the formation of the State of Gujarat the appellant 's 'services were transferred to that State but the Bombay Rules continued to apply. Under the Bombay Rule aforesaid, namely, r. 161(c)(2)(ii)(1) the Government of the State of Gujarat retired the appellant at the age of about 53 years. The appellant filed a writ petition in the High Court. The High Court took into account section 115(7) of the but held that since the Saurashtra Rule 3(i) also empowered the 'State Government to retire the appellant at an age earlier than 55 years there was no variation of conditions of service to his disadvantage under the Bombay Rule and therefore the latter rule was not invalid for want of Presidential assent. The High Court took the view that the expression "unless for special reasons otherwise directed by Government" in r. 3 (i) of the Saurashtra Rules meant that the Government could for special reasons retire a Government servant before he had attained the normal superannuation age of 55 years. Against the High Court 's judgment dismissing his writ petition the appellant came by special leave, to this Court. HELD : Rule 3(i) of the Saurashtra Rules, if construed of interpreted in the manner in which it had been done by the High Court, would bring it into direct conflict with Moti Ram Deka 's case as well as other cases decided by this Court. In Moti Ram Deka 's case it was laid down that if any rule permitted the appropriate authorities to retire compul sorrily a civil servant without imposing a limitation in that behalf that such 245 civil servant should have put in a minimum period of service. that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2) of the Constitution. The principle is that the rule relating to compulsory retirement of a Government servant must not only contain the outside limit of superannuation but there must also be a provision for a reasonably long period of qualified service which must be indicated with sufficient clarity. For example if 55 years have been specified as the age of superannuation and if it is sought to retire the servant even before that period it should be provided in the rule that he could be retired after he has attained the age of 50 years or he has put in service for a period of 25 years. [248 G 249 G] On the above principle rule 3 (i) of the Saurashtra Rules would have to be declared invalid if the expression "unless for special reasons otherwise directed by Government" is so construed as to give a power to order compulsory retirement even before attaining the 'age of 55 years. A statutory rule, however, should be so interpreted as to make it valid and not invalid. The correct interpretation of Rule 3(i) is that it gives power to the Government to allow a Government servant to remain in service even beyond the age of 55 years for special reasons; so construed the Rule would not be invalid and the appellant could not under it have been retired before be had attained the age of 55 years. By applying the Bombay Rule his conditions of service were varied to his disadvantage because he could then be compulsorily retired as soon as he attained the age of 50 years. As the previous approval of the Central Government was not obtained in accordance with the proviso to section 115(7) of the , the Bombay Rule could not be made applicable to the appellant. [249 G 250 C] The appellant was thus entitled to remain in service until he attained the age of 55 years and the impugned order directing his retirement was invalid and ineffective. [250 E F] Bholanath J. Thaker vs State of Saurashtra, A.I.R. (1954) S.C. 680, referred to. Moti Ram Deka etc. vs General Manager N.E.F. Railways Maligaon, Pandu etc. ; , State of Bombay vs Saubhag chand M. poshi; , , P. Balakotaiah vs Union of India; , , Dalip Singh vs State of Punjab, and Gurdev Singh Sidhu vs State of Punjab & Anr. ; , applied.

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.

Constitution of India, 1950, Arts, 84, 101, 102. 1O3(2) and 1O4 Scope of Powers of the Election Commission under Sections 10A, 146 (1) (2) of the Representation of the People Act, read with article 103 (2) of the constitution. Respondent No. 2 who is a voter in the Srikakulam Constituency submitted a petition to the President of India under Articles 84, 101. 103 and 104 of the Constitution of India alleging that respondent No. 1, a returned candidate to the Lok Sabha on April 28, 1967 in a bye election from that constituency, had become subject to the disqualifications contained in Article 102(1). The President. exercising his powers under Article 103(2) of the Constitution. sought the opinion of the appellant by an order dated May 18, 1968. The appellant issued a notice dated June 6, 1968 to respondent No. 1 calling upon him to submit his reply to the allegations contained in respondent 's petition lo the President. Earlier to this, the appellant condoned the delay in submission; of account of election expenses by respondent No. 1. On June 26, 1968, respondent No. 1, therefore, filed a Writ Petition in the Andhra Pradesh High Court asking for a writ of prohibition forbidding the appellant from taking further action pursuant to the Notice dated June 6 and for a declaration that the appellant had no jurisdiction to inquire into the petition submitted by respondent No. 2 to the President. The High Court allowed the petition and issued a writ of Prohibition. It has granted to the appellant a certificate of fitness under Article 133(1)(c) of the Constitution. Allowing the appeal, the Court ^ HELD: 1. The President acted both in the exercise of constitutional authority and in the discharge of his constitutional obligation in referring the question raised by respondent No. 2 's petition for the opinion of the appellant. Upon the presentation of a petition by respondent 2 to the President of India;,. alleging that respondent 1 had become subject to the disqualifications mentioned in article 102(1) of the Constitution, a question clearly arose as to whether respondent 1 had truly become subject to any of the disqualifications mentioned in that article. By clause (2) of article 103 the President was bound to obtain the opinion of the appellant before giving` his decision on the question. Not only that, but the President was further bound to act according to the opinion given by the appellant. [213D E] 2. The Election Commission, by reason of the provisions of Section 146(1) and (2) of the Representation of the People Act, 1951, had the power and authority to require respondent 1 to furnish information on matters which were relevant to the subject matter of the inquiry, namely, the allegations contained in the petition presented by respondent 2 to the President of India. [214B C] (a) The Representation of the People Act, 1951, confers extensive powers on the Election Commission in regard to inquiries pertaining to the questions referred by the President for its opinion under Article 103 of the Constitution. [213F G] 211 (b) article 103(2), as it stood then, required the President to obtain the opinion of the Election Commission before deciding the question referred to in clause (1) of that article. The President was bound to act according to the opinion given by the Commission. By the Forty second Amendment Article 103(2) requires the President to consult the Election Commission. The Amendment Article expressly confers power on the Commission to make? for that purpose, "such inquiry as it thinks fit". The implication of the unamended Article was in truth and substance the same namely. that since the Commission was charged with the obligation to tender its opinion to the President, it had the power to make such inquiry as it thought fit in order to enable it to express its opinion. which under the law as it stood then, was binding on the President. The Forty second amendment expressed clearly what was necessarily implicit in the old provision. If the Constitution envisages that the Commission should have the power to make such inquiry as it thinks fit even when its opinion is not binding on the President who is merely required to "consult` ' the Commission, it cannot be that the Commission could tender its binding opinion without the right and pay the duty, of making, the necessary inquiry. [214D G] (c) Article 103(1) gives finality to the President 's decision which, under old provision, had to be in conformity with the opinion of the Election Commission. Before giving an opinion which thus had finality, the Commission acted but fairly in asking respondent l to submit his say. In giving to respondent I an opportunity to submit his explanation. the appellant, far from acting beyond the scope of the statutory and constitutional powers acted in conformity with the principles of natural justice. [215B] 3. In the instant case? though respondent 2 was not in a position to make a categorical assertion in his petition that respondent 1 had incurred a specific disqualification, he did make allegations, generally, in regard to disqualifications said to have been incurred by respondent 1. Upon the making of those allegations a question arose as contemplated by Article 103(1)(a) of the Constitution and the President had to obtain the opinion of the Election Commission on that question. Respondent 2 's petition could not have been rejected by the President without reference to the Election Commission on the around that the allegations made by respondent 2 were unfounded or unsubstantial. The High Court was not correct when it held that the question whether respondent 1 had become subject to any disqualification under Section 10A of the Representation of the People Act did not arise on the facts stated in the petition by respondent No. 2. [215H, 216A B] Brundeban Nayak vs Election Commission of India and Anr., ; ; discussed and applied. (b ) By Section 10A of the Representation of the People Act. the Election Commission has the power to declare a person to be disqualified if it is satisfied that he has failed to lodge an account of election expenses within the time and in the manner required by or under the Act and has no good reason or justification for the failure. A declaration of disqualification made in pursuance of power conferred by section 10(A) is a declaration made by the Election Commission under a law made by Parliament. It, therefore, attracts Article 102(1) (e) and consequently article 103(1) of the Constitution. The High Court therefore misdirected itself in reaching the conclusion that the appellant acted beyond 212 its jurisdiction in issuing notice to respondent I in calling upon him to submit his explanations in regard to the allegations made by respondent No. 2 in his petition to the President. [215C D, F H]

The appellant is the Mahant of Emhar Math of Puri which is an ancient Public Hindu Religious Trust. Being a trustee, the appellant has been assessed in the status of an "individual" under the Orissa Agricultural Income Tax Act, 1947 for the assessment years 1948 49 to 1967 68 in respect of the income derived from agricultural lands owned by the trust. These assessments were made after granting the exemption under section 8(1) of the Act which provides that "any sum derived from land held under such trust and actually spent for the said purpose (charitable or religious purposes) shall not be included in the total agricultural income of such assessee. " The appellant challenged the constitutional validity of section 8 (1) of the Act under which the assessments were made principally on the ground that section 8(1) was discriminatory and hit by article 14 of the Constitution, in as much as under the said provision, in respect of non public muslim trusts created for religious or charitable purposes the exemption contemplated therein was con fined to such agricultural income or was actually spent for the public purposes of charitable or religious nature, while in the case of muslim trusts (Waqfs) the entire agricultural income whether spent for charitable or religious purpose or not, was exempt from the operation of the Act under section 9 of the Act. The Orissa High Court, negatived the said contention on an examination of the provisions of Sections 8 and 9 in the context of the scheme of the Act and dismissed the Writ Petition. Dismissing the appeal by special leave the Court. ^ HELD: ( 1 ) section 8 ( 1 ) of the Orissa Agricultural Income tax Act, 1 947 is free from the vice of discrimination under article 14 of the Constitution and the said provision is perfectly valid and constitutional. [663 G Hl (2) The scheme of the Act is that under the charging provision agricultural income tax is levied on the total agricultural income of the previous year of every assessee subject to the exemption which have been provided for under Sections 8, 9 and 16. [661 C D] The legislative intent of granting of limited exemption is brought out by Sections 8(1) and 16 of the Act. Whereas exemption in regard to the amount actually spent for charitable purposes under section 8(1) is in relation to the agricultural income of a public charitable trust, the exemption of similar nature and extent contemplated by section 16 is in regard to the agricultural income of any assessee who may not be a trustee owning lands under a public charitable trust, in other words, in either case, the exemption is confined to such part of the agricultural income which is actually spent. by the assessee f. charitable purposes. [661 D E] 657 (3) Section 9 of the Act, in terms, says that the exemption thereunder is confined to Muslim Trusts "referred to in section 3 of the Musalman Waqf Validating Act, 1913". section 3 of the Validating Act refers only to muslim trusts which are in the nature of Waqf alal aulad. The exemption in section 9 of the Act, therefore clearly applies only to Muslim Trusts which are in the nature of Waqf alal aulad. The marginal note to section 9 as well as the proviso to the section make this clear. [662 B, 633 B C] If that be so, then all muslim trusts other than Waqf alal aulad squarely fall under section 8 ( I ) and to all such waqfs the limited exemption contemplated therein would apply. If that be so, the gravamen of complaint that all waqfs (Muslim Trusts) other than waqf alal aulad are receiving favourable treatment as against non Muslim public charitable trusts must fall to the ground. [663 C, E] As regards Muslim trusts which are in the nature of waqf alal aulad which alone are covered by section 9 the proviso clearly shows that the share of the beneficiary under such a trust far from being exempted is brought tb tax and the tax is made realisable from the mutawali and read with the proviso the main provision really confines the benefit of exemption only to ultimate illusory or remote public charitable or religious purpose an(l is thus completely consistent with the object and scheme of the Act. [663 F G] Fazlul Rabbi Pradhan vs State of West Bengal & ors ; , applied.

These two appeals Civil Appeal No. 3446 of 1987 and Civil Appeal No. 3447 of 1987 were filed in this Court against the judgment of the High Court in the Writ Petition No. 6789 of 1982. Ratan Prakash Mangal and Kuldip Singh, respondents Nos. 1 and 2 in the Civil Appeal No. 3446 of 1987 and the appellants in Civil Appeal No. 3447 of 1987, had filed the said writ petition challenging a notification dated 20th May, 1982, issued under section 4(1) read with section 17(4) of the Land Acquisition Act, 1894 (the Act) and also the consequential notification dated 21st May, 1982, issued under section 6 of the Act with regard to a plot No. 289. The notification under section 4(1) of the Act was quashed in part in so far as it invoked Section 17(4) of the Act, and the notification under section 6 was quashed as a whole with regard to the said plotNo. The Civil Appeal No. 3446 of 1987 was preferred by Krishi Utpadan Mandi Samiti, Muzaffar Nagar for which the said plot had been acquired, for setting aside the judgment of the High Court. Civil Appeal No. 3447 of 1987 was preferred by Ratan Prakash Mangal and Kuldip Singh afore mentioned hereinafter referred to as respondents Nos. 1 & 2 asserting that the notification under section 4(1) should have been quashed by the High Court in its entirety and not only in so far it invoked section 17(4) of the Act. Initially, a Notification dated 20th March, 1975 was issued under section 4(1) of the Act for acquiring land, including the plot No. 289, for construction of a market yard for the appellant Krishi Utpadan Mandi Samiti. Later, this Notification was superseded by another Notification dated 30th August, 1975 issued under section 4(1) with regard to land which did not include the said plot. Subsequently, another Notification dated 26th October, 1978, was issued under section 4(1) read with Section 17(4) of the Act with regard to land, including the plot abovementioned. The Notification dated 26th October, 1978 was followed by 183 a Notification dated 27th October, under section 6. Prior to the issue of these Notifications, respondents Nos. 1 and 2 had purchased the said plot No. 289. The said respondents Nos. 1 and 2 had challenged the Notifications dated 26th October, 1978 and 27th October, 1978 by a writ petition in the High Court. The High Court had quashed the two Notifications in so far as Plot No. 289 was concerned. This Judgment of the High Court had been challenged by Krishi Utpadan Mandi Samiti before this Court in Civil Appeal No. 2970 of 1979. This Court had held that even though the quashing of the Notification under Section 6 had been justified, the High Court had not been right in quashing the Notification under section 4(1) in its entirety, and had set aside the Judgment of the High Court in so far as it had quashed the Notification under section 4(1) in its entirety, while maintaining the rest of the Judgment with a direction regarding inquiry under Section 5A into the objections of the respondents Nos. 1 and 2 to the proposed acquisition etc. In pursuance of the said direction, inquiry under section 5A had been made and the Land Acquisition Officer had submitted a report on 20th January, 1981, after about 15 months of the direction above said of this Court, to the effect that the Plot No. 289 might be exempted from acquisition. The Government did not agree with the said report and issued the Notifications impugned in present appeals. Allowing Civil Appeal No. 3446 of 1987, and dismissing Civil Appeal No. 3447 of 1987, the Court, ^ HELD: There was no doubt with regard to the legal position that the Report dated 20th January, 1981 of the Land Acquisition Officer was not binding on the State Government and it was still open to it to continue the proceedings for the acquisition of the Plot No. 289 notwithstanding the said report. The Government had its reason why in place of issuing a Notification under section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under section 4(1), fresh notifications under section 4 and 6 had to be issued as also the reason for the delay in issuing the fresh Notifications, as was apparent from the record. As regards the submission that section 17(4) of the Act had been erroneously invoked in fresh Notification under section 4(1) dated 20th May, 1982 also and that inquiry under Section 5A had again to be made before issuing this Notification, it was enough to point out that once an inquiry under the said section had already been made and the parties had been given full opportunity to substantiate their case in the enquiry and the State Government had not been inclined to agree with the 184 report of the Land Acquisition Officer submitted in pursuance of that inquiry, it would have been a futile exercise to repeat the whole performance again. After the issue of the earlier Notification dated 26th October, 1978, a period of nearly 3 1/2 years had expired when the fresh Notification dated 20th May, 1982 above said was issued and apparently the necessity to acquire the plot No. 289 during this period became more acute due to this delay. Further, as stated in the said Notification itself, the urgency had become more imminent on account of the direction issued by this Court on 2nd March, 1982 in Writ Petition No. 1318 of 1982 filed by the traders in gur, khandseri and foodgrains, Muzaffar Nagar, challenging the Notification under Section 7(2)(b) of the U.P. Act No. 25 of 1964. Consequently, it was diffcult to hold that the opinion of the State Government that it was a fit case to invoke section 17(4) of the Act was invalid on the ground that there was no basis or material in support of the opinion. On the facts of the case, it was not possible to hold that the Notification dated 20th May, 1982 had been issued by the State Government in colourable exercise of its power. [194A F] The Notification dated 20th May, 1982 and 21st May, 1982 had not been challenged by respondents Nos. 1 and 2 on the basis of mala fides of any particular officer of the State Government. What was urged was that it was a case of legal mala fides inasmuch as in issuing the said fresh Notification dated 20th May, 1982, an attempt had been made by the State Government to circumvent the direction of this Court issued in the Civil Appeal No. 2970 of 1979 to make inquiry under Section 5A of the Act and to proceed thereafter in accordance with law, the State Government did make an inquiry under Section 5A of the Act in pursuance of the direction of this Court after giving full opportunity to the concerned parties to substantiate their case. It was difficult to agree with the submission of respondents 1 and 2 that the government attempted to circumvent the direction of this Court. A case of legal mala fide was not made out. [194G H; 195B] The Government all through was of the opinion that Plot No. 289 did not deserve to be released from acquisition. Also, this plea lost significance and became almost of academic value inasmuch as the State Government had not issued a notification under section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under Section 4(1). After the issue of the fresh Notification what was really to be seen was whether there was justification for invoking section 17(4) of Act or not. There was such a justification. There had been a material change in the circumstances after the report of the Land Acquisition 185 Officer dated 20th January, 1981, to justify Section 17(4) of the Act being invoked and to dispense with a further inquiry under section 5A of the Act. [196D E; 198C] The submission of the respondents 1 and 2 about the lack of application of mind before issuing the Notification dated 20th May, 1982 with regard to plot No. 289 had no substance, as indicated by the original record produced by counsel for the State Government. The effect of issuing a fresh Notification under Section 4(1) and the delay in issuing it had benefited the respondents 1 and 2 inasmuch as now they would be entitled to compensation not on the basis of market value of plot No. 289 as on 26.10.78 when the earlier Notification under Section 4(1) was issued but as on 20th May, 1982 when the fresh Notification under the said section was issued. [200G H; 201A] Civil Appeal No. 3446 of 1987 was allowed and the judgment of the High Court in the Writ Petition No. 6789 of 1982 was set aside, and as a consequence, Civil Appeal No. 3447 of 1987 was dismissed. [201B] State of Punjab vs Gurdial Singh & Ors., ; ; The Collector (District Magistrate) Allahabad and Anr. vs Raja Ram Jaiswal, etc. ; , ; P.L. Lakhanpal vs Union of India & Ors., ; Siemens Engineering & Manufacturing Co. of India Limited vs Union of India & Anr., ; Narayan Govind Gavate vs State of Maharashtra, ; and State of U.P. vs Pista Devi, ; , referred to.

Appeal No. '285 of 1961. Appeal from the judgment and order dated December 6 1960, of the Gujrat High Court in Special Civil Application No. 434 of 1960. H.N. Sanyal, Additional Solicitor General of India, B. H. Dhebari, and T. M. Sen, for the appellants. I.M. Nanavati, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondents. August 21. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal by special leave raises a question of the correct interpretation of some words in s.18A(1)(b) of the Industries (Development and Regulation) Act, 1951. The Central Government made an order under section 15 of that Act appointing a committee of three persons for the purpose of making full and complete investi 173 gation into the circumstances of the case as it was of opinion that there had been.or was. likely to be a, substantial fall in the volume of production in respect of cotton textiles manufactured in the industrial undertaking known as Hathisingh Manufacturing Company Ltd., Ahmedabad, for which having regard to the economic conditions prevailing there was no justification. After the committee made its report the Central Government being of opinion thereupon that this industrial undertaking was being managed in a manner highly detrimental to public interest made an order under s.18A of the Act authorising Ambalal Shah (the first appellant before us) to take over the management of the whole of the said undertaking. Against this order the industrial undertaking and its proprietor who are the two respondents before us filed a petition in the Gujarat High Court under article 226 of the Constitution praying for issue of writs directing the authorised controller and the Union of India not to take over the management on the basis of the order under s.18A. The main ground on which the application was based was that on a proper construction of s.18A(1)(b) the Central Government has the right to make an order thereunder only where the investigation made under section 15 was initiated on the basis of the opinion as mentioned in s.15(b) that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. It was also urged that in fact the committee appointed to investigate had not directed its investigation into the question whether the industrial undertaking was being managed in the manner mentioned above. The other grounds mentioned in the petition which were however ' abandoned at the time of the hearing included one that. the alleged opinion formed by the Government as mentioned in the order under s.18A was in the absence of any material for the same in the report 174 of the investigating committee and therefore ' was arbitrary, capricious and malafide. On bahalf of the Government and the authorised controller it was urged that the question which one of the five opinions mentioned ins. 15 formed the basis of the investigation under that section was wholly immaterial. The allegation that the investigating committee had not directed its investigation into the question whether the undertaking was being managed in a manner. highly detrimental to the scheduled industry concerned or to public interest was also denied. The High Court however came to the conclusion that on a correct construction of section 18A (1)(b) it was necessary before any order could be made thereunder that the investigation should have been initiated on the basis of the opinion mentioned in s.15(b) of the Act. It also accepted the petitioners ' contention that no investigation had in fact been held into the question, whether the undertaking was being managed in a manner highly detrimental to public interest. Accordingly it made an order "setting aside the order of the Central Government dated 28th July, 1960, and directing the respondents not to interfere with or take over the management of the undertaking of the first petitioner, namely "Hathisingh Mills" by virtue of or in pursuance of the said order". It is against this decision that the present appeal is directed. The principal question in appeal is whether the High Court is right in its view as regards the construction of section 18A. The relevant portion of s.18A(1) runs thus "If the Central Government is of opinion that (a) x x x x (b) an industrial undertaking in respect of which an investigation has been made under section 15 (whether or not any directions 175 have been issued to the undertaking in pursuance of section 16), is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, the Central Government may, by notified order, authorise any person or body of persons to take over the management of the whole or any part of the undertaking or to exercise in respect of the whole or any part of the under taking such functions of control as may be specified in the order. . ." The dispute is over the construction of the words "an ]investigation has been made under section 15". Section 15 is in these words "Where the Central Government is of the opinion that (a)in respect of any scheduled industry or industrial undertaking or undertakings (i)there has been, or is likely to be a substantial fall in the, volume of production in respect of any article or class of articles relatable to that industry, or manufactured, or produced in the industrial undertaking or undertakings, as the case may be, for which having regard to the economic conditions prevailing, there is no justification ; or (ii)there has been or is likely to be a marked deterioration in the quality of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, which could have been or can be avoided; or (iii)there has been or is likely to be,, a rise in the price of an article or class of articles recitable to that industry or manufactured or produced 'in the industrial undertaking or undertakings. As the 176 case may be for which there is on justification; or (iv)it is necessary to take any such action as is provided in this Chapter for the purpose of conserving any resources of national importance which are utilized in the industry or, the industrial undertaking or undertakings, as the case may be ;or (b)any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, the, Central Government may make or cause to be made a full and complete investigation into the circumstances of the case by such person or body of persons as it may appoint for the purpose. " It may be mentioned here that s.15(b) as it originally stood was amended in 1955 and it was after the amendment that the words as mentioned above appear. Reference may also be made in passing to s16 under which once an investigation under s.15 has been commenced or completed the central Government if it considers desirable, may issue directions to the industrial undertaking or undertakings concerned in several matters. Section 17 of the original Act was repealed in 1953 by Act 26 of 1953. The same amending Act introduced into this Act two new chapters Chapter IIIA and Chapter IIIB of which s.18A in Chapter IIIA makes provisions as set out above for an order, by the Central Government authorising any person or body of persons to take over the management of the whole or any part of the under taking. These provisions of section 18A it may be mentioned take the, place of :the. provisions that previously appeared in s.17(1). That section, now repealed, had empowered the Central Government to authorise any person, or development council or any other 177 body of person,% to take,over the management of an undertaking or to exercise with respect thereto such functions of. control as might be provided by the order, in one class of cases only viz. , where after a direction had been issued in, pursuance of section 16 the Central Government was of opinion that the directions had not been complied with and that the industrial undertaking in respect of which directions had been issued was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. The present section ISA empowers the Government to authorise any person or persons to take over the management or to excercise such functions of control as may be specified, in two classes of cases. the first of these classes is mentioned in el. (a) of s.18A(1), viz., where the Central Government, is of opinion that directions issued in pursuance of s.16 have not been complied with by an industrial undertaking. The second class with which we are here directly concerned is mentioned in el. (b) viz. , where the Central Government is of the opinion that an industrial undertaking in respect of which an investigation has been made under s.15 is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest irrespective of whether any directions had been issued in pursuance of s.16 or not. What is noticeable in the wording of this clause is that while an investigation under s.15 may be initiated in respect of an industrial undertaking where the Central Government is of any of the five opinions mentioned in s.15(a)(i), 15(a)(ii), 15(a)(iii), 15(a)(iv) and s.15(b), s.18A(1)(b) does not refer to any of these opinions( Indeed, it does not refer at all to the question of the initiation of the investigation and mentions only the making of the investigation under s.15. Read without the addition of anything more, the language of s.18 A (1) (b) empowers the Central Government.to authorise a person or persons to take over the management of an industrial undertaking 178 or to exercise specified functions of control in respect of that undertaking,if the one condition of an investigation made under s.15 has been fulfilled irrespective of on what opinion that investigation was initiated and the further condition is fufillled that the Central Government is of opinion that such undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. The contention made on behalf of the respondents before us which found favour with the High Court is that when the legislature used the words "an investigation has been made under s.15" it meant "an investigation has been made under s.15 based on an opinion of the Central Government that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. " We should have thought that if the legislature wanted to express such an intention it would not have hesitated to use the additional words mentioned above,. It was urged, however, on behalf of the respondents that these further words, viz., " 'based on an opinion of the Central Government that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest" are implicit in cl.(b) of s.18A. In his lengthy address to convince us of the correctness of this contention the learned counsel advanced in substance only two arguments. The first is that it is only where the investigation under s.15 is initiated on an opinion mentioned in s.15(b) that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interestthat the report of the investigation can furnish the government with materials on which any opinion can be formed that an industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public inter est. For this argument we can find no basis. It appears to 170 us that where the investigation has been initiated, in respect of an industrial undertaking, on an opinion that there has been or is likely to be a fall in the volume of production for which having regard to the economic conditions there is no justification s.15(a)(i) or an opinion that there has been or is likely to be a marlied deterioration in the quality of any article which could have been or can be avoided s.15(a)(ii); or an opinion that there has been or is likely to be a rise in the price of any article for which there is no justification s.15(a)(iii); or an opinion that it is necessary to take action for the purpose of conserving any resources of national importance s.15 (a)(iv), the investigation in order to be complete must also consider the quality of the management of the undertaking just as it would so consider the quality of management where the investigation is initiated on an opinion that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. For, even when the investigation has been initiated on the Government 's forming any of the opinions mentioned in the four sub clauses of el. (a) of s.15, the investigator has necessarily to examine three matters : (1) whether the opinion formed by the Government is correct; secondly, what are the causes of this state of things, viz., the unjustifiable fall in the volume of production or the deterioration in the quality of the article or the rise in the price of the articles or the necessity of an action for the purpose of conserving the resources ; and thirdly how this state of things, if it exists can be remedied. In considering the second of these matters, viz., the cause of this state of things the investigator must examine how far and in what manner the quality of management is responsible for it. He may come to the conclusion that the management is in no way responsible and that some other cause lies at the root of the difficulty. He may hold on the other hand, that the 180 management is solely responsible or he may hold that while other causes. also play their part the defect in the quality of management is. , also in part responsible. Indeed, we find it difficult to understand how an investigator having embarked on an investigation. ordered by the Government in respect of an industrial undertaking on the basis of one or more of the opinions mentioned in section 15 (a) can avoid an inquiry into the quality of the management of the industrial undertaking. It is said that the use of the words "for which having regard to the economic conditions prevailing there is no justification" in cl. (a)(i) indicate and circumscribe the scope of the enquiry and that the investigator would only try to ascertain whether or not the economic conditions are such that do or do not justify the fall in the volume of production and then to see, where necessary, how these economic conditions can be altered. To say so is however to miss the entire scheme of the legislation providing for the investigation and for action following the same. Clearly, the purpose of this legislation is to,enable the Central Government to take suitable action to remedy the undesirable state of things mentioned in the different clauses of s.15. In order that Government may have proper materials to know what action is necessary the legislature empowered the Government to make or cause to be made "a full and complete investigation". In section 18, it empowered the person or body of persons appointed to make investigation to choose one or more persons possessing special knowledge to assist in the investigation and further vested the investigating committee with all the powers of. the Civil, Court under the Code of Civil Procedure, for the purpose of taking evidence,. on oath and for, enforcing the attendance of witnesses and compelling the production of documents and, material. objects. The whole purpopse of the legislation would be frustrated unless the investigation could be "full and complete. " No 181 investigation which has not 'examined the quality of management of the industrial undertaking could be said to be full or complete. It was next contended that the use of the words "circumstances of the case" shows that the investigation had to be made only into the matter in respect of which the government has formed an opinion and not into anything else. Assuming that it is so and that the investigator has primarily to conduct his investigation where the investigation has been initiated on the basis of an opinion as regards fall in production, into questions as regards such fall ; and similarly, where the investigation has been initiated on an opinion as regards the deterioration in quality, into the question of such deterioration, that does not other the fact that the investigator would have to try to ascertain the causes of the fall in production or: the deterioration in quality and this part, of the investigation would necessarily include an investigation into the quality of the management. Learned Counsel contended that if an investigation made on the basis of one or more of the opinions mentioned in el. (a) of s.15 was sufficient to furnish the materials on which the Government could form an opinion whether or not an industrial undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, el. (b) would by wholly unnecessary. With this we are unable to agree. There may be many cases where there may be information justifying the formation of opinion that the industrial undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, even though,.there are no materials for an opinion that there has been or is likely to be an unjustifiable fall in production or an avoidable deterioration in quality or an unjustifiable rise in prices or the necessity of taking action for the purpose of conserving resources as 182 mentioned in the four sub clauses of cl. (a) of s.15. It was also urged that it would be unfair to expect the management, where the investigation has been initiated on the formation of an opinion as mentioned in cl. 15(a), to lead any evidence as regards the quality of its management and so there is risk of the investigator being misled. We can see no reason however for any management to have any doubt on the question that investigation would be directed among other things to the question of quality of management. We believe that one of the first things that any management would do when an investigation is initiated on the basis of any such opinion would be to try to show how efficient it was and how in spite of the high quality of,its management the misdeeds of labour or the unsympathetic attitude of Government or the difficulties of transport or some other cause beyond their control was responsible for the undesirable state of things into which the investigation was being held. The argument that except where the investigation has been initiated on the basis of an opinion mentioned in section 15(b) there would be no material for the Government to form an opinion that the industrial undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, therefore fails. Equally untenable is the second argument advanced by the learned counsel that absurd results would follow if the words "investigation has been made under section 16" are held to include investigations based on any of the opinions mentioned in s.15(a). Asked to mention what the absurd results would be the learned counsel could only say that an order under section 18A(1)(b) would be unfair in such cases, as the owner of an industrial undertaking would have no notice that the quality of management was being investigated. That will be says 183 the learned counsel, condemning a person unheard. This argument is really based on the assumption that when the investigation has been initiated on the basis of any of the opinions mentioned in cl. (a), the quality of the management will not be investigated As we have stated earlier, there is no basis for this assumption. We have therefore come to the conclusion that the plain words used by the legislature "in respect of which an investigation has been made under section 15" cannot be cut down by the restricting phrase "based oil an opinion that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. " We must therefore hold that,the construction placed by the High Court on these words in s.18A(1)(b) is not correct. This brings us to the consideration of the other question raised, viz. , whether in fact the investigation had been held into. the question whether. the industrial undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. On this question the High Court came to a conclusion adverse to the appellants. It is not clear how the respondents though abandoning the ground that Government had nonmaterial before it for forming the opinion that the undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, could still urge that no investigation had been actually held into the question whether the industrial undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. The question whether investigation had in fact been held or not into the question whether the industrial undertaking was being managed in a Manner highly detrimental to the scheduled industry concerned or to public interest, would be relevant only to show that the Government 184 acted without any material before it or acted mala facie. If the allegation of ' mala fide or the allegation that there was no material before the Government for forming its opinion is abandoned, the question whether an investigation had in fact been held into the question whether the industrial undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, becomes irrelevant. We are satisfied however that the High Court was wrong in its view that it was not established that investigation had in fact been held into this question. We find that the assertion in the petition under article 226 that the investigation had not been directed "towards any alleged mismanagement of the mills" was denied in the affidavit sworn on behalf 'of the Union of India. When thereafter on October 10, 1960, affidavits in rejoinder filed on behalf of the petitioners affirmed 'that "no question was put which would suggest that the committee was investigating into any mismanagement of the mills," an affidavit of Mr. Thomas de Sa, who was a member of the investigating committee was, filed on behalf of the Union of India. This affidavit made the categorical assertion that the "committee" investigated not only into the question relating to the fall in the volume of production in respect of cotton textiles manufactured in the said industrial undertaking but also made a full and complete investigation into the circumstances of the working of the said industrial undertaking including the management thereof and as to whether the said undertaking was being managed in a manner detrimental to the industry concerned or to public interest. " The High Court has thought it fit to reject this testimony of Mr. De Sa for reasons which appear to us to be wholly insufficient. It appears that during the hearing the Advocate General asked for time to file an affidavit preferably of Mr. P. H. Bhuta who was. the lion official member of t he Committee of investigation but ultimately filed the 185 affidavit of Mr. De Sa and not the affidavit of ' Mr. Bhuta. The High Court seems to think that as. Mr. Bhuta was an independent member of the investigation committee while Mr. De Sa was in the service of the Government Mr. De Sa 's, statement is open to suspicion. In our view such suspicion of, high public officials is not ordinarily .,justified. , Mr. De Sa was as much a member of the investigating committee as Mr. Bhuta and so no less, competent than Mr. Bhuta to testify as regards the matter in issue. We do not think it right to suspect his honesty merely because he is an officer of the Union of India. The learned judges of the High, Court, appear also to have lost sight of, the fact that the questionnaire which annexed as annexure X to. the, affidavit of the second respondent Rajendra Prasad Manek Lal itself includes a number of questions which show unmistakably that the quality of management was being enquired into. A circumstance which appears to have weighed with the High Court is that the report of the committee which as the learned judges rightly say would be the best evidence to show "that there was in fact an investigation into the question of the management of the said undertaking" was not produced by the Union of India when called upon to do so by I. &. Nanavati on behalf of the petitioners. It is proper to mention that it does not appear that the learned judges themselves directed or desired the Advocate General to produce the report for their inspection. It further appears that no written application for the production of the docu ment was made on behalf of the petitioners. It does not seem to us to be fair to draw an inference against the Union of India merely because an informal request by the petitioners ' advocate was not acceded to. In view of what happened in the court below we asked the appellants ' counsel whether he was prepared to produce the report before us. The learned counsel readily produced the report and after examining the relevant portion 186 where the report deals with the question of management, we read it out in Court so that the respondents ' counsel could know the exact situation. This portion of the report says : ,,that the management is in the hands of a young and inexperienced person ; and the committee of the opinion that the present manager is incapable of handling the affairs of the mills ; the present managing agents are incapable of investing any further The fact that the report does contain such an opinion is sufficient to show that an investigation was actually held into the question of the quality of the management as affirmed by Mr. De Sa. The High Court 's view therefore that. no investigation was hold into the question of the management of the undertaking wag wrong. We have therefore come to the conclusion that the respondents were not entitled to any writ directing these appellants not to give effect to the, Government 's order under s 18A(1)(b). We therefore allow the appeal, set aside the order of the High Court directing the issue of the writ and order that the application under article 226 of the Constitution be dismissed. The appellants will get their costs both here and below. Apnpeal allowed.

Being of the opinion that there had been a substantial fall in the volume of production in respect of cotton textiles manufactured in the respondent company, an industrial under taking, for which having regard to the economic conditions prevailing there was no justification, the Central Government made an order under s.15 of the Industries (Development and Regulation) Act,, 1951, appointing a committee of three persons for the purpose of making a full and complete investigation into the circumstances of the case. After the committee made its report,the Central Government being of the opinion thereupon that the company was being managed in a manner highly detrimental to public interest, made an order under section 18 A of the Act authorising the first appellant to take over the management of the whole of the said undertaking. The respondents challenged the legality of the order on the ground, inter alia, that on the proper construction of s.18.A the Central Government had the right to make the order under that section on the ground 172 that the company was being managed in a manner highly detrimental to public interest only where the investigation made under s.15 was initiated on the basis of the opinion,as mentioned in section 15(b), whereas in the present case, the investigation ordered by the Central Government was initiated on the formation of an opinion as mentioned in cl. (a) (1) of section 15. Held, that the order passed by the Central Government under section 18 A was valid and that the words. used by the legislature in section 18A (1)(b) "in respect of which an investigation has been made under section 15" could not be cut down by the restricting phrase "based on an opinion that the. industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. " Section 18A (1)(b) empowers the Central Government to authorise a person to take over the management of an industrial undertaking if the one condition of an investigation made under section 15 had been fulfilled irrespective of on what opinion that investigation was initiated, and the further condition is fulfilled that 'the Central Government was of opinion that such undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest.

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 three respondents, who were the General Manager, the Assistant Manager and the Secretary of the Laxmi Devi Sugar Mills Ltd., were charged under sections 12, 13 and 26 of the United Provinces Shop and Commercial Establishment Act, 1947, for contravening the provisions of the Act relating to holidays, leave and maintenance of certain registers regarding a class of field workers employed by the company to guide, supervise and control growth and supply of sugar cane for use in the factory. It was contended on their behalf that those employees were workers within the meaning of the and the United Provinces Shop and Establishment Act did not apply to them. The Judicial Magistrate rejected that contention and convicted the respondents under section 26 of the Act and sentenced them to pay a fine of Rs. 30 each. On a reference by the Sessions judge recommending that the said convictions and sentences may be set aside, the High Court acquitted the respondents. The State Government appealed to this Court by Special Leave. Held, that the order of acquittal passed by the High Court was erroneous. The provisions of the were intended to benefit only workers employed in a factory and since field workers guiding, supervising and controlling growth and supply of sugar cane for use in the factory were not employed in the factory, the did not apply to them and they fell within the definition of " Commercial Establishment " under the United Provinces Shop and Commercial Establishment Act, 1947.

The appellants, an 'association of rubber chappal manufacturers who were using rubber in their manufacturing process, filed a petition in the High Court challenging the levy and collection from the manufacturers of chappals, of a duty under section 12 of the aS amended by Rubber Amendment Act, 1960. The grounds of challenge were: (1) that the imposition on the appellants was outside the ambit of Entry 84 of List I of VII Schedule of the Constitution, which deals with the duties which can be levied on goods manufactured or produced in India; (2) Section 12(2) which provides the machinery for levy and collection has given uncontrolled and unbridled discretion to the Rubber Board and no guiding principle or policy was laid down in the Act to enable the Board to choose between the owners of estates of rubber or the users of the rubber; and (3) the rules framed under the section do not indicate with sufficient clarity and precision on whom the levy was to be made. The High Court dismissed the petition. In appeal to this Court, HELD: (1) (a) The excise duty could be imposed at the stage which was found to be most convenient and lucrative as that is a matter relating to the machinery of collection and did not affect the essential nature of the tax. Therefore, merely because the incidence of tax is shifted to the users of rubber under section 12(2) which provides for the method of collection, the tax would not cease to be one falling within Entry 84.[73 B C;F G] R.C. fall vs Union of India, [1962] Supp. 3 S.C.R. 436, followed. Re: the Central Provinces and Berar Act, 14 of 1938, , applied. (b) If the duty is not excise duty because it is imposed on the user Parliament would even then have legislative competence to provide for its collection from users, whatever be its nature, under Entry 97 of List I read with article 248 of the Constitution. [73 H; 74 A B] (2) The task of subordinate legislation necessary for implementing the purpose and objects of an enactment can be delegated, so long as the law has provided the method by which the. delegate can be controlled, there is a guidance for fixing rates of tax and there is a provision to see that reasonable rates are fixed. [74 D F] Municipal Corporation of Delhi vs Birla Cotton, Spinning and Weaving Mills, ; , followed. In the present case, the Act was enacted for the purpose of development of rubber industry under the control of the Union Parliament has 69 enacted that the Rubber Board can levy and collect the duty either from the owner of the rubber estate or the user of the rubber. But the Board is enjoined to do so in accordance with the Rules made by Central Government under section 25(1) (a) of the Act and which are placed before each House of Parliament for approval. The Board itself is a high powered body and all interests are represented among its members 'and all its acts are subject to the control of the Central Government under section 22. [74 H; 75 Ii; 78 C] Further. the Board is vitally interested in the collection of the duty and it has to see that such duty is collected without undue delay and proper expedition. The objects and reasons of the Amending Act (which can be taken into consideration for the purpose of seeing if there is any alleged infringement of article 14) show that the Board was finding it difficult to levy and collect the duty from the owners and it was considered that it would be much more easy to collect it from the users, in accordance with the rules. Thus it is necessary that it should be left to the rule making authority to indicate the cases and the circumstances in which the duty was to be collected from the owner or user. [75 C; 77 H; 78 A B] Since the policy of the Act has been enunciated with sufficient clarity, and guidance has been furnished as to how the Board should exercise its powers in the matter of levy, there is no discrimination and article 14 is not violated. Ipoh vs C.I.T. Madras; , and Raghubar Dayal Jai Prakash vs Union of India, ; , referred to. (3) A combined reading of rr. 33, 33A and 33D indicates that a definite provision is made with regard to the category of persons on whom the collection of the duty is to be made, namely, the users of rubber.

The 'any felts ' manufactured by the appellant assessee were held by the assessing authorities to be not 'textiles ' within the meaning of Item 30 of Schedule 'B ' the Punjab General Sales Tax Act, 1318 and thereafter, on appeal the Tribunal and on reference the High Court also confirmed this view. Allowing the appeal by special leave, the Court ^ HELD: 1. 'Dryer felts ' are 'textiles ' within the meaning of that expression in Item 30 of Schedule 'B ' to the Punjab General Sales Tax Act, 1948. [551 E] 2. In a taxing statute words of every day use must be construed not in their scientific or technical sense but as understood in common parlance, meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it." [548 A, F] Ramavatar Budhaiprasad vs Assistant Sales Tax officer, Akola, A.l.R. , M/s. Motipur Jamindary Co. Ltd. vs State of Bihar, A.l. R. , State of West Bengal vs Washi Ahmed. ; and Madhya Pradesh Pan Merchant 's Association, Santara Market, Nagpur vs State of Madhya Pradesh, 7 S.T.C. 99 at 102 referred(1 to E Gretfell vs IR.C. [1876)] I exhibit D. 242 at 248, Planters Nut and Choco Co. Ltd. vs The King, [1951] 1 DLH 385 and 200 Chests of 'Tea, (1824) 9 Wheaton (U.S.) 430 at 438; quoted with approval. Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention us clearly expressed by the Legislature. The reason is that the Legislature does not suppose our merchants to be 'naturalists, or geologists, or botanists". In the instant case the word 'textiles ' is not sought by the assessee to be given a scientific in preference to its popular meaning. It has only one meaning namenamely a woven fabric and that is the meaning or technical meaning which it bears in ordinary parlance. [550 E G]. The concept of 'textiles ' is not a static concept. It has, having regard to newly developing materials, methods techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language be regarded as textiles [550 H] The word 'textiles ' is derived from Latin 'texere ' which means 'to weave ' and it means woven fabric. When yarn, whether cotton, silk. woollen rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a 'textile ' and is known as such. Whatever be 546 the mode of weaving employed, woven fabric would be 'textile '. What is necessary is no more than meaning of yarn and weaving would mean binding or putting together by some process so as to form a fabric. A textile need not be of any particular size or strength or weight. the use to which it may be put is also immaterial and does not bear on its character as a textile. The fact that the 'dryer felts ' are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit, cannot militate against 'dryer felts ' falling within category of textiles, if otherwise they satisfy the description of textiles. The refers to textile fabrics in this sense. [549 C D, E F., G H] Ramavatar Budhaiprasad vs Assistant Sales lax officer Akola; , and M/s. Motipur Jamindary Co. Ltd. vs Stale of Bihar, ; , distinguished.

The appellant. was tried by the Sessions judge and acquitted of the charge of murder. On appeal the High Court convicted him and sentenced him to imprisonment for life. The appellant applied for and was granted a certificate under Art 134 (1) (c) of the Constitution for appeal to the Supreme Court on the ground that there was unusual delay in delivering the judgment of the High Court and that the judg ment failed to deal with certain questions of fact which were raised at the hearing of the appeal. Held, that the certificate granted by the High Court was not a proper certificate. The mere ground of delay in giving judgment did not fall within the words "fit one for appeal to the Supreme Court" in article 134 (1) (c). The points raised in the appeal before the High Court were questions of fact and the High Court was not justified in passing such questions on to the Supreme Court for further consideration thus converting the Supreme Court into a court of appeal on facts. Haripada Dev vs State of. West Bengal; , and Sidheswar Ganguly vs State of West Bengal, [1958] section C. R. 749, followed. Banaswmi Parshed vs Kashi Krishna Narain, (1900) L. R. 23 1. A I I and Radhakrishna Ayyar vs Swaminathna Ayyar, (1920) L. R. 48 I. A. 31, referred to.

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.

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.

vil Appeal No. 508 of 1957. Appeal by special leave from the judgment and decree dated June 3, 1955, of the Calcutta High Court in Appeal from Appellate Decree No. 1090 of 1949. N. C. Chatterjee and D. N. Mukherjee, for the appellant. B. C. Panda and P. K. Chaterjee, for the respondent, 882 1961. February 21. The Judgment of Kapur and Shah, JJ. was delivered by Shah, J. Hidayatullah, J. delivered a separate judgment. SHAH, J To secure repayment of Rs. 2,500/ Anath Nath Mittra hereinafter referred to as Mittra mortgaged four parcels of land to Haridas Mondalhereinafer referred to as Mondal by deed dated April 25, 1930. Mondal filed suit, No. 18 of 1937 on June 11, 1937, for enforcement of the mortgage in the Court of the 2nd Subordinate Judge, Midnapore, and obtained a preliminary mortgage decree for Rs. 5,000/and interest and costs. This decree was made absolute and in execution of the decree, the mortgaged property was sold for Rs. 4,160/ and an amount of Rs. 2,176,66 out of the decretal amount remained due and payable under the mortgage decree. Out of the four parcels of land sold, three were purchased by Mondal and the remaining was purchased by Mittra 's wife. Mondal then applied for a personal decree under 0. 34, r. 6 of the Civil Procedure Code and obtained on September 7, 1940, a decree for payment of Rs. 2,338,15,0 against Mittra. Mondal then applied for executing the personal decree by Misc. Execution Cage No. 1 1 of 1941. In the meanwhile, the Bengal Legislature enacted the Bengal Money lenders Act, 1940, which enabled the courts in certain circumstances to reopen decrees already passed. Availing himself of this Act, Mittra filed a suit under section 36 of the Bengal Money lenders Act for an order reopening the personal decree. By order dated August 16, 1941, the Subordinate Judge, Midnapore, decreed the suit and directed that a new decree for Rs. 1,431 15 0 be drawn up and that the amount due under the personal decree be paid in three annual instalments. Against this decree, an appeal was preferred to the District Court, Midnapore. The District Judge dismissed the appeal and allowed the cross objections filed by Mondal. In Second Appeal No. 1442 of 1942, the High Court of Judicature at Calcutta set aside the decree of the District Judge and restored the decree of the Subordinate Judge, 2nd Court, Midnapore. Mittra did not pay the amount as directed under the 883 new decree and Mondal applied for executing the decree. Mittra then filed another suit under section 36 of the Bengal Money lenders Act in the 2nd Court of the Subordinate Judge, Midnapore, for reopening the, decrees preliminary and final passed in the mortgage suit. The Subordinate Judge dismissed this suit as it was, in his view, barred as res judicata. In appeal to the District Court, the decree was confirmed. But the High Court in Second Appeal ordered that the preliminary and final decrees be reopened and the case be remanded to the trial court for passing a fresh preliminary decree. Against the said decree of the High Court, this appeal is filed with special leave. Section 30 of the Bengal Money lenders Act, 1940, provides in so far as it is material that notwithstanding anything contained in any law for the time being in force, or in any agreement, no borrower shall be liable to pay after the commencement of the Act a sum in respect of principal and interest which,, together with any amount already paid or included in any decree in respect of a loan exceeds twice the principal of the original loan and that the borrower shall not be liable to pay interest at rate per annum in cases of secured loans exceeding 8 per cent. simple. By section 36, the liability on loans secured or otherwise which contravenes the provisions of section 30 is liable to be reopened. It is provided by sub.s. (1) of s.36 in so far as it is material that notwithstanding anything contained in any law for the time being in force, if in any suit brought by a borrower for relief under this section whether heard ex parte or otherwise, the court has reason to believe that the exercise of one or more of the powers under the section will give relief to the borrower it shall exercise all or any of the powers specified therein as may be considered appropriate. The court is invested with the power of reopening transactions including taking of accounts between the parties, of releasing the borrower of all liability in excess of the limits specified in cls. (1) and (2) of section 30 and offsetting aside either wholly or in part or of revising or altering any security given or agreement made in respect of any loan. Exercise of these powers 884 is subject to the provisos which are not material for the purposes of this appeal. By sub section (2), the court reopening a decree is prohibited from doing anything which affects the rights acquired bona fide by any person other than the decree holder in consequence of the execution of the reopened decree; but is enjoined to order the restoration to the judgment debtor of such property, if any, of the judgment debtor acquired by the decree holder in consequence of the execution of the reopened decree as may be in the possession of the decree holder on the date on which the decree was reopened and also to order the judgment debtor to pay to the decree holder in such number of instalments as it may think fit, the whole amount of the new decree passed under cl. The court is further enjoined to direct that in default of payment of any instalments, the decree holder shall be put into possession of the property which has been restored to the judgment debtor and that the amount for which the decree holder purchased such property in execution of the reopened decree shall be set off against so much of the amount of the new decree as remained unsatisfied. Sub section (6) provides that notwithstanding any. thing contained in any law for the time being in force, the court which, in a suit to which the Act applies, passed a decree which was not fully satisfied by the first day of January, 1939, may exercise the powers conferred by sub sections (1) and (2) in any proceeding in execution of such decree. Section 36, sub section (1), contemplates the institution of a suit by a borrower for relief under that section and the court is thereby invested with the power of reopening decrees already passed. Mittra in the year 1941 filed the suit under section 36 of the Act for reopening the personal decree passed under 0. 34, r. 6 of the Civil Procedure Code. In Schedule " A " to the plaint, he set out the principal amount due under the mortgage. the interest at the rate of 8% due thereon from the date of the mortgage till the date of the suit, costs of the suit, and after giving credit for the price realised by sale of the properties, he submitted that Mondal was entitled to 885 recover only Rs. 66 13 2 and that Mondal should be declared entitled to that amount in twenty annual instalments. By a suit under section 36, Mittra undoubtedly was entitled to reopen the preliminary decree, decree absolute for sale and also the personal decree; ' but in the first suit, he gave up his right to reopen the preliminary decree and the decree absolute for sale, and was content to obtain an order that the personal decree alone be reopened. In the execution under the mortgage decree one parcel of land was purchased by Mittra 's wife and it is presumably on account of this circumstance that Mittra was unwilling to have the preliminary decree reopened. The District Judge, Midnapore, who heard the appeal against the order passed by the 2nd Court of the Subordinate Judge in the first suit under section 36 of the Act observed: " It is admitted before me by the learned pleader for the appellant that the reopening of the entire transaction will not be to the benefit of the appellant and the latter, therefore, does not want this to be done. The only relief he claims is that the new decree passed by the learned Subordinate Judge for Rs. 1,431 15 0 shall be reduced to Rs. 66 13 2 as mentioned in his application under section 36 of the Act. " In the first suit under section 36 filed by Mittra, the claim to reopen the preliminary decree and the decree absolute was deliberately abandoned and he obtained relief expressly on the footing that he did not, desire that those decrees should be reopened. Is it thereafter open to Mittra to file another suit for obtaining relief under section 36 by reopening the preliminary decree and the decree absolute ? In our judgment, section 36 contemPlates filing of one suit and not successive suits for reopening transactions including decrees and obtaining relief under the Act. If in a suit filed for that purpose, a borrower does not obtain relief which he has asked for or abandons his right to relief, in our judgment it will not thereafter be open to him to institute a second suit for relief which could have been but was not claimed in the earlier suit. The plea that in the previous suit it was not open to Mittra to make a claim for reopening the 886 preliminary decree and the decree absolute is without substance. By sub section (6) of section 36, the right to grant relief in proceedings in execution of a decree already passed but which is not satisfied is vested in. the court passing the decree and the first suit under section 36 was filed in the court which had originally passed the mortgage decree. The claim to reopen the decrees preliminary and final was abandoned not because the court was incompetent to grant relief but because Mittra did not at that stage desire to reopen those decrees. We are unable to agree with the High Court that to a suit under section 36 of the Act, the rule contained in 0. 2, r. 2 of the Code of Civil Procedure does not apply. We are also of the view that the right to claim relief which could have been but has not been asked for in the previous suit must be regarded as res judicata. In that view of the case, this appeal will be allowed and Mittra 's suit No. 105 of 1947 dismissed with costs throughout. HIDAYATULLAH, J. I have had the advantage of reading the judgment just delivered by my brother, Shah, J.; but I regret my inability to agree that the judgment under appeal be reversed. The appellant, a money lender, had advanced a sum of Rs. 2,500/ to the respondent on a simple mortgage of four properties. He filed a suit which was decreed on November 13, 1937, when a preliminary decree for Rs. 5,000/ plus costs was passed against the respondent. This decree was made final on February 25, 1938. On May 17, 1939, the four properties were sold for Rs. 4,160/ , and the balance then remaining due was Rs. 2,176/ . Three of the properties were purchased by the appellant (decree holder), and the fourth, by the wife of the mortgagor. On September 7, 1940, a personal decree for Rs. 2,338 15 3 was passed against the respondent. In 1941, execution of that decree was taken out. In the meantime, the Bengal Money lenders Act had come into force on August 1, 1940. The respondent there. upon made an application under section 36 of the Bengal Money lenders Act for reopening the decree. The 887 respondent did not say which decree he wanted reopened; but with his application he gave a statement of account of the entire amount as reduced under the Bengal Money lenders Act and by the amount realised A by sale of the four properties, and asked that a decree for the balance, Rs. 66 13 2, should be passed against him. The application was partly allowed, and afresh decree for Rs. 1,431 15 0 was passed. If the earlier decrees had been reopened, the amount due would have been Rs. 5,591 15 0, but the Subordinate Judge said : " As Rs. 4,160/ was paid, I find no necessity of cancelling the sale and ordering restitution, but for the balance of Rs. 1,431 15 0, a new decree be drawn up." The respondent appealed, and the appellant cross objected. The District Judge dismissed the appeal, allowed the cross objection, and dismissed the application. On appeal to the High Court by the present respondent, R. C. Mitter, J. allowed the appeal. He held that the personal decree was liable to be reopened, and restored the decree for Rs. 1,431 15 0 passed by the Subordinate Judge. The respondent who was directed to pay the amount by instalments under the orders of Mitter, J. made default in payment, and a money execution case was ,started against him. He, thereupon, brought a suit under section 36 of the Bengal Money lenders Act for reopening the preliminary, final and personal decrees. This suit was dismissed as barred by constructive res judicata and the principle of 0. 2, r. 2 of the Code of Civil Procedure, by the Subordinate Judge, and the appeal to the District Judge also failed. On further appeal to the High Court, K. C. Das Gupta, J. (as he then was) and Guha, J. allowed the appeal. The learned Judges held that 0. 2, r. 2 of the Code of Civil Procedure did not apply to the suit, because it refers to a previous suit and not to an application filed in execution for relief They also pointed out that under the Bengal Money lenders Act the duty was laid upon the Court to reopen any decree, if it was likely to give relief to the borrower, and that the relief did not 888 depend upon the desire or claim of the borrower. They further pointed out that even Mitter, J. was of the opinion that the relief to be given was incumbent ,,,upon the Court and independent of the wishes of the borrower. In the appeal before us filed with special leave, Mr. N. C. Chatterjee contended that the suit was barred by res judicata, waiver and estoppel, and that the Divisional Bench of the High Court was in error in ordering the reopening of the three decrees, when the respondent himself had not asked on the earlier occasion that they be reopened. The scheme of the Bengal Money lenders Act is as follows: The Act, though passed to control moneylenders and to regulate and control money lending, gave relief to borrowers in many ways. One such way was to put the limit of what is popularly known as Damdupat on interest, and another was to limit the rate of interest to 8 per cent. simple in the case of secured loans. By section 36, transactions which contravened these provisions were required to be reopened. This reopen ing was not limited to transactions, but decrees also were required to be reopened, unless fully satisfied by the first day of January, 1939. The section gave vast powers to Courts reopening decrees. Sub section (2) of section 36 provided: " (2) If in exercise of the powers conferred by sub section (1) the Court reopens a decree, the Court (a) shall, after affording the parties an opportunity of being heard, pass a new decree in accordance with the provisions of this Act, and may award to the decree holder such costs in respect of the re. opened decree as it thinks fit, (b) shall not do anything which affects any right acquired bona fide by any person, other than the decree holder, in consequence of the execution of the reopened decree, (c) shall order the restoration to the judgment debtor of such property, if any, of the judgmentdebtor acquired by the decree holder in consequence of the execution of the reopened decree as may be in 889 the possession of the decree holder on the date on which the decree was reopened, (d) shall order the judgment debtor to pay to the decree holder, in such number of instalments as it A may think fit, the whole amount of the new decree passed under clause (a), and (e) shall direct that, in default of the payment of any instalment ordered under clause (d), the decree holder shall be put into possession of the property referred to in clause (c) and that the amount for which the decree holder purchased such property in execution of the reopened decree shall be set off against so much of the amount of the new decree as remains unsatisfied. " The stages at which decrees could be reopened were laid down by sub sections (1) and (6) of section 36. Sub section (1) provided : " Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act applies, or in any suit brought by a borrower for relief under this section whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the borrower, it shall exercise all or any of the following powers as it may consider appropriate. " Sub section (6) provided: " Notwithstanding anything contained in any law for the time being in force, (a) the Court which, in a suit to which this Act applies passed a decree which was not fully satisfied by the first day of January, 1939, may exercise the powers conferred by sub sections (1) and (2) (i) in any proceedings in execution of such decree, or (ii) on an application for review of such decree made within one year of the date of commencement of this Act, and the provisions of rules 2 and 5 of Order XLVII of the First Schedule to the Code of Civil Procedure, 1908, shall not apply to any such application; 890 (b) any Court before which an appeal is pending in respect of a decree referred to in clause (a) may either itself exercise the like powers as may be exercised under sub sections (1) and (2), or refer the case to the Court which passed the decree directing such Court to exercise such powers, and such Court shall after exercise thereof return the record with the additional evidence, if any, taken by it and its findings and the reasons therefore to the Appellate Court and thereupon the provisions of rule 26 of Order XLI of the First Schedule to the Code of Civil Procedure, 1908, shall apply. " The words "suit to which this Act applies" were defined to mean: " 2 (22). any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a proceeding in execution (a). for the recovery of a loan advanced before or after the commencement of this Act; (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or other:wise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act; or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act. " By section 2(21), " suit " included an appeal. The definition was still further widened for purposes of section 36 vide sub section (3) but nothing turns on it. The effect of these provisions may be summed up: The reopening of transactions and decrees could be achieved: (a)in any suit to which the Act applied; (b) in a suit brought by the borrower for relief under section 36; (c) in any proceeding in execution of decrees;,: (d) by an application for review of a decree made within one year of the date of commencement of the Act; and 891 (e) by appellate Courts at all the above stages. Once the Court was moved, the action of the Court was dictated by the Act, and the Court was compelled by the Act to give full relief. The Court in this case, was required by law to reopen all the decrees passed against the respondent. Indeed, R. C. Mitter, J. quite correctly pointed out: " In this case the judgment debtor was entitled to have all the decrees, namely, the preliminary, final and the personal decrees reopened. He should not have been refused relief simply because he had asked for the reopening of the personal decree only if there had been a contravention of the provisions of section 30 of the Bengal Money lenders Act. " The learned Judge, however, declined to remand the case for the application of the Act or even to apply it himself, because he felt that what was asked for by the respondent should at,least have been granted, and he granted only that relief. The law, however, gave no such option. It was mandatory, and laid a duty upon the Court. The respondent then filed a suit, and asked for all the reliefs which the Court had to award, and there can be no doubt that unless the suit be incompetent, the Act must be applied even now, because the volition of the borrower is entirely out of place in the application of the Act. The respondent no doubt, when he applied on the previous occasion, asked that the Act be applied only so far as benefited him; but his wishes were irrelevant, and the Act had to be applied, as it stood. Every one who has dealt with this case has felt this to be the true position in law. Thus, the question is whether the respondent was precluded from bringing the suit. The suit could be barred under section 11 or 0. 2, r. 2 of the Code of Civil Procedure, or by the application of the principle of constructive res judicata, or because of waiver, estoppel or the equitable principle of approbation and reprobation. The opening words of Sub section (1) and again of sub=s. (6) of section 36 are: " Notwithstanding anything contained in any law for the time being in force 892 and they are apt to put out of consideration both section 11 and O. 2, r. 2 of the Code of Civil Procedure. Waiver and the equitable doctrine of approbation and reprobation can apply only if a right were give up. They can have no application where the question is not so much of a right of a party as of the duty of a Court under the Act. The Court was moved, and had to do its duty. If it can be moved a second time by another proceeding, neither those principles nor the principle of constructive res judicata can apply. The remedies which are enjoined by the Act are not exclusive of one another, either expressly or by necessary intendment. As the law stands, the Court could take action to enforce it at almost any stage of the proceedings between the parties commenced by the creditor, and, in addition, in proceedings or a suit commenced by the borrower. The intention of the law is clear and manifest that borrowers must be protected. Indeed, in Jadunath Roy vs Kshitish Chandra Achariya Choudhury (1), the Judicial Committee held that the preliminary, the final and the personal decrees in a suit to enforce a simple mortgage were all connected and were, in effect, one decree only, and there could be no question of reopening one decree and not the others. And in Joy Chand Lal Babu vs Kamalaksha Choudhury (2), a consent decree in a mortgage suit,,, which combined the preliminary, the final and the personal decrees into one decree, was held to, be properly reopened. The decrees passed against the respondent were required by law to be reopened, and no provision of the Code of Civil Procedure or of equity could bar the suit. The first was excluded expressly, and equity was hardly applicable in view of the law on the subject. Indeed, by the suit even the.decree, of Mitter, J. could be reopened, if it did not comply. with the law. In my opinion, the order of the Divisional Bench of the Calcutta High Court, with respect, is correct and to hold otherwise is to decline to give effect to the protection, which the Act has sedulously erected in (1) (1949) L.R. 76 I.A. 179, (2) (1949) L.R. 76 I.A. 131. 893 favour of borrowers and against rapacious moneylenders. I find myself in such complete agreement with the judgment impugned, that I do not find it necessary to cover the same ground. I would, therefore, dismiss the appeal with 'Costs. BY COURT. In view of the majority judgment of the Court, this appeal will be allowed and Mittra 's Suit No. 105 of 1947 dismissed with costs throughout.

The appellant obtained a preliminary and then a final mort gage decree against the respondent and thereafter a personal decree for the debt remaining due to him 'after sale of the property mortgaged. The appellant applied for execution of the personal decree and thereupon the respondent sued for relief under section 36 of the Bengal Money lenders Act, 1940, by reopening the personal decree. In the suit relief for reopening the preliminary decree and final decree was not claimed. The personal decree was reopened in that suit and an instalment decree for a smaller amount passed instead, which was ultimately upheld by the High Court. The respondent failed to pay the instalments and the appellant applied for executing the decree. The respondent then filed another suit under section 36 of the Act for reopening the preliminary and final decrees. The Subordinate judge dismissed the suit holding that it wag barred as res judicata and the District judge on appeal affirmed that decision. But the 881 High Court in second appeal reversed those decisions and directed the preliminary and the final decrees be reopened and remanded the case to the trial court for passing a fresh preliminary decree. Hence this appeal with special leave. Held (per Kapur and Shah, JJ.), that section 36 of the Bengal Money lenders Act, 1940, contemplated the filing of one and not successive suits for the reopening of transactions including decrees and obtaining relief under the Act. If in such a suit, the borrower failed to seek the entire relief he was entitled to and abandoned his right to a part of the relief, he would be precluded from seeking that relief in another suit. The principle underlying r. 2 of 0. 2 of the Code of Civil Procedure as also the principle of res judicata applied to a suit under section 36 of the Act. Per Hidayatullah, J. When the respondent moved the executing court under section 36 of the Act he had not filed a suit but only an application. It was the duty of the court thereunder to give him full relief although he might not have asked for it. If the court failed in its duty and he filed a suit no question of waiver or constructive res judicata could at all arise. This was made clear by the non obstante words of sub sections (1) and (6) Of section 36 and the question that arose under the section was not s? much of the right of a party as of the duty of the court to give entire relief under the Act. The remedies enjoined by the Act were not exclusive of one another, either expressly or by necessary intendment, and were intended to give the widest possible relief to the borrowers. jadhunath Roy vs Kshitish Chandra Achariya Choudhury (1949) L.R. 76 I.A. I79 and joy Chand Lal Babu vs Kamalaksha Choudhury, (1949) L.R. 76 I.A. 131, referred to. Since the Act required that the decrees passed against the respondent had to be reopened, no provision of the Code of Civil Procedure or of equity could bar the suit, the former being expressly excluded and the latter made inapplicable by the substantive provisions of the Act.

A suit was filed by the appellants in the Court of the Assistant Collector seeking ejectment of the respondent tenant from his lands, under section 77(3) proviso 2(e) of the Punjab Tenancy Act, 1887 on the ground that he had defaulted in the payment of rent, and it was decreed. In execution of the decree, the respondent was ejected from the suit land. No appeal was filed from the said decree but the respondent filed a suit in the Civil Court against the appellants alleging that he was in fact a mortgagee in possession of the suit land and not a tenant and that the decree of ejectment passed by the Revenue Court was without jurisdiction and, therefore, a nullity, and claimed restoration of the possession of the suit land from which he had been wrongly ousted by the Revenue Court. The suit was dismissed by the Subordinate Judge holding that the claim of the respondent to be a mortgagee in possession of the suit land was wrong and that the order of the Revenue Court was perfectly in order and within that court 's jurisdictional competence and that it was of a binding nature on the respondent and was not open to challenge in subsequent proceedings. The appellant asserted that the claim by the respondent in the subsequent suit was barred by the principles of res judicata. The suit was dismissed. In appeal, the Additional District Judge reversed the findings of the trial court and decreed the suit of the respondent. The appellants filed regular second appeals before the High Court. 94 A Single Judge of the High Court was of the view that, in view of the conflicting judgments on the points for determination in the case, the matter required to be referred to a larger bench. The Full Bench, by a majority view, held that the decision of the Revenue Court under section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties would not operate as res judicata and it would be open to challenge in a subsequent suit or in other collateral proceedings between the parties, and remitted the matter back to the Single Judge for disposal in accordance with the above decision. The question for consideration in the appeals by Special Leave before this Court was: as to how far an order of eviction of a person by the Revenue Court under section 77(3) of the Punjab Tenancy Act, 1887 operated as res judicata for a title suit filed by a person claiming to be a mortgagee and not a tenant of the alleged landlord. Dismissing the appeals by special leave, this Court, ^ HELD: 1. The High Court was right in holding that there was no res judicata so far as the second suit based on the assertion of the title of the respondent was concerned. [105C D] 2.1 The overall scheme of the Act is to provide speedy remedies with regard to disputes between the landlords and tenants and also under what circumstances that relationship came to an end. Sections 98 and 99 do not in any way affect the question whether the decision of the Revenue Court under the Revenue Act can operate as res judicata in certain cases. The limits of the jurisdiction would be apparent by the fact that all suits by a landlord to eject a tenant do not encompass suits to decide whether a person was a tenant or not or whether the plaintiff was a landlord or not. [98C; 99 F G] 2.2 ouster of jurisdiction of Civil Courts should not be inferred easily. It must be clearly provided for and established. If the dispute was as to the nature of the relationship of landlord and tenant between the parties, the Revenue Court under the Punjab Tenancy Act had no jurisdiction; when there was admitted position, the relationship of landlord and tenant was accepted, the remedies and rights of the parties should be worked out under the scheme of the Act. [103C D] 2.3 A salutory and simple test to apply in determining whether the previous decision operated as res judicata or on principles analogous thereto was to find out whether the first court could go into the question 95 whether the respondent was a tenant in possession or mortgagee in A possession. In view of the language of section 77 it is clear that it could not and, therefore, there was no res judicata. The subsequent civil suit was. therefore, not barred by res judicata. [105B C] Raj Lakshmi Dasi and others vs Banamali Sen and others, ; Om Prakash Gupta vs Rattan Singh and another, ; Shri Raja Durga Singh of Solan vs Tholu; , ; Magiti Sasamal vs Pandab Bissoi, ; Lal Chand (dead) by Lrs. and others vs Radha Kishan, [1977] 2 SCR 522 and State of Tamil Nadu vs Ramalinga Samigal Madam; , , referred to.

In the eviction suit filed by the respondents against the appellant under the West Bengal Premises Tenancy Act, 1956, on the ground that the appellant was in arrears of rent, that he had sub let the premises and that the respondents required the premises for their personal use, the appellant deposited the arrears of rent within a period of 30 days i.e. within the time but did not deposit the interest due on the arrears as required by section 17(i) of the Act. The respondents therefore, filed an application under section 17(3) of the Act to strike off the appellant 's defence for failure to deposit the interest. The said application was accepted by the Trial Court and, therefore, the respondents filed a civil revision application in the Calcutta High Court against that order which was dismissed on April 4, 1968. During the pendency of the said revision application, section 17A was newly introduced in the 1956 Act with retrospective from 26 8 1967. By that section tenants were given the right, if the proceedings for eviction was not disposed of, to apply within 30 days of the said date for setting aside the order for striking off the defence. In view of the challenge by way of revision application in the High Court against the order striking off his defence the appellant did not take recourse to the provisions of the newly introduced section 17A of the West Bengal Premises Tenancy Act. After the dismissal of the revision petition, the appellant filed an application under the new section 17A of the Act praying that the order dated July 25, 1963 passed by the Trial Court, striking off his defence be set aside. Along with the said application, an application to condone the delay under section 5 of the Limitation Act was also filed. The Trial Court dismissed both the applications and the High Court confirmed that order in revision. Allowing the appeal by special leave, the Court ^ HELD: 1. The true meaning and effect of section 39 is that if any special period of limitation is prescribed by the Act, that period will govern the proceeding under the Act in preference to the period, if any, prescribed by the Limitation Act. But apart from such an over riding effect of the period of limitation prescribed by the Act, not only that the other provisions of the Limitation Act do not stand excluded or superseded, but they are expressly made applicable by section 39 of the Act. [949 A B] 2. Section 39 of the West Bengal Premises Tenancy Act, 1956, which is clear and specific, leaves no doubt that the provisions of the Limitation Act 946 would apply to proceedings under the West Bengal Premises Tenancy Act, subject to the condition that if there is a provision in the West Bengal Act relating to limitation, that provision would prevail over the provisions of the Indian Limitation Act relating to limitation. Since the West Bengal Act prescribed a specific period of limitation for filing an application for setting aside an order striking out the defence, namely a period of 30 days commencing on August 26. 1967 when the first Ordinance came into force, that period would undoubtedly apply to the making of the application under section 17A of the Act. Since the appellant did not file his application under section 17A before the due date, that is to say, before September 25, 1967, the application must be held to be barred by limitation. But, by reason of section 39 of the Act, all other provisions of the Limitation Act would be attracted including section 5 of the latter Act. [948 D F] In the instant case since the appellant did not file his application under section 17A of the Act, before the due date, that is to say, before September 25, 1967, the application under section 17A is barred by limitations. However, the application filed by him under section 5 of the Limitation Act for condonation of delay is maintainable. [948 A B, G] M/s. Pakarmal Gurudayal vs Sagarmal Bengani approved. When a Court condones the delay caused in filing a proceeding, it does not extend the period of limitation prescribed by law for filing it. It treats the proceeding as if it is filed within limitation, which it has the power to do if sufficient cause is shown for not filing the proceeding within the prescribed period. [949 B C]

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] .

Pera Ram, Ganga Ram, Bhago and Kalu Ram were the tenants of agricultural land owned by Mrs. Raj Kanta, the appellant. The tenants made separate applications under section 18 of the Punjab Security of Land Tenures Act, 1953, on September 4, 1961 for purchasing the land held by them from the land owner. These applications were allowed by the Assistant Collector on October 31, 1961. Accordingly, the tenants deposited the first instalment in November 1961. Ultimately, however, the tenants did not pay the rent of the respective holdings for Kharif 1961. It is common ground that the last date by which the rent for Kharif 1961 was payable by the tenants to the land owner was January 15, 1962 and that the tenant did not pay the rent and did not show sufficient cause for the same. In view of the default, the land owner filed separate applications under section 9(1)(ii) of the Act on the ground that as the tenants had failed to pay the rent regularly without sufficient cause, they were entitled to be ejected by the land owner. The applications for ejectment were, however, dismissed but on appeal the Collector allowed the appeals by his order dated May 31, 1962. Second appeals preferred by the tenants in the ejectment proceedings were dismissed by an order dated 5 11 62 of the Commissioner and ultimately upheld by the Financial Commissioner by his Order dated December 21, 1962. Having failed before the Revenue courts, the tenants respondents filed a writ petition in the High Court which was heard by a single judge. But in the case of Kalu Ram the Financial Commissioner allowed the petition and rejected the prayer for his ejectment by the land owner as a result of which the land owner filed a writ petition in the High Court. All the petitions were consolidated and heard together, by the single Judge who allowed the writ petition of the tenants and quashed the order of the Financial Commissioner directing ejectment of the tenants. The writ petition of the land owner against Kalu Ram was, however, dismissed. Hence, the four appeals by the land owner appellant to this Court. Allowing the appeals, the Court ^ HELD: 1. The Punjab Security of Land Tenures Act 1953 is a piece of social legislation meant to ameliorate the lot of the tenants by conferring on them the status of a permanent tenancy or the rights to purchase the land on payment of instalments. At the same time, the landlords within a very limited sphere have been assured protection in respect of the rights which they possess in the land and have been given the right to eject the tenants on specified grounds which are contained in the various sub clauses of section 9 of the Act. Sub Clause (ii) is one such sub clause. This right was absolute and could not 1007 be curtailed by interpreting clause (ii) of section 9(1) of the Act through a process of twisting the law and doing violence to the language of the section, especially when it admits of no ambiguity. [1010 A C, 1011 A B] Bhagirath Ram Chand vs State of Punjab and Ors., A.I.R. 1954 Punjab 167: referred to. The word 'regular ' which is derived from the word 'regula ' which means 'rule ', means in a regular manner, methodically, in due order and postulates a state of symmetry, consistency and uniformity. In other words, 'regular ' means a consistent course of conduct without any break or breach. [1011 B, D, F & 1012 A] Arab Bank vs Ross, ; Hammond vs London County Council, [1931] Chancery 540; quoted with approval. Although the Act is heavily loaded in favour of the rights of the tenants so as to confer on them several important benefits and privileges yet as the Act is confiscatory in nature, so far as the landlord is concerned, it should be strictly construed within the limited sphere inasmuch as the landlord is conferred limited grounds on which ejectment is permissible under section 9 of the Act which appears to be a safety valve for the limited rights that are left with the landlord under the Act. In order therefore to advance the object of the Act so as to assure the limited protection to the landlord, the language employed in the various clauses of section 9 has to be construed so as to give real benefit to the landlord within the limited range that the section operates. [1012 D F] A correct interpretation of the plain language and the words and phrases used in clause (ii) of section 9(1) of the Act would be that the word 'regular ' connotes a consistent course of conduct without any break or breach and the 'regular payment of rent ' would mean that the rent should be paid punctually without any default or laxity. The Legislature clearly intended to use the word 'regularly ' to mean payment of rent in this manner. The Legislature never contemplated that a single default could be condoned. The word 'regularly ' has been used immediately after the words 'fails to pay the rent ' and is followed by the words "without sufficient cause". The Legislature clearly provided that if the tenant had committed a default whether one, two or more, the same could only be condoned if sufficient cause is shown and not otherwise. [1012 A D] 4. The words "failure to pay rent regularly without sufficient cause" in Section 9(1)(ii) of the Act cause postulate the following conditions: 1. there must be a failure on the part of the tenant to pay rent; 2. such failure must be to pay rent regularly, that is to say, the rent should be paid punctually consistently without any break or breach; 3. if there is any default ranging from one to several, the tenant has got to show sufficient cause if his case is to be taken out of the mischief of section 9(1)(ii). [1012 F H] 5. It is well settled that the Legislature does not waste words and every word that is used by it must be presumed to have some significance. The function of the Court is 'jus decere ' not 'jus dare '. The Court cannot, therefore, in 1008 order to promote its social philosophy turn and twist the plain and unambiguous language of the law so as to ascribe to it a meaning different from the one intended by the Legislature. The words 'without sufficient cause ' clearly indicate that in order to escape ejectment, the tenant must at least be regular in payment of the rent and if he wants to get rid of the consequences of his default, he must prove sufficient cause. Reading the entire sentence, the cumulative effect thereof unmistakably is that the Act includes even a single default and that is why instead of using the word 'default ', the word 'regularly has been employed which is immediately followed by the words 'without sufficient cause '. If the legislature intended that a single default would not entitle a landlord to eject the tenant under the Act, then it would have said so expressly either by way of an explanation or otherwise in clause (ii) of section 9(1) of the Act. [1013 C F] 6. While the Explanation to section 9(1) of the Act takes care to define as to when a tenant would be deemed to be in arrears and fixes a period of two months, indeed if the intention of the legislature was that a single default in payment of rent could be condoned, it should have included this incident also in the explanation. This provides therefore, the most important intrinsic circumstance to support the interpretation of clause (ii) of section 9(1) of the Act. [1014 A B]

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

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.

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.

11 7 of 1958. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. R.K. Garg, M. K. Ramamurthi section C. Agarwala and D. P. Singh, for the petitioners. The respondent did not appear. 306 1961 August 29. The Judgment of the Court was delivered by S.K. DAs, J. This is a writ petition oil behalf of the Bihar State Mukhtars ' Association, Patna and the Vice President and the General Secretary thereof. The petition has been heard exparte as there, has been no appearance on behalf of the Chief Justice and Judges of the Patna High Court who were cited as respondents to the petition. The petitioners contend that certain rules of the Patna High Court made as far back as 1922 under s.11 of the (Act XVIII of ' 1879), hereinafter referred to as the Act, in respect of the functions. , powers and duties of Mukhtars practising in the subordinate courts are now invalid and void, because they contravene the fundamental right of the petitioners guaranteed under article 19(1)(g) of the Constitution of India and are not saved by cl. (6) thereof. The petitioners have, in particular, challenged the validity of r. 2 made by the said High Court under section 11 of the Act and incorporated in Chapter III, Part VII of the General Rules and Circular Orders of the High Court of Judicature at Patna (Civil), 1922. The petitioners pray that an appropriate writ, direction or order be issued by this Court declaring that r. 2 aforesaid is unconstitutional and there fore, void and inoperative. We shall presently read the rule ; but before we do so a few facts which are not in dispute may be stated. The petitioners state that the Bihar State Mukhtars ' Association was formed some 30 years back with the object of generally protecting the interests of the Mukhtars in the State of Bihar practising in the courts subordinate to the High Court of Patna within the meaning of section 3 of the Act. At its various annual conferences the said Association passed resolutions to move the high Court for the removal of the restriction imposed by r. 2 aforesaid on the right of Mukhtars practising in 307 subordinate civil courts. The High Court did not remove the restriction. On July 27, 1958 at an emergent Executive Committee meeting of the Association it was. resolved to move ' the Supreme Court under article 32 of the Constitution. The present writ petition has been filed in pursuance of that resolution. The enrolment of Mukhtars is made under certain provisions of the Act to which a reference must now be made Under s.3 of the Act "a subordinate Court" means all courts subordinate to the High Court including courts of Small Causes established under Act IX of 1850 or Act XI of 1865. "Legal practitioner" means an advocate, vakil or attorney of any High Court, a pleader, Mukhtar or revenue agent. Section 6 of the Act empowers the High Court to make from time to time rules consistent with the Act in respect of certain matters including inter alia the qualifications, admission and certificates of proper persons to be Mukhtars of the subordinate courts. It appears that by a rule made under section 6 of the Act, the High Court of Patna laid down that any person who shall produce a certificate from a committee constituted by the High Court that he has passed an examination in the subjects prescribed from time to time by the High Court for the mukhtarship examination may be admitted. as a Mukhtar to practise in courts subordinate to the High Court. Rule 10 laid down the subjects in which the examination was to be held. This examination was known as the Mukhtarship examination. It was abolished some time in the year 1947 48. Under section 7 of the Act the High Court made certain rules for the grant of certificates to Mukhtars who had passed the necessary examination for admission as prescribed by the rules referred to above. Section 7 also provided for annual renewal of such certificates. The argument of learned advocate for the petitioners is rested. mainly on the pro. visions of section 9 and they must be quoted in full, 308 "Every mukhtar holding a certificate issued under section 7 may apply to be enrolled in any Civil or Criminal Court mentioned therein and situate within the same limits ; and, subject to such rules as the High Court may from time to time make in this behalf, the presiding Judge shall enroll him accordingly; and thereupon he may practise as a mukhtar in any such Civil Court and any Court subordinate thereto, and may (subject to the provisions of the Code of Criminal Procedure) appear, plead and act in any such Criminal Court and any Court subordinate thereto. " Section 10 says in effect that except as provided by the Act or any other enactment t for the time being in force, no person shall practise as a Mukhtar in any Court unless he holds a certificate issued under s.7 and has been enrolled in such court or in some court to which it is subordinate. Then come,% section 1 1 under which the impugned rule was made. This section is in these terms. "Notwithstanding anything contained in the Code of civil Procedure, the High Court may, from time time, make rules declaring what shall be deemed to be the functions, powers and duties of Mukhtars practising in the subordinate courts and, in the case of a High Court not established by Royal Charter, in such Court. " The High Court of Patna made a number of rules defining the functions, powers and duties of Mukhtars practising in the subordinate courts. One of these rules is r. 2 which is 'in these terms. "Rule 2: A Mukhtar shall not be allowed to address any Civil Court except for the purpose of stating the nature , and. effect of his application or to offer any legal argument or to examine any witness without the leave of the Court specially given. " 309 The argument of learned Advocate for the petitioners is 'this. He has submitted that s.9 of the Act gives every Mukhtar holding a certificate issued under s.7 the right to apply to be enrolled in any Civil or Criminal Court subordinate to the High Court and on enrollment in accordance with the rules , he has the right to practise as a Mukhtar in any Civil Court and in 'Courts subordinate thereto and ' has further the right to appear, plead and act in any Criminal Court. This right of practice learned Advocate for the petitioners has contended, cannot be curtailed and section 11 which empowers the High Court to Make rules declaring what shall be deemed to be the functions, powers and duties of the Mukhtars practising in the subordinate courts does not empower the High Court to make a rule which curtails the right given by s.9. His argument further is that the impugned rule curtails the right of a Mukhtar to, practise in the Civil Courts inasmuch as it says, that a Mukhtar shall not be allowed to address any Civil Court except for the purpose of stating the nature and effect of his application or to offer any legal argument or to examine any witness without the leave of the court specially given. He has contended firstly, that the rule is in excess; of the rulemaking power under section 11 and secondly, is An unreasonable restriction on the right guaranteed under article 19(1)(g) of the Constitution. The simple question for decision really is this: is the impugned rule in excess of the powers given to the High Court under section 11 of the Act ? If the rule is intra vires the Act, then clearly enough there has been no violation of any, fundamental right of the petitioners. The right of the petitioners to practise in the subordinate court a was create d by the act. In the arguments before us there was no challenge to the constitutional validity of section 11 of the Act as permitting. an unreasonable restriction of a guaranteed right, if on a proper construction that section enabled the High Court to regulate the right 310 of practice of Mukhtars. The complaint before us was that the impugned r. 2 was not justified by section 11 of the Act. Therefore, the only question which we need consider is whether the impugned rule is in excess of the authority given by section 11 of the Act. It seems to us that the impugned rule is clearly within that authority. The learned Advocate for the petitioners has. sought to make a distinction between the right to practise as given by section 9 and the functions, powers and duties as mentioned in section 1 1. Relying on the majority decision in Aswini ' Kumar Ghosh and another vs Arabinda Bose & another(1) he has submitted that the right to practise means the right to appear and plead as well as to act on, behalf of suitors in the subordinate courts; the power of the High Court to make rules under s.1 1 of the Act as respects the functions, powers and duties of Mukhtars practising in the subordinate courts merely means that the High Court may give effect to the right given under section 9 by making rules, but it cannot curtail that right ; when therefore the High Court made the impugned rule restricting the right of Mukhtars to plead in civil courts, it did something in excess of the power given by section 11. We are unable to accept this line of argument as correct. Sections 9 and 1 1 of the Act must be read together and it would be wrong to treat the right to practise given by section 9 as. dissociated from the functions, powers and duties of Mukhtars referred to in section 1 1. The learned Advocate for the petitioners is reading the two sections as though one section gives an absolute right and the other section merely empowers the making of rules to effectuate that right. That, we do not think, is a proper reading of the two sections. It is worthy of note that under section 9 itself a distinction is made between the right of a Mukhtar to practise in civil courts and his right to appear, plead and act in any criminal. court. In express terms section 9 gives every (1) ; 311 Mukhtar the right to appear, plead and act in any criminal court ; it does not, however, give such an unlimited right in a civil court. On the contrary, it merely says that on enrolment a Mukhtar may practise in any civil court, but under section 11 the High Court may make rules declaring what shall be deemed to be the functions, powers and duties of Mukhtars practising in the subordinate courts. It is clear to us that in declaring what shall be the functions and powers of mukhtars practising in the subordinate courts, the High Court can so delimit them as to regulate the right of practice. It will be wrong to treat the functions and powers as dissociated from the right to practise. The right to practise 'Must depend on the functions and powers. It is also worthy of note that the expression used in section 11 of the Act is much wider than the expression used in section 15 of the Indian Bar Council Act, 1926, (Act XXXVIII of 1926), which gives the Bar Council the power to make rules to provide for and regulate the rights and duties of Advocates of the High Court. We do not think that the majority decision in Aswini Kumar Ghosh vs Arabinda Bose (1) is of any assistance to the petitioners. That decision depended on the interpretation of section 2 of the Supreme Court Advocates (Practice in High Courts) Act, 1951. That section provided that "notwithstanding anything contained in the Bar Councils Act or any other law regulating the conditions subject to which a person not entered in the roll of Advocates of a High Court may be permitted to practise in that High Court, every Advocate of the Supreme Court shall be entitled as of right to practise in any High Court whether or not he is an Advocate of ' that High Court". It was held by the majority that a rule made by a High Court which denied to an Advocate of the Supreme Court the right to exercise an essential part of his function, by insisting oil a, dual agency on the Original Side was much more than a rule (1) 312 of practice and constituted a serious invasion of his statutory right to practise and the power of making such a rule, unless expressly reserved, was repugnant to the right conferred by section 2 aforesaid The point to be noticed is that the majority held that unless the power was expressly reserved by the statute, a rule could not be made repugnant to the right conferred by section 2 of the. Supreme Court Advocates (Practice in High Courts) Act, 1951. If it be held that sections 9 and 1 1 of the Act must be read together and functions and powers mentioned in s.11 are not dissociated from the right to practise mentioned in a. 9, then it is clear enough that section 1 1 expressly reserves the power of the High Court to make rules declaring what shall be the functions, powers and duties of Mukhtars practising in the subordinate courts. If this be the correct interpretation of sections 9 and 11 of the Act, then the principle laid down by the majority in Aswini Kumar Ghosh vs Arabinda Pose(,) is if no assistance to the petitioners in the present case. For the reasons given above, we hold that r.2 of the rules made by the High Court under section 11 of the Act is not in excess of the rule making power and the petitioners cannot complain of any violation of their fundamental right to practise the profession to which they have been enrolled under the provisions of the Act. The petition fails and is accordingly dismissed. As there has been no appearance on behalf of the respondents, there will be no order for costs. Petition dismissed.

Section 9 of the , entitles a duly enrolled Mukhtar to "Practise" in any Civil Court, and section 11 thereof empowers the High Court to make rules declaring .what shall be deemed to be the ,functions, powers and duties" of Mukhtars practising in the subordinate Courts. Rule 2 framed under section 1 1 lays down that a Mukhtar shall not be allowed to address any Civil Court except for the purpose of "stating the nature. and effect of his application or to offer any legal argument or to examine any witness" without the leave of the Court. The petitioners contended that r. 2 was in excess of the rule making power under section 1 1 and was an unreasonable restriction on their rights under article 19 (1) (g) of the Constitution. Held, that sections 9 and 1 1 of the Act must be read together and the right to "practise" given under section 9 cannot be dissociated from the "functions, powers and duties of Mukhtars" as contemplated under section 11. In declaring what shall be the functions, powers and duties of a Mukhtar the High Court may by its rules so delimit them as to regulate their right of practice in the Civil Courts, and such delimitation is no violation of their fundamental right to practise the profession as allowed under the Act. Aswini Kumar Ghosh vs Arabinda Bose, , explained and distinguished.

Section 7(2)(n) of the Bihar State Madarasa Education Board Act, 1982 confers power on the State Madarasa Educa tion Board to dissolve the managing committee of an aided and recognised Madarasa institution. The committees of management of the respondent institutions established by the Muslim minority community failed to comply with the direc tions issued by the Board with regard to payment of salary to teachers, whereupon the Board in exercise of its power under section 7(2)(n) of the Act dissolved the said committees. The respondents filed writ petitions under Article 226 of the Constitution assailing section 7(2)(n) of the Act as violative of Article 30(1) on the ground that it interfered with their right of management of institutions. The High Court declared section 7(2)(n) unconstitutional It, however, observed that the majority of members of the Madarasa Educa tion Board and its Chairman may not belong to minority community, therefore, the Board 's constitution will not be in consonance with the minorities constitutional right under Article 30 of the Constitution. Dismissing the appeals by the Board, the Court, HELD: 1. Article 30(1) of the Constitution protects the right of minorities to establish and administer educational institutions of their choice. The rights so granted are, however, not absolute. Minorities have no right to malamin ister. The State has power to impose regula 400 tions made in the interest of efficiency of institution 's discipline, health, sanitation and public order even though such regulations may indirectly impinge on the exclusive right of administration and management of the institution. The State has, however, no power to completely take over the management of a minority institution under the guise of regulating the educational standards by superseding or dissolving managing committee or by appointing ad hoc com mittees in place thereof. [403D F; 404C E] In the instant case, section 7(2)(n) of the Bihar State Madarasa Education Board Act, 1982 in so far as it provides for dissolution of the managing committee of a Madarasa is, clearly violative of constitutional right of minorities under Article 30(1) of the Constitution. [404E F] In re Kerala Education Bill 1957, [1959] SCR 995; Sidha rajbhai vs State of Gujarat; , ; State of Kerala vs Very Rev. Mother Provincial etc. ; , ; Ahmedabad St. Xaviers College Society vs State of Gujarat, ; ; Lilly Kurian vs Lawina, ; and All Bihar Christian Schools Assn. vs State of Bihar, ; , referred to. Article 30(1) of the Constitution does not contem plate that an autonomous Educational Board entrusted with the duty of regulating efficiency in the aided and recog nised minority institutions, should be constituted exclu sively by persons belonging to the minority community. In the instant case, the constitution of the Board under section 3 of the Act ensures that its members are only those who are interested in teaching and research in Persian, Arabic and Islamic studies. This provision fully safeguards the inter est of Madarasa of the Muslim community. The observations made by the High Court are contrary to the scope of Article 30(1) of the Constitution. [404H; 405A, B C]

% In these writ petitions and civil appeals, Lalit Narayan Mishra Institute of Economic Development and Social Change, Patna, a registered society, and its Registrar, Dr. Jagadanand Jha, challenged the constitutional validity of Bihar ordinances Nos. 15 of 1986 and 30 of 1986, replaced by the Bihar Private Educational Institutions (Taking over) Act, 1987 ( 'The Act '). Dr. Jagadanand Jha further challenged the validity of the order of termination of his services as the Registrar of the Institute, dated April 21, 1986 in the writ petition (Civil) No. 439 of 1987. As disposal of the writ petition (Civil) No. 431 of 1987 wherein the constitutional validity of the Act was challenged and the writ petition (Civil) No. 439 of 1987 above said would virtually mean the disposal of the other writ petitions and appeals, the Court dealt with those two writ petitions. On April 19, 1986, the State Government of Bihar promulgated ordinance No. 15 of 1986, whereby the Lalit Narayan Mishra Institute of Economic Development and Social Change, Patna ( 'Institute ') was taken over. On the day the ordinance was promulgated, possession of the Institute was taken over and the services of Dr. Jagadanand Jha, the Registrar of the Institute were terminated by the impugned order dated April 21, 1986. The petitioners filed Writ Petitions before the High Court, challenging the validity of the said ordinance and the order of termination of the services of Dr. Jagadanand Jha. The High Court dismissed the writ petitions, Both, the Society and Dr. Jagadanand Jha, preferred two appeals by special leave being Civil Appeal No. 4142 of 1986 and Civil Appeal No. 4141 of 1986 respectively. The Society and Dr. Jagadanand Jha also challenged the ordinance No. 30 of 1986 by Writ Petition (Civil) No. 55 of 1987 and the constitutional validity of the Act replacing the said two ordinances. 312 Allowing the writ petitions (Civil) Nos. 87 of 1987 and 439 of 1987 and Civil Appeal No. 4141 of 1986, in so far as they related to the order of termination of the services of Dr. Jagadanand Jha, and dismissing the writ petitions (Civil) Nos. 55 of 1987 and 431 of 1987 and Civil Appeal No. 4142 of 1986, the Court, ^ HELD: The provisions of the Act are the same as those of the two ordinances Nos. 15 and 30 of 1986. The first attack on the validity of the Act and the ordinances was founded on the plea of violation of Article 14 of the Constitution. It was contended that the Act and the ordinances were discriminatory in nature and violative of Article 14 of the Constitution of India and should be struck down. The contention was wholly misconceived. The ordinances were not promulgated and the Act was not passed for the purpose of nationalisation of the Institute only. It was apparent from the provisions of the ordinances and the Act that the private educational institutions as defined therein were to be taken for the purpose as mentioned in the Preambles to the ordinances and the Act in a phased manner. All the institutions which answered the description given in section 2(a) of the Act were to be nationalised. It was not correct to say that the Institute had been signled out for nationalisation. [319E; 321D; 323D F] There can be no doubt that when nationalisation had to be done in a phased manner, all the institutions cannot be taken over at a time. The nationalisation in a phased manner contemplates that by and by the object of nationalisation will be taken over. In implementing the nationalisation of the private institutions in phased manner, the Legislature had started with the Institute, and the question of singling out the Institute or treating it as a class by itself did not arise. It was the legislative decision that the Institute should be taken over in the first phase of nationalisation. The Legislature had not left it to the discretion of the executive government for the purpose of selecting the private educational institution for the first phase. It was very difficult to assail a legislative decision. Of course, a legislative decision can be assailed if it is violative of any provision or part III of the Constitution. So far as Article 14 was concerned, the Court did not think that it had any manner of application inasmuch as the question of discrimination did not arise as soon ss it was conceded that it was a case of in a phased manner and that for the first phase the Institute had been chosen by the Legislature itself. The Institute had been chosen by the legislative process. It was true that the ordinance Were promulgated under Article 213 of the Constitution, bot it could not be characterised as an executive act. In any even, ultimately, the Legislature itself had 313 passed the Act with the inclusion of the Institute in the Schedule thereto as the only institution to be nationalised in the first phase. Even assuming that the question of discrimination might arise also for the purpose of selection for the first phase, there were justifiable reasons for selecting the Institute for the first phase of nationalisation; the State had changed the name of the Institute, provided the site for the Institute, got the building constructed through its own agencies and funds and supervised the prescription of syllabi. The fact could not be excluded that since 1975 it is the State of Bihar nurturing the Institute, spending money and exercising necessary control over it, and these facts fully justified the propriety of legislative wisdom in selecting the Institute for nationalisation in the first phase. [323G H; 324B C; 325C E] There could be no doubt that on the date the ordinances were promulgated and the Act was passed, the same could not be challenged on the ground of non implementation of the legislative intent in nationalising similar institutes by amending the Schedule. If a legislative enactment cannot be challenged as discriminatory on the date it is passed, it is difficult to challenge the same as violative of Article 14 of the Constitution on the ground of inaction of the executive in implementing the purposes of the Act, regard being had to the fact that it was the Legislature which had made the selection for the first phase of nationalisation. If no such selection had been made by the Legislature and the entire thing had been left to the discretion of the Government, it might have been possible to complain of discriminatory treatment. It is common knowledge that when any litigation ensues and remains pending, the Government generally does not take any step till the final disposal of the litigation. It was apparent that in view of the pendency of litigations, the State Government had granted approval of only temporary affiliation to the three institutions mentioned in the additional affidavit of the petitioner society and that too on certain conditions. If the State Government had no intention of taking over other institutions in accordance with the provisions of the Act, it would have sanctioned permanent affiliation to the three institutions. The Court could not accept the contention of the petitioner society that the professed object of nationalisation in phases was a mere pretence and a colourable device to single out the Institute or that the facts of exclusion of eleven similarly situated Institutes and the subsequent recognition of the three other Institutes imparted vice of discrimination to the impugned Act. The question of discrimination or discriminatory treatment of the Institute did not arise and the contention of the petitioner society in this regard was rejected. [325G H; 326A B; F; 327E F] 314 The next attack of the petitioner society to the impugned Act was A founded on violation of the provision of Article 19(1)(c) of the Constitution. The question was whether the fundamental right of the petitioner society, as conferred by Article 19(1)(c), had been infringed or not, and, further, whether the fundamental right to form association, as contained in Article 19(1)(c) of the Constitution, also included within it the concomitants or the activities or the objects or purposes of an association. [327F; 328E ] Article 19(1)(c) confers a right on the citizens to form association. In exercise of such a right, the petitioner society had constituted itself into an association. That right of the Society remained unimpaired and uninterfered with by the impugned Act and ordinances. There was no doubt that the Institute had been taken over by the provisions of the ordinances and the Act. It was true that with the taking over of the Institute, the Society had lost its right of management and control of the Institute, but that is the consequence of all acquisitions. When a property is acquired, the owner loses all control, interest, and ownership of the property. Similarly, the Society, which was the owner of the Institute, had lost all control and ownership of the Institute. It might be equally true that the Institute was the only activity of the Society, but what was concerned was the right of the Society to form association. So long as there was no interference with the Society, its constitution or composition, it was difficult to say that because of the taking over or acquisition of the Institute, which was the only property of activity of the Society, the fundamental right of the Society to form association had been infringed. The decision of this Court in Damyanti Naranga vs Union of India, , had not manner of application to the present case. The observations made in the decision of this Court in All India Bank Employees ' Association vs National Industrial Tribunal, ; , supported the view the Court had taken that the fundamental right guaranteed under Article 19(1)(c) does not extend to or embrace within it the objects or purposes or activities of an association. It does not carry with it a further guarantee that the objects or purposes or activities of an association so formed shall not be interfered with by law except on grounds as mentioned in Article 19(4). In the circumstances, the contention of the petitioner society that because of acquisition of the Institute, the Society had lost its right of management over the Institute, and the Institute being the main or the only activity of the Society, the impugned legislations interfered with the right of the society to form and continue the association and, as such, were unconstitutional and void under Article 19(1)(c) of the Constitution. was unsound and rejected. [329C D; 330B C, E; 331E G; 332A B] 315 Another ground on which the validity of the Act and the ordinances was assailed was the absence of legislative competence of the State Legislature, Counsel for the petitioner society submitted that having regard to the pith and substance of the Act, the Act fell within Entry 66 of List I and the Entry 25 of List III and Entry 66 of List I must be harmoniously construed, but to the extent of overlapping, the power conferred by Entry 66 must prevail over the power of the State under Entry 25. [332C, F] By the impugned Act, the Legislature has not laid down any law relating to the subjects mentioned in the Entry 66, List I, or in Entry 25, List III. The Act only provides for the taking over of private educational institutions in phases and has taken over the Institute to start with for the first phase. An Entry in any of the Lists of Seventh Schedule will apply when a law is enacted by the Legislature on any of the subjects mentioned in the Entry. In this case, the impugned Act does not lay down any law touching the subject referred to in Entry 66, List I, or Entry 25, List III. Therefore, neither of these two Entries applied. The Entry that applies to the impugned legislation is Entry 42 of List III, pertaining to acquisition and requisition of property. The taking over of the private educational institutions and the Institute in the first phase is nothing but acquisition of property. The Institute was the property of the petitioner society and by the impugned Act the property stood transferred to and vested absolutely in the State Government free from all encumbrances. The only Entry relevant is Entry 42 of List III. As soon as Entry 66 of List I was excluded, it was irrelevant which of the Entries 25 or 42 of List III was applicable, in either case, the State Legislature was competent to make the enactment. There was no substance in the contention of the petitioner society that the Act was invalid because the State Legislature had lacked competence in passing the same. [333B F] As it is held that the impugned Act is really a legislation relating to acquisition of property within the meaning of Entry 42 of list III, the question might arise whether after the repeal of Article 31(2) by the Constitution (Fourty Forth Amendment) Act, 1978, any compensation was compulsorily payable for the acquisition of property. The point was not ultimately pressed, and the Court was not called upon to decide the point or express any opinion on the same. [334B D] The Court then dealt with the case of Dr. Jagadanand Jha, Registrar of the Institute, whose services were terminated by an order dt. April 21, 1986, as a result of the ordinance No. 15 of 1986 promulgated on April 19, 1986. [334D E] 316 The petitioner Dr. Jagadanand Jha was not a member of the teaching staff; he was the Registrar of the Institute, which comes within the expression "other categories of staff" under sub section (4) of Section 6 of the said ordinance. It is true that under sub paragraph (4), it has been provided that sub paragraphs (2) and (3) shall apply mutatis mutandis, but such application will be limited to the term of appointment and other conditions of service of a member of non teaching staff of the institution. In other words, the State Government may appoint a committee for the purpose of considering the term of appointment and other conditions of service of the members of the non teaching staff, and has to decide accordingly. It was thus apparent that the State Government proceeded on the basis that under sub paragraph (4) of paragraph 6 of the ordinance, it was to consider the question of termination of the services of the members of the non teaching staff as in the case of the members of the non teaching staff, as provided in sub paragraph (3) of paragraph 6 of the ordinance. Even then, the Court was not impressed with the manner and haste in which the order of termination had been passed. Although it was alleged that a Committee had been formed and the State Government had terminated the services of the petitioner on the report of the Committee, the Court could not understand the necessity for such haste; in the circumstances, it would not be unreasonable to infer that the Committee or the State Government had not properly applied its mind before the order of termination of the services of Dr. Jha was made. [336E H; 337A B] There can be no dispute that when there is a legislative direction for termination of the services of employees, the compliance with the principles of natural justice may not be read into such direction and, if such terminations are effected without giving the employees concerned an opportunity of being heard, no exception can be taken on the same. But in this case, sub paragraph (4) of paragraph 6 of the ordinance does not contain any direction for the termination of the services of the members of non teaching staff. Even in spite of that, if the State Government wanted to terminate the services of the petitioner Dr. Jha, it could not be done without giving him an opportunity of being heard, for such an act on the part of the State Government would be an administrative act. It is clear from the provision of sub paragraph (4) of paragraph 6 that the services of the members of the non teaching staff have been intended to be continued. The services of the petitioner Dr. Jha, who had been working in the post of Registrar of the Institute for a long time, could not be terminated without giving him an opportunity of being heard. Counsel for the respondents also did not oppose this view. Therefore as the petitioner had not been given an opportunity of being 317 heard, the impugned order of termination of the services of the petitioner could not be sustained. [337C G; 338A] Both the Society and Dr. Jha were not able to substantiate the allegation of mala fides against the then Chief Minister of Bihar. Even assuming although holding to the contrary, that the Chief Minister had acted mala fide, the same could not vitiate the legislative process in the exercise of which the impugned Act and the ordinances had been respectively passed and promulgated. The respondents also had failed to prove the alleged mismanagement of the Institute by the Society or Dr. Jha; the allegation of mismanagement was not pressed . [338B C] The impugned order dated April 21, 1986 of termination of the services of the petitioner Dr. Jha was quashed. Writ Petitions (Civil) Nos. 87 of 1987 and 439 of 1987 and Civil Appeal No. 4141 of 1986 in so far as they related to the said order of termination of the services of Dr. Jagadanand Jha, were allowed. The State Government would be at liberty to consider the question of termination of the service of Dr. Jha after giving him a reasonable opportunity to make representation. The Writ Petitions (Civil) Nos. 55 of 1987 and 431 of 1987 and Civil Appeal No 4142 of 1986 were dismissed. [338D E] State of Rajasthan vs Mukandchand, ; ; Maganlal Chaganlal (P) Ltd. vs Municipal Corporation of Greater Bombay, ; ; in re The Special Courts Bill, 1978, ; Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., [5969] SCR 279; B.S. Reddy vs Chancellor, Osmania University, ; ; Sakal Papers (P) Ltd. vs Union of India, ; ; Dwarkadas Shrinivas of Bombay vs Sholapur Spinning & Weaving Co. Ltd., ; ; Damyanti Naranga vs Union of India, ; ; All India Bank employees ' Association vs National Industrial Tribunal, ; ; State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhenga, (1009) and K.I Shephard vs Union of India & Ors. , ; , referred to.

Section 2 of the Supreme Court Advocates (Practice in High Courts) Act, 1951, provided that "notwithstanding anything contained in the (XXVIII of 1926), or any other law regulating the conditions subject to which a person not entered in the roll of advocates of a High Court may be permitted to practise in that High Court every advocate of the Supreme Court shall be entitled as of right to practise in any High Court whether or not he is an advocate of that High Court " : Held by the Court (PATANJALI SASTRI C.J., VlvIAN BosE, and GHULAM HASAN JJ. MUKHERJEA and DAS JJ. dissenting) The practice of law in India generally involves the exercise of both the functions of acting and pleading behalf of litigant parties, and when section 2 of the abovesaid Act conferred upon an advocate of the Supreme Court the right to " practise " in any High Court, it is legitimate to understand that expression as authorising him to appear and plead as well as to act behalf of suitors in all the High Courts including the Original Side thereof. It is fallacious to relate that expression as applied to an advocate either, the one band, to the court in which the advocate is enrolled, or,, the other, to the court in which he seeks to exercise the statutory right conferred him. It must be related to the general constitution of the Bar in India as a single agency in dealing with the litigant public. A rule made by a High Court which denies to an ' advocate the right; to exercise an essential part of his function by insisting a dual agency the Original Side is much more than, a rule of practice and constitutes a serious invasion of his statutory right to practise, and the power of making such a rule, Unless expressly reserved (as it 'was reserved by the Bar Councils Act) would be repugnant, to the right conferred by section 2; and as the, Act does not reserve any such power, the statutory right, of a Supreme Court advocate under section 2 to plead as well as 'to act in the High Courts of Calcutta, and Bombay in the exercise 2 of their Original Jurisdiction can not be taken away or curtailed by the rules of those courts, and any rule which the Calcutta High Court may have made in the past purporting to exclude any advocate from practising the Original Side or from appearing and pleading unless he is instructed by an attorney cannot affect such right. MUKHERJEA J. The word " practise" when used with reference to an advocate is an elastic expression having no rigid or fixed connotation and the precise ambit of its contents can be ascertained only by reference to the rules of the particular forum in which the profession is exercised. When a. 2 of the Supreme Court Advocates (Practice in High Courts) Act, 1951, speaks of a Supreme Court advocate being entitled as of right to practise in any High Court, what it actually means is that he would be clothed by reason of this statutory provision with all the rights which are enjoyed by an advocate of that court, and his right to plead and to act would depend the Bar Councils Act and the rules validly framed by that court, subject to this that no rule or provision of law would be binding which would affect in any way his statutory right to practise in that court solely by reason of his being enrolled as an advocate of the Supreme Court. DAS J. The words "to practise", used in relation to lawyers as a class, mean "to exercise their profession" which is their dictionary meaning and which is wide enough to cover the activities of the entire genus of lawyers. They are words of indeterminate import and have no fixed connotation or content. In their application to particular species of lawyers their meaning varies according to the scope and ambit of the profession of the particular species in relation to whom they may be used and such meaning has to be ascertained by reference to the subject or context. A Supreme Court advocate being entitled only,"to appear and plead" in that court, when section 2 autborised him to practise" in any High Court it must be taken, to have meant that he was authorised to do in the High Courts all that he was entitled to do in the Supreme Court, namely, to appear and plead only. Alternatively the section must be taken to authorise every Supreme Court advocate to practise as of right in any High Court as advocates of that High Court do and the exercise of the profession of an advocate in a High Court by a Supreme Court advocate must involve the observance of the rules of practice of that High Court except to the extent they are abrogated by section 2. That sec tion has made the Supreme Court advocate a statutory advocate ' of the High Court where he goes to practise and as such he is bound by the rules of such High Court except, such of them as are contrary to this new statutory right. Whichever of the two constructions is adopted, a Supreme Court advocate cannot appear in the Original Side of the Calcutta or Bombay High Courts unless he is instructed by an attorney. Queen vs Doutre (L.R. 9 App. Cas. 745), Powers of Advocates, ln re (I.L.R. and Laurentius Ekka vs Dukhi Koeri (I.L.R. 4 Pat. 766) referred to. 3 Per PATANJALI SASTRI C.J., VIVIAN BOSE, and GHULAM HASAN JJ. The non obstante clause in section 2 can reasonably be read as overriding "anything contained" in any relevant existing law which is inconsistent with the new enactment. Sections 9(4) and 14(3) of the Bar Councils Act and section 2 of the new Act cannot stand together. Whether by force of the non obstante clause liberally construed or of the well established maxim of construction that the enacting part of an Act must, when it is clear, control the non obstante clause when both cannot be read harmoniously, the new Act must have the effect of abrogating the powers reserved and continued in the High Courts by sections 9(4) and 14(3) of the Bar Councils Act . MUKHERJEA and DAS JJ. The non obstante clause in section 2 of the said Act removes only those provisions contained in the Bar Councils Act, 1926, and in any other law, which regulate the conditions subject to which a person not entered in the roll of advocates of a High Court may be permitted to practise in that High Court. Other provisions contained in the Bar Councils Act or other statutes, which lay down the conditions under which an advocate enrolled in the High Court is entitled to practise in the Original Side of that court stand unaffected by the Act. Even if the entire Bar Councils Act is excluded for the purpose of section 2, the rules framed by the Calcutta and Bombay High Courts under their Letters Patent would remain valid and effective of their own force even without the saving provision contained in the Bar Councils Act and the Letters Patent would also remain in full force. Per PATANJALI SASTRI C. J., MUKHERJEA, DAB, VIVIAN BosE, and GHULAM HASAN JJ. Speeches made by members of the House of Parliament the floor of the House are not admissible as extrinsic aids to the interpretation of statutory provisions. State of Travancore Cochin and Another vs Bombay Co. Ltd. etc, ([1952] S.C.R. 1112), Administrator General of Bengal vs Prem Lal ( [1895] 22 I.A. 107), Krishna Aiyangar vs Nella Perumal ( [1920] 47 I.A. 33), A.K. Go`alan vs The State of Madras ( ; and Debendra Narain Roy vs Jogesh Chandra Deb (A.I.R. referred to. Held per PATANJALI SASTRI C.J., DAs, VIVIAN BOSE and GHULAM HASAN JJ. The statement of objects and reasons annexed to a Bill, the form of the original Bill and the fact that certain words: or phrases were added to or omitted from the original Bill are also not admissible as aids to the construction of a, statute. MUKHERJEA J. Judicial opinion the point whether in construing a statute the, statement of objects and reasons or the original form of the Bill or reports of committees can be referred to is not uniform. English Courts and the Privy Council have laid down that such extrinsic aids must be dismissed from consideration. But there are American decisions to the effect that the general history of a statute and the various steps leading up to an enactment including amendments or modifications of the original Bill and reports of Legislative Committees can, be looked I at for 4 ascertaining the intention of the legislature where it is in doubt. The legislative history is, however, clearly inadmissible where there is no obscurity in the meaning of a statute. Per MUKHERJEA and DAS JJ. Punctuation is after all a minor element in the construction of a statute, and even if the orthodox view that it forms no part of the statute is to be regarded as of imperfect obligation and it can be looked at as contemporanea, expositio, it is clear that it cannot be allowed to control the plain meaning of a text. Stephenson vs Taylor ( [1861] 1 B.S. 101), Clawdon V. Green , Duke of Devonsshire vs Conor (L.R. , Maharani of Burdwan vs Murtanjoy Singh ([1886] 14 I.A. 30), Pugh vs Ashutosh Sen ( (1928]55 I.A. 63) referred to. Judgment of the Calcutta High Court reversed.

The appellant firm was assessed to sales tax under the pro visions of the Bihar Sales Tax, 1944, for three periods commencing from October 1, 1947, and ending on March 31, 1050. Its claim for certain deductions was disallowed, and its applications in revision under section 24 Of the Act to the Board of Revenue, Bihar, were dismissed by three orders dated August 20, 1953, September 3, 1953 and April 30, 1954. Under section 25(1) of the Act the appellant applied to the Board to state a case to the High Court of Patna on certain questions of law, but the applications were dismissed by order dated August 30, 1954, on the ground that no questions of law arose. The appellant then moved the High Court for requiring the Board to state a case on the said questions of law. The High Court dismissed the applications in respect of the first two periods of assessment, but by order dated November 17, 1934, directed the Board to state a 277 case in regard to the third period on one of the questions of law which only, in its opinion, arose. By its judgment dated January 21, 1957, the High Court answered the question against the appellant. On February 17, 1955, the appellant made applications to the Supreme Court for special leave to appeal against the orders of the Board of Revenue dated August 20, 953, and September 3, 1953, in respect of the first two periods; and on April 12, 1955, it similarly applied for special leave in respect of the third period. Leave was granted in respect of all the three applications by order dated December 23, 1955, the leave granted in regard to the third period being confined to the order of the Board dated August 30, 1954. When the appeals came up for hearing the question was raised as to whether the appeals were maintainable in view of the fact that no applications for leave to appeal were filed against the orders of the Board of Revenue and the High Court subsequent to the orders of the Board in respect of which only special leave had been granted. Held, that though the words of article 136 of the Constitution of India are wide, the Supreme Court has uniformly held as a rule of practice that there must be exceptional and special circumstances to justify the exercise of the discretion under that Article. Pritam Singh vs The State, ; , V. Govinda rajulu Mudaliar vs The Commissioner of Income tax, Hyderabad, A.I.R. 1959 S.C. 248 and Messrs Chimmonlall Rameshwarlal vs Commissioner of Income tax (Centyal), Calcutta, , relied on. Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax, West Bengal, ; and Baldev Singh vs Commis sioner of Income tax, Delhi and Ajmer, , explained. Held, further, that in the circumstances of the present case the appellant was not entitled to a grant of special leave against the orders of the Board of Revenue where the result would be to by pass the High Court by ignoring its orders. Held, also, that though special leave might have been granted on an application made under article 136, the Court is not precluded from coming to a conclusion at the time of the hearing of the appeal that such leave ought not to have been granted. Baldota Brothers vs Libra Mining Works, A.I.R. 1961 S.C.C. 100, followed.

The Calcutta Thika Tenancy Act, 1949, came into force before the appellant landlords could obtain possession in execution of their decree for ejectment against the respondent tenants. Failing to get the decree set aside under 0. 9, r. 13 of the Code of Civil Procedure the tenants made an application under section 28 of the said Act praying that the decree against them be set aside on the ground that they were Thika tenants, but the Munsif holding that they were not Thika tenants dismissed their application. While an application by the tenants under section 115 of the Code of Civil Procedure against the Munsif 's order was pending in the High Court the Calcutta Thika Tenancy Ordinance, 1952, and the Calcutta Thika Tenancy (Amendment) Act, 1953, came into force. The 1053 Amendment Act omitted section 28 of the Original Act. The High Court after considering the effect of section 1(2) of the Amendment Act held that it did not affect the operation of section 28 of the Original Act which was applicable to these proceedings. The High Court also found that the tenants were Thika Tenants 591 and remanded the case to the Munsif for disposal according to law whereupon the Munsif rescinded the decree. On an application by the landlord under section 115 of the Code of Civil Procedure against the order of the Munsif rescinding the decree the High Court held that the question of applicability of section 28 was res judicata between the parties and could not be raised again before the High Court and dismissed the landlord 's application. On appeal by the landlord by special leave the respondent contended that the appellant was barred by the principle of res judicata from raising before this Court the question whether on the enact ment of the Thika Tenancy Amendment Act, 1953, section 28 of the Original Act survives or not in respect of proceedings pending on the date of the commencement of the Thika Tenancy Ordinance, 1952 : Held, that the appellants were not precluded from raising before this Court the question that section 28 of the Original Thika Tenancy Act was not available to the tenants after the Thika Tenancy Amendment Act came into force merely because they had not appealed from the High Court 's order of remand. An interlocutory order which did not terminate the proceedings and which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken, could be challenged in an appeal from the final decree or order. Maharaja Mohesur Singh vs The Bengal Government, (1859) 7 M.I.A. 283; Forbes vs Amecroonissa Begum, (1865) 10 M.I.A. 340 and Sheonath vs Ramnath, (1865) 10 M.I.A. 413, followed. Ramkripal Shukul vs Mst. Rup Kuari, (1883) L.R. 11 I.A. 37, Bani Ram and Any. vs Nanhu Mal, (1884) L.R. 11 I.A. 181 and Hook vs Administrator General of Bengal and Oys., (1921) L.R. 48 I.A. 187, distinguished. Section 28 of the Calcutta Thika Tenancy Act, 1949, after its omission by the amending Act was not available in respect of proceedings pending on the date of the commencement of the Thika Tenancy Ordinance of 1952. Mahadeolal Kanodia vs The Administrator General of West Bengal, [196O] 3 S.C.R. 578 followed.

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 respondents Nos. 1 to 10 who were Writ PetitiOners in the High Court, were appointed as clerks between June, 1963 to January, 1967 on temporary basis and were promoted to higher posts thereafter. They contended that at the rele vant time there was, no rule or order requiring that ap pointments to their posts shall be made through Public Service Commission. The Gujarat Government issued Gujarat Non Secretariat Clerks, Clerk Typists and 'Typists (Direct Recruitment Procedure) Rules, 1970. Thereafter, by resolu tion dated 15 4 1971, it was stated that seniority of the candidates who were to be selected for the posts of Clerks, Clerk typists and typists shall be determined as if their allotment or appointment was from 17 4 1970 irrespective of the question whether they were in service or not, and that their names shall be arranged in a common seniority list in order of merit in accordance with the principles laid down in the Rules. The Writ petitioners filed a Writ Petition in the Guja rat High Court feeling aggrieved by the said 1970 Rules and the 1971 resolution. The Writ Petitioners contended that the Government should be directed to treat their entire service as regular and that their seniority should be fixed on the basis of the dates on which they had joined their respective posts. The State Government in its counter affidavit pointed out that the Writ Petitioners were not recruited through proper channel; that even though the centralised recruitment scheme was in existence and was applicable with effect from January, 1963, the Writ Petitioners did not come through the employment exchanges that their appointments were by way of a stop gap arrangement. The State, however, admitted in its affidavit that the Writ Petitioners were not under the purview of the Gujarat Public Service Commission at the time of their appointment. The State contended that the Writ Petitioners were irregularly appointed and that 1970 Rules were framed on humanitarian considerations to regularise their appointments and that, their seniority could not be counted from the dates of their appointment and could be counted only from 17th April, 1970. The High Court came to the conclusion that the Centra lised Recruitment Scheme was not applicable when the Writ Petitioners were appointed and that the posts were also not within the purview of the Gujarat Public Service Commission until March, 1969. The High Court therefore, held that the appointments of the petitioners were regular and were not required to be regularised under the 1970 Rules. It also held that the State Government had no power to issue the circular under rule 30 of the Rules for allotment and fixa tion of a seniority and that the instructions contained in the resolution of 1971 were not applicable to the Writ Petitioners. The High Court allowed the Writ Petition, struck down the seniority list, and directed the State Government and the Director of Civil Supplies to treat the services of the petitioners as regular from the dates when they were appointed initially and not to apply the instruc tions contained in the resolution of 1971 to compute their seniority. The appellants, who claimed to have been appointed regularly from the beginning and who contend that the ap pointments of the writ petitioners were irregular filed appeal by Special Leave. The appellants contended: 1. That the initial appointment of the Writ Petitioners was irregular, being in violation of the centralised recruitment scheme, since the office 678 of the Director of Civil Supplies became a part and parcel of the Directorate of Civil Supplies, and that the centralised recruitment scheme was ap plicable to the recruitment of the Writ Petition ers. The appointment to the posts held by the Writ Petitioners were required to be made through Public Service Commission, but as they were not made through P.S.C. the appointments were irregular. Dismissing the appeal with a modification, HELD: 1. The High Court has rightly negatived both the contentions of the appellants. The State in its affidavit had admitted that the posts, the Writ Petitioners were not within under the purview of the Public Service Commission at the time of their appointment. The High Court has also rightly held ' that by describing the cadre in question as a "State Cadre", it could not be said that the modified scheme was made applicable to the Directorate. It is clear from the scheme that it governed the recruitment to the regional offices and not to the offices of the Directorate. [680 C E, F G] 2. Rule 29 of the 1970 Rules can apply only if the initial appointment was irregular, i.e., if the Public Service Commission was not consulted when the consultation was required and if the recruitment had not taken place through the Centralised Recruitment Scheme when it was necessary to do so. In the ' present case Rule 29 cannot apply because the appointments of the Writ Petitioners were regular. [681 G H] 3. The view taken by the High Court is quite justified and does not call for interference. [681 F] 4. The High Court, however, was not justified in direct ing that the seniority should be counted from the respective dates of the appointment of the Writ Petitioners. 'the High Court ought to have left the matter to the State Government to re examine the question of fixing the seniority to give effect to their intention of ameliorating the lot of the writ petitioners. [682 A B]

minal Appeal No. 240 of 1960. Appeal by special leave from the judgment and order dated November 25, 1958, of the Punjab High Court in Criminal Appeal No. 114 of 1954. Jai Gopal Sethi, C. L. Sareen and R. L. Kohli, for the appellant. N. section Bindra, R. H. Dhebar and D. Gupta, for respondent. August 30. The Judgement of the Court was delivered by SARKAR, J. The appellant Payare Lal was the Tehsildar of Patiala. He and Bishan Chand, a Patwar. clerk of the Tehsil Office, were prosecuted for offences under s.5(2) of the Prevention of 330 Corruption Act, 1947. The Criminal Law Amendment Act, 1952 (Act XLVI of 1952), to which it will be convenient hereafter to refer as the Act, required the trial to be held by a special Judge appointed under it and in accordance with certain provisions of the Code of Criminal Procedure mentioned in section 8 of the Act. The Principal question in this appeal turns on the construction of sub section (1) of this .section which we will later set out. The trial commenced before section Narinder Singh the special Judge, Patiala. He heard the evidence but before he could deliver a judgment he was transferred and was succeeded by section Jagjit Singh. section Jagjit Singh did not recall the witnesses and hear the evidence over again, but proceeded without any objection from either side, with the trial from the stage at which his predecessor had left it and having heard the arguments of the advocates for the parties, delivered his judgment convicting both the accused of the offences with which they had been charged and passed certain sentences on them. The accused appealed against their conviction to the High Court of Punjab. The appeals came to be heard by Mehar Singh J., who,, though no point had been taken by the accused, himself felt considerable difficulty as to whether section Jagjit Singh had the power to decide the case on the evidence recorded by his predecessor and referred the matter to a larger bench taking the view that if the course followed was defective, the defect would be one of jurisdiction of the Court and could not be cured by the consent of parties. The case was thereupon heard by a bench of that High, Court constituted by Gurnam Singh and Mehar Singh JJ. who took different views. Gurnam Singh J. held that section 350 of the Code applied to the trial before a special Judge in view of section 8(1) of the Act and under the terms of section 350, which we will later set out, section Jagjit Singh was entitled to proceed on the evidence recorded by his predecessor 331 section Narinder Singh, while Mehar Singh J., was of the opinion that section 8(1) of the Act did not make section 350 of that Code applicable to such a trial. He also held that what section Jagjit Singh had done was not a matter of mere irregularity curable under section 537 of the Code. The matter was then referred to Passey J., who agreed with Gurnam Singh J. On the question of section 537 of the Code, Gurnam Singh and Passey JJ. expressed no opinion in the view that they had taken of section 8(1) of the Act. The appeals were thereafter heard on the merits by Tek Chand J. who upheld the conviction of the appellant but reduced the sentence passed on him. He,, however, acquitted the other accused Bishan Chand giving him the benefit of doubt. The appellant has now come up to this Court in further appeal with special leave. There is no appeal by the State against the acquittal of Bishan Chand. There is no covntroversy that the general principle of law is that a judge or magistrate can decide a case only on evidence taken by him. Section 350 of the Code is a statutory departure from this principle. That section so far as material was at the date section Jagjit Singh decided the case in these terms : section 350. Whenever any Magistrate, after having heard and recorded the whole or any part of the evidence in an inquiry or a trial, ceases to exercise jurisdiction therein, and is succeeded by another Magistrate who has and who exercises such jurisdictions, the Magistrate so succeeding may act on the evidence so recorded by his predecessor, or partly recorded by his predecessor and partly recorded by himself or be may resumption the witnesses and recommence the inquiry or trial It is only if this provision was available to section Jagjit Singh that the course taken by him can be supported. 332 As we have said earlier, section 8 of the Act makes certain provisions of the Code applicable to the proceedings before a special Judge The question is whether section 350 of the Code. was one of such provisions. The answer to this question will depend on the construction of sub ss.(1) and (3) of section 8 of the Act the material portions of which we now set out. section 8 (1) A special judge may take cognizance of offences without the accused being committed to him. for trial, and in trying the accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898 . for the trial of warrant ' cases by magistrates. (3) Save as provided in sub section (1) . . the provisions of the Code of Criminal Procedure, 1898, shall, so far as they are not inconsistent with this Act, apply to the proceedings before a special Judge ; and for the purposes of the said provisions, the Court of the special judge shall be deemed to be a Court of session trying cases without a jury or without the aid of assessors. . . . In substance these sub sections provide that a special Judge shall follow the procedure prescribed by the Code for the trial of warrant cases by magistrates and save to this extent. , the provision ,, of the Code applicable to a Court of session, shall govern him as if he were such a Court subject to certain qualifications which are not relevant for the present case. There is no controversy that section 350 of the Code is applicable only to magistrates and not a Court of session and cannot therefore be applied to a special Judge under sub section (3) as it makes only those provisions of the Code applicable to him which would apply to a Court of session. The only controversy is whether that section is applicable to a special Judge under sub s.(1) of section 8 of the Act. If it is so applicable, it must be applied 333 though under sub section (3) it is not applicable, for this sub section, is to have effect " 'Save as provided in subsection (1)". The real question is, what is meant by the words "the procedure prescribed by the Code . . . for the trial of warrant cases by magistrates" In section 8(1) of the Act ? Does section 350 of the Code prescribe one of the rules of such procedure ? It is necessary however to point out that by an amendment made in the Act after judgment had been delivered in this case by section Jagjit Singh, it has been expressly provided that section 350 of the Code applies to the proceedings before a special Judge. On the amended Act, therefore, the question that has arisen in this case, would no longer arise. For reasons to be hereafter stated, this amendment clearly does not govern the proceedings before section Jagjit Singh and this case has to be decided without reference to the amendment. Is was once held by the Madras High Court in In re, Vaidyanatha Iyer (1) that section 350 of the Code prescribed a rule of procedure for the trial of warrant cases as mentioned in section 8 (1) of the Act. This seems to be the only reported decision taking that view. All other decisions which have been brought to our notice take the contrary view. Even in Madras, in In re Fernandez (2), a Full Bench of the High Court has now hold that section 350 of the Code was not applicable to a special Judge and has overruled In re Vaidyanatha Iyer (1). That appears to be the position on the authorities. It is true that section 350 of the Code is a provision applying to all magistrates and therefore, also to a magistrate trying a warrant case. That however does not in our opinion decide the question. We think it 'relevant to observe that it is a right of an accused person that his case should be decided by a judge who has heard the whole of it and we agree with the view expressed in Fernandez 's case(2) (1) ; A.I.R. (1954) Mad. (2) 334 that very clear words would be necessary to take away such an important and well 'established right. We find no such clear words here. We turn now to the word used. When sub section (1) of section 8 of the Act talks of a procedure prescribed by the Code for the trial of warrant cases by magistrates it is reasonable to think that it has the provisions and the language of the Code in view. When we look at the Code, we find that ch. XXI is headed "of the. Trial of Warrant Cases by Magi strates". This chapter consists of sections 251 to 259. Section 251 is in these terms : section 251 In the trial of warrant cases by Magistrates, the Magistrate shall, (a) in any case instituted on a police report, follow the procedure specified in section 251A; and (b) in any other case, follow the procedure specified in the other provisions of this Chapter. The Code, therefore, expressly refers to sections 251 259 as containing the procedure specified for the trial of warrant cases by magistrates; this then,, is the procedure it prescribes for the trial of such cases. It would be legitimate, therefore, to think that the Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrates" also meant only these sections of the Code and did not contemplate section 350 of the Code as a procedure so prescribed, though that section is applicable to the proceedings before a magistrate trying a warrant case. It does not seem to us that the words "the procedure prescribed by the Code. . for the trial of warrant cases by magistrates" meant a procedure which may be followed by magistrates in all cases. Further more section 350 occurs in a chapter of the Code which deals with general provisions relating to inquiries and trials and is not a provision which has been specifically prescribed by the Code for application to the 335 trial of warrant cases by magistrates, as are sections 251 to 259. Again, section 350 of the Code cannot, without doing violence to the language used in it, be applied to the proceedings before a special Judge Clearly it cannot be, applied where its terms make such application impossible. Now the section can be applied only when one magistrate succeeds another. It lays down what the succeeding magistrate can do. Now suppose one special Judge succeeds another. How can he exercise the powers conferred by the section ? The section applies only when the predecessor is a magistrate. The predecessor in the case assumed is however a special Judge. Such a Judge is not a magistrate for the purpose of the Act, nor does the Act require that he is to be deemed to be such. Section 8 (1) of the Act which only requires a special Judge to follow the procedure for the trial of a warrant case, cannot justify the creation of a fiction making the predecessor special Judge, a magistrate. It is of some interest to note here that the amendment to the Act which expressly makes section 350 of the Code applicable to proceedings before a special Judge also provides that for the purposes of so applying the section, "a special Judge shall be deemed to be a magistrate". Clearly, the legislature thought that unless such a fiction was created, the application of the section to the proceedings before a special Judge would create difficulties or anomalies. Therefore also, the Act could not in our view, have intended that section 350 of the Code would be available to a special Judge as a rule, of procedure prescribed for the trial of warrant cases. For all these reasons, we would prefer the opinion expressed by Mehar Singh J. We think that under the Act, as it stood before its amendment as aforesaid, section 350 of the Code was not available when one special Judge succeeded another. 'we hold that section Jagjit Singh had no authority 336 under the law to proceed with the trial of the case from the stage at which section Narinder Singh left it. The conviction by section Jagjit Singh of the appellant cannot be supported as he had not heard the evidence in the case himself The proceedings before him were clearly incompetent. It is then said that this defect was a mere irregularity and the conviction of the appellant can, if sustainable on the evidence, be upheld under EA. 537 of the Code. In regard to this section, it was said by the Privy Council in Pulukuri Kotayyam vs King Emperor (1), "When a trial is conducted in a manner different from that prescribed by the Code (as in N. A. Subramania Iyer 's case, 1901 L.R. 28 I.A. 257), the trial is bad, and no question of curing an irregularity arises but if the trial is conducted substantially in the manner prescribed by the Code, but some irregularity occurs in the course of such conduct, the irregularity can be cured under section 537, and none the less so because the irregularity involves, as must nearly always be the case, a breach of one or more of the very comprehensive, provisions of the Code". It seems to us that the case falls within the first category mentioned by the Privy Council. This is not a case of irregularity but want of competency. Apart from section 350 which, as we have said, is not applicable to the present case, the, Code, does not conceive of such a trial. The trial offends the cardinal principle of law earlier stated, the acceptance of which by the Code is clearly manifest from the fact that the Code embodies an exception to that principle in section 350. Therefore, we think that section .537 of the Code has no application. It cannot be called in aid to make what was incompetent, competent. There has been no proper trial of the case and there should be one. (1) (1947) L.R. 74 I.A. 65, 75. 337 'Then it is said or,. behalf of the appellant that we should not send the case back for a fresh trial but decide it ourselves on the evidence on the record. Coming from the appellant, it is a somewhat surprising contention. According to him, a point which we have accepted, there has realy been no proper trial of the case. It would follow from this that there has to be one. In the absence of such a trial we cannot even look at the evidence on the record. Lastly, we have to say a few words on the amendment of the Act expressly making section 350 of the Code applicable to the proceedings, before a special Judge. The amendment came long after the decision of the case by section Jagjit Singh and had not expressly been made retrospective. It was said on behalf of the respondent, the prosecutor, that the amendment being 'in a procedural provision was necessarily retrospective, and, therefore, no exception can now be taken to the action taken by section Jagjit Singh. Assuming that the rule contained in section 350 of the Code is only a rule of procedure, all that would follow would be that it would be presumed to apply to all actions pending as well as future : Kimbray vs Draper (1). Such a retrospective operation does not assist the respondent 's contention. Nor do we think it an argument against sending the case back for retrial that the special Judge now hearing the case would be entitled to proceed on the evidence recorded by section Narinder Singh in view of the amendment. Whether he would be entitled to do so or not would depend on whether the amended Act would apply to proceedings commenced before the amendment. It has to be noted that the impugned part of the proceedings was concluded before the amendment. On this question, we do not propose to express any opinion. In any event, under section 350 as it now stands a succeeding magistrate (1) 338 liar, power to resummon and examine a witness further. We cannot speculate what the special Judge who tries the case afresh will think fit to do if section 350 of the Code is now applicable to the proceedings before him. For all these considerations, we think it fit to send the case back for retrial. We therefore, allow the appeal and set aside the conviction of the appellant and the sentence passed on him. The case will now go back for retrial According to law.

The appellant and another were prosecuted ' for offences under section 5(2) of the Prevention of Corruption Act, 1947. The trial commenced before the special judge who heard the evidence but before he could deliver judgment was transferred and was succeeded by another special judge. The latter did not recall the witnesses and did not hear the evidence over again, but proceeded with the trial without any objection from either side from the stage at which his predecessor had left. He convicted both the accused. On appeal, the Punjab High Court held that section 350 Criminal procedure Code applied to the trial before a special judge in view of section 8(1) of the Criminal Law Amendment Act, 1952, and the succeeding special judge was entitled to proceed on the evidence recorded by his predecessor. The controversy is whether section 330 of the Code of Criminal Procedure is applicable to a special judge under sub s.(1) ,of section 8 of the Criminal Law Amendment Act, 1952, though it is not applicable under sub section (3) of the Act. Therefore the question is what is meant by the words "The procedure prescribed by the court. for the trial of warrant cases by magistrate" in sub s.(1) of section 8 of the Act, and whether section 350 of the Code prescribe one of the rules of such procedure. The Act was since amended and therein it is expressly provided that s.350 of the Code applies to the proceedings before a special judge. The amendment does not govern the present proceeding as the impugned part of the proceedings was concluded before the amendment. Held, that the Criminal Law Amendment Act, 1952, did not intend that section 350 of the Criminal Procedure Code would be available as a rule of procedure prescribed for the trials of warrant cases, to a special judge as the special Judge was not a magistrate for the purpose of the Act not did the Act require before the amendment that he was to be deemed to be such. 329 The Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrate" meant only the sections 251 to 259 of the Criminal Procedure Code as expressly referred in the code as containing the procedure St specified for the trials of warrant cases by magistrate and did not contemplate section 350 of the Code as a procedure so prescribed. Held, further, that where in a case there is want of competency and not a mere irregularity, section 537 of the Code of Criminal Procedure has no application. It cannot be called in aid to make what was incompetent, competent. Held, also, that it is the right of an accused person that his case should be decided by a judge who has heard the whole of it and that very clear words would be necessary to take away such an important and well established right. In the present case the succeeding special judge had no authority under the law to proceed with the trial of the case from the stage at which hi , predecessor in office left it, and the conviction of the appellant cannot be supported as he had not heard the evidence in the case himself. The proceeding before the succeeding special judge were clearly incompetent. There has been no proper trial of the case and there should be one. In re Vaidyanatha Iyer, (1954) 1 M. I,. cable. Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I A. 65 and Kimbray vs Dapper, , referred to In re Fernandez. (1958) 11 M. L. J. 294, approved,.

The appellant was posted as the Local Purchase Officer at the Army Ordnance Depot in Poona district. In connection with the purchase of some engineering tools, charges were brought against him under section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act, for having procured pecu niary benefit for a certain contractor by corrupt means, thereby causing wrongful loss to the army department. The Trial Court convicted the appellant, and in appeal the High Court confirmed the conviction. The Supreme Court granted him Special Leave to appeal under article 136 of the Constitu tion, and allowing the appeal, HELD: 1. Both the courts below had proceeded on the footing that it was for the accused to prove the ingredients of section 5(1)(d) of the Act. This approach was wrong. It was for the prosecution to prove affirmatively that the appel lant by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other person. [536 C D] 2. Normally this Court in special leave against a con current judgment of the High Court and the trial Court does not re appraise the evidence, but here we find that both the courts below have drawn wrong inferences from proved facts and have made a completely wrong approach to the whole case by misplacing the onus of proof which lay on the prosecution on the accused and presuming that the accused had a dishon est intention. [536 B C, H] Narayanan Nambiar vs State of Kerala [1963] Supp. 2 SCR 724; 730 731, referred to.

The two appellants, who were tried along with there others, were acquitted by the Judicial Magistrate of charges under sections 65(a),66(b),81 and 83 of the Bombay Prohibition Act, 1949, but were convicted by the High Court in appeal by the State. The Magistrate found that the prosecution evidence was insufficient to establish conspiracy or abetment in transporting the contraband liquor and tobacco found in the car on search. The High Court took a different view of the evidence and allowed the appeal so far as the appellants and another were concerned. It was urged on behalf of the appellants that the search was in contravention of section 103 of the Code of Criminal Procedure and the finding of the contraband articles had not been proved. Held, that a motor car was not a 'place ' within the meaning of sections 102 and 103 of the Code of Criminal Procedure or the Bombay Prohibition Act, 1949, and section 103 of the Code had therefore no application to a search of a motor vehicle. Consequently, it was not obligatory upon the Police Officer to comply with the formalities prescribed by that section nor upon the Court to discard the Panchnama or the evidence of the finding of the articles where no witnesses of the locality could be called. Although the High Court in the convicting the appellants under section 66 (b) of the Prohibitiuontion Act, conviction under sections Act was not sustainable and must rate was in error in discarding the entire evidence because discrepancies therein without appraising its intrinsic value. 387 Held, further that the Code of Criminal Procedure places no special limitation on the powers of the High Court in deal ing with an appeal against acquittal, It can review the evi dence and arrive at its own conclusion. The presumption of innocence applies with equal, if not greater force in such an appeal and the burden of proving its own case lying as always on the prosecution. The High Court would not therefore lightly disturb findings arrived at by the trial court on appreciation of the oral evidences

The appellants along with four others were tried and convicted by the Sessions Judge for the offences of dacoity and murder and sentenced to undergo imprisonment for life. On appeal the High Court confirmed the conviction and sentence. Pending that appeal it issued a rule for enhancement of the sentence, and finally the rule was made absolute and they were ordered to be hanged. The appellants thereupon filed the present appeals by special leave granted by this Court, The main point raised before this Court was that the High Court misconceived the ambit and scope of the decision of this Court in Ram Prakash vs State of Punjab [1959] S.C.R. 121 and that the High Court committed an error in law in treating the confession made by the co accused as substantive evidence against the appellants. Held: (i) Though a confession mentioned in section 30 of the Indian Evidence Act is not evidence as defined by section 3 of the _Act, it is an element which may be taken into consideration by the criminal courts and in that sense, it may be described as evidence in a non technical way. But in dealing with a case against an accused person, the court cannot start with the confession of a co accused person, it must begin with other evidence adduced by the prosecution and after it has formed its opinion ,with regard to the quality and effect of the said evidence, then it is per missible to turn to the confession in order to lend assurance to the conclusion of guilt which the judicial mind is about to reach on the said other evidence. Kashmira Singh vs State of Madhya Pradesh, [1952] S.C.R. 526, Emperor vs Lalit Mohan Chukerbutty, Cal. In re: Perivsswami Moopan, Mad. 75 and Bhuboni Sahu vs The King, [1949] 76 I.A. 147, followed. (ii) The distinction between evidence of an accomplice under section 133 and confession tinder section 33 Evidence Act is that the former is evidence under section 3 and the court may treat it as substantive evidence and seek corroboration in other evidence but the latter is not evidence under section 3, and the court should first start from other evidence and then find assurance in the confessional statement for conviction. 624 (iii) The High Court was in error in taking the view that the decision in Ram Prakash 's case was intended to strike a dissenting note from the well established principles in regard to the admissibility and the effect of confessional statement made by accused persons. Ram Prakash vs State of Punjab , explained. (iv) On examining the evidence in the present case on the above principles it is found that there is no sufficient evidence to prove the prosecution case.

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]

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.

The appellant filed a complaint against the respondent and another under ss 385, 389, 500/109 of the Indian Penal Code. The Trial Court found that there was no conspiracy to defame the appellant or to extort money from him and a charge under section 500 Indian Penal Code only was framed against the respondent. It was found that the facts mentioned in the charge were not stated in the complaint. The Trial Court holding that a separate complaint should have been filed in respect of the offence with which the respondent was charged, acquitted him. The High Court rejected the appellant 's application for revision of the order of the Trial Court with the remark " rejected as no offence The appellant appealed by special leave. Held, that the offence charged was a separate offence, although of the same kind, from the offence in respect of which the facts had been stated in the complaint. For this separate offence a separate complaint should have been filed in accordance with the provisions of section 198 of the Code of Criminal Procedure. The Provisions of section 198 of the Code of Criminal Procedure are mandatory. In appeal the Supreme Court could do what the High Court could have done The order of acquittal of the respondent was a nullity, and the proper order should be one of discharge.

The appellant, who was a junior officer in the State service, was appointed as an officiating senior officer on May 10, 1954. On May 12, 1954, an order was passed reverting him to the, post of junior officer. On the ground that he refused to obey the order of reversion, on May 6, 1957 he was suspended, and ultimately dismissed. The orders of the suspension and dismissal were set aside by the Court of Judicial Commissioner. By order dated November 7. 1960, he was reinstated in the post of the senior officer which he was holding on the date of his suspension. with effect from the afternoon of May 7, 1957. By the same order, he was reverted to his substantive post of junior officer with retrospective effect from June, 7, 1957, as another officer was already occupying the post. The appellant, thereupon, challenged both the orders dated May 12, 1954, and November 7, 1960, but the Judicial Commissioner dismissed the petition. In appeal to this Court, HELD : (1) The order dated November 7, 1960 reverting the appellant to his substantive post did not entail forfeiture of the appellant 's pay or allowances, or loss of seniority in his substantive rank, or stoppage or postponement of his future chances of promotion. The appellant could not claim the salary of the senior post from the date of suspension or dismissal till date of reinstatement, because, the appropriate authority, when reinstating the appellant could revert him, as from an earlier date, to his substantive post from the officiating post, provided the order was not passed mala fide. [641 H; 642 B C] Parshotam Lal Dhingra vs Union of India, ; , referred to. (2) There is nothing to show that any retrospective operation was given to the order dated May 12, 1954 In any event, the Judicial Commissioner was justified in refusing to entertain any contention as to its validity seven years after the order was passed. [640 H]

No. 1 1 of 1952. Appeal from the Judgment and Order dated January 18, 1950, of the High Court of Judicature at Madras (Satyanarayana Rao and Viswanatha Sastri JJ.) in Case Referred No. 25 of 1947. O.T.G. Nambiar (Samarendra Nath Mukherjee, with him I for the appellant. M. C. Setalvad, Attorney General for India, and C. K Daphtary, Solicitor General for India (G. N. Joshi and P.A. Mehta, with them) for the respondent. December 22. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal from the judgment and order of the High Court of Judicature at Madras upon a reference made by the Income tax Appellate Tribunal under section 66(1) of the Indian Incometax Act, 1922. The appellant company, the assessee, is incorporated in the United Kingdom under the English Companies Act and has it registered office in London. It owns a spinning and weaving mill at Pondicherry in French India where it manufactures yarn and cloth. Messrs. Best and Co. Ltd., Madras, have been appointed 525 the agents of the assessee under an agreement dated, the 11th July, 1939, and have been invested with full powers in connection with the business of the assessee in the matter of purchasing stock, signing bills and other negotiable instruments and receipts and settling, compounding or compromising any claim by or against the assessee. The yarn and cotton manufactured in Pondicherry were sold mostly in British India and partly outside British India. In the accounting year 1941 and 1942 all the contracts in respect of the sales in British India were entered into in British India and the deliveries were made and payments received in British India. In regard to the sales outside British India also, payments in respect of such sales were received in Madras through the said agents. The total sales of the goods in the assessment year 1942 43 were Rs. 69,69,145 and for the assessment year 1943 44 were Rs. 93,48,822. The value of the sales in British India amounted to Rs. 57,07,431 for the assessment year 1942 43 and to Rs. 67,98,356 for the assessment year 1943 44. The value of the total sales outside British India amounted to Rs. 12,61,714 for the year 1942 43 and Rs. 25,50,472 for the year 1943 44. Out of the said amounts received in respect of the foreign sales the amounts received in British India were Rs. 9,62,434 for 1942 43 and Rs. 75,230 for 1943 44 and the amounts received outside British India were Rs. 2,99,280 for 1942 43 and Rs. 24,75,242 for 1943 44. On these facts the Income tax Officer found that the assessee was resident in British India within the meaning of section 4 A (c) (b) of the Act by reason of its income arising in British India in the year of account exceeding its income arising without British India and on that basis he assessed the company for the two assessment years 1942 43 and 1943 44 as resident in British India on the profits and gains which had accrued to the company both within and without British India under section 4 (1) (b) (i) and (ii) of the Act. The order of the Income tax Officer was confirmed by the Appellate Assistant Commissioner and, the order 526 of the Appellate Assistant Commissioner was confirmed by the Appellate Tribunal on the 15th May, 1946. The assessee applied to the Appellate Tribunal under section 66 (1) of the Act for reference to the High Court of certain questions of law arising out of its order. The, Commissioner of Income tax in his reply suggested the following two questions for reference (1)Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that section 42 (1) and (3) of the Income tax Act has no application to income accruing or arising to the assessee company in British India or to income received by it in British India during the previous year?" " (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the entire income of the assessee company during the accounting year ended 31st December, 1941, was assessable under section 4(1) of the Incometax Act, and that no portion of such in come was entitled to be exempted under section 42(3) of the Act ? The Appellate Tribunal however referred the following questions to the High Court: " (1) Whether on the facts and in the circumstances of the case, section 42 (1) and (3) of the Act alone and not section 4 of the Act have application to the income accruing or arising to the assessee company in British India and to the income attributable to the sale proceeds received by it in British India during the previous year?" " (2) Whether on the facts and in the circumstances of this case the entire profits and gains arising to the assessee company in British India should be taken into account for the purpose of applying the test laid down under section 4 A (c) (b) or only that part of the profits which should be determined after the application of sectioin 42(3) of the Act as reasonably be attributable to that part of the operations carried on in British India ?" and " (3) Whether on the facts and in the circumstances ' of the case, the provisions. of the Indian Income tax 527 Act contained in section 4 (1) with the subsections and section 4 A (c) (b) are not ultra vires in so far as they seek to assess foreign income of the company registered outside British India ?" The third question was concluded by the decision of their Lordships of the Privy Council in the case of Wallace Bros. & Co. Ltd. (1) and was therefore not argued before the High Court and the High Court answered it by stating that the provisions of section 4 (1) and section 4 A (c) (b) of the Act were not ultra vires the Indian Legislature. The question No. (1) was further amended by agreement between the learned counsel for the revenue authority and the assessee and it was reframed as under: " (1) Whether on the facts and in the circumstances of the case section 42 (1) and (3) of the Act alone and not section 4 of the Act have application to the income accruing or arising by reason of sales in British India of manufactured goods where the manufacturing process took place outside British India?" The question (2) was retained in the form in which it had been referred by the Appellate Tribunal. Both these questions were answered against the assessee by the High Court. The assessee obtained the necessary certificate from the High Court for leave to appeal to this court and hence this appeal. It may be observed that in reply to the. notice under sections 22(2) and 38 of the Act for the assessment year 1942 43 the agents of the assessee had on the 1st June, 1943, submitted a return under protest and had claimed that the income shown in the return should be apportioned under section 42(3) of the Act as between the operations carried on in British India and operations carried on outside British India. They had further declared that the company was non resident in British India during the previous year for which the return was made. In the statement enclosed therewith the total world income for the year ended 31st December, 1941, had been shown at Rs. 10,23,907. Profit at 10 per cent. on British Indian sales which (1) (1948) 76 I.A. 86. 528 aggregated to Rs. 57,07,431 was shown at Rs. 5,70,743 and after deduction of the proportionate expenses relating to sales in British India and sundry charges was put down at the net figure of Rs. 4,58,026 which was shown as the British Indian income. It was thus contended that the income arising in British India in the year of account did not exceed its income arising without British India and that therefore the assessee was non resident in British India. This calculation of profits at the rate of 10 per cent. on British Indian sales did not make any allocation between manufacturing profits and merchanting profits and all the profits arising out of British Indian sales were shown in one lump sum. The Income tax Officer took it as settled law that the profits arose in the country in which the sales took place and as the bulk of the sales had taken place in British India the bulk of the profits accrued or arose in British India. He held that the provisions of section 42(3) would apply only where the profits arose outside British India but which by virtue of section 42(1) were deemed to accrue or arise in British India, and that it did not apply where the profits actually arose in British India by the sale of goods in British India. He therefore held that the entire profits on "Sales made in British India actually arose in British India and were liable to tax under section 4 (1) (c). On a calculation of the figures he came to the conclusion that the income of the assessee arising in British India in the accounting year exceeded its income arising without British India and that the assessee was resident in British India under section 4 A(c). The assessee was also held ordinarily resident in British India under section 4 B(c) and he assessed the company accordingly on that basis. The Appellate Assistant Commissioner also proceeded on that basis and confirmed the order of the Income tax Officer. He was however further of the opinion that the entire profits were received where the sale pro ceeds were received and the assessee was therefore. liable to tax under section 4(1)(a) also. This conclusion was arrived at by him relying upon two decisions of their Lordships of the Privy Council: (1) 529 Pondicherry Railway Company V. Commissioner of Income tax, Madras(1) and Commissioner of Income tax, Madras vs Diwan Bahadur Mathias(2), in the first of which at page 369 Lord Macmillan observed as follows : Their Lordships accordingly are of the opinion that the income derived by the Pondicherry Railway Company from the payment made to them by the South Indian Railway Company is on the facts stated received in British India within the meaning of the Act by the Agent of the Pondicherry Railway Company there on their behalf " It is unnecessary to go on to consider whether the business is carried on in British India, which is the form which question (c) takes, for it is enough if the profits of a business carried on by the assessee are received in British India and the place where the business is carried on is not material. " The Appellate Tribunal adverted to the fact that the whole income of the company, so far as 1942 43 is concerned was received in British India and so far as 1943 44 is concerned a major part of it in this way was received in British India, but did not base its decision on this aspect of the case. It held that the scope of section 42(3) was circumscribed by confinement to those cases where profits were deemed to accrue or arise under section 42 alone and there was no warrant for extending the principle of apportionment to other cases where the profits and gains were made taxable under other sections of the Act. It also held that section 42 dealt with " deemed " income whereas section 4 A (c) dealt with income that arose in British India. Therefore, it could not be said that for the purpose of section 4 A (c) a proportionate "deemed " income should be taken as income that arose in British India. When the application for reference was made to the Appellate Tribunal the Commissioner of Income tax in the question (1) which he suggested included within its ambit this aspect of the income having been received by the assessee in British India during the previous year. But when the Appellate Tribunal refrained the question (1) it merely (1) (2) [1939] 7 I.T.R 48. 530 confined it to income accruing and arising to the assessee in British India and to the income attributable to the sale proceeds received by it in British India during the previous year. The question (1) as finally framed by the High Court adverted to the income accruing or arising by reason of sales in British India on manufactured goods where manufacturing process took place outside British India and the aspect of the income having been received by the assessee in British India was absolutely ignored. When the questions were originally referred to the High Court the position in law as then understood was that profits arose in the country in which the sales took place. This position was however negatived, particularly in the case of manufacturing businesses, in a decision of this court. in Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay(1). After hearing at considerable length the arguments urged before us on behalf of the assessee as well as the Income tax authorities we feel that in view of that decision the questions framed by the Tribunal and the High Court do not bring out the real point in controversy between the parties and it is agreed that the following two questions truly represent I and bring out the matter on which the parties are at issue. We therefore resettle the questions originally framed and reframe them as below: (1) Whether in view of the finding of fact in this case that the entire profits were received in India and the company is liable to tax under section 4 (1) (a) of the Act, the provisions of section 42(1) have any relevancy ? (2) Can the income received in India be said to arise in India within the meaning of section 4 A(c)(b) of the Act ? If not, should only those profits determined under section 42(3) as attributable to the operations carried out in India be taken into account for applying the test laid down in section 4 A (c) (b) ? (1) ; ; 18 I.T.R. 472. 531 The case is remanded to the High Court with the direction that it should give its opinion on, these two questions and submit the case to this court within three months. section N. Mukherjee, for the appellant. Porus A. Mehta, for the respondent. December 8. BHAGWATI J. By our judgment dated the 22nd December, 1952, we reframed the questions as below: (1) Whether in view of the finding of fact, in this case that the entire profits were received in India and the company is liable to tax under section 4 (1) (a) of the Act, the provisions of section 42 (1) have any relevancy; (2) Can the income received in India be said to arise in India within the meaning of section 4A (c) (b) of the Act ? If not, should only those profits determined under section 42 (3) as attributable to the operations carried out in India be taken into account for applying the test laid down in section 4A (c) (b), and remanded the case to the High Court with the direction that it should give its opinion on these two questions. The High Court has accordingly considered these two questions which were referred to it for opinion and has answered the question No. I in the negative and against the assessee and question No. 2 in the manner following, i.e., the income received in British India cannot be said to wholly arise in India within the meaning of section 4A (c) (b) of the Act and that there should be allocation of the income between the various profit producing operations of the business of the company in the light of the principle contained in the judgments in Ahmedbhai Umarbhai 's case(1) and in Anglo French Textile Company vs Income tax Commissioner(2) relating to the same assessee. When the matter came up for further arguments before us on this opinion of the High Court,Shri section N. Mukherjee, the learned counsel for the appellant (1) (1950] 18 I.T.R. 472, (2) A.I.R, 70 532 did not contest the correctness of the answer to question No. I in view of the decision of this court in Turner Morrison & Co., Ltd. vs Commissioner of Incometax, West Bengal(1). It may be noted that even before the High Court the learned counsel appearing for both the parties agreed that the matter was concluded by this decision against the assessee and question No. I was answered accordingly by the High Court. In regard to the question No. 2 however Shri Porus A. Mehta, learned counsel for the respondent, contended before us that the matter was not concluded by the judgment of the majority in Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay(1) and that the High Court was wrong in the answer which it gave to this question. He contended that the decision in the case of Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay("), turned on the statutory provisions of the Excess Profits Tax Act read with section 42 (3) of the Indian Income tax Act which was expressly incorporated therein by virtue of section 21 of the Act and not on any general principles of apportion. ment of income, profits or gains enunciated therein. He took us in extensover the portions of the majority judgments and tried to demonstrate that the decision there was based purely on the applicability of section 42 (3) of the Indian Income tax Act, but for the applicability of which, according to his submission, there was no room for the apportionment of the income, profits or gains of the business, in the manner contended by the appellant. We do not accept this contention of the respondent. Section 4A(c) (b) is concerned with the income arising in the taxable territories in a particular year exceeding the income arising without the taxable territories in that year and the very words of the section are capable of being construed as also contemplating a state of affairs where there may have to be a division or apportionment between the income arising in the taxable territories and the income arising without the taxable territories (1) (2) ; 533 in the particular year. The whole of the argument urged before us on behalf of the respondent was aimed at establishing that the scheme of the Indian Income tax Act was not to tax the source of income but the income, profits or gains from whatever source derived which were received or were deemed to be received in the taxable territories or which accrued or arose or were deemed to accrue or arise in the taxable territories during the particular year and that it was immaterial whether the income, profits or gains were derived from business operations carried on in the taxable territories or without the taxable territories. This argument was possible when the decisions which held that income, profits or gains arose or accrued at the places where the sales took place were good law, because then there was no question of apportionment of income, profits or gains arising from the business operations carried on in the taxable territories 'and income, profits or gains arising from the business operations carried on without the taxable territories. The moment however it was held, as it was done in Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay(1), that though profits may not be realised until a manufactured article was sold profits were not wholly made by the act of sale and did not necessarily accrue at the place of sale and to the extent profits were attributable to the manufacturing operations profits accrued at the place where business operations were carried on, these decisions went by the board. The question whether a particular part of the income, profits or gains arose or accrued within the taxable territories or without the taxable territories would have to be decided having regard to the general principles as to where the income, profits or gains could be said to arise or accrue. Section 42 of the Indian Income tax Act has no relevance to the determination of this question because it is mainly concerned with income Which is deemed to have arisen, or accrued and not with income which actually arises or. accrues within the taxable Territories. Section 42 (3) also is a part of the ' scheme which is enacted in section 42 and cannot help (1) (1950)S.C.R. 335. 534 in the determination of the question before us As a matter of fact the use of the words "under section 42(3)" used in the question No. 2 as reframed by us was not appropriate and the only question which should have been sent to the High Court was "If not, should only those profits determined as attributable to the operations carried out in India be taken into account for applying the test laid down in section 4A (c) (b). " If, therefore, section 42(3) has nothing to do with the determination of the income arising in the taxable territories as distinguished from the income arising without the taxable territories as understood in section 4A(c) (b) of the Act what we have got to consider is whether there is anything in the Act which prevents the application of the general principle of apportionment of income, profits or gains between those which are derived from business operations carried on within the taxable territories and those which are derived from business operations carried on without the taxable territories. The contention which was advanced by Shri Porus A. Mehta on behalf of the respondents in this behalf, viz., that the word ,arise " was the only word used in section 4A (c) (b) and the word "accrue" did not find any place therein, that there was a distinction between the conception of arising and the conception of accrual and that the apportionment of the income was appropriate only in cases where the income arose and was inappropriate in cases where the income accrued, was sufficiently repelled in the judgment in Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai &.Co., Bombay(1), where it was observed: " Whether the words 'derive ' and 'Produce ' are or are not synonymous with the words 'accrue ' or arise it can be said without hesitation that the words 'accrue ' or " arise ' though not defined in the Act are certainly synonymous and are used in the sense of 'bridging, in as a natural result '. Strictly speaking, the word 'accrue ' is not synonymous with 'arise ', the former connoting idea of growth or accumulation and the (1) ; at p. 364. 535 latter of the growth or accumulation with a tangible shape so as to be receivable. There is a distinction in the dictionary meaning of these words, but throughout the Act they seem to denote the same idea or ideas very similar and the difference only lies in this that one is more appropriate when applied to a particular case. In the case of a composite business, i.e., in the case of a person who is carrying on a number of businesses, it is always difficult to decide as to the place of the accrual of profits and their apportionment inter se. For instance, where a person carries on manufacture, sale, export and import, it is not possible to say that the place where the profits accrue to him is the place of sale. The profits received relate firstly to his business as a manufacturer, secondly to his trading operations, and thirdly to his business of import and export. Profit or loss has to be apportioned between these businesses in a businesslike manner and according to well established principles of accountancy. In such cases it will be doing no violence to the meaning of the words accrue ' or 'arise ' if the profits attributable to the manufacturing business are said to arise or accrue at the place where the manufacture is being done and the profits which arise by reason of the sale are said to arise at the place where the sales are made and the profits in respect of the import and export business are said to arise at the place where the business is conducted. This apportionment of profits between a number of businesses which are carried on by the same person at different places determines a so the place of the accrual of profits. " The phraseology of section 42(3) of the Act 'also repels the contention in so far as the profits and gains of the business which are referred to therein and which are capable of apportionment as therein mentioned are deemed to accrue or arise in the taxable territories thus using the words "accrue" and "arise" as synonymous with each other. The above passage is also sufficient in our opinion to establish that the apportionment of income, or gains between those arising from business opinion 536 carried on in the taxable territories and those arising from business operations carried on without the taxable territories is based not on the applicability of section 42(3) of the Act but on general principles of apportionment of income, profits or gains. That was really the ratio of the judgment of the majority in Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay(1), and any attempt to distinguish that 'ease from the present one by having resort to the statutory provisions of the Excess Profits Tax Act is really futile. We are accordingly of the opinion that the answer given by the High Court to the question No. 2 also was correct. The appeal before us will accordingly be allowed and the answers to the questions Nos. 1 and 2 refrained by us will be as under: Question No. 1 In the negative; and Question No. 2 The income received in British India cannot be said to wholly arise in India within the meaning of section 4A (c) (b) of the Act and that there should be allocation of the income between the various business operations of the assessee company demarcating the income arising in the taxable territories in the particular year from the income arising without the taxable territories in that year for the purposes of section 4A (c) (b) of the Act. In so far as the appellant has failed in one part of the case and succeeded in another part we think that the proper order for cost should be that each party bears and pays his own costs of this appeal including ,the costs of the remand before the High Court. Appeal allowed.

The assessee, a company incorporated in the United Kingdom and having its registered office in London, manufactured yarn and cloth in their,mill at Pondicherry. The assessee had appointed another company in Madras as their agents. The manufactured goods were sold mostly in British India and partly outside British India. All the contracts in respect of the sales in British India: were entered into in British India and deliveries were made and payments were received in British India. In regard to sales outside British India also, payments were received in Madras 69 524 through the agents and it was found as a fact that, the entire profits were received in India: Held, (i) that in view of the finding of fact that the entire profits were received in India and the assessee was liable to tax under section 4 (1) (a), the provisions of section 42 (1) had no relevancy ; (ii)that the income received in British India could not be said to wholly arise in British India within the meaning of section 4A (c) (b) and that there should be allocation of the income between the various business operations of the assessee demarcating the income arising in the taxable territories in the particular year from the income arising without the taxable territories in that year for the purposes of section 4A (c) (b) of the Act. Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co. ([1950] S.C.R. 335), Pondicherry Railway Company vs Commissioner of Income tax, Madras [1931] (58 I.A. 239), Turner Morrison and Co. vs Commissioner of Income tax [1951] (19 I.T.R. 451 ; , referred to.

The appellant encashed high denomination currency notes of the value of Rs. 87,5oo and was called upon by the Incometax Officer to submit a return for the relevant year. The appellant made three statements, discrepant in material particulars, at different stages as to how he received the amount. The Income tax Officer held that the true nature of the receipt had not been disclosed, treated it as income from an undisclosed source and assessed him accordingly. The Assistant Commissioner of Income tax upheld that order on appeal. On a further appeal, the Appellate Tribunal reviewed the facts, considered the discrepancies in the appellant 's case and affirmed the order of assessment. An application for a reference to the High Court having been made under section 66 of the Indian Income tax Act, the Tribunal held that no question of law arose from its order and dismissed the same. The High Court thereafter summarily dismissed the application made by the appellant under section 66(2) of the Act. Against that order of summary dismissal special leave to appeal was obtained from this court and the sole question for determination in the appeal was whether the order of the Tribunal on the face of it disclosed any question of law and if the High Court was right in summarily dismissing the application under section 66(2) of the Act. Held, that no question of law arose from the order of the Tribunal and the appeal must fail. In order to decide whether the principles laid down by this court in Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay, and Omar Salay Mohamed Sait vs Commissioner of Income tax, Madras, (1959) 37 I.T.R. 151, applied to a particular case, it was necessary to read the order of the Tribunal as a whole for determining whether or not it had properly considered the material facts and the evidence, for and against, in coming to its final conclusion and whether any irrelevant consideration or matter of prejudice had vitiated such conclusion. Those decisions do not require that the order of the Tribunal must be examined sentence by sentence so as to discover a minor lapse here or an incautious opinion there and rest a question of law thereon. 771 Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay, and Omar Saley Mohamed Sait vs Commis sioner of Income tax, Madras, , explained. Although a mere rejection of an explanation given by the assessee does not invariably establish the nature of a receipt. , where the circumstances of the rejection are such as to properly raise the inference that the receipt is an income, the assessing authorities are entitled to draw that inference. Such an inference is one of fact and not of law.

The respondent firm Harivallabhdas Kalidas was appointed the Managing Agent of Shri Ambika Mills Ltd., the appellant in the connected appeal by means of a Managing Agency Agreement the relevant portion of which ran thus: (2)(a) The Company shall pay each year to the said Firm either the commission of 5 (five) per cent on the total sale proceeds of yarn, and of all cloth, manufactured from cotton, 51 silk, jute, wool, waste and other fibres and sold by the company, or a commission of three pies per pound avoirdupois on the sale, whichever the said Firm choose to take, and also a commission of 10 (ten) per cent on the proceeds of sale of all other materials sold by the Company and 10 (ten) per cent on the bills of any ginning and pressing factories and on any other work done by the Company. " And by clause (5) it was provided: " (5) The remuneration payable to the said Firm under clause 2(a) shall be paid to the said Firm forthwith after the 31st day of December or such other date as the Directors may fix for the closing of the accounts of the Company in each year and after such accounts are passed by the company in General Meeting. " Subsequently, at the request of the Managed Company the Managing Agents agreed to charge commission at 3 per cent on sales instead Of 5 per cent for the year ending December 31, 1950 and a resolution to that effect was passed by the Managed Company and a formal agreement to that effect was executed. The income tax Authorities, however, taxed the Managing Agents for two assessment years on the basis that by entering into an agreement with the mills they had voluntarily relinquished certain sums of money as their commission which had accrued to them as income for the purpose of income tax. An appeal was taken to the Income tax Tribunal which held that the agreement between the Managing Agent and the Managed Company to receive remuneration at 3 per cent on the total sale was valid and took effect from January, 1, 1950 and the questions whether the commission accrued on the proceeds of every single sale or only when the assessee firm exercised its option to charge it on the total sale proceeds or on the weight of the yarn sold and whether the Managing Agents would get their commission after the whole profit was determined at the end of the year, were decided in favour of the Managing Agents. The High Court also on a reference made to it at the instance of the Commissioner of Income tax, answered the above mentioned question in favour of the Managing Agents. On appeal by the Incomee tax Commissioner by special leave, Held, that on a proper construction of the agreement, it was clear that there was no accrual of commission till the end of the year and that it did not accrue as and when the sales took place. The Managing Agents were to be paid at the end of the year and by agreeing to the modification of the agreement before then they had not voluntarily relinquished any portion of the commission. Commissioner of Income tax, Madras, vs K.R.M.T.T. Thiagaraja Chetty and Co., ; , E.D. Sasoon and Co. Ltd. vs The Commissioner of Income tax Bombay City, [1955] i S.C.R. 313 and Commissioner of Inland Revenue vs Gardner Mountain and D ' Ambrumenil Ltd., , not applicable.

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.

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 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 appellant assessee was a partnership firm carrying on business inter alia of manufacture and erection of cranes. During the assessment year 1965 66, the assessee entered into two contracts for supply and erection of 3 motion electrical overhead travelling cranes. The assessee carried out both the contracts and fabricated and erected 3 motion electrical overhead travelling cranes according to the contract specifications. A question arose in the assessment of the assessee to sales tax for the assessment year 1965 66 whether the amount of Rs. 1,34,500/ received by the assessee under the contract with M/s. Kamlapati Motilal Sugar Mills and the amount of Rs. 2,38,000/ received under the contract with M/s. Upper Doab Sugar Mills Ltd., formed part of the turnover of the assessee and was liable to sales tax. The Sales Tax Officer took the view that the contracts were essentially contracts of sale of ready made cranes and the erection of the cranes at the factory site was merely incidental to the sales and the amounts of Rs. 1,34,500/ and Rs. 2,38,000/ received under the contracts were, therefore taxable. This view was upheld by the Assistant Commissioner in appeal, but in revision the Additional Judge (Revisions) held that each of the two contracts was a works contract not involving any sale of goods and hence the amounts were not exigible to sales tax. On a reference to the High Court at the instance of the Commissioner of Sales Tax, the High Court took the view that each of the two contracts was for supply of 3 motion electrical overhead travelling cranes as a complete unit and "the predominant object was supply of crane as complete unit" and "the bestowing of labour and skill in the execution of the contract" appeared to have been incidental to the supply of the machine. " The High Court observed that in its view parties "intended the property to pass in the subject matter of the contract, namely, the completed crane as movable property" and concluded that it was a contract of sale of goods and not a contract for work and labour. The High Court accordingly answered both the questions referred to it against the assessee and in favour of the Revenue. Allowing the appeal by special leave the Court, ^ HELD: 1. The primary test to find out whether a contract is a contract of sale or a contract for work and labour is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work. The Court 's have evolved some subsidiary tests to resolve the difficulty arising in the application of this primary test as there are a large number of cases which are on the 622 border line and fall within what may be called "grey area". One such test formulated by the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh vs Purshottam Premji, 26 STC 38 is: "The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole. .In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it (at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price." [628 C G] Commissioner of Sales Tax, M.P. vs Purshottam Premji, 26 STC 38; State of Rajasthan vs Man Industrial Corporation 24 STC 349; Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra, ; ; applied. Each of the two contracts for fabrication and erection of a 3 motion electrical overhead travelling crane is not a contract for sale but a contract for work and labour, (a) It is essentially a transaction for fabricating component parts and putting them together and erecting them at the site so as to constitute a 3 motion electrical overhead travelling crane. The transaction is no different than one for fabrication and erection of an open godown or shed with asbestos or tin sheets fixed on columns, (b) It is not as if a 3 motion electrical overhead travelling crane is fabricated by the manufacturer and then sold and delivered to the customer as a chattel, (c) The fabrication and erection of a 3 motion electrical overhead travelling crane is a highly skilled and specialised job and the component parts have to be taken to the site and they are assembled and erected there and it is only when this process is complete, then a 3 motion electrical overhead travelling crane comes into being. The process of assembling and erection requires a high degree of skill and it is not possible to say that the erection of a 3 motion electrical overhead travelling crane at the site is merely incidental to its manufacture and supply. The fabrication and erection is one single indivisible process and a 3 motion electrical overhead travelling crane comes into existence only when the erection is complete. The erection is thus a fundamental and integral part of the contract, because without it the 3 motion electrical overhead travelling crane does not come into being. The manufacturer would undoubtedly be the owner of the component parts when he fabricated them but at no stage does he become the owner of 3 motion, electrical overhead travelling crane as a unit so as to transfer the property in it to the customer. The 3 motion electrical overhead travelling crane comes into existence only when the component parts are fixed in position and erected at the site, but at that stage it becomes the property of the customer because it is permanently embedded in the land belonging to the customer. The result is that as soon as 3 motion electrical overhead travelling crane comes into being, it is the property of the customer and there is, therefore, no transfer of property in it by the manufacturer to the customer as a chattel. [630C D, 631E H 632 A] Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra, [1979] 1 SCR page 644: followed.

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.

Appeal No. 154 of 1961. Appeal by special leave from the judgment and order dated October 31, 1960, of the National Industrial Tribunal (Bank Disputes), Bombay, in Reference No. 1 of 1960. WITH Petitions Nos. 70 80 and 82 of 1961. Petitions Under Article 32 of the Constitution of India for enforcement of Fundamental Rights. A.S. R. Chari, V. G. Raw, D. P. Singh, Al. K. Ramamurthi. R. K. Garg and section C. Agarwal, for the appellant and the petition (in Petn. No. 80 of 61). M. C. Setalvad, Attorney General of India, N. V. Phadke, K. H. Bhabha, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondents Nos. 2 17 and 19 34 (In appeal and Petn. No. 80 of 61). J.B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondents NOS. 41 49 (In appeal and Petn. 80 of 1961). Anand Prakash, for Respdts. 35 40 (In Petn. No. 80 of 61). A. V. Viswanatha Sastri, D. P. Singh, M. K. Ramamurthi, R. K. Garg and section C. Agarwal, for Intervener No. 2. D.S. Nargolkar and K. R. Choudhri, for Petitioners Nos. 70 and 82 of 61). M. C. Setalvad, Attorney General of India, C.K. Daphtary, Solicitor General of India, H.N. Sanyal Additional Solicitor General of India, J.B Dadachanji, 272 section N. Andley, Rameshwar Nath and P. L. Vohra, for Respdt No. 2 (In Petns. Nos. 70 and 82 of 61). Naunit Lal .for intervener No. 3. M. C. Setalvad Attorney General of India and T. sen, for Intervener No. 1. 1961. August 28. The Judgment of the Court was delivered by AYYANGAR, J. Civil Appeal No. 154 of 1961 has been filed on special leave obtained from this Court Against an order of K. T. Desai, J., functioning as the National Industrial Tribunal (Banks Disputes) Bombay dated October 31, 1960. The point arising for decision in the appeal is as regards the constitutional validity of section 34A of the Banking Companies Act, 1949 which was enacted on August 26, 1960 as an amendment to the parent Act (Act X of 1949). The appellant before this Court is the All India Bank Employees ' Association which is a trade union organization of Bank Employees of several banks operating in India The Punjab National Bank Employees ' Union, which is a trade union with similar objects has been committed to intervene in this appeal in support of the appellant union The three other Writ Petitions are by other Bank Employees ' Unions whose description would be apparent from the cause title and all these cases have been heard together because in the writ petitions also the point raised is identical, viz., the validity of s.34A of the Banking Companies Act, which will be referred to hereafter as the impugned provision. Section 34A whose validity is the matter in dispute in these proceedings runs in the following terms "34A. (1)Notwithstanding anything contained in section 11 of the . or any other law for the time being in force, no banking company 273 shall in any I proceeding under the said Act or in any appeal or other proceeding arising therefrom or connected therewith, be Compelled by any authority before which such proceeding is pending to produce, or give inspection of, any of its books of account or other document or furnish or disclose any statement or information, when the banking company claims, that such document, statement or information is of a confidential nature and. that: the production or inspection of such document or the furnishing or disclosure of such statement or information would involve disclosure of information relating to : (a)any reserves not shown as such in its published balance sheet ; or (b)any particulars not shown therein in respect of provisions made for bad and doubtful debts and other usual or necessary provisions. (2)If, in. any such proceeding in relation to any banking company other than the Reserve Bank of India,, any question arises as to whether any amount out of the reserves or provisions referred to in sub section (1) ,should be taken into account by the authority before which such proceeding is pending, the authority may, if it so thinks fit, refer the question to the Reserve Bank and the Reserve Bank shall after taking into account principles of sound banking and all relevant circumstances concerning the banking company, furnish to the authority a certificate stating that the authority shall not take into account any amount as such reserves and provisions of the banking company or may take them into account only to the extent of the amount specified by it in the certificate, and the certificate of the Reserve Bank on 274 such question shall be final and shall not be called in question in any such proceeding. (3)For the purposes of, this section, "banking, company" shall have the meaning assigned to it in the , Before commencing the examination of the points in controversy and the grounds on which the legality of the above provision is impugned. It would be helpful for a better appreciation of the problem if we set out in very brief outline, the history of the steps which led to the enactment in dispute ' There was a long standing practice in England of Banking Companies, as distinguished from companies carrying on other commercial etc. activities, not to disclose, in their balance sheets and Profit & Loss accounts, bad and doubtful debts and the provision made therefore, as well as, the secret reserves created and held under various items a practice which received judicial recognition by Buckley, L., J. in .Newton vs Birmingham Small Arms Co. Ltd. (1) This practice was followed by several banks in India and questions arose from time to time as to how far the practice was consistent with the statutory provisions as to disclosure contained in the several Companies Acts enacted from time to time. ; We shall, how ever, add that the desirability and; even the legality of this practice has not gone without challenge, though there has been a considerable body of opinion which has held this to be salutary and necessary for the preservation and progress of a credit institution like a bank. We are not now concerned with the desirability or ethics of the practice which is a matter for the consideration of the legislature but as to the steps by which accord was established between the practice and the law. The Indian Companies Act of 1866 drew no distinction between the contents of balance sheet,% of banking companies as distinguished from those of (1) 275 other companies and both were required to disclose a list of debts owing to the concern which were considered bad or doubtful Pro visions on the same lines, i. e., without any, distinction between Banking and other companies, were copied and continued by the Indian Companies Act of 1882. When, however, the Companies Act of 1913 was enacted, Form F ' to the 3rd Schedule to the Act contained a note in respect of the sub heading ' 'book debts ' under the head Property & Assets ' in the balance sheet, reading "distinguishing ill the case of a bank between those considered good and in respect of which the bank is fully: secured and those considered good for which the bank holds no security other than the debtor 's personal security; and distinguishing in all cases between debts considered good, and debts considered doubtful or bad. Debts due b y directors or other officers of the company or any of the either severally or joint with any other persons to be separately stated in all cases. " It would be seen that by reason of this note the obligations imposed upon banks as regards the classification of their; assets and the information to: be disclosed became slightly more detailed than in ' the case of other companies. The practice, 'however, of bankers to which we adverted earlier not to disclose or not to disclose to the full extent bad and doubtful debts but to make, provision for them by setting aside under other heads, sufficient moneys which would operate as secret reserves, so that the credit of the institution would not be affected while its financial stability would remain unimpaired; was continued notwithstanding this, change in the form. The Central Bank of India Limited in its published, balance sheets of the year 1925 adopted the above practice which however, wasn 't obviously in strict conformity with the requirements of From 'F 'to the third schedule read with note. The 276 managing director of the bank was prosecuted by one Shamdasani who was a shareholder of the bank ,or "filing and publishing statements which were false in material particulars" an offence punishable under section 282 of the Indian Companies Act. The Magistrate acquitted the accused on the ground that the balance sheet was in accordance with the usual practice of bankers and that the reserves of the company which were shown under various heads though not as a specific provision for bad and doubtful debts covered the possible losses several times. Ail application for revision was filed before the High Court of Bombay and Fawcett, J. allowed it holding that a declared provision. of the form cannot be allowed to be whittled down by general considerations as to the object of a balance sheet. " This judgment was rendered on February 28, 1927 (vide Shamdasani vs Pochkanwala (1) and very soon thereafter the Government of India intervened by a notification dated March 29, 1927 under section 151 of the companies Act 1913 amending form 'F ' and as amended banks were excluded from the requirement of disclosing the reserve for bad and doubtful debts under the heading, `capital and Liabilities ' in the left hand side of the balance sheet, and in the right hand column "book debts which were bad and doubtful for which provision had been made to the satisfaction of the auditors",, were not required to be shown as part of the property and assets of a Bank. The provisions of the Companies Act of 1913 underwent numerous changes by the amending Act of 1936 which included inter alia one whereby the change effected by the Notification, dated March 29, 1927, in Form `F ' were omitted and Form `F 'was made to retain the note which accompanied it under the Act of 1913 without the exception in favour of banks effected by the Notification. This was possibly unintended, because on the day after the amending Act came into operation, the Central Government published a Notification on January 16, 1937 (1) A.I.R. 1927 Bom. 414 : 277 again under s.151 of the Companies Act restoring the alterations in the balance sheet Form 'F ' as had been effected by the prior Notification ,of March 1927. The validity of this Notification was questioned as being beyond the powers of the Central Government by Shamdasani who filed a complain against the Central Bank of India Limited and its directors charging them with having issued a false balance sheet for the year ending December 31, 1939 a balance sheet which was in conformity with the form as modified by the Notification. The Magistrate upheld the validity of the Notification and quitted the accused. Shamdasani preferred a revision to the High Court and a full Bench of the Bombay High Court held that the Notification was beyond ' the powers of the Central Government, though the order of acquittal was affirmed upholding the plea of the accused that their act was bona fide in that they believed the alteration in the form to be valid (Vide Shamdasani vs The Central Bank of India Ltd.(", Immediately after 'this judgment the Central legislature passed Act XXX of 1943 with retrospective effect validating the Notification and amending the relevant sections of the Companies Act. (sections 132,151, article 107) so as to empower the Government to effect changes in the form of the balance sheet in the manner in which they had done in January ' 1937. The next event in order of date relevant to the present context is the report of the Company, Law Amendment Committee of the United Kingdom presided over by Mr. Justice Cohen where the entire question of undisclosed reserves was fully discussed. The pros and cons of the question were elaborately considered by the Committee and it is sufficient therefore in this connection to a short passage in the report. In paragraph 101 the problem is thus set, out : "The chief matter which has and controversy is the question of undisclosed or, a. (1) I. L. R. 278 the Are, frequently called, secret or inner reserves. An undisclosed reserve is commonly created by using profits to write down more than is necessary such assets as investments,freehold and leasehold property or plant and machinery by creating excessive provisions for bad debts or other contingencies by charging capital expenditure to revenue ; or by undervaluing stock in trade. Normally the object of creating an undisclosed reserve is to enable a company to avoid violent fluctuations in its published profits or its dividends. " The Committee made number of recommendations several of which were adopted in ' the U. K. Companies Act of 1948, and those relevant ' to the point under discussion served to bring the law as to the contents of a balance sheet of a Banking Company unto. line with the practice of sound and well managed banks. In India, special legislation in relation to Banking Companies embodying several of these recommendations was enacted in the shape of the Banking Companies Act 1949 (Act of 1949). Section 29 of the Act laid down the law in regard to requirements of the contents of the balance sheets of banks. The balance sheet and Profit & Loss account were to be in the form set out in the 3rd schedule to that and sub section (3) of that section exempted Banking Companies from the, requirements of conforming to the form of balance sheet and Profit & Loss, account of companies registered under the Indian Companies Act; and the Central Government were empowered by sub section (4) to amend the, form set out in the schedule by Notifications published in the official. , Gazette. In Form 'A ' which provided the model of a balance sheet 'and Profit & Loss account in the case of banks, there was not much change as compared to the requirements of the previous law except that in the Profit & Loss account (Form 'B ' )I the third schedule) the provision for bad and doubtful debts was permitted to be excluded from the 279 income so that the amount of bad and doubtful debts did not figure separately on the income side of the profit & loss account. The income as required to be shown was "income (less provision made during the year for bad and doubtful debts)". This last item was modified by a Notification issued under the power conferred by s.29(4) of the Act in December 1951, so that after amendment .the beading "Income" in the Profit & Loss Account ran: "Income (less provision made during the year for bad and doubtful debts and other usual and necessary provisions"). Thus so far as shareholders of Banks and the general public including the customers of the bank were concerned, banks were relieved from the obligation of disclosing the entirety of their reserves as such and also of the extent of bad or doubtful debts and the provision made therefore. While the law was in this state disputes arose between the employees of banks all over India and the respective banks with regard to wages, conditions of work etc. which were referred by the Central Government in June 1949 to an ad hoc Tribunal with Shri K. C. Sen, a retired Judge of the Bombay High Court as Chairman. The Tribunal passed an award but its validity was successfully challenged in this Court in April 1951 on the ground that all the members of the Tribunal who passed the award were not those who had all inquired into the dispute. Thereafter a fresh Tribunal was appointed in January 1952 with Shri section Panchapages Sastri, a retired Judge of the High Court of Madras as Chairman. The award of this Tribunal was published in April, 1953, but it is not necessary to state its terms. Appeals against the award were preferred to the Labour Appellate Tribunal both by the banks as well as by workmen. The Appellate Tribunal which heard the appeal consisted of three members with Shri Jeejeebhoy as president. The claim of the workers in the appeal before the Appellate Tribunal in great part related to a 280 demand for increased wages and salaries and the main defence of the banks was that they had not the capacity to pay anything beyond what the Sastry Tribunal had granted. The Jeejeebhoy Tribunal set out their difficulties in assessing the plea of incapacity raised by the banks in the context of the provisions of the Banking Companies Act and the form of balance sheet prescribed thereunder in the following terms : "At the very outset there is an initial difficulty in arriving at a correct estimate of the financial position of banks. There are two circumstances which militate against our securing a proper insight into the financial state of banks. We refer in particular to (a) the undisclosed or secret reserves and (b) to the manner in which it is permissible in law for a banking company to exhibit its balance sheet. It is not in dispute that bank do have undisclosed or secret reserves which they acquire in a number of ways, and such undis closed reserves cannot be ascertained from the balance sheet. . . . . . . x x x The other difficulty with which we are confronted at the outset is the manner in which a bank is permitted to present its profit & lose account. On the income side the form originally prescribed by the Banking Companies Act required the banks to declare "Income less provision made during the year for bad and doubtful debts)" ; this has now been altered by an amendment made by the Central Government in exercise of the powers conferred under sub section 4 of section 29 of the Banking Companies Act to read "Income (less provision made during the year for bad and doubtful debts and other usual or necessary provisions)". The effect of this alteration is that the profits as shown for any 281 particular year are first shown not only of bad and doubtful debts but also of 'other usua l or necessary provisions ' before being shown in the balance sheet. . . . It maybe that these other usual or necessary provisions ' have been passed by the Board of Directors, and by the auditors of the concern and may even have been scrutinized by the Reserve Bank of India ; but it is our duty and function to decide the question of the capacity of a bank to pay, and in the absence of important information of this character our estimate of the capacity of a concern to pay must necessarily be incom plete. . . . Banks feel that they now have the form of the Banking Companies Act to shield themselves against an enquiry on the subject ; but insofar as we are concerned we consider these undisclosed reserves and these appropriations. relevant for the purposes of our investigation and in their absence we would have to decide as beat as we could from the other materials before us; and draw such inferences as justified. " It was the contention of the workmen that an Industrial Tribunal had the right in law to compel banks to sis, lose their secret reserves as well as the amount of "the bad and doubtful debts and other necessary provisions" which bad been excluded under the head "income" in the, Profit & Loss Account of banks. This matter was agitated by them before this Court in State Bank of India and others vs Their Workmen (1) being an. appeal against the decision of the Labour Appellate Tribunal. In view, however, of the conclusion reached by this Court on other parts of the case it refrained from pronouncing upon the correctness or otherwise of this claim by the workmen. The diputes between the employees of banks (1)(1959), 2 L.T L. J. 205. 282 and the managements, however, continued with the result that on March 21, 1960 the Central Government in exercise of the powers conferred on it by sub section (1A) of section 10 of the referred the dispute which related to several matters to the National Tribunal constituted by & Notification of Government of the same date, K. T. Desai, J. was the Tribunal so appointed. Most of the major banks in the country were made parties to the reference including the Reserve Bank and State Bank of India. After the Tribunal started functioning and after the parties formulated their respective contentions, applications were filed by the Bank Employees Association on June 9, 1960, for directing the respondent banks to produce before the Tribunal for the purposes of adjudication several documents listed in the applications. Among the items in respect of which production was thus sought were (1) statements showing "the secret reserves in any form" of each bank from 1954 right upto December 31, 1959 ; and (2) statements showing the provision made "for bad and doubtful debts and other usual and necessary provisions" during the years 1954 to 1959 and the total amounts outstanding in such items in each bank in the said years. The banks filed their reply on July 16, 1960. The production of the documents and the information called for on several of the matters including the above two was resisted by the Indian Banks Association (being an association of employers) on the ground that they were by law exempted from disclosure in the interest of the industry and the public and claimed absolute privilege from making the disclosure. It was at this stage that the impugned provision was enacted by Parliament as an amendment to the Banking Companies Act. As several of the banks relied upon the impugned provisions in support of their plea that they could not be compelled to disclose either the quantum of their secret reserves or their nature, or as regards the provision made in 283 the several years for "bad and doubtful debts and for other reasonable and necessary provision", the bank employees association challenged the constitutional validity of section 34A of the Banking Companies Act, which, if valid, could have afforded a sufficient answer to the demand for production of the documents in relation to these matters. This objection was argued before the National Tribunal which upheld the validity of the section. As we have stated earlier, Civil Appeal No. 154 is directed against and challenges the correctness of this decision. The Writ Petitions have been filed by Bank Employees Associations which were not parties to the application for production before the National Tribunal and are intended to support the plea of the appellant in Civil Appeal No. 154 of 1961. The foregoing narrative would show that the Banking Companies Act, as it stood before the amendment now challenged, had brought the law as to the disclosure of secret reserves and the provision for bad and doubtful debts etc. Into accord with the usual practice of Bankers, and had protected these items from being compulsorily disclosed to the shareholders of the respective companies and to the general public. There had been a controversy as to whether the workmen of these establishments were or were not entitled to be placed on a different position from the shareholders because of the bearing of these undisclosed items on the determination of the quantum of their wage etc. and on their conditions of work having financial implications. Parliament had, by the impugned legislation, extended the protection from compulsory disclosure to the workmen as well, but with a safeguard in their cue that the Reserve Bank would determine the amount of reserves etc. which could be taken into account in the course of industrial adjudication. The question before us is, is this attempt at some approximation of the position of the workmen to that of shareholders etc. unconstitutional ? 284 Mr. Chari, learned Counsel for the appellant in Civil Appeal No. 154 addressed to us the main arguments in the case and these were supplemented by learned Counsel appearing for the petitioners in the several writ petitions and also by learned Counsel on behalf of the Interveners both in the appeal as well as in the petitions. Though the arguments before us ranged over a very wide field, the attack on the validity of the legislation was rested on two main grounds : (1) that the impugned legislation contravened the fundamental right guaranteed to "trade unions" by the provi sion contained in sub cl. (c) of el. (1) of article 19; and (2) that it violated the freedom of equality guaranteed by article 14 of the Constitution. We shall consider these two points in that order : First as to the impugned provision being obnoxious to, or in contravention of sub cl.(c) of cl. (1) 'of article 19 'of the ' Constitution. This Article runs, to quote only the relevant words "Article 19. (1) All citizens shall have the right (a). . . . . . . . (b). . . . . . . . (c) to form associations or unions The right is subject to the qualification contained in cl.(4), reading : "(4). Nothing in sub clause (c) of the said clause shall affect the operation of any existing law insofar as it imposes, or prevent the State from making any law imposing, in the interests of public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub clause. " It is not the contention of any of the learned Counsel that the right of workmen to form unions or associations which is the right guaranteed by sub cl. (c) of cl. (1) of article 19 on its literal reading has 285 been denied by the impugned legislation. The argument, however, was that it would not be a proper construction of the content of this guaranteed freedom to read the text literally but that the freedom should be so understood as to cover not merely a right to form an union in the sense of getting their union registered so as to function as an union, i.e., of placing no impediments or restrictions on their formation which could not be justified as dictated by public order or morality but that it extended to confer upon unions so formed a right to effectively function as an instrument for agitating and negotiating and by collective bargaining secure, uphold or enforce the demands of workmen in respect of their wages prospects or conditions of work. It was further submitted that unless the guaranteed right comprehended these, the right to form an Union would be most illusory. To understand the implications of learned Counsel 's submission in their proper perspective the several steps in the reasoning might be set out as follows : (1)The Constitution guarantees, by sub cl.(c) of cl. (1) of article 19, to citizens in general and to workers in particular the right to form unions. In this context it was pointed out that the expression `union ' in addition to the word ,association ' found in the Article refers to associations formed by workmen for "trade union" purposes ; the word "union, being specially chosen to designate labour or Trade unions. (2)The right to "form an union" in the sense of forming a body carries with it as a concomitant right a guarantee that such unions shall achieve the object for which they were formed. If this concomitant right were not conceded, the right guaranteed to form an union would be an idle right, an empty shadow lacking all substance. (3)The object for which labour unions axe brought into being and exist is to ensure collective 286 bargaining by labour with the. employers. The necessity for this has arisen from an incapacity stemming from the handicap of poverty and consequent lack of bargaining power in workmen as compared with employers which is the reason d 'etre for the existence of labour organizations. Collective bargaining in order to be effective must be enforceable labour withdrawing its co operation from the employer and there is consequently a fundamental right to strike a right which is thus a natural deduction from the right to form unions guaranteed by sub cl. (c) of cl.(1) of article 19. As strikes, however, produce economic dislocation of varying intensity or magnitude, a system has been devised by which compulsory industrial adjudication is substituted for the right to strike. This is the ratio underlying the provisions of the under which Government is empowered in the event of an industrial dispute which may ultimately lead to a strike or lock out or when such strikes or lock outs occur, to refer the dispute to an impartial Tribunal for adjudication with a provision banning and making illegal strikes or lock outs during the pendency of the adjudication proceedings. The provision of an alternative to a strike in the shape of industrial adjudication is a restriction on the fundamental right to strike and it would be reasonable and valid only if it were an effective substitute. (4)For an adjudication to satisfy the tests of reasonableness and effectiveness two conditions are necessary : (a) that the adjudicator should be enabled to have before him all the materials which are necessary for pronouncing upon the matter in controversy before him ; and (b) that the adjudicator by whom the controversy between the parties should be decided should be an impartial person or body who would render the decision or award after fully hearing the parties, and that no matter in controversy should be the subject of ex parte decision by an interested party or without the disputants having an opportunity to know the, 287 materials on which the decision is reached, as also an opportunity to place their case with reference to such material. (5)In regard to the right of labour unions to function effectively and to achieve the object of their existence as set out earlier, by negotiated settlement or by compulsory adjudication, the only limitations permitted to be imposed by law are those set out in cl.(4) of article 19 and unless, therefore, either the objects of the association or the marmer of achieving them are contrary to, or transgress public order or morality, for which reason alone reasonable restrictions might be imposed upon the guaranteed right, the. freedom guaranteed is absolute. (6)The legislation now impugned withdraws as it were a vital issue in dispute between the parties before the adjudicator, viz:, the capacity of the industry to pay, from his cognisance and vests the power of deciding that issue in the Reserve Bank which is a biased and interested party, the decision itself being rendered ex parte, the trade unions being deprived even of the knowledge of facts which lead to the decision. It was on this line of reasoning that learned Counsel submitted that the impugned enactment violated the freedom guaranteed by sub cl. (c) of el. (1) of article 19. We shall now proceed to consider the soundness and tenability of the steps in the reasoning. It is not necessary to discuss in any detail the first step as sub cl. (c) of el. (1) of article 19 does guarantee to all citizens the right ',to from associations". It matters little whether or not learned Counsel is right in his submission that the expression "union ' in the clause has reference particularly to Trade Unions or whether the term is used in a generic sense to designate any association formed for any legitimate purpose and merely as a variant of the expression "Association" for comprehending every body of persons so formed. It is not controverted 288 that workmen have a right to form "associations or unions" and that any legal impediment in the way of the formation of such unions imposed directly or indirectly which does not satisfy the tests laid down in cl. (4) would be unconstitutional as contravening a right guaranteed by of the Constitution It is the second step in the argument of the learned Counsel, viz., that the right guaranteed to form "an union" carries with it a concomitant right that the achievement of the object for which the union is formed shall not be restricted by legislation unless such restriction were imposed in the interest of public order or morality, that calls for critical examination. We shall be referring a little later to the authorities on which learned Counsel rested his arguments under this head, but before doing so we consider it would be proper to discuss the matter on principle and on the construction of the constitutional provision and then examine how far the authorities support or contradict the conclusion reached. The point for discussion could be formulated thus : When sub cl. (c) of cl. (1) of article 19 guarantees the right to form associations, is a guarantee also implied that the fulfilment of every object of an association so formed is also a protected right, with the result that there is a constitutional guarantee that every association shall effectively achieve the purpose for which it was formed without interference by law except on grounds relevant to the preservation of public order or morality set out in cl. (4) of article 19? Putting aside for the moment the case of Labour Unions to which we shall refer later, if an association were formed, let us say. for carrying on a lawful business such as a joint stock company or a partnership, does the guarantee by sub cl.(c) of the freedom. to form the association, carry with it a further guaranteed right to the company or the partnership to pursue its trade and achieve its profit making object and that the only limitations 289 which the law could impose on the activity of the association or in the way of regulating its business activity would be those based on public order and morality under cl. (4) of article 19? We are clearly of the opinion that this has to be answered in the negative An affirmative answer would be contradictory of the scheme underlying the text and the frame of the several fundamental rights which are guaranteed by Part III and particularly by the scheme of the seven freedoms or groups of freedoms guaranteed by sub cls. ( 'a) to (g) of el. (1) of article 19. The acceptance of any such argument would mean that while in the case of an individual citizen to whom a right to carry on a trade or business or pursue an occupation is guaranteed by sub cl. (g) of cl. (1) of article 19, the validity of a law which imposes any restriction on this guaranteed right would have to be tested by the, criteria laid down by cl. (6) of article 19. if however he associated with another and carried on the same activity say as a partnership, or as a company etc. , he obtains larger rights of a different content and with different characteristics which include the right to have the validity of legislation restricting his activities tested by different standards, viz., those laid down in el. (4) of article 19. This would itself be sufficient to demonstrate that the construction which the learned Counsel for the appellant contends is incorrect, but this position is rendered clearer by the fact that article 19 as contrasted with certain other Articles like articles 26, 29 and 30 grants rights to the citizen as such, and associations can lay claim to the fundamental rights guaranteed by that Article solely on the basis of their being an aggregation of citizens, i.e., in right of the citizens composing the body. As the stream can rise no higher than the source, associations of citizens cannot lay claim to rights not open to citizens, or claim freedom from restrictions to which the citizens: composing it are subject. The resulting position way, be illustrated thus If an association were formed ' for ' the purpose of 290 arrying on business, the right to form it would be Guaranteed by sub cl. (c) of cl. (1) of article 19 subject to any law restricting that right conforming to cl. (4) of article 19. As regards its business activities, however, and the achievement of the objects for which it was brought into existence, its rights would be those guaranteed by sub cl. (g) of cl. (1) of article 19 subject to any relevant law on the matter conforming to el. (6) of article 19 ; while the property which the association acquires or possesses would be protected by sub el. (f) of cl. (1) of article 19 subject to legislation within the limits laid down by cl. (5) of article 19. We consider it unnecessary to multiply examples to further illustrate the point. Applying what we have stated earlier to the case of a labour union the position would be this : while the right to form an union is guaranteed by sub el. (c), the right of the members of the association to meet would be guaranteed by sub el. (b), their right to move from place to place within India by sub cl.(d), their right to discuss their problems and to propagate their views by sub cl. (a), their right to hold property would be that guaranteed by sub cl. (f) and so oneach of these freedoms being subject to such restrictions as might properly be imposed by cls. (2) to (6) of article 19 as might be appropriate in the context. It is one thing to interpret each of the freedoms guaranteed by the several Articles in Part III a fair and liberal sense, it is quite another to read which guaranteed right as involving or including 'Concomitant rights necessary to achieve the object which might be supposed to under lie the grant of each of those rights, for that construction would, by a series of ever expanding concentric circles in the shape of rights. concomitant to concomitant rights and so on, lead to an almost grotesque result. There is no doubt that in the context of the principles underlying the Constitution and the manner in which its Part III has been framed the 291 guarantees embodied in it are to be interpreted in a liberal way so as to subserve the purpose for which the constitution makers intended them and not in any pedantic or narrow sense, but this however does not imply that the Court is at liberty to give an unnatural and artificial meaning to the expressions used based on ideological considerations. Besides it may be pointed out that both under the Trade Unions act as well as under the the expressions `union signifies not merely a union of workers but includes also unions of employers. If the fulfilment of every object for which an union of workmen was formed were held to be a guaranteed right, it would logically follow that a similar content ought to be given to the same freedom when applied to an union of employers which would result in an absurdity. We are pointing this out not as any conclusive answer, but to indicate that the theory of learned Counsel that a right to, form unions guaranteed by sub cl. (c) of ol.(1) of article 19 carries with it a fundamental right in the union so formed to achieve every object for which it was formed with the legal consequence that any legislation not falling within el. (4) of article 19 which might in any way hamper the fulfilment of those objects, should be declared unconstitutional and void under Art, 13 of the Constitution, is not a proposition which could be accepted as correct. Besides the qualification subject to which the right under sub cl. (c) is guaranteed, viz., the contents of el. (4) of article 19 throw considerable light upon the scope of the freedom, for the significance and contents of the grants of the Constitution are beat understood and read in the light of the restrictions imposed. If the right guaranteed included not merely that which. would flow on a literal reading of the Article, but every right which is necessary in order that the association brought into existence fulfils every object for which it is formed, the qualifications therefor, would be not merely those in cl.(4) of Art, 19, but would be. more numerous and 292 very different, restrictions which bore upon and took into account the several fields in which associations or unions of citizens, might legitimately engage themselves. Merely by way of illustration we might point out that learned Counsel admitted that though the freedom guaranteed to workmen to form labour unions carried with it the concomitant right to collective bargaining together with the right to strike, still the provision in the forbidding strikes in the protected industries as well as in the event of a reference of the dispute to adjudication under section 10 of the was conceded to be a reasonable restriction on the right guaranteed by sub cl.(c) of cl.(1) of article 19. It would be seen that if the right to strike were by implication a right guaranteed by sub cl. (c) of cl. (1) of article 19 then the restriction on that right in the interests of the general public, viz., of national economy while perfectly legitimate if tested by the criteria in el. (6) of article 19, might not be capable of being sustained as a reasonable restriction imposed for reasons of morality or public order. On the construction of the Article, therefore, apart from the authorities to which we shall refer presently, we have reached the conclusion that even a very liberal interpretation of sub cl. (c) of cl. (1) of article 19 cannot lead to the conclusion that the trade unions have a guaranteed right to an effective collective bargaining or to strike, either as part of collective bargaining or otherwise. The right to strike or the right to declare a look out may be controlled or restricted by appropriate industrial legislation, And the validity of such legislation would have to be tested not with reference to the criteria laid down in cl.(4) of article 19 but by totally different considerations. We shall now proceed to consider the authorities, relied ion by the learned Counsel in support of this theory of "Concomitant right" to collective bargaining guaranteed to labour unions. first as regards the decisions of this Court on which learned 293 Counsel relied Romesh Thappar vs The State of Madras(1)Was the earliest case referred to; and learned counsel placed reliance in particular on the following passage in the judgment of the learned Chief Justice : "Turning now to the ' merits, there can be no doubt that freedom of speech and expression includes freedom of propagation of ideas, and that freedom is ensured by the freedom of circulation. 'Liberty of circulation is as essential to that freedom as the liberty of publication. Indeed, without circulation the publication would be of little value : Ex parte Jackson, ; Based on this, learned Counsel submitted that if the phrase "freedom of speech and expression ' in sub cl. (a) of el. (1) of article 19 were given this liberal construction so as to effectuate the object for which the freedom was conferred, a similar construction ought to be adopted of the content of the freedom guaranteed by sub cl. (c) of el. (1) of article 19. We are, however, unable to discern any analogy between the two cases. It is obvious that "freedom of speech" means freedom to speak so as to be heard by others, and therefore to convey one 's ideas to others. Similarly the very idea of freedom of expression necessarily connotes that what one has a right to express may be communicated to others. Unless therefore the freedom guaranteed by sub cl.(a) of el. (1) of article 19 were read as confined to the right to speak to oneself or to express his ideas to himself, which obviously they could not mean, the guaranteed freedom would mean freedom to address others, and of conveying to others one 's ideas by printed word, viz., freedom of circulation. We do not see, therefore, any analogy between the case which was considered by this Court in Romesh Thappar 's (1) case and the one before us. (1) ; In A. 294 The observations in the judgment of Bhagwati, J. in Express New,,?,papers (Private) Ltd. vs Union of India(1) on which Counsel relied, in regard to the content of the 'freedom of speech and expression that they "include within its scope the freedom of the press", for the press with the printed word is merely the mechanism by which the freedom is exercised do Dot really carry the matter any ` further. We were next referred to the observations of Das C. J. in the advisory opinion Re the Kerala Education The question, which was being considered in the passage,relied on, related to the scope and content of cl. (1) of article 30 which guaran tees to all minorities a right to establish and administer educational institutions of their choice. The question debated before this Court was, whether the provision in the Kerala Education Bill which denied recognition by Government to educational institutions run by minorities contravened this freedom guaranteed to them ? Dealing with this Das C. J. said : "Without recognition, therefore, the edu cational institutions established or to be established by the minority communities cannot fulfil the real objects of their choice and the rights under article 30(1) cannot be effectively exercised. The right to establish educational institutions of their choice must, therefore, mean the right to establish real institutions which would effectively serve the needs of their community and the scholars who resort to their educational institutions. There is, no doubt, no such thing as fundamental right to recognition by the State but to deny recognition to ' the educational institutions except upon terms tantamount to the surrender of their constitutional right of administration of the educational institutions of their choice is (1) (2) 1959 S.C.R. 995. 295 in truth and in effect to deprive them of their rights under article 30 (1).19 We do not consider that these observations and this construction of el. (1) of article 30 assist learned Counsel in his submission as regards the theory of concomitant rights flowing from the freedom guaranteed by sub cl. (c) of cl. (1) of article 19. The observations of the learned Chief Justice and the conclusions drawn are in relation to the construction of article 30 and cannot be divorced from ' the context. They do not purport to lay down any general rule of construction for the freedoms guaranteed under the several sub heads of cl. (1) of article 19, and, indeed, what we have pointed out earlier should suffice to indicate the impossibility of upholding any such construction of the freedoms guaranteed by the latter Article. Learned Counsel also referred us to certain passages in two judgments of the Supreme Court of the United States : National Association for the advancement of colored people vs Alabama,(1)and Bates vs Little Rock(2)in which the Court held that, freedom of speech and assembly which were fundamental rights guaranteed by the Constitution would be abrogated or improperly encroached upon by legislation 'which compelled the disclosure to public authorities of the membership rolls. In the two decisions the facts were that the associations in question were for the protection of coloured persons and the requirement of disclosure of the names of members was inserted in the law for the purpose of putting a pressure upon these associations so as to dissuade people from joining them. The argument of learned Counsel before us was based on the dicta in these two decisions that the I right to form an association which followed by reason of the due process ' clause in the 14th amendment carried with it the right to ensure that the associations were able to maintain themselves as associations. In the two (1) 2 Law. Second 1488. (2) 4 Law. Second 480. 296 decisions referred to, the learned Judges of the Supreme Court of the United States were not construing the content of a provision on the lines of article 19(1)(c), for in America, the right of association is not any specifically guaranteed right, but has been derived by judicial interpretation of the due process clause of the 14th Amendment. But apart from this the legislation there impugned was one which directly affected the formation of the association and in that sense may be hit by the terms of sub cl.(c) of cl.(1) of article 19 if statutes with similar purpose were enacted in India. The decisions cited are no authority for the second step in the argument for which they were cited. Learned Counsel also referred us to two other decisions of the Supreme Court of the United States in which the right of employees to self organization, to form, join and assist labour organisations and to bargain collectively through representatives of their own choice and to engage in concerted Activities for the purpose of collective bargaining or other mutual aid has been referred to as "a fundamental right" (vide National Labor Relations Board vs Jones and Laughlin Steel Corporation and ors. , (1) and Amalgamated Utility Workers vs Consolidated Edison Company of New York) (2). We do not consider the inference sought to be drawn well founded. What the learned Judges of the Supreme Court were referring to as a fundamental right was not with reference to a fundamental right as recognized or guaranteed by the Constitution, but in the sense of a right of the unions which enacted law. recognized or respected, and as other decisions of the United states ' Supreme Court show, was subject to regulation by the legislature(3). We have, therefore, reached the conclusion that the right guaranteed. by sub cl.(c) of cl.(1) of article 19 does not carry with it a concomitant right (1) ; ,909. (2) ; , 741. Vide Weaver Constitutional Law and its Administration (1 946) p. 505, referring to Dorchy vs, Kansas ; : "Neither he common law nor the 14th Amendment confers the absolute right to strike. " 297 that the unions formed for protecting the interests of labour shall achieve the purpose for which they were brought into existence, such that any interference, to such achievement by the law of the land would be unconstitutional unless the same could be justified as in the interests of public order or morality. In our opinion, the right guaranteed under sub cl. (c) of el. (1.) of article 19 extends to the formation of an association and insofar as the activities of the association are concerned or as regards the steps which the union might take to achieve the purpose of its creation, they are subject to such laws as might be framed and that the validity of such laws is not to be tested by reference to the criteria to be found in cl. (4) of article 19 of the Constitution. In this view it is not necessary to consider the other steps in. the argument of learned Counsel all of which proceed upon the correctness of the step which we have just now disposed of. Nevertheless we consider it proper to deal with the submission that the impugned legislation (a) withdraws an essential part of the dispute between the parties from the jurisdiction of an impartial adjudicator and vests the same in the Reserve Bank of India which is a biased body ; and (b) that the adjudicator is left without proper materials to discharge his duties by withdrawing the, proper materials from his cognizance. A complaint that the impugned provision withdraws the dispute from the adjudication of an impartial arbitrator and leaves it to the decision of another body is an obvious overstatement of the position. The dispute between the parties in relation either to wages, bonus or other amenities or perquisites which involve financial obligations on the part of the employer remain even after the impugned provision was enacted, with the adjudicator and he alone determines the rights of the parties subject to the provisions of the Industrial law or other relevant legislation, and the relief which he could award to the employees remains 298 the same. The adjudicator alone determines ' the capacity of the industry to pay or to bear the enhanced cost. The only result of section 34 A is that in regard to two itmes, viz., secret reserves and the provision made by banks "for bad and doubtful debts and other necessary provisions", the reasonable quantum which would be available for being taken into account by the adjudicator would be estimated and determined by an expert body which is a governmental authority or practically a department of Government, viz., the Reserve Bank of India which is entrusted by law with duty of maintaining the credit structure of the country. From what we have 'stated earlier as the genesis of the legislation now impugned, it would be apparent that Government had to effect a reconciliation between two conflicting interests : one was the need to preserve and maintain the delicate fabric of the credit structure of the country by strengthening the real as well as the apparent credit worthiness of banks operating in the country. It was really this principle which is vital to the economic life of the community that has been responsible for the changes that have been made from 1927 onwards as regards the form of balancesheet and of the Profit & Loss accounts of banking companies as distinguished from other trading and industrial organizations. There was urgent need to protect from disclosure certain of the items of appropriation by banks in order to preserve them as credit institutions. On the other hand, there was the need an equally urgent need for enabling the workers in these institutions not to be denied a proper wage and other emoluments and proper conditions of service. the question was how far information which in the interests of national economy the banks were entitled to withhold from their shareholders and the general public, was to be made available for determining the capacity of the banks to pay their employees. It was in these Circumstances that the impugned legislation was 299 enacted which while preserving industrial adjudication in respect of disputes between the banks and their employees, entrusted the duty of determining the surplus reserve which could be taken into account as part of the assets for determining capacity to pay, to the Reserve Bank. Thus understood there does not appear to be anything unreasonable in the solution which the I impugned legislation has effected. We do not also consider that there is any substance in the complaint that the Reserve Bank of India is a biased body. If it was not the Reserve Bank of India, the only other authority that could be entrusted with the function would be the Finance Ministry of the Government of India and that department would necessarily be guided by the Reserve Bank having regard to the intimate knowledge which the Reserve Bank has of the banking structure of the country as a whole and of the affairs of each bank in particular. In the circumstance therefore it matters little from the point of view of the. present argument whether it is the Finance Ministry that was vested with the power to determine the matters set up in section 34 A or whether it is the Reserve Bank that does so, as under the impugned enactment. Learned Counsel made a further submission that the impugned enactment was a piece of colourable legislation and that the purported objective of securing secrecy from disclosure was really a device adopted for depressing wages and for denying to workmen employed in banks their legitimate rights. It was urged that the preamble to the amending Act sought to make out that the real purpose behind the legislation was the ensuring of secrecy from disclosure of the reserves held by the banks and of the bad and doubtful debts which arose in the course of business and the provision made for these losses and proceeded on the ratio that such disclosure would hurt the credit of the 300 banks which would have repercussions not merely on the individual bank but also on the banking structure of the country as a whole. This, it was submitted, was not the real but only the colourable object and purpose underlying the legislation. In this connection it was stressed that section 21 of the and r. 30 of the Industrial Disputes Rules had made ample provision for securing secrecy to the affairs of every concern in regard to which disclosure would not be in public interest. We are satisfied that this submission has no basis in fact and besides even if made out does not affect the validity of the legislation. As we have pointed out already, the impugned legislation merely carries out to its logical conclusion the effect of the changes in the form of the balance sheet and Profit and Loss accounts of Banks which starting in 1927 culminated in the notification dated December 22, 1951 under section 29 (4) of the Banking Companies Act amending the Forms appended to that Act. If the construction of the "right to form unions" under sub cl. (c) of cl.(1) of article 19 put forward by learned Counsel for impugning the validity of the enactment is negatived, then subject to the point about article 14 which we shall examine presently, legislative competence being conceded there could be no legal objection to its validity. Objections based on colourable legislation have relevance only in situations when the power of the legislature is restricted to particular topics, and an attempt is made to escape legal fetters imposed on its powers by resorting to forms of legislation calculated to mask the real subject matter. No such problem exists in the present case and it is common ground that once the legislation passes the test of the fundamental rights,guaranteed by Part III, legislative competence not being in dispute, its. validity is beyond cavil. The question whether the secrecy assured by section 21 of is or is not sufficient to protect the interests of I the Banks, is a matter of legislative policy and is for Parliament 301 alone and even the fact that the Court could be persuaded that the existing law is sufficient would be no ground for invalidating the 'impugned legislation. When the end which the legislature reeks to achieve, viz ., secrecy is competent, the enquiry as to ultra vires stops. Whether less than what was done might have been enough, whether more drastic provision was made than occasion demanded, whether the same purposes could have been achieved by provisions differently framed or by other means, these are wholly irrelevant considerations for testing the validity of the law. They do not touch or concern the ambit of the power but only the manner of its exercise, and once the provisions of of the Constitution are out of the way, the validity of the legislation is not open to challenge. The next point urged was that the impugned provision was in violation of article 14; though the several learned Counsel who. appeared in support of the case of the workers were not all agreed as to the precise grounds upon which it could be ' held that the impugned provision violated article 14. It was first submitted that the provision was rendered invalid because it vested an arbitrary power in. banks which were parties to a dispute under the , to claim or not to claim the privilege of not producing the documents and that no criterion had been indicated as to the Circumstances in which Banks could decide to make the claim. But this, however, is answered by the provision itself which runs "When the banking company, claims that such document, statement of information is of a confidential nature and: that the production or inspection of such document. would involve disclosure of '. information relating to the matters set not the. matters set out in sub clauses (a) and (b)" 302 It was also submitted that sub cl. (b) of sub section (1) was vague, in that a reference was made to "provision made for bad and doubtful debts and other usual or necessary provisions". We do not see any substance in this point either, because these words are taken from the form under the Banking Companies Act and their meaning is clear in banking circles. In fact, in the application which the employee associations made before the adjudicator to direct the production of information and documents from the banks this phrase was used and it is apparent that even the Bank Employees ' Associations understood it as having a definite connotation. It was next submitted on behalf of some of the interveners that section 34A(1) and (2) violated article 14 in that the classification contained in it was impermissible as not being based on rational grounds. It was said (1) that the protection against a disclosure applied only to adjudications under the industrial Disputes Act and not to other adjudications ; (2) that it applied only to certain banking companies and not to all banking companies; and (3) that by reason of section 34A (2) the provisions of the impugned enactment were applied in a discriminatory manner to all banks other than the Reserve Bank. The first two points cover the same ground and arise out of the fact that the. impugned provision by its 3rd sub section defines a "banking company" referred to in it and to which its provisions apply, as meaning a ""Banking Company" under the . The defines a "Banking Company" in section 2(b) as follows: "Banking Company means a banking company as defined in section 5 of the Banking Companies Act, 1949, having branches or other establishments in more than one State and includes the State Bank of India and the Reserve Bank of India. " 303 It would thus be seen that though the Banking Companies Act applied to every banking company it is only those banks whose operations extended beyond one State were brought within the scope, of the definitions of a "banking company" under the . The result of that was that Banking Companies not having branches in more than one State would be an industry so as to be within the but not , 'a banking company" within its definition. In the circumstances learned Counsel is right in his submission that such banking companies as are not within the definition of "a banking company" under the would not be entitled to claim the protection from disclosure conferred on "banking companies" by the impugned provision. This, however, is no ground for holding the legislation invalid. In the first place, the complaint of discrimination is not by the banks who are not on the terms of section 34A entitled to the protection from disclosure of their reserves etc. Secondly it is common ground that 95 % of the banking business in this country is in the hands of Banks which are, within the definition of "banking companies" under section 2(b) (b) of the . Besides, these banks, employ over 80,O0O out of the 90,000 bank employees. In the circumstances and seeing that the injury to the credit structure will only be by the disclosure of the reserves etc., of the banks of this class, there is sufficient rational connection and basis for classification to justify the differentiation. The fact that the legislation does not cover every banking company is therefore no ground for holding the provision to be discriminatory within article 14. The last point about the exclusion, of the Reserve Bank of India from the operation of section 34A (2) has also no substance. in the very nature of things and on the scheme of the provision the Reserve Bank could not but be excluded from sub section (3) of the impugned provision. In determining 304 what reserves could properly be taken into account, the Reserve Bank would be discharging not any quasi judicial but only an administrative function, determining this matter with reference to uniform business principles and it therefore appears to us that. there is no impropriety in its findings being final even in regard to itself. A submission on similar lines about bias was also made in relation to the impact of the impugned provision insofar as it related to the industrial dispute between the State Bank of India and its employees. It was pointed out to us that the Reserve Bank of India owned practically the entirety of the sharecapital of the State Bank of India, with the result that the Reserve Bank was pecuniarily and vitally interested in supporting the State Bank as against the latter 's employees in any industrial dispute and that the element of bias which the situation involved would invalidate the impugned provision. We consider this argument without force. If, as we have held, the impugned provision is valid and does not violate any of the freedoms guaranteed by of the Constitution in regard to the employees of the Reserve Bank, the challenge to the impugned provision cannot obviously be successful in the case of the employees of the State Bank. As we have stated earlier, though the arguments before us ranged on a very wide ground, we have not thought it necessary to deal with all of them because in view of our conclusions on the crucial points in the case the others which were subject of debate before us did not arise for consideration. The appeal fails and is dismissed with costs. The petitions also fail and are dismissed with costs. (one hearing fee) Appeal and Petitions dismissed.

Section 34 A of the Banking Companies Act, 1949, introduced in 1960, provides that no banking company shall be compelled to produce or give inspection of its books of account or other document or furnish or disclose any statement or in formation which the company claims to be of a confidential nature and the production etc., of which would involve dis closure of information relating to any reserves not shown as such in its published balance sheet or any 'particulars not shown therein in respect of provisions made for bad and doubtful debts and other usual or necessary provisions. Sub section (2) of section 34 A provides that any authority, before whom the question as to whether any amount out of such reserves or provisions should be taken into account, may refer the question to the Reserve Bank and the Reserve Bank shall furnish to the authority a certificate stating that the authority shall or shall not take into account the amount specified therein. Sub section (3) makes section 34 A applicable to only such banking companies whose operations extend beyond one State. The Appellant contended 270 that section 34 A contravened the fundamental right guaranteed to trade unions by Art 19(1)(c) of the Constitution as it prevented them from effectively exercising the concomitant right of collective bargaining in respect of wages, bonus etc. before industrial Tribunals by shutting out important and relevant evidence and that the section violated article 14 of the Constitution as it was not made applicable to all the banking companies. Held, that section 34 A of the. Banking Companies Act, 1949, was constitutionally valid and did not and either article 19(1)(c) or article 14 of the Constitution. The right guaranteed by article 19(1)(c) of the Constitution does not carry with it a concomitant right that unions formed for protecting the interests of labour shall achieve their object such that any interference to such achievement by any law would be unconstitutional unless it could be justified,under article 19(4) as being in the ' interests of Public order or morality. The right under article 19(1)(c) extends only to the formation of an association or union and insofar as the activities of the association or union are concerned or as regards the steps which the union might take to achieve, its object, they are subject to such laws as, may be framed and such laws cannot be, tested under article 19(4). Section 34 A was, enacted to effect a i.e conciliation between the conflicting interest of labour to obtain proper relief in industrial arbitration and tire need to preserved and maintain the delicate fabric of the credit structure of the country by strengthening the as well as the apparent credit worthiness of banks operating in the country. It preserved industrial adjudication in respect of disputes between the banks and their employees by entrusting the duty of determining the surplus reserve which could be taken into account as a part of the assets for determining their capacity to pay to the Reserve Bank. Ramesh Thappar vs State of Madras ; Express Newspapers (P) Ltd. vs Union of India, , Be. The Kerala Education Bill, (1959) S.C.R. 995, National Association for the advancement of coloured people vs Alabama, 2 Law. Second 1488, Bates vs Little Rock, 4 Law Ed. Second 480,. National Labour Relations Board vs Jones & Lauqhlin Steel Corporation, ; and Amalgamated Utility Workers vs Consolidated Edison Company of New York, ; , referred to. Though there were certain banks which were not entitled to the protection of section 34 A that was no ground for holding that the section offended article 14. The complaint was not made by the banks who were not given the protection. Admittedly, 95% of the banking business in the country was in the hands of 271 banks to whom section 34 A applied and. they employed 80,000 out of the 90,000 bank employees. The injury to the credit, structure will only be by the disclosure of the reserve etc. ' of the banks of this class and there is sufficient rational connection and basis for the classification to justify the differentiation. The exclusion of the Reserve Bank from the operation of section 34 A (2) also does not amount to discrimination; in the very nature of things and on the scheme of the provision the reserve Bank could not but be excluded.

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 petitioners were detained under the Jammu & Kashmir Public Safety Act 1978. Their cases were referred to the Advisory Board, which did not submit its report yet to the Government, although eight weeks from the date of detention had already expired. It was argued that there was a violation of sub section (1) of Section 16 of the Public Safety Act and therefore, further detention of the Petitioners was invalid. Accepting the petitions it was, ^ HELD: (1) The petitioners enjoy a fundamental right under Article 21 of the Constitution not to be deprived of their personal liberty, except according to procedure established by law. In cases where a Government resorts to preventive detention, Clauses (4) to (7) of Article 22 prescribe the conditions relating to preventive detention. A perusal of these Clauses will make it immediately apparent that the constitution places the greatest emphasis on severely limiting the period of preventive detention and envisages time bound stages for the processing of a case as it reaches its determination. The Jammu & Kashmir Public Safety Act contains provisions which specify the successive stages and also prescribe the period within which each stage must be completed [143 H, 144 A B] 2. It is clear that the period prescribed by sub s (1) of section 16 of the Act for the submission of its report by the Advisory Board has already expired. Sub section (1) of section 16 provides that the Advisory Board, after considering the material before it and such further material as it may deem necessary and after hearing the person concerned, shall . submit its report to the Government within eight weeks from the date of detention. ' The obligation placed on the Advisory Board to submit its report within the prescribed period must be construed strictly in as much as the personal liberty of a person is involved and having regard to the emphasis which the Constitution has placed, and which emphasis is reflected in the Act, on the necessity of expeditiously determining whether the detention of the person concerned should be continued. [144 B F] 143 Shri Mritunjoy Pramanik vs The State of West Bengal, , referred to.

The appellant was a mining company with its head office at Nagpur. The business of the head office was to look after the sale of coal extracted from the collieries. An employee of the company working in the head office made applications under section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, to the Assistant Commissioner of Labour, Nagpur. The company objected that by virtue of the notification under section 1(3) of the Act the mining industry had been exempted from the operation of the Act including section 16 and therefore the Assistant Labour Commissioner had no jurisdiction. The authorities under the Act as well as the High Court under articles 226 and 227, re jected the company 's contention. The High Court took the view that what was exempted by the third item in the notification was not the head office of a mine but the mine itself and consequently the employees of the head office were governed by the Act. The company appealed to the Supreme Court by special leave. HELD : The notification in question said that the Act would come into force on 21st November, 1947 "in all the industries except the following" and then went on to name four industries the third one being 'Mines '. After the word 'following ' the, word industries must be read and thus read the notification in effect said the Act would come into effect on the given date in all industries except the industries mentioned. Therefore it was not only mines but the mining industry itself that was exempted from the operation of the Act. [593 A B, D E] If the notification exempted the industry of mines or the mining industry it could not be said that it merely exempted that part of the said industry of mines or mining industry which consisted of raising coat at the colliery and did not include the head office thereof. As the High Court said, the head office was part of the integrated activity of the company. Therefore when the mining industry was exempted from the operation of the Act the exemption applied not only to that part of the industry which consisted of raising coal at the colliery but also to that part of it which consisted in the sale of coal and its supply to the customers and would thus include the head office also. [593 E G] M/s. Godavari Sugar Mills Ltd. vs D. K. Worlikar, A.I.R. and M/s. Serajuddin and Co. vs Their Workmen, [1962] 3. S.C.R. 934, distinguished. On the above view the Assistant Labour Commissioner had no jurisdiction under the Act to deal with the matter in question. [595 E]

The three respondents, who were the General Manager, the Assistant Manager and the Secretary of the Laxmi Devi Sugar Mills Ltd., were charged under sections 12, 13 and 26 of the United Provinces Shop and Commercial Establishment Act, 1947, for contravening the provisions of the Act relating to holidays, leave and maintenance of certain registers regarding a class of field workers employed by the company to guide, supervise and control growth and supply of sugar cane for use in the factory. It was contended on their behalf that those employees were workers within the meaning of the and the United Provinces Shop and Establishment Act did not apply to them. The Judicial Magistrate rejected that contention and convicted the respondents under section 26 of the Act and sentenced them to pay a fine of Rs. 30 each. On a reference by the Sessions judge recommending that the said convictions and sentences may be set aside, the High Court acquitted the respondents. The State Government appealed to this Court by Special Leave. Held, that the order of acquittal passed by the High Court was erroneous. The provisions of the were intended to benefit only workers employed in a factory and since field workers guiding, supervising and controlling growth and supply of sugar cane for use in the factory were not employed in the factory, the did not apply to them and they fell within the definition of " Commercial Establishment " under the United Provinces Shop and Commercial Establishment Act, 1947.

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.

In exorcise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu by a Notification No. II (2) H. O. 6060/76 dated 21 t November, 1976 exempted the Buildings owned, inter alia by all the co operative societies from all the provisions of the said Act. Since the protection available to the petitioners, who wore tenants in a building belonging to respondent No. 2, an Apex Society registered under the Tamil Nadu Co operative Societies Act, 1961 and covered by the said notification. had been withdrawn and since the petitioners were facing the imminent prospect of suffering eviction decrees against them, they filed the present writ petitions challenging the constitutional validity of the impugned notification on the ground that the same was violative of article 14 of the Constitution. The petitioners contended that treating the buildings owned by all the co operative societies in the State of Tamil Nadu as falling into one group while exercising the power under sec. 29 of the Act will have to be regarded as a rational classification based on an intelligible differentia but the differentia on which this classification was based had no excuse with the object of curbing the two evils of rack renting and unreasonable eviction for which the power to grant exemption had been conferred upon the State Government under sec. 29 of the Act and since the impugned notification did not satisfy be test of nexus the exemption granted to all such buildings could not be sustained and Will have to be regarded as discriminatory and violative of article 14. In other words Counsel urged that there was and is up warrant OF any presumption that co operative societies qua landlords will not indulge in rack renting or will not unreasonably evict tenants; in fact they would not be different from other private landlords so far as the two evils sought to be curbed by the Act are concerned and therefore Counsel urged that the exemption granted could not be said to be in conformity with the guidance afforded by the scheme and the previsions of the Act. 417 Dismissing the petitions, ^ HELD: It is true that under sec. 4 of the Tamil Nadu Co operative Societies Act the very object of every co operative society registered thereunder is the promotion of economic interests of its members and sec. 62 of the Act provides for payment of dividends on shares to its members as also for payment of bonus to its members and paid employees. But these aspects of a co operative society do not mean that it could be likened to any other body undertaking similar activities on commercial lines and to do so would be to miss the very basis on which the co operative movement was launched and propagated and has been making progress in the country during the last several decades. Indisputably, co operative societies which carry on their activities in various fields do so for the purpose of attaining the social and economic welfare of a large section of the people belonging to the middle class and the rural class by encouraging thrift, self help and mutual aid amongst them, especially by eliminating the middle man. But the object of promoting the economic interrupts of the members has to be achieved by following co operative principles where the profit motive will be restricted to a reasonable level unlike other commercial bodies where sky is the limit so far as their desire to earn profits is concerned. Sections 4 and 62 of the Act and Rule 46 of the Rules make it clear that in the matter of distribution of profits by way of payment of dividend to members and payment of bonus to members as well as paid employees restrictions have been placed by law and the same is maintained at a reasonable level and considerable portion of the net profits is apportioned and required to be carried to various kinds of funds, like co operative development fund, co operative education fund, reserve fund etc. In fact it is such statutory appropriations and restrictions on payment of dividends and bonus which differentiates co operative societies from other bodies undertaking similar activities on commercial lines and therefore, the buildings belonging to such co operative societies are substantially different from the buildings owned by private landlords. Further it has to be appreciated that these statutory provisions are applicable to all types of co operative societies specified in Rule 14 whatever be their nature or functions. The profit element being maintained at a reasonable level by provisions of law in all types of co operative societies there is every justification for the assumption that no co operative society will indulge in rack renting or unreasonable eviction. In this view of the matter if the State Government came to the conclusion that in the case of co operative societies there being no apprehension that they would indulge in either of these two evils exemption from the provisions of the Tamil Nadu Act No. 18 of 1960 should be granted in favour of buildings belonging to such co operative societies it will have to be regarded is a legitimate exercise of the power conferred on it under sec. 29 of the Act the same being in conformity with the guidance afforded by the preamble and provisions of the Act in that behalf. [422D 5; 424C G] Besides, on the factual side of the issue the facts and circumstances put forward by the State Government in its counter affidavit which have gone unchallenged clearly show that the differentia on the basis of which the classification was made had a clear nexus with the object with which the power to grant exemption has been conferred upon the State and therefore the impugned notification will have to be regarded as valid. [425E F] 418

Respondent 1, a conductor of the Mysore Government Road Transport Department was dismissed. for misconduct on 25 1 1961. The legality of the said dismissal order was questioned in the High Court under article 226 with a further prayer to declare that he had continued in service since the date of his suspension and commencement of disciplinary proceedings. The High Court allowed the writ petition on 11 9 1964 and quashed the dismissal order with an observa tion viz. "It is further ordered that this is without preju dice to the holding of fresh enquiry if they consider the same necessary". On 1 8 1961. the Road Transport Corpora tion was constituted and the Government Road Transport Department was abolished. Such of the employees who had exercised their option as per the notice dated 23 6 1961, were taken over by the appellant corporation. The re spondent No. 1 was not given the option as he was dismissed by that date. On a complaint under the. Contempt of Courts Act against respondent 2 and the appellant, that there was disobedience to the order of the High Court dated 12 9 1964, the respondent 1 was paid ,,he salary by the State Govern ment for the period 25 1 1961 to 31 7 1971. Since he was not paid back salary and allowances and also the salary due from 1 8 1961, the respondent filed a writ petition No. 1579/66 which was again allowed. On a concession made by the counsel for the State Government that the State Govern ment was willing to make available to the petitioner an option to become an employee of the appellant corporation, the High Court held: "Notice shall be in the same form in which it was served on other employees and with a month 's time to exercise his option. If he exercises his option to become an employee of the corporation the petitioner will have all. the benefits. such as continuity in service, seniority, the benefit of the old conditions of service applicable in Mysore Government Road Transport Department. The petitioner will also be entitled to the salary for the period ' between August 1, 1961 and the date of his appoint ment as an employee of the corporation". On appeal by special leave by the corporation, the Court, HELD: (1) The order of the High Court dated 11 9 1964 could not possibly amount to a declaration that the first respondent had continued in the service of either the Mysore Government or had become the servant of the appellant corpo ration, a separate legal entity which came into existence by means of a Notification under section 3 of the Road Transport Corporation Act, 1950. As a separate legal entity the corpo ration could not be said to have stepped automatically into the shoes of the Mysore Road Transport Department, there being no provision of the Act or Rules made thereunder to that effect. [927 A D] (2) The declaratory relief asked for not having been granted, that relief would be deemed to have been refused. Failure to go in appeal against that decision operates as a bar for claiming such a relief in the subsequent writ petition. [931 B] (3) The effect of the High Courts ' order setting aside the dismissal was that the stigma of dismissal was removed from the record of the first respondent. The winding of the department on the facts of the case, operates as the discharge of the respondent. The respondent cannot be deemed to be the corporation 's employee inasmuch as he has not exercised any option nor did be ask for a notice of option in the original writ petition filed by him. [931 D E] 926 Mysore State Road Transport Corporation vs A. Krishna Rao & Anr., C.A. No. 1720 of 1967 S.C. decided on 6 8 1969, followed. (4) Neither the Act nor the two notifications under section 34(1) of the Act contain any provision. which could entitle an employee of the Mysore Government Road Transport Depart ment to get a notice automatically. The notifications could apply only to those persons who, on 1 8 1961 had already exercised an option to serve under the corporation in pursu ance of notice issued to them. It makes no provision for persons to whom for any considerable reason, no notice has been issued. [928 D F] (5) When the first respondent applied in the High Court for another writ or direction under article 226 in 1966, the High Court over stepped the limits of mere interpretation or application of the law and indulged in what is nothing short of legislation by directing the State Government to serve a notice calling upon the first respondent to exercise his option on the question whether he wanted to become an employee of the Mysore State Road Transport Corporation in the same way in which other employees of the Transport Department had been asked to exercise their option. [929 C E] (6) The State Government owed no duty to the first respondent to pay him after transport department was wound up in the absence of any contract 10 show what duty the Government could have to employ the first respondent after its transport department was wound up or to direct the corporation to do so. [929 G H] (7) In order to compel the corporation to do anything only a general direction u/s 34 of the Act could be given by the Government. There neither could be a special direction with regard to a particular case nor was any special direction given by the Government for any such case. The High Court could not take upon itself the power to fill any gap in the provision of the. Act, even if there be one, and compel the Government to perform a function which the Gov ernment was not under any kind of obligation to discharge. The High Court could not give a specific direction to make a provision to meet what it thought was required in a particular or individual case if such a case fell outside the provisions made by the Act and the rules. There is no justification at for such assumption of powers by the High Court. [929 H, 930 A B]

Appeal No. 143 of 1956. Appeal by special leave from the judgment and decree dated September 23, 1952, of the Bombay High Court in First Appeal No. 57 of 1949. section P. Desai and I. N. Shroff for the appellant. A. V. Viswanatha Sastri, J. B. Dadachanji, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the respondents. 642 1961. September 13. The Judgment of the Court was delivered by DAS GUPTA, J. The appellant and the Second respondent are both descendants of Vallabhacharyaji, a great Vaishnava teacher who flourished more than 400 years ago. Vallabhacharyaji left his native place near Champaranya in South India, and coming to Gujarat and other parts of India established shrines for the worship of Vishnu at several places. His descendants became the priests and Shebaits of such shrines and also of other shrines established thereafter. These came to be known as Gadis. While each of these Gadis had a temple for the worship of Vishnu, considerable properties, movable and immovable were acquired for them from time to time by gift or otherwise. One such shrine was established more than 100 years ago at Nadiad and about the year 1899 A. D. a descendant of Vallabhacharyaji who on adoption took the name of Anniruddhalalji Murlidharji became the head of the Nadiad shrine and was thus possessed of the movable and immovable properties appertaining to the Gadi. This gentleman also became by, adoption head of another shrine known as the Moti Haveli at Jamnagar in the year 1913 and then took a slightly different name Annirudhalalj 'i Brijeshji. Both these adoptions were in accordance with the Goda Dattak custom of adoption which prevailed among the members of the Vallabhacharya community. Aniruddhalalji Murlidharji (alias Aniruddhalalji Brijeshji) died on December 17, 1935 leaving a widow Mahalaksbmi Bahuji Maharaj, who is the first respondent before Us. The question of adopting an heir to him assumed importance immediately on his death and it appears there was some talk. of adopting by the Goda Dattak custom one of the sons of the present appellant, who it is necessary to mention. was the natural brother of Aniruddhalalji. The talks however proved fruitless and ultimately on June 1, 1946, 643 the second respondent who as already stated was also a descendant of Vallabhacharya was adopted. The present suit was brought by the appellant in respect of the Haveli and other properties left by Anniruddhalalji at Nadiad. In this he, challenges the validity of the adoption of the second respondent by the first respondent, Mahalakshmi Bahuji Maharaj. The main prayer in the suit is for a declaration that respondent No. 2 was not the legally adopted son of Aniruddhalalji and did not acquire any right or shares in his property by the alleged adoption. The other prayers included one for a declaration that he the appellant was the nearest heir of the deceased, that the first respondent had no other right in the property except as a Hindu widow, for an injunction restraining her from frittering away the property or any part thereof, for an order on her to produce the balance of the sale proceeds of Maharaja 's Bag which she had sold off and for an order on both these respondents , to render accounts of the properties of Goswami Anniruddhalalji which might have come into their hands. It is no longer in dispute that the plaintiff would be the nearest heir on the death of the widow if there has been no valid adoption of the second respondent to Aniruddhalalji. The appellant challenged the validity of the adoption on three main grounds. The first was that under the custom ' of the Vallabharcharya community under which Goda Dattak adoption is made, the adoptee (using that word to denote the boy taken in adoption) must be only from the family of the adoptive father if this be possible and in the present case even though the plaintiff himself as well as his two sons were available for adoption the second respondent was adopted in preference to them. The second ground was that under the Goda Dattak custom the wife 's sister 's husband cannot be validly adopted. The third around was that Aniruddhalalji 644 had expressed his desire in this matter of adoption in such a manner that there was an implied prohibition by him from taking in adoption anybody except the present appellant or one of his sons. The first two grounds were raised in Issue No. 8 of the 19 Issues that were framed by the Trial Court while the third ground was raised in Issue No. 12. These Issues are in the following words : Issue No 8 Does the. plaintiff prove the custom that in Goda adoption: (i) a widow cannot adopt her sister 's husband as a son to her husband ? (ii) the adoptee should belong to the family of the adopter ? Issue No. 12: Does the plaintiff prove that the Defendant No. 1 was prohibited by Anniruddhalalji from adopting in the Goda form any one except the plaintiff or one of his sons ? It may be mentioned that an Issue was framed as, regards the factum of adoption in Issue, No. 6, viz., whether Defendant No. 2 's adoption is proved, in view of what was said in paragraph 14 of the plaint that he was not aware whether Defendant No. 1 and Defendant No. 2 had performed any ceremonies or rites according to the Goda Dattak form of adoption or as required by Hindu Law. This issue was answered in the affirmative and the correctness of that answer has not been challenged before us. The Trial Court held that the plaintiff had riot been able to establish the alleged custom for Goda Dattak that a widow could not adopt her sister 's husband as a son to her husband nor that the adoptee should belong to the family of the adopter and accordingly answered Issue No. 8 in the negative. As regards Issue No. 12 the plaintiff relied on a letter which was marked exhibit 115, apart from his own evidence and evidence of some of his witnesses. The Trial Court accepted Defendant No. 1 's contention that this letter had 645 been inspired by the plaintiff himself and so No. reliance could be placed on ' it. The oral testimony given by the plaintiff and other witnesses in support of the story that Aniruddhalalji had in his life time given certain directions in the matter of adoption of a son to him was also found not reliable. Accordingly, Issue ,No. 12 was also answered in the negative. One other argument addressed to the Trial Court was that Defendant No. 1 had not obtained the consent of her husband 's sapindas for this adoption and so under the Madras School of Mitakshara Law, which it is said governed the parties, the adoption was invalid. The Trial Court considered this argument even though the, question whether the Madras School of Mitakshara governed the parties and so the adoption was invalid without the consent of the husband 's, sapindas had not been specifically raised in the pleadings nor had any issue been framed on , ,his. The learned Judge however rejected the argument, being of opinion that "the ordinary law of adoption which puts restrictions on the widow 's right to adopt in Madras cannot be taken to be prevailing in the case of customary adoption in the Goda form by widow in the Goswami families. " Holding that the Defendant No.2 's adoption could not be held to be invalid the Trial Court dismissed the suit with costs. The plaintiff 's appeal to the High Court of Bombay met a similar fate. The learned Judges of High Court agreed with the Trial Court that the plaintiff had not been able to prove either that the wife 's sister 's husband was not eligible for adoption under the Goda Custom or that the son to be adopted must if possible come from the family of their adoptive father. On the question whether there was an implied prohibition to adopt anybody other than the plaintiff or his sons, .also, they agreed with, the Trial Court even though they were not prepared to 646 say that the letter (exhibit 115) was written by the Defendant No., 1 under undue influence of the plaintiff., The learned Judges of the High Court refused to consider the further question raised on behalf of the appellant that the adoption was invalid in the absence of consent of the Sapindas as the proper. pleading on which, such a question could have been raised had not been made in the plaint and no issue had been framed. The High Court refused to frame an issue then, but Rave time to the plaintiff to make an application for amendment of the plaint. An application for amendment was duly made but was rejected by the learned judges who were of opinion that the application had not been made in good faith. The appeal was dismissed with costs. The plaintiff has filed the present appeal against the decision of the High Court after obtaining special leave from this Court. The appellant contends that the Courts below were wrong in holding, firstly. that a custom which barred the adopted of the wife 's sister 's husband in the Goda form of adoption had not been proved. secondly that a custom that if possible the adoptee must be from the family of the adoptive father had not been proved; and lastly that the alleged implied prohibition against adopting anybody excepting the plaintiff and one of his sons had not been established. It was also urged that the High Court was wrong in refusing to entertain the plea that the adoption was invalid in the absence of the consent of the husband 's sapindas and in any case totally wrong in allowing the application for amendment of the plaint seeking to raise such a plea. Before coming to the several grounds urged on behalf of the appellant we have to consider a preliminary objection raised on behalf of the respondent. It is urged that this appeal has become infructuous by reason of, the operation of section 14 of the Hindu Succession Act, It is said that, as 647 admittedly respondent No. 1, Mahalakshmi Bahuji Maharaj, was in possession of the properties in suit at the date of the commencement of the Hindu Succession Act, she became the full owner of the properties in question in case the adoption by her of respondent No. 2 is invalid. There maybe some force in this argument if the properties in question are the private secular properties of Anniruddhalalji. The position may well however be different if these properties were the Devattar properties belonging to the Thakur of which Anniruadhalalji was a Shabeit. It appears that a suit has actually been brought by certain Vaisnavas seeking a declaration that these properties are all Devattar properties of the Thakur. In view of this position we are of opinion that it would not proper for us to decide in the present case whether under section 14 of the Hindu Succession Act Defendant No. 1 had become the full owner of the properties in suit if the adoption by her was invalid. We shall therefore decide this appeal on merits leaving it open to the 1st respondent to pursue her claim under section 14 of the Hindu Succession Act if that becomes necessary. Coming now to the merits of the appeal it is necessary to consider first the question of the alleged limitation on the power to adopt by Goda practice as regards the wife 's sister 's husband or a member from another Vallabhacharya family even though members of the adoptive father 's family be available. It will be helpful to consider in this con nection first the objects of Goda adoption. These objects have been mentioned by plaintiff 's own witness Chandras Shankar Laxmishakar Upadhyaya who appears to have a fair amount of knowledge of Goda Dattaka adoptions, to be three fold. The primary object was mentioned by him to be that 1 & "person going in "Goda" adoption can perform "several (worship) etc., of the Thakorji (idol) and that tradition of "sewa" (worship etc.,) can be ' continued". The second object mentioned by him is "that, after. the death of the 648 person taking in adoption, the person going in adoption can perform his "shraddha" ceremonies etc " ' The third object according to him is "to continue the line of the person taking in adoption. " Other witnesses who have given evidence on this point have said more or less the same thing. It is obvious that if the above be the objects of Goda adoption it must be implicit In the nature of Goda adoption that anybody who would be incapable of accomplishing any of these objects would be ineligible for adoption. It is on this basis that it was urged that wife 's sister 's husband 's son was not eligible. The argument is that the wife 's sister 's husband would be unable to perform the Shradha of the adoptive father because the adoptee would not cease to be the Shadu of the person to whom the adoption is made, it was further said that the adoptee would the incapable of performing the Sradh of the adoptive maternal grand father as the latter would be the adoptee 's father in law. Unfortunately however for the plaintiff 's case 'his witnesses were unable to quote any authority except their own ipso dixit for this proposition that the adoptee would be incapable of performing the Sradh of his adoptive father or adoptee maternal grand father. The plaintiff 's witness Anantkrishna Sastri a Mahamahopadhyaya, made a statement that according to Dharmashastras a wife 's sister 's husband cannot be adopted. As authority for this proposition he relied on a passage in Dattak Mimanea which prohibits the adoption of a daughter 's son, a sister 's son and a mother 's sister 's son and adds thus: "This clearly proves that a daughter 's son and a mother 's sister 's son are (in this respect) equal to a sister 's son. This is just proper because there is in these three, the same degree of (prohibited) marriageship (Viruddha Sambandha). " It is true that Dattak Mimansa has in a later passage gone further and said that son of a woman who could not be married because of Virudha Sambsndhar relationship should be excepted from adoption 649 We have however held in Mrs. Abhiraj Kuer vs Debendra Singh(1) in which judgment has been delivered to day that this rule in Dattaka Mimansa against Viruddha Sambandha putra is only recommendatory and not mandatory. Apart from that it is difficult to see how the wife 's sister 's husband can be considered to be ViruddhaSambandha putra. It is thus clear that even if the limitations of the orthodox Dattak adoption apply to Goda adoption there is no bar to the adoption of, the wife 's sister 's husband. On the materials on the record we are also satisfied that there is no custom barring the adoption of the wife, is sister 's husband in Goda Dattak form. On the question whether in Goda Dattak adoptions the adoptee must if possible be from the family of the adoptive father, it is important to notice that the several objects for which Goda Dattak adoptions are made may well be satisfied even if the adoptee be from some other Vallabhacharya family. Practically the only evidence given in support of the case that there is a custom as alleged that if possible the adoptee must be from the adoptive father 's family is by the plaintiff himself. His witness Lakshmi Shankar Upadhaya, who, as al. ready stated, appears to have considerable ex perience of Goda Dattaka adoptions does not speak of any such custom. Even his witness Hari Krishna Virji Sastri who appears rather partial to him it may be mentioned that he admits having read even the plaint on being sent for by the plaintiff does not speak of any such custom. Against the plaintiff 's own evidence that there is such a custom we, find defendant No. 2 giving three instances where boys from other families were adopted in Goda Dattak even though members in the adoptive father 's family were present. It is true that the evidence does not show whether such adoptions from other family (1) C.A. No. 379 of 1958 decided on 15.9,61, 650 took, place only after members in the adoptive father 's family who might have been available for adoption declined to be adopted. It will be unreasonable however to expect such evidence as to the exact circumstances under which adoptions were made from other families even in the presence of members in the adoptive father 's family. But even if it be correct to say that the defendant has not established clearly that members from other families were adopted even though members in the adoptive father 's family were willing to be adopted, the fact remains that the plaintiff has not been able to establish by either any authoritative texts or from the opinion of some person well learned about the Goda Dattaka customs that a custom exists barring the adoption of members from other Vallabhacharya families if it were possible to adopt members from the adoptive father 's family. This brings us to the contention most vehemently urged before us that the evidence establishes an implied prohibition by Anniruddhalalji of the adoption of any person other than the plaintiff or one of his two sons. Reliance is placed first on the letter exhibit 115. We are inclined to agree with the High Court that this letter was written by Mahalakahmi Bahuji Maharaj of her own accord and cannot be brushed aside as having been written under the influence of the plaintiff. All that the letter shows however is that Anniruddhalalji had expressed a desire that Gokul Nath (who is plaintiff 's son) should be taken in adoption to him. While a reasonable reading of this letter would show that Anniruddhalalji authorized Mabalakshmi Bahuji Maharaj to make an adoption and that he expressed his preference for the adoption of Gokal Nath, the letter does not show even remotely that Anniruddhalalji indicated any wish that no body except Gokul Nath should be adopted. It is interesting to remember in this connection that plaintiff 's own in the Plaint is not that Anniruddhalalji had 651 declared any wish that nobody other than Gokul, Nath should be adopted but that his desire was that, "no body other than the 1 plaintiff or any one of hit sons should be adopted. " The plaintiff in his own testimony has no doubt said that Anniruddhalalji after asking the plaintiff to give his eldest son in Goda adoption told Mahalakshmi Bahuji Maharaj that ,only his brother 's son should be adopted". if, this was true it is difficult to understand why the plaintiff tried to make a case in the plaint that Anniruddhalalji had declared a wish that nobody except the plaintiff himself or one of his sons should be adopted. The plaintiff 's witnesses who have spoken as regards the declaration by Anniruddhalalji of his wish in this matter of adoption have not stated that Anniruddhalalji said that only his brother 's son should be adopted. His witness Nateswarji the brother of Anniruddhalalji 's, first wife says that "during his last illness Anniruddhalalji had spoken in my presence and in the presence of Defendant No. 1 that his desire was to adopt Bhaiya Raja and he had inquired of Defendant No. 1 what her desire was". Defendant No 1 had replied that her desire was the same as his desire. Such a talk had taken place only once in my presence. " Accepting that Nateshwarji has stated the full truth here his evidence does not show anything more than was indicated in the letter exhibit 115 itself and does not show that Defendant No. 1 prohibited even by implication the adoption of anybody else excepting Bhaiya Raja (the plaintiff 's son). The plaintiff 's witness Gobardhan stated in hip, evidence : Anniruddhalalji was speaking to all persons in touch with him that he wanted to take Bhaiya Raja in "Goda Dattak" and later that "he was spoken to by Maharaj that he wanted to take Bhaiya Raja in adoption". Even this witness who goes to the length of saying that a date was actually fixed by Anniruddhalalji for the adoption of Bhaiya Raja & story which none of the other witnesses give is not prepared to say that Anniruddhalalji said to Defendant No. 1 or to anybody else that nobody other 652 than Bhaiya Raj should be adopted. It is not possible in this state of the evidence to accept as true the plaintiffs uncorroborated testimony that Anniruddhalalji said to defendant No. 1, Mahalakshmi Bahuji Maharaj that only the plaintiff 's son should be adopted. We are therefore of opinion that the High Court is right in its conclusion that no implied prohibition by Anniruddhalalji of adoption of anybody other than the plaintiff or his sons has been proved. The last argument that the parties being governed by the Madras School of Mitakshara, the adoption is invalid in the absence of consent by the husband 's sapindas must be rejected, for the simple reason that the letter exhibit 115 and the evidence of the plaintiffs own witnesses justify the conclusion that in his life time Anniruddhalalji authorised Mahalakshmi Bahuji Maharaj to make an adoption after his death though at the same time indicating his preference for one particular boy. The necessity of consent of the husband 's sapindas would arise if the Madras School of Mitakshara law was applicable only where there was no authority from the husband. In the present case there was authority from the husband to adopt and so even if the rule of Orthodox Dattak adoption was applicable and Anniruddhalalji was governed by the Madras School of Mitakshara the question of any consent of husband 's sapindas does not arise at all. In the view we have taken of this argument it is unnecessary for us to consider whether the High Court was right in rejecting the application for amendment of the plaint that was made by th plaintiff in order to induce the High Court to consider this very argument. It is also not necessary for us to enter into the question on which some evidence appears to have been led 1 though no issue was framed, viz. whether Goda Dattak adoption is a mere variant 653 of the orthodox Dattak adoption or an affiliation altogether different from Dattak adoption. We therefore express no opinion on this question. The appeal is dismissed with costs. Appeal dismissed.

The first respondent on the death of her husband who was a descendant of the famous Vaishnava teacher Vallabhacharyaji and was possessed of certain Devattar properties belong to the Thakur of which be was the Shebait, adopted her sister 's husband as a son under the Goda Dattak Custom of adoption which prevailed amongst the Vallabhacharya community. The appellant who was the own brother of the deceased adoptive father contended inter alia that under the Goda Dattak custom a widow could not adopt her sister 's husband as a son to her husband, that the adoptee should belong to the family of the adopter and that the widow should obtain the ,consent of her husband 's sapindas for the adoption. Held, that the rule in Dattaka Mimansa against the adoption of the son of a woman who could not be married because of Viruddha Samandha relationship is recommendatory and even if the limitation of the orthodox Dattak adoption apply to Goda adoption there is no bar to the adoption of the wife 's sister 's husband. Abhiraj Kuer vs Devendra Singh, C. A. No. 379 of 1961 decided on 15 9 61, referred to. In the present case it has not been proved that under the Goda Dattak customs a custom existed barring the adoption of members of other Vallabhachari families if it were possible to adopt members from the adoptive father 's family. As in the present case there was authority from the husband to adopt the question of the consent of the sapindas of the ' husband did not arise even if he was governed by the Madras School of Mitakshara.

Plaintiff No. 1 and plaintiff No. 2 were father and son while defendant was the brother of plaintiff No. 1. The plaintiffs in their suit against the defendant claimed that the suit house in which the defendant was living, belonged to them by virtue of a patta issued in their names. They alleged that the deceased brother of plaintiff No. 1, who remained a bachelor till his death, loved plaintiff No. 2 as his son and had thought of adopting plaintiff No. 2 but since he died all of a sudden it could not be done. The defendant on the other hand claimed that he and his deceased brother lived as members of a joint family after the partition of their family that as a result of the joint efforts of himself and his deceased brother the Maharaja, of Bikaner sanctioned sale of the house to them, that the purchase money was paid out of their joint income but that the patta was granted in the names of the plaintiffs due to political reasons and therefore the plaintiffs were at the most benamidars. The trial court held that the house was acquired by the deceased brother from the Government of Bikaner for the plaintiffs and the patta was granted in favour of the plaintiffs and that they were in its possession till 1956. It rejected the defendant 's claim that it was acquired with the joint funds of himself and his deceased brother. On appeal the High Court held that the house had been purchased by the deceased brother out of his own money in the names of the plaintiffs without any intention to confer any beneficial interest on them and on his death plaintiff No. 1 and the defendant succeeded jointly to the estate as his heirs. ^ HELD: The transaction under which the patta was obtained was not a benami transaction. The house was acquired by the deceased brother with his money and with the intention of constituting plaintiff No. 2 as the absolute owner thereof. [648G] Where a person buys property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case the transferee holds the property for the benefit of the person who has contributed the purchase money and he is a real owner. The second case which is loosely termed a benami transaction is a case where a person, who is the owner of the property, executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case the transferor continues to be the real owner. The difference between the two kinds of benami transactions is that whereas in the former there is an operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of the person who has 629 contributed the purchase money, in the latter there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature in both cases is that the real title is divorced from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not depends upon the intention of the person who has contributed the purchase money in the former case, and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is statutorily recognized in section 82 of the Indian Trust Act, 1882. [638B E] Meenakshi Mills, Madurai vs The Commissioner of Income Tax, Madras, ; at p. 722; Mohammad Sadiq Ali Khan vs Fakhr Jahan Begam & Ors. 59 I.A. 1; Manmohan Das & Ors. vs Mr. Ramdai & Anr. A.I.R. 1931 P. C. 175; Jaydayal Poddar (deceased) through his L.Rs. & Anr. vs Mst. Bibi Hazra & Ors. referred to. 2. The principles governing the determination of the question whether a transfer is a benami or not are: (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money and (4) the question as to what his intention was, has to be decided on the basis of the surrounding circumstances, the relationship of the parties the motives governing their action in bringing about the transaction and their subsequent conduct. [641C E] In the instant case the deceased brother was a bachelor. On the death of the wife of plaintiff No. 1, plaintiff No. 2 and his younger brother were staying with the deceased brother. Plaintiff No. 1 was almost in an indigent condition while defendant practised law for some time and later entered into service. The patta for the house was issued in the name of plaintiffs nos. 1 and 2 at the request of the deceased brother for the benefit of plaintiff No. 2 and was handed over to him after he completed his education. This conduct of the deceased brother established that it was his intention that, when he secured the patta from the State Government in the names of plaintiffs it was his intention that plaintiff No. 2 whom he loved, should become the owner. [641F H] 3. The declaration made by the deceased, who had contributed the purchase money subsequent to the date of purchase to the effect that the property belonged to plaintiff No. 2 was admissible in evidence either under section 32(3) or section 21 of the Indian Evidence Act to prove his intention that he intended that plaintiff No. 2 should become its owner. [647E] Shephard & Anr. vs Cartwright & Anr. ; , distinguished.

One B, a Brahmin Karnam, executed a will in 1903 authorising his 'widow to adopt. After his death, the widow adopted R in 1904. The first respondent was R 's adopted son. R died in 1950, and his adoptive mother died in 1952. During his lifetime, R was recognised by every member of the family as the adopted son of B, and he was registered as the Karnam and he acted as the Karnam till his death. In 1953, the appellant, claiming to be the nearest heir of B filed a suit for recovery of possession of B 's property contending that R 's adoption was invalid, because, the adoptive mother had not attained the age of discretion at the .time of the adoption and was therefore not competent to make the adop tion. The suit was dismissed. In appeal to this Court, HELD : Where there is a lapse of several years between the adoption and its being questioned, the burden rests heavily upon him who challenges it, and every allowance for the absence of evidence to prove it must be favourably entertained. [303 D E] In the present case, having regard to the long lapse of time, the recognition of R as, the adopted son of B, and the fact that those who could have given evidence in favour of the adoption had passed away, a strong presumption in favour of the validity of adoption should be drawn. The appellant made no attempt to produce the certified copy of the register of births which would have shown, the exact age of the mother and thus failed to rebut the presumption. [303 C D; F] Venkataseetarama Chandra Row vs Kanchu Marthi Raju A.I.R. applied.

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]

A deed of trust was executed by the respondent on March II, 1938, when she was residing at D in the State of Bihar, in respect of the properties described in the Schedules referred to in the deed, some of which were situate outside the State of Bihar. In the trust deed she described herself as the settlor, and it was recited therein that the settlor had installed a deity named Iswar Srigopal in her house and had since been regularly worshiping and performing the puja of the said deity; and that she had been erecting a Nat Mandir to be named in memory of her deceased son. The recitals also showed that the settlor had provided for the construction of two temples (jugal Mandir), in one of which was to be installed the deity Srigopal and other deities, and in the other the marble image of, her preceptor and that the temple, committee shall consist of the, Jugal. Mandir shebait for the time being and six pious Hindus who must be residents. of D and of whom at least four shall be Begalis. One 76 602 of the clauses of the trust deed recited : "The ' pronamis ' and perquisites to be offered to the deities and image in the jugal Mandir shall form part of the Srimati Charusila Trust Estate and neither the shebait nor any one else shall have interest or claim in or over same. ,, The provisions of the trust deed in regard to the ceremonials relating to free distribution of food and water and the festivals to be performed for the deity and the image, which were well known festivals in which members of the Hindu Community usually take part, contemplated that they were to be done on a large scale so as to enable a large number of persons to take part in them. There was also a provision in the trust deed for the establishment of a hospital for Hindu females and a charitable dispensary for patients of any religion or creed. After the coming into force of the Bihar Hindu Religious Trusts Act, 1950, the President of Bihar State Board of Religious Trusts started proceedings under sections 59 and 70 Of the Act against the respondent in respect of the trust on the footing that it was a public trust to which the Act applied. The respondent made an application to the Patna High Court under article 226 of the Constitution in which she prayed that a writ or order be issued quashing the proceedings taken against her by the Bihar State Board of Religious Trusts on the grounds (I) that the trust deed dated March II, 1938, was a private endowment created for the worship of a family idol in which the public were not interested, (2) that the Act did not apply to private trusts, (3) that the Act was ultra vires the Constitution by reason of the circumstance that its several provisions interfered with her rights as a citizen guaranteed under Part III of the Constitution, and (4) that, in any case, the Act was not applicable to the trust deed in question as some of the properties were situate outside the State of Bihar. Held (1) that on its true construction the deed of trust dated March 11, 1938, created a religious and charitable trust of a public nature. Deoki Nandan vs Murlidar, ; , considered. In re Charusila Dasi, I.L.R. [1946] I Cal. 473, explained. One of the relevant considerations as to whether the trust was a public trust, will be if by the trust deed any right of worship has been given to the public or any, section of the public answering a particular description. (2) that the Act does not apply to private endowments. Mahant Ram Saroop Dasji vs section P. Sahi, [1959] SUPP. 2 S.C.R. 583, followed. (3) that the provisions of the Act do not take away or abridge any of the rights conferred by Part III of the Constitution. Mahant Moti Das vs section P. Sahi, [1959] Supp. 2 S.C.R. 563, followed. 603 (4) that section 3 of the Act makes the Act applicable to all public religious and charitable institutions within, the meaning of the definition clause in section 2(1) Of the Act, which are situate in the State of Bihar and any part of the property of which is in that State. (5) that where the trust is situate in Bihar the State has legislative power over it and also over its trustees or their servants and agents who must be in Bihar to administer the trust, and as the object of the Act is to provide for the better administration of Hindu Religious Trusts in the State of Bihar and for the protection of properties appertaining thereto, in respect of the property belonging to the trust outside the State the aim is sought to be achieved by exercising control over the trustees in Personam, and there is really no question of the Act having extra territorial operation. (6) that, in the present case, the circumstance that the temples where the deities were installed are situate in Bihar and that the hospital and charitable dispensary are to be established in Bihar for the benefit of the Hindu Public in Bihar, gives enough territorial connection to enable the legislature of Bihar to make a law with respect to such. trust. Tata Iron & Steel Co. Ltd. vs State of Bihar, [1958] S.C.R. 1355 and The State of Bombay vs R.M.D. Chamaybaugwala, (1957] S.C.R. 874, relied on. Saydar Gurdyal Singh vs The Rajah of Faridkote, (1894) L.R. 21 I.A. I71, distinguished.

The late R. Sridharan married Rosa Maria Steinbichler, a christian Austrian of descent, under the and a son Nicolas Sundaram was born out of the wedlock. In the assessment proceedings i respect of income tax, wealth tax and expenditure tax, Sridharan claimed to be assessed in the status of a member of Hindu Undivided Family consisting of himself and his son, contending that the property held by him was ancestral and Nicolas Sundaram was a Hindu. The officers dealing with these taxes rejected the contention and assessed him as an individual on the ground that succession to the property of a person married under the , is governed by the and not by ordinary Hindu Law and Nicolas Sundaram could not become a member of Hindu Undivided Family With his father. these orders were affirmed by the Appellate Assistant Commission i the Appellate Tribunal in appeals by Sridharan against the assessments. On further applications made by Sridharan, the Income Tax Appellate Tribunal referred the matter to the High Court which decided in favour of Sridharan but granted a certificate of fitness. Meanwhile, Sridharan died, and his widow filed wealth tax returns, claiming the status of a member of Hindu Undivided Family. The Revenue authorities followed their earlier decisions, and ultimately the matter was referred to the High Court which decided in favour of respondent Mrs. Sridharan, but granted Leave to appeal to this Court. Dismissing the appeals, the Court, ^ HELD: ( 1 ) Under the codifying, Acts. the orthodox concept of the term "Hindu" has undergone a radical change and it has been given an extended meaning. The Acts not only apply to Hindus but also to a large number of other persons. Any child legitimate or illegitimate, one of whose parents is a Hindu by religion and who is brought up as a Hindu, is a Hindu. [478D E] (2) Section 21 of the has no bearing on the present case. The section does not in any way impair or alter the joint family structure between n assessee and his son. Nor does it affect the discretion vested in a Hindu assessee to treat his properties as joint family properties by taking into his fold his Hindu sons so as to continue joint family properties [479 A C] Shastri Yagnapurushdasji & Ors. vs Muldas Bhundardas Vaishya and Anr. ; ; Bhagwan Koer vs J. C. Bose & Ors. 11; Lingappa vs Esudasan ; Mothey Anja Ratna Raja Kumar vs Koney Narayana Rao & Ors. AIR 1953 SC 433 and Ananthaya vs Vishnu , referred to. Webster 's 3rd New International Dictionary of the English Language; Encyclopaedia Britannica (15th Edn.); Gitarahasya by B. G. Tilak Principles of Hindu Law (14th Edn.) pp. 671 and chap. I para 6 by Mulla, and Hindu Law & Usage (11th Edn.) pp. 290 by Mayne, referred to.

The Commissioner of Police, Ahmedabad, Respondent No. 1 therein passed an order of detention dated 23.5.1988 against Abdul Latif Abdul Wahab, petitioner 's brother under section 3(2) of the Gujarat Prevention of Anti Social Activities Act, 1985 and served the same on the detenu, while he was in jail, in pursuance of an order of remand made by the Desig nated Court, Ahmedabad in CR No. 40 of 1987. The petitioner, detenu 's brother challenged the validity of this order on the ground, amongst others, that there has been absolute non application of mind on the part of the detaining author ity in making the order of detention. The grounds of detention furnished to the detenu, makes mention of three criminal cases viz. Case No. 372/85, Case No. 456/87 and Case No. 2/88 pending against the detenu at P.S. Kalupur, out of which case No. 372/85 is stated to be pending in Court and the other two pending for examination. The detaining authority acting on the basis of the said complaints apprehended that detenu 's criminal activities will adversely affect the public order because the activi ties, the weapons kept by the detenu and his associates cannot except create terror in the State of Gujarat. The detaining authority further felt that the detenu though in jail, there are full possibilities that he may be released on bail in that offence. It may be pointed out that in case No. 2/88, the name of the detenu does not find place in the FIR. Likewise in case No. 372/85 aforesaid, detenu 's name is not there. 891 In case No. 456/87, registered on 16.10.87 the detenu was arrested the same day. The case related to the seizure of a revolver from the person of detenu. The detaining authority while issuing the order of detention against the detenu, did not at all consider the fact that the Designated Court declined to grant bail to the detenu by its order dt. May 13, 1988. The detaining authority also was not aware that no application for bail by detenu was filed between May 13 to May 23, 1988 i.e. when the detention order was made. The Court in order to decide the various contentions advanced by the parties felt it necessary to consider the background as well as the various detention orders passed against the detenu. The first in the series is an order dt. 11th September, 1984 when the Respondent No. 1 issued to the detenu a notice to show cause why he should not be externed from the boundaries of Ahmedabad and the surroundings rural areas. In 1985 the detenu was arrested u/s 307, 143, 147, 148 & 324, I.P.C. CR case No. 37/85 wherein he was granted bail by the Sessions Judge on February 14, 1985. On 24th March 1985, Commr. of Police passed an order of detenu 's detention. On 6th July 1985 charge sheet in CR Case No. 37 of 1985 was submitted. On 27th September, 1985 inquiry into the externment proceedings was completed. On Dec. 12, 1985 the detenu surrendered and was taken into custody. On May 26, 1986, the detenu was acquitted in that case. The detenu was released from the jail on June 23, 1986 and as soon as he came out of the jail, an order of detention under Preven tion of Anti Social Activities Act was served on the detenu there and then and he was once again taken into custody. It may be mentioned in this connection that on Jan. 18, 1986, the order of externment of the detenu from Ahmedabad city and rural areas of Gandhi Nagar etc. was made when the detenu was in jail. The State Govt. on appeal by the detenu confirmed the order of externment. However on August 7, 1986, the Govt. revoked the order of detention, as Advisory Board could not be constituted. On the same day the State Govt. passed the second order of detention under PASA and the same was served on the detenu the same day. The detenu challenged the validity of both the externment order as also the detention order in the High Court. The High Court re jected the petition challenging the order of detention and he filed petition for special leave in this Court. This Court released the detenu on parole on 23.1.87 as he was to participate in municipal elections which were to take place on 25th Jan. 1987. The detenu was released on parole on 24th Jan. 1987. He won the election from all the wards wherefrom he had contested. This Court on February 9, 1987 quashed the detention order and 892 directed the respondents to set the detenu at liberty. On February 14, 1987 when the detenu went to the police station with his advocate to mark his presence as required by the earlier bail order, he was again taken into custody for breach of order of externment of 18.1.1986. He was granted bail. On February 15, 1987 an order of detention under section 8(a) of the National Security Act was passed against the detenu. The detenu challenged the same but in the meantime Advisory Board released him. On October 16, 1987, the detenu was again arrested for an incident of Feb. 14, 1986. He applied for bail before the Designated Court which was refused. Against that order he preferred an appeal to this Court under section 16 of the Terrorists and Disruptive Activities (Prevention) Act 1985. This Court set aside the order of the Designated Court and remitted the matter back to the said Court with a direction to decide the matter afresh and enlarge the detenu on bail pending the disposal of the application for bail. Another order of detention was passed against the detenu on Jan. 25, 1988 which was later withdrawn as the Advisory Board declined to confirm the same. The detenu was released on March 14, 1988. At the hearing of the appeal by this Court on 7.4.88 an application was made that the detenu has absconded whereupon this Court ordered that the detenu should surrender within a week 's time. He accordingly surrendered on April 13, 1988. On May 23, 1988 the order of detention in question was made which is hereby challenged. The contention raised on behalf of the petitioner is that in the grounds of detention furnished in support of the order of detention, no prejudicial act on the part of the detenu is alleged between March 14, 1988 and April 13, 1988 during which small period he was a free man; as he was in jail for nearly three years prior to March 14, 1988 except for short periods when he was on parole, and after April 13, 1988 again he was under custody. It is urged that no preju dicial activity has been shown, when the detenu was on parole. As such the action of the respondent is wholly vindictive and in total defiance of law. According to him there has been no application of mind at all to the most glaring fact that the Designated Court in defiance of this Court 's order did not grant interim bail to the detenu by its order dt. 13.5.88. There was no possibility therefore of the detenu being released on bail. It was thus impossi 893 ble to prove the statement made in the grounds of detention that there were full possibilities that the detenu may be released on bail in this case. Allowing the petition, this Court, HELD: The detention of a person without a trial is a very serious encroachment on his personal freedom and so at every stage, all questions in relation to the detention must be carefully and solemnly considered. [901G] The past conduct or antecedent history of a person can be taken into account in making a detention order but the past conduct or antecedent history of the person, on which the authority purports to act, should ordinarily be proxi mate in point of time and would have a rational connection with the conclusion drawn by the authority that the deten tion of the person after his release is necessary. [901F G] There must be awareness in the mind of the detaining authority that the detenu is in custody at the time of service of the order of detention on him, and cogent rele vant materials and fresh facts have been disclosed which necessitate the making of an order of detention. [905D E] In the instant case, the detenu was in jail custody in connection with a criminal case and the order of detention was served on him in jail. It is also evident that the application for bail filed by the detenu was rejected by the Designated Court on May 13, 1988. The statement in the grounds of detention that at present you are in jail yet "there are full possibilities that you may be released on bail in this offence also" clearly shows that the detaining authority was completely unaware of the fact that no appli cation for bail was made on behalf of the detenu for his release before the Designated Court and as such the possi bility of his coming out on bail is non existent. This fact of non awareness of the detaining authority clearly estab lishes that the subjective satisfaction was not arrived at by the detaining authority on consideration of relevant materials. The only period during which he was free person was from March 14, 1988 to April 13 1988. During this period no act prejudicial to the maintenance of public order has been alleged to have been committed by the detenu. [905E G; 906E F] A mere bald statement that the detenu is in jail custo dy is likely to be released on bail and there are full possibilities that he may continue 894 the offensive activities without reference to any particular case or acts does not show on the face of the order of detention that there has been subjective satisfaction by the detaining authority in making the order of detention in question. [907C D] The order of detention was accordingly quashed and the detenu directed to be set at liberty forthwith. [907D] Rameshwar Shaw Burdwan & Anr. vs Distt. Magistrate Burdwan & Anr., ; referred to; Alijan Mian vs Distt. Magistrate Dhanbad & Ors. , [1983] 4 SCC 301 referred to; Ramesh Yadav vs Distt. Magistrate, Etah & Ors., referred to; Suraj Pal Sahu vs State of Maharashtra & Ors., ; referred to; Vijay Narain Singh vs State of Bihar & Ors., referred to; Raj Kumar Singh vs State of Bihar & Ors., ; referred to; Binod Singh vs Distt. Magis trate Dhanbad & Ors., ; at 420 21; Poonam Lata vs M.L. Wadhawan and Anr., ; referred to and Smt. Shashi Aggarwal vs State of U.P. & Ors., ; at 440, referred to.

Respondent No. 1 was born in undivided India on July 3, 1934. He went to Pakistan in October 1950. In 1953 he obtained a visa from the Indian High Commission in Pakistan and came to India on July 22, 1953. After the expiry of his period of stay he sought permanent settlement in India. On May 6, 1955 he filed a suit claiming that he was a minor when he went on a trip to Pakistan and had not ceased to be an Indian citizen. He sought a permanent injunction restraining the Union of India and other authorities from deporting him. The Munsif who tried the suit held that respondent No. 1 had ceased to be an Indian citizen, and dismissed the suit. The District Judge in first appeal held that being a minor whose father was in India respondent no.1 could not by leaving for Pakistan, lose his Indian nationality. In second appeal the High Court of Allahabad remanded the case to the first appellate court to determine the question whether by having spent one year in Pakistan after attaining majority respondent No. 1 had acquired the citizenship of Pakistan. The High Court rejected the contention on behalf of the State that in view of section 9(2) of the Indian which came into force on December 30, 1955 and Rule 30 of the Citizenship Rules made under the Act, the question whether respondent No. 1 was a citizen of India or not could only be decided by the Central Government. In taking this view the High Court relied on the decision in Abida Khatoon 's case in which a single Judge of that court had held that section 9 of the was not retrospective and could not take away the vested right of a citizen who had already filed a suit to have his claim for citizenship decided by a court. 'the first appellate court gave after remand a finding favourable to respondent No. 1 and on receipt of this finding the High Court dismissed the State 's appeal. The State then appealed to this Court. The questions that fell for consideration were : (i) whether section 9 of the Act would apply to a suit pending on the date when the Act came into force; (ii) whether in view of the fact that the procedure established by law before the commencement of the Act allowed the question as to the acquisition of the citizenship of another country to be determined by courts, there was by giving retrospective operation to section 9, a violation of the guarantee of personal liberty under article 21. HELD : (i) The language of sub section (1) of section 9 is clear and unequivocal and leaves no room for doubt that it would cover all cases where an Indian citizen has acquired foreign nationality between January 26, 1950 and its commencement or where he acquires such nationality after its commencement. The words "or has at any time between the 26th January 1950 and the commencement of the Act, voluntarily acquired the citizenship of another country" would become almost redundant if only prespective operation is given to section 9(1) of the Act. This according to the settled rules of interpretation cannot be done, [1010 F G] 1007 (ii) The Act has been enacted under the powers of the Parliament preserved by article 11 in express terms and a law made by Parliament cannot, as. held in lzhar Ahmed 's case be impeached on the ground that it is inconsistent with the provisions contained in other Articles in Part II of the Constitution. The Parliament had also legislative competence under Entry 17, List I of Seventh Schedule. It could thus make a provision, about the forum where the question as do whether a person had acquired citizenship of another country could be determined and this is what has been done by r. 30. [1011 B D] The cases that would ordinarily arise about loss of Indian citizenship by acquisition of foreign citizenship would be of three kinds : (1) Indian citizens who voluntarily acquired citizenship of a foreign, State perior to the commencement of the Constitution; (2) Indian citizens who voluntarily acquired the citizenship of another State or country between January 26, 1950 and December 30, 1955 i.e. the date of commencement of the Act, and (3) Indian Citizens who voluntarily acquired foreign citizenship after the date of commencement of the Act i.e. December 30, 1955. As regards the first category they were dealt with by article 9 of the Constitution. The second and third categories would be covered by the provisions of section 9 of the Act. Therefore, if a question arises as to whether when and how an Indian citizen has acquired citizenship of another country that has to be determined by the central Government by virtue of the provisions of sub section (2) of section 9 read with r. 30 of the Citizenship Rules. In view of the amplitude of the language employed in section 9 which takes in persons mentioned in category (2) mentioned above, the entire argument which prevailed with the Allahabad High Court in Abida Khatoon 's case can have no substance. [1011 D H, 1012 C] lzhar Ahmad Khan vs Union of India, [1962] Supp. 3 S.C.R. 235, 244, 245., Akbar Khan Alam Khan & Anr. vs Union of India, ; and The Government of Andhra Pradesh vs Syed Mohd. Khan, [1962] Supp. 3 S.C.R. 288, referred to. Abida Khatoon & Anr. vs State of. U.P. & Ors. A.I.R. 1963 All 260, disapproved. (iii) The contention that retrospective operation of section 9 would contravene article 21 of the Constitution could not be accepted. If the Parliament was competent under article 11 which is a constitutional provision read with the relevant entry in List I to legislate about ' cases of persons belonging to categories 2 and 3 referred to earlier it could certainly enact a legislation in exercise of its sovereign power which laid down a procedure different from the one which obtained before. The new procedure would ltself become the "procedure established by law" within the meaning of article ' 21 of the Constitution. [101 2 E G] The High Court was therefore wrong in the present case in calling for a decision of the lower appellate court on the issue of the plaintiff having acquired or not the citizenship of Pakistan between July 3, 1952 and the date of his return to India. [High Court accordingly directed to have question determined by Central Government and thereafter dispose of appeal finally]. [1013 B C]

Appeal No. 401 of 1961. Appeal by special leave from the judgment and order dated May 24, 1961, of the Allahabad ' High Court in Civil Misc. Writ No. 846 of 1961. M. C. Setalvad Attorney General for India and J.P. Goyal for the appellant. C. B. Agarwala and C. P. Lal, for respondents Nos. 1 and 2. C. K. Daphtary, Solicitor General of India, R. K. Garg, section C. Agarwala, D. P. Singh and M. K. Ramamurthi, for respondents Nos. 3 to 13. September 20. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. This appeal, by special leave, is directed against the judgment of the, High Court of Allahabad dismissing a writ petition filed 720 by the appellant praying for the issue of a writ in the nature of mandamus directing the State of Uttar Pradesh and the District Magistrate, Meerut, not to give effect to the resolution passed in the meeting of the members of the Municipal Board, Pilkhuwa, dated February 6. 1961 and for the quashing of the proceedings of that day. The appellant was the President of the Municipal Board, Pilkhuwa, in January February, 1959. On January 4, 1959, a written notice of the intention to make a motion of no confidence in the President signed by nine members of the Board, including Ram Nath and Kesho Ram Gupta, was delivered to the District Magistrate, Meerut, in Pursuance of sub section (2) of s.87 A of the U.P. Municipalities Act, 1916 (U.P. Act II of 19 16), hereinafter called the Act. The District Magistrate, Meerut, duly convened a meeting of the Board on February 6, 1961. The appellant moved writ petition No. 367 of 1961 in the High Court on February 2, 1961, and questioned the validity of that notice. That petition was dismissed in limine on the same day. It was held that unless and until an order of removal is passed actually by the State Government there could not be any removal of a member or anything which would disentitle a member to take part in the proceedings of the meeting and that the application was also premature. The meeting of the Board took place on February 6, 1961. Mr. Agarwala, Munsif, Meerut, presided over the meeting all the ten members who were present, voted for the motion of no confidence and the Munsif declared the motion to, have been carried. The appellant, by his writ petition, desired the proceedings of the meeting to be quashed and the resolution expressing no confidence in the appellant be not given effect to by the state of U.P. an . ' the District Magistrate. 721 It was urged before the High Court that the MO notice of motion delivered to the District Magistrate was invalid and so were the proceedings of the meeting. Ram Nath and Kesho Ram Gupta who had signed the notice and also Raghunandan I?,;, Prasad who, along with them took part in the proceedings of the meeting and voted in support of the no confidence ' resolution, bad incurred, prior to January 4, 1961, disqualification under s.13 D (g) of the Act inasmuch as they were in arrears in the payment of municipal tax and other dues in excess of one year 's demand to which section 166 of the Act applied. The contention was that on account of the having incurred the aforesaid disqualification, they were disqualified from being members of the Board and, consequently, were not competent to exercise the rights of a member of the Municipal Board. The High Court held that Ram Nath had been proved to be in arrears in payment of house tax on February 6, 196 1, and that Kesho Ram Gupta and Raghunandan Prasad were not in arrears in payment of the Tehbzarai tax for the year 1959 60 and house tax respectively. It held that a member of the Board did not cease to be a member on his mourning the disqualification under s.13 D(g) and that he became disqualified merely to exercise office and to act as a member. The I earned Judges observed : "During the continuance of the dis qualification the person 's right to act as a member falls into a state of suspension. On removal of the disqualification the state of suspension disappears and his right to exer cise office as a member of the board revives unless he has been removed by Government from membership of the board under section 40 of the Act during the continuance of dis qualification. " Holding that the motion of no confidence was valid as it had been passed by the vote of nine members 722 who constituted the majority of more than half the total number of members of the Board, that being seventeen, and that those nine members of the Board being qualified and duly elected members of the Board, Ram Nath 's taking part in that meeting did not vitiate its proceedings in view of the provisions of sub section (2) of section 113 of the Act, the learned Judges dismissed the writ petition. The learned Judges did not consider the validity of the notice on merits as they were of opinion that the order on writ petition No. 397 of 1961 operated as res judicata, though in view of their opinion the notice of motion of no confidence would have been invalid if the name of Ram Nath be excluded from the signatories as in that case the number would be eight and so one short of the number required by the provisions of sub section (2) of section 87 A of the Act. The meeting held in pursuance of a bad notice would also have been invalid. The learned Attorney General, appearing for the appellant, has raised the following, contentions : (i) The order dismissing writ petition No. 397 of 1961 could not operate as res judicata as it had been dismissed mainly on account of its being premature and not on merits. (ii) A member of the Municipal Board, on incurring a disqualification under section 13 D, ceases to be a member of the Board so long as the disqualification exists and therefore he cannot act as a member of the Board for any purpose. (iii) Kesho Ram Gupta was also a disqualified member of the Board and the resolution of the Board dated February 6, 1961, holding that no Tehbazari tax was due from Kesho Ram Gupta and that the amount deposited by him under protest on February 9, 1961, be refunded. , was ultra vires the power of the Board which had no power to review or revise the imposition of tax. 723 (iv) Due to the disqualification incurred by Ram Nath and Kesho Ram Gupta, both the notice of motion of no confidence and the proceedings of the meeting were bad as, excluding their signatures and votes, the number of members signing the notice and of those voting at the meeting becomes less than half the total of the members of the Board. (v) The proceedings of the meeting were vitiated even if Ram Nath alone, who was a disqualified member, had taken part in the meeting and were not saved by the provisions of sub section (2) of a. 113, as the meeting held in pursuance of the provisions of section 87 A of the Act is not a meeting of the Board to which the provisions of sub section (2) of section 113 can apply. The learned counsel for the respondents conceded that the order dismissing writ No., 397 of 1961 could not operate as res judicata in ' these ,proceedings on the question whether the notice of no confidence was a valid notice or not. We do not agree with the second contention .for the appellant, or with the view expressed by the learned Judges that a person who incurs disqualification under cl. (g) of a. 13 D of the Act becomes disqualified to exercise office and to act as a member. Section 13 C of the Act lays down the qualifications for membership of the Board and section 13 D lays down the disqualifications for membership. Of its ten clauses, the relevant clause of section 13 D for our purpose is cl. It reads : "A person, notwithstanding that he is otherwise qualified, shall be disqualified for being chosen as, and for being, a member of a Board if he is in arrears in the payment of municipal tax or other dues in excess of one year 's demand to which section 166 applies". 724 Second proviso to this section is: " 'Provided further that in the case of (g), the disqualification shall cease as soon as the arrears are paid. " If a member of the board falls in arrears in the payment of tax, he incurs this disqualification. The provisions of section 13 D do apply to members of the board incurring disqualification during the period of their membership and are not confined in their application to the stage previous to the election as, in that case, the expression "and for being ' in the section would have been unnecessary. This expression has been interpreted in Election Commission, India vs Saka Venkata Subba Rao (1) in connection with the interpretation of article 191, whose relevant provision is "is person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State. . It was observed at page 1157 : "Article 191, which lays down the same set of disqualifications for election as well as for continuing as a member, and article 193 which prescribes the penalty for sitting and voting when disqualified, are naturally phrased in terms wide enough to cover both preexisting and supervening disqualifications. " There is nothing in section 13 D or in any other section of the Act which provides for the suspension or cessation from membership of a duly elected member on his incurring any of the disqualifications under section 13 D. On the other hand the provisions of section 40 of the Act lead to the inference that a member incurring such a disqualification, continues to be entitled to take part in any proceedings of the Board or to perform the duties of a member. Section 40 deals with the removal of members and empowers the State Government (1) ; 725 in the case of a city or the Prescribed Authority in any other case, to remove a member of the board on any of the grounds mentioned in cls. (a) to (f) of sub section The ground for removal mentioned in cl. (b) is that a member has incurred any of the disqualifications mentioned in Bs. 12 D and 13 D. Sub sections (3), (4) and (5) of section 40 read : "(3) The State Government may remove from the board a member who in its opinion has so flagrantly abused in any manner his position as a member of the board as to render his continuance as a member detrimental to the public interest: (4) Provided that when either the State Government or the Prescribed Authority, as the case may be, proposes to take action under the foregoing provisions of this section, an opportunity of explanation shall be given to the member concerned, and when such action is taken the reasons therefore shall be placed on record. (5) The State Government may place under suspension a member, against whom proceeding under sub sections (3)and (4) has been commenced, until the conclusion of the enquiry and any member who has been so suspended shall not so long as the order of suspension continues to remain in force, be entitled to take part in any proceedings of the board or otherwise perform the duties of a member. " The State Government is empowered to suspend a member against whom proceedings under sub section (4) had commenced, i.e., against whom action for removal is being taken on one of the grounds mentioned 'in cls. (a) to (f) of sub section A member so suspended is not entitled to take part in any proceedings of the board or otherwise perform the duties of a member during the period of suspension. It can be legitimately inferred from the provisions 726 of sub section (5) that in the absence of an order of suspension the member who had not only incurred any of the disqualifications mentioned in section 13 D, but against whom the Government might have started proceedings, was entitled to take part in the proceedings of the board or to perform the duties of a member so long as the Government does not place him under suspension. We are therefore of opinion that a member of the Municipal Board does not automatically come under suspension or lose his right to take part in the proceedings of the board or perform the duties of a member or cease to be a member of the board merely on his incurring any of the disqualifications mentioned in a. 13 D. It may be mentioned that any other conclusion can have very unstable effect and can indefinitely make the validity of the proceedings and action of the board uncertain as one cannot predicate at any moment of time as to which of the members of the board has incurred a disqualification, a matter which must be dependent mostly on the proof of the allegations made. Such could not have been the intention of the Legislature. Kesho Ram Gupta and Ragbunandan Prasad had incurred the disqualification under cl. (g) of section 13 D of the Act, they were not incompetent to exercise their rights as members of the board and could therefore validly sign the notice. , of motion of no confidence and take part in the proceedings of the meeting held in pursuance of the provisions of section 87 A of the Act on February 6, 1961. It follows that the proceedings of, and the resolution passed at the meeting of February 6, 1961, are valid and that the order of the High Court dismissing the appellant 's writ petition is correct, though for different reasons. In view of this opinion., it is not necessary to deal with the other contentions for the appellant. We therefore dismiss the appeal with costs. Appeal dismissed.

The appellant was the President of a Municipal Committee. A written notice of the intention to move a motion of no confidence in the President signed by nine members of the Board was delivered to the District Magistrate under section 87 A sub section (2)of the U.P. Municipalities Act, 1916. The District Magistrate duly convened a meeting of the Board, but before the date of the meeting the appellant moved a writ petition in the High Court and questioned the validity of the notice. The writ petition was dismissed in limine inter alia as being premature. The Meeting of the Board. was held on the due date and all the members present, voted for the motion of no confidence and the Munsif of the area who had presided declared the motion to have been carried. The appellant by his second writ petition before" the High Court desired that the 719 proceeding of the meeting be quashed and the resolution ex pressing no confidence in the appellant be not given effect to, by the State and the District Magistrate, for the reason that two of the members of the Board who had signed the notice and subsequently taken part in the proceedings of the meeting and voted, had 'incurred disqualification under section 13 D (g) of the U.P. Municipalities Act, 1916, inasmuch as they were in arrears in the payment of municipal tax and other dues to which section 166 of the Act applied. Held, that an order, dismissing a writ petition in limine not on merits but for the reason that it was premature. could not operate as res judicata in subsequent proceedings. does not automatically come under suspension, or lose his rights to take part in the proceeding of the Board, or perform the duties of a member or cease to be a member of the Board merely on his incurring any of the disqualification mentioned in section 13 D of the U.P. Municipalities Act, 1916. A member of the Municipal Board, merely, by incurring the disqualification under cl. (g) of section 13 D of the U.P. Municipalities Act, 1916, was not incompetent to exercise his rights as a member of the Board. Election Commission, India vs Saka Venkata Subba Rao, ; , referred to.

The Respondent filed proceedings for eviction against the Petitioner firm in respect of a property situated at Narnaul under the Haryana Urban (Control of Rent and Evic tion) Act, 1973 and obtained a decree of eviction. Petition er 's appeal against that decree failed in the High Court and the Special Leave Petition filed by it in this Court was also dismissed on 24.8.87. While dismissing the Special Leave Petition this Court inter alia directed that the order of eviction shall not be executed for a period of six months on the Petitioner 's filing usual undertaking in this Court within four weeks. Usual under taking implied that the Petitioner was in possession of the property and that it would deliver vacant possession of the property by the time granted to it by the Court. The Petitioner did not file any undertaking in this Court. Instead three of Sanjay Kumar and Lala Ram sons of Rajkumar and Ved Prakash who are sons of Ganpat Ram (a partner in the petitioner 's firm) filed a suit in the Court of senior Sub Judge, Narnaul for permanent injunction restraining the decree holders from ejecting Sanjay Kumar & Lala Ram. In the said suit the said plain tiffs obtained an order of temporary injunction dated 3.11. The said suit was filed against Kalu Ram and Puran Chand son of Roshan Lal and also against Ganpat Rai. The learned Senior Subordinate Judge in his order dated 12.2.88 granting injunction to the plaintiffs took the view that the plaintiffs had claimed a right of tenancy to the premises in question independently and as such the decree of eviction passed by this Court in Special Leave Petition No. 5597 of 1987 would not bind the plaintiffs. On this reason ing he issued the injunction. Being unable to obtain possession of the property in question, Kalu Ram and Ant. who were respondents in Special Leave Petition (decree holders) have filed this Petition praying for initiation of Contempt of Court proceedings against the Petitioner firm. 224 Disposing of the Petition with some directions this Court, HELD: On the date of the order of this Court dated 21st August 1987, in the Special Leave Petition, the Petitioner therein had obtained time on the implied assurance and representation that they were in possession of the premises in question and were capable of delivering the vacant pos session to the applicants. The effect of the said order of this Court, is that the applicants would have vacant posses sion from the firm, Ganpat Ram Rajkumar. [227C D] Having regard to the relationship between the parties and having regard to the undertaking promised to be filed in this Court, upon which time was obtained from this Court, it appears, there is a clear non compliance of the order. [227E] The said order must be implemented and cannot be allowed to be defeated by the dubious methods adopted by the part ners of the said firm of Ganpat Ram Raj Kumar. The whole conduct betrays a calculated attempt to defeat the order of this Court and to mislead the Court. Sons and grandsons of the partners or erstwhile partners of the firm cannot be allowed to frustrate the order of this Court. [227G H; 228A] The Respondents, all of them, were guilty of acts which had to the situation and thereby frustrate the order of this Court. Though perhaps the respondents could not be found guilty of violating any undertaking as there was none, in the facts and circumstances of the case, this Court should ensure compliance with its order dated 24th August 1987 and see that vacant and peaceful possession is given to the applicant in the interest of Justice. [229D E] Failure to give possession, if it amounts to contempt in a situation of this nature is a continuing wrong. There was no scope for application of section 20 of the Act. [230B] The Court accordingly directed the learned Senior Sub Judge. Narnaul (Haryana) to cause, deliver up the vacant possession of the shop situated at Sabji Mandi Narnaul Distt. Mohindergarh (Haryana), if necessary with the help of police forthwith. The learned Senior Sub Judge is also di rected to report compliance immediately. Save as aforesaid, the Court passed no order on this application. Respondents viz., firm Ganpat Ram, Rajkumar, Ganpat Ram, Rajkumar, Sanjay Kumar, Lalu Ram and Ved Prakash are directed to pay to the applicants the costs of this Application, quantified at Rs.2,500. This order will 225 not prevent or prejudice the applicants from taking any step for recovery of arrears of rent and mesne profits as they are entitled to in accordance with law. [230C E] Babu Ram Gupta vs Sudhir Bhasin & Anr., ; and Thackar Hariram Motiram vs Balkrishan Chatrathu Thacker

An order had been made under section 3(2)(C) Of the , directing that the respondent, "a Pakistan national 745 shall not remain in India after the expiry of three days". The respondent moved the High Court of Punjab under article 226 of the Constitution to quash the order contending that he was not a Pakistan national. The High Court held that if there was Prima facie material to show that a person was a foreigner, a civil court would not go into the question whether he was a foreigner for under section 9 of the , that question had to be decided by the prescribed authority which under the Rules framed under the Act, was the Central Government. The High Court came to the conclusion that there was no Prima facie material on the basis of which an order under section 3(2)(C) Of the could be passed against the respondent and in that view quashed the order. On appeal by the Union of India by special leave, Held, that section 9 of the dealt with the termi nation of the citizenship of an Indian citizen and had no application to this case as the Union did not contend that the respondent had been an Indian citizen whose citizenship had terminated. Section 8 of the which made the decision` of the Central Government on a question of the nationality of a foreigner who is recognised as its national by more than one foreign country or when it is uncertain what his nationality is final, also did not apply as the only question in this case was whether the respondent was a foreigner or an Indian Citizen. The case was governed by section 9 of the under which when a question arises whether a person is or is not a foreigner, the onus of proving that he is not a foreigner is on that person. The High Court was in error In placing on the Union of India the burden of proving that the respondent was a foreigner.

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 petitioner was appointed as Excise Sub Inspector in February 1964 in the State of U.P. and was later promoted as Excise Inspector on ad hoc basis on February 24, 1972. He was confirmed as Excise Sub Inspector w.e.f. April 1, 1967. Though promoted on ad hoc basis, the petitioner has continuously been working as Excise Inspector since February 24, 1972. Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner i.e. after 24.2.1972. They were promoted to the post of Excise Superintendent on 29.9.1983 and the petitioner was ignored. Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution. According to the State and other respondents, the petitioner 's promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules, he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules. His name has not been shown in the seniority list of Excise Inspectors. According to them his case has rightly not been considered for further promotion. On the other hand, it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution. It is submitted on his behalf that the petitioner is, in any case, entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards. Respondents concede that the petitioner can be appointed under 1983 rules, but contend that he is not entitled to the benefit of past service for purposes of seniority. 885 Allowing the writ petition this Court HELD: When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors. The nature of duties of both the cadres were similar. The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of excise Sub Inspectors under them. The Excise Sub Inspectors were thus natural contenders for the post of Inspectors. There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors. Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules. [890H 891B] It is not disputed that under the 1983 rules, the petitioner is eligible to be promoted and appointed as Excise Inspector. [891C D] The 1983 rules came into force on March 24, 1983. There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today. Inaction on the part of the State Government is wholly unjustified. The petitioner has been made to suffer for no fault of his. He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily. [891E] Rule 21(i) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date. In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner. The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion. Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972. The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector. The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post. The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post. [891G, 892B E] None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated. The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary. [892F] Masood Akhtar Khan & Ors. vs State of Madhya Pradesh, ; Direct recruits Class II Engineering Officers Association vs State of Maharashtra & Ors., ; ; P. Mahendran & Ors, etc. vs State of Karnataka Singh & Ors. , ; ; Krishena Kumar & Ors. vs Union of India & Ors. , ; ; A.K. Bhatnagar & Ors. vs Union of India & Ors. , ; ; Baleshwar Dass & Ors. etc. vs State of U.P. & Ors. , [1981] 1 S.C.C. 449; Narender Chadha & Ors. vs Union of India & Ors. , ; and Kumari Shrilekha Vidyarthi etc. vs State of U.P. & Ors. , , referred to.

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 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.

The first respondent who lost to the appellant by 24 votes in the Assembly Elections filed an election petition in the High Court under section 81 of the Representation of the People Act, 1951 asking for the appellant 's election to be set aside and for declaration that he should be declared as the successful candidate. In para 9(i) of the petition the respondent pleaded that 74 ballot papers cast in his favour were wrongly rejected on the ground that they did not contain the signature of the Presiding Officer. The High Court ordered inspection of these ballot papers. The High Court held that the rejection of these 74 ballot papers for want of the Presiding Officer 's signature was not justified and gave the respondent No. 1 credit of all those votes and on that basis while setting aside the election of the appellant, declared the first respondent to have been duly elected. Hence this appeal. The appellant urged that the pleading in para 9(i) of the Election petition did not amount to a concise statement of the material facts as required by law; the High Court went wrong in allowing inspection of the ballot papers; the 74 ballot papers in dispute did not contain the signature of the presiding officer and were rightly rejected at the counting in view of the mandatory provision in rule 56(2) of the Conduct of Elections Rules, 1961 and the High Court 's view that in the absence of a prayer for recrimination under section 97 of the Act, the appellant was precluded from asking for a recount of the other rejected ballot papers is not tenable in law. Dismissing the appeal, HELD: An election petition is presented in terms of section 81 of the Act. Section 83 prescribed as to what the petition should contain. Clause (a) of sub section (1) of section 83 states that an election petition shall contain a concise statement of the material facts on which the petitioner relies. In the instant 119 case the number of ballot papers alleged to have been wrongly rejected has been furnished, the counting table number has been given, the booth number has also been disclosed and the ground for rejection has even been pleaded. The only specific detail which was wanting was the serial number of the ballot papers. This particular was not available to the election petitioner in spite of attempts made on his behalf. The Court, therefore, agrees with the High Court that in the facts and circumstances of the case the pleading in paragraph 9(i) set out the material facts in a proper way and no defect can be found with it. The High Court had rightly ordered the inspection of the ballot papers. [126 B C; H; 127 A; 128 F G; 127 F] Samant N. Balakrishan etc., vs George Fernandez and Ors, etc.; , explained and distinguished, Bhabhi vs Sheo Govind and Ors., [1975] Suppl. S.C.R. 202, referred to. Rule 38(1) of the Conduct of Election Rules, 1961 provides inter alia that every ballot paper before it is issued to an elector shall be stamped on the back with a distinguishing mark and shall be signed in full on its back by the presiding officer. The distinguishing mark can be put by anyone but the signature has got to be of the presiding officer and obviously he has to personally do that job. Rule 56(2)(h) provides that the returning officer shall reject a ballot paper if it does not bear both the distinguishing mark and the signature as mentioned in sub rule (1) of rule 38. There is a proviso to sub rule (2) of rule 56 which says that where the returning officer is satisfied that any such defect as is mentioned in clause (h) has been caused by any mistake or failure on the part of a presiding officer or polling officer, the ballot paper shall not be rejected merely on the ground of such defect. The proviso, once it is applicable is a mandate that the ballot paper is not to be rejected. [129 F G; 130 G; 129 E F; 130 E; 131 H] In the instant case the 74 ballot papers in dispute were rejected because they did not contain the signature of the presiding officer as required under rule 38(1). To see whether the proviso to sub rule (2) of rule 56 was applicable, it has to be found out whether the absence of the signature of the presiding officer on these ballot papers was on account of mistake or of his failure. On the submissions at the bar, the question of mistake does not arise. It was the obligation of the presiding officer to put his signature on the ballot papers before they were issued to the voters. Every voter has the right to vote and in the democratic set up prevailing in the country no person entitled to share the franchise can be denied the privilege. Nor can the candidate be made to suffer. Keeping this position in view the Court is of the definite view that the present case is one of the failure on the part of the presiding officer, who had been taken ill on the date of poll and was away from the place of polling for quite some time, to put his signature on those ballot papers so as to satisfy the requirement of law. The ballot papers therefore were not liable to be rejected as the proviso applied and the High Court came to the correct conclusion in counting these ballot papers and giving credit thereof to the respondent No. 1. [130 C; F G; 131 F H; 130 H; 131 E; H; 132 A] 120 In a case in which the election petition claims that the election of the returned candidate is void, and also asks for a declaration that the petitioner himself or some other person has been duly elected, section 100 as well as section 101 of the Act would apply, and it is in respect of the additional claim for such declaration that section 97 comes into play. Section 97(1) thus allows the returned candidate to recriminate and raise pleas in support of his case that the other person in whose favour a declaration is claimed by the petition cannot be said to be validity elected, and these would be pleas of attack and it would be open to the returned candidate to take these pleas, because when he recriminates, he really becomes a counter petitioner challenging the validity of the election of the alternative candidate. The result of section 97(1) therefore is that in dealing with a composite election petition, the Tribunal enquires into not only the case made out by the petitioner, but also the counter claim made by the returned candidate. That being the nature of the proceedings contemplated by section 97(1), it is not surprising that the returned candidate is required to make his recrimination and serve notice in that behalf in the manner and within the time specified by section 97(1) proviso and section 97(2). If the returned candidate does not recriminate as required by section 97, then he cannot make any attack against the alternative claim made by the petition. [135 A F] Kum. Shradha Devi vs Krishna Chandra Pant & Ors. , ; ; Jabar Singh vs Genda Lal, ; and P. Malaichami vs M. Andi Ambalam & Ors. ; referred to. In the instant election petition two reliefs had been claimed, firstly, for setting aside the election of the returned candidate, i.e. the appellant, and secondly, for a declaration that the election petitioner (respondent No. 1) was the duly elected candidate. The relief claimed was in terms of section 100(1)(d) (iii) and section 101(a) of the Act. Admittedly no application for recrimination was filed by the appellant. In the absence of a recrimination petition conforming to the requirement of section 97 of the Act the appellant who happens to be an advocate and is presumed to know the law, was not entitled to combat the claim of the election petitioner on the ground that if the remaining rejected ballot papers had been counted the election petitioner would not have been found to have polled the majority of the valid votes. [132 D E; 133 A; 138 C D]

Appeal No. 76 of 1959. Appeal from the judgment and decree dated November 16, 1951, of the Madras High Court in Second Appeal No. 1656 of 1947. T. V. R. Tatachari, for the appellants. K. N. Rajagopal Sastri and T. Satyanarayana, for the respondent No. 1., 1961. September 22. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This is an appeal by a certificate granted by the High Court of Madras against its judgment and decree in Second Appeal 741 Suit No. 27 of 1939 filed by respondent 1 Gollapalli Ramalingamurthi against respondent 2 Immani Venkanna and his four sons appellants 1 to 4. The appellants and respondent 2 are members of an undivided Hindu family. The case for respondent 1 was that he had purchased the properties described ' in the Schedule attached to his plaint on April 1, 1936 in a sale held by the Official Receiver in the insolvency of respondent 2. A registered sale deed was accordingly issued in favour of respondent 1 (exhibit P. 4) on September 21, 1936. In pursuance of the said sale respondent 1 obtained possession and enjoyment of such properties after partitioning them with Rayudu, the brother of respondent 2. In October, 1938, however, the appellants and respondent 2 trespassed on the said properties and so respondent 1 had to file the present suit claiming a declaration of his title in regard to the said properties, and asking for their possession and for past and future mesne profits. That in brief is the nature of the suit from which the present appeal arises. The claim thus made by respondents 1 was resisted by respondent 2 and the appellants on several grounds. It was urged by respondent 2 that the transfer in favour of respondent 1 was benami and that respondent 1 was not the real owner of the properties. In support of this case respondent 2 gave, what according to him, was the antecedent history of the sale in favour of respondent 1. He alleged that he had sustained heavy losses in business conducted by him with the result that he was indebted to the extent of Rs. 25,000. Apprehending that the suit properties would be lost to the family at the instance of his creditors he and his junior mother in law Kanthamani Seshamma approached respondent 1 's father in law Suryaprakasa Sastrulu for advice and on his advice respondent 2 executed a collusive and nominal mortgage deed for Rs. 1,000 (exhibit P. 9) in favour of respondent 1 on June 16, 1933. Similarly, on the same advice a similar nominal transfer deed was executed in favour of respondent 1 on August 6, 1939, (exhibit P. 12) after the properties covered by the said document had been released from an earlier non possessory mortgage (exhibit P. II) which had been executed on July 21, 1930. Thus, according to respondent 2 the documents executed in favour of respondent 1 were nominal and collusive and were not supported by any consideration. Respondent 2 further alleged that the execution of the said collusive documents between him and respondent 1 came to the knowledge of some of his creditors and that led to an insolvency petition against respondent 2 by one of his creditors in 1.P. No. 91 of 1933. This petition was filed in the Court of the Subordinate Judge at Ellore on September 15, 1933, against respondent 2. In these insolvency proceedings respondent 2 was adjudicated insolvent and the Official Receiver, appointed to take charge of respondent 2 's properties, brought the said properties to sale subject to the aforesaid nominal mortgages in favour of respondent 1. Kanthamani Seshamma purchased the said properties with her own money but benami in the name of respondent 1 on condition that respondent 1 would reconvey the said properties to the family of respondent 2 whenever called upon to do so. The allegation of respondent 1 that he had obtained possession of the properties was denied, and it was urged that respondent 1 had no title to the properties and was entitled to no relief in the suit filed by him. That is the substance of the pleas raised by respondent 2 and the appellants joined respondent 2 in making the same pleas by their separate written statement. At the trial three issues were tried as preliminary issues; they were issues 5, 8 and 9. Issues 8, and 9 were in regard to the court fees payable on the claim made in the plaint and regarding the pecuniary jurisdiction of the Court. The Court found that it had jurisdiction to try the suit and it valued the subject matter of the suit at Rs. 2,411 7 2 on which additional court fees was paid by respondent 1. Issue 5 was as to whether the sale in favour of respondent 1 bound the shares of the appellants in the family properties. The learned trial judge answered this issue in favour of the appellants purporting to follow the Full Bench decision of the Madras High Court in Ramasastrulu vs Balakrishna Rao (1). According to the said decision the right of respondent 2 as the father of the appellants and manager of the undivided Hindu family to sell the shares of his sons for purposes binding on the family did not vest in the Official Receiver on his insolvency, and so the sale effected by the Official Receiver in favour of respondent 1 did not, and could not, in law bind the shares of the appellants in the properties conveyed. After these findings were recorded respondent 1 applied for the amendment of his plaint and the said amendment was allowed. By this amendment respondent 1 alleged that the suit properties were the self acquired properties of respondent 2 and so the appellants had no interest therein. On this alternative plea it was urged by respondent 1 that the properties sold by the Official Receiver to respondent 1 conveyed the entire properties which belonged to respondent 2 alone. In addition to this alternative claim made by an amendment respondent 1 also made an alternative prayer that he should be either given possession of the whole of the properties or 1/5th of the properties according as the properties are found to be separate properties of respondent 2 or are held to be properties of the undivided family consisting of respondent 2 and the appellants. These alternative grounds taken by respondent 1 by virtue of the amendment were traversed by respondent 2 and the appellants in their additional written statements.(1) I.L.R. 744 When the suit went to trial on the amended pleadings several issues were framed by the learned trial judge. In addition to the issues arising on the pleadings the learned trial judge framed suo motu one more issue 1(a), whether respondent 1 was the benamidar of the appellants, and if yes whether the appellants could be allowed to plead the same as a defence in the suit. The learned trial judge found that the suit properties were the joint family properties of respondent 2 and the appellants. Alternatively he held that even if they were originally the self acquired properties of respondent 2 they had been blended with the family properties and thus became the properties of the undivided family. He found that the shares of the appellants in the said properties did not vest in the Official Receiver and so were not conveyed to respondent 1. He came to the conclusion that the purchase by respondent 1 from the Official Receiver was only a benami transaction for the benefit of the appellants and that respondent 1 had not obtained possession of the properties at any time. According to the learned trial judge the sale in favour of respondent 1 was fraudulent and was brought into existence to defraud the creditors of respondent 2; and this fraud had been carried out and the creditors of respondent 2 had been defrauded. Since the fraud had been carried out, the learned judge held respondent 2 and the appellants could not be allowed to plead the same as a defence in the suit. As a result of this finding the learned judge passed a preliminary decree in favour of respondent 1 for 1/5th share in items 1 to 4 and 8 to 10 of the properties described in the Schedule attached to the plaint. In regard to items 5 to 7 on which the dwelling house of the family was constructed the learned judge held that respondent 1 was entitled to monetary compensation. Consistently with the preliminary decree thus passed as to the share of respondent 1 the learned judge 745 also directed that future mesne profits should be determined under O. 20, r. 12(c) of the Code of Civil Procedure. Against this decree respondent 1 preferred an appeal, No. 288 of 1943, in the Court of the Subordinate Judge,, West Godavari at Ellore. In this appeal he claimed that a decree should be passed in his favour in respect of the whole of the properties sold to him by the Official Receiver. The appellants filed cross objections and urged that the learned trial judge was in the error in framing issue 1 (a) suo motu and challenged his conclusion on it. The appellate Court agreed with the conclusions of the trial judge and so dismissed both the appeal and the cross objections. Against this appellate decree respondent I filed a Second Appeal, No. 1656 of 1947, and the appellants filed cross objections. This appeal came on for hearing before Mr. Justice Raghava Rao and it was urged before him that since the Provincial Insolvency (Amendment) Act No. 25 of 1948 which introduced section 28A had come into operation in the meanwhile retrospectively the decision of the Courts below that the Official Receiver could not in law have sold the appellant 's shares in the family properties could not longer be sustained. This contention was raised by respondent 1. It was met by the appellants by their counter contention that issue 1(a) had been sprung upon them as a surprise; it had been framed by the trial court after it had heard arguments on both sides and that the appellants had no opportunity to show that in fact the fraud contemplated by the parties had not been effectively carried out. They alleged that if the fraud had not been carried out the principle of estoppel invoked against them could not come into play. This contention raised by the appellants was accepted by the High. Court which called for a finding by the trial co art on issue 1(a), after giving both the parties an opportunity to adduce evidence on the 746 question about the completion or otherwise of the fraud connected with the benami purchase. After remand the trial court took evidence and made a finding that respondent 2 bad successfully played fraud on his creditors by getting the properties purchased by respondent 1 benami for his sons at the sale held by the Official Receiver. In due course this finding was submitted by the trial court to the High Court. Thereupon the appellants filed objections to the said finding. After this finding was received the second appeal was again placed for bearing by Mr. Justice Ragghava Rao. At the second hearing the appellants raised the point the amending Act by which section 28A was inserted in the Provincial Insolvency Act was ultra vires. The learned judge overruled the objections made by the appellants against the finding submitted by the trail court on the issue remanded to it and accepted that finding; but in view of the fact that the vires of the amending Act was challenged he thought it exp edient that the second appeal should be heared by a Bench of two judges. That is how the second appeal came before a division Bench of the Madras High Court for final disposal. In its final judgment the High Court has observed that the argument that Act 25 of 1948 was ultra vires was not pressed before the High Court, that certain other grounds were sought to be raised by the appellants but they were not allowed to be raised; so that in the result the main argument urged before the High Court was whether having regard to the fact that the fraud contemplated by respondent 2 and respondent 1 had been effectively carried out it was open to the appellants to plead that fraud against respondent 1 in respect of his claim for possession of the suit properties in the present suit. The High Court considered the conflicting decisions on this point and adhered to the view which has prevailed in the said High Court 747 since the decision in Vodiana Kamayya vs Gudisa. Mamayya (1) and held that the appellants and respondent 2 were estopped from setting up the fraud against respondent 1 in his present suit. In the result respondent 1 's claim in respect of the whole of the properties conveyed to him by the Official Receiver has been decreed. It is against this decree that the appellants have come to this Court with a certificate granted by the High Court and the principal point which has been argued before us on their behalf by Mr. Tatachari is that the High Court was in error in coming to the conclusion that in a case where both the transferor and the transferee ' were equal in fraud and where the fraud contemplated has been carried out it is not, open to the appellants to plead that fraud in defence against the claim made by respondent 1 to obtain possession of the properties conveyed to him benami by the Official Receive Mr. Tatachari contends that where the parties are equally guilty estoppel cannot be pleaded against the appellants and the estate must be allowed to remain where it rests. The point thus raised lies within a narrow compass and the material facts which give rise to it are no longer in dispute. The transaction in favour of respondent 1 is the result of a fraudulent plan to which both he and respondent 2 agreed. In was effected with the mutual consent of the vendore and the vendee to defraud the creditors of the vendor. That being so the transfer is not supported by any consideration and the transferee agreed to act as the benamindar until the transferor required him to reconvey the properties to his sons. The object intended to be achieved and the fraud initially contemplated by both the parties have been achieved and the creditors of respondent 2 have been defrauded. Possession of the properties, however, remained with respondent 2 and his sons the appellants; and in the present 748 section respondent 1 seeks to obtain possession of the properties on the ground that a deed of conveyance has been passed in his favour by the Official Receiver. Thus both the parties are confederates in the fraud and are equally guilty. Respondent 2 and the appellants seek to resist respondent 1 's claim to recover possession of the properties conveyed to claim on the ground that the conveyance is void having been effected for a fraudulent purpose which has been carried out. They urge that it has not been supported by any consideration and no title has passed in favour of the transferee. Respondent 1 sheets this challenge to his title by pleading that respondent 2 who participated in the fraud cannot be allowed to plead his own fraud in support of his refusal to part with the possession of the properties, and he urges that there is a conveyance duly executed in his favour on which the Court must act without permitting respondent 2 to challenge its validity. The High Court his upheld the plea of respondent 1 and has not allowed either respondent for the appellants to plead the fraud in support of their defence. Is this decision right? That is the question which falls to be decided in the present appeal. Reported decisions bearing on this question show that consideration of this problem often gives rise to what may be described as a battle of legal maxims. The appellants emphasised that the doctrine which is preeminently applicable to the present case is ex dolo malo non oritur action or ex turpi causa non oritur actio. In other words, they contended that the right of action cannot arise out of fraud or out of transgression of law; and according to them it is necessary in such a case that possession should rest where it lies in pari delicto potior est conditio possidenties; where each party is equally in fraud the law favors him who is actually in possession, or where both parties are equally guilty the estate will lie where it falls. On the other hand, respondent 1 argues that the proper maxim to apply is nemo allegans suam turpitudinum audiendumest, 749 whoever has first to plead turpitudinum should fail; that party fails who first has to allege fraud in which he participated. In other words, the principle invoked by respondent 1 is that a man cannot plead his own fraud. In deciding the question as to which maxim should govern the present case it is necessary to recall what Lord Wright, M. ' R. observed about these maxims in Berg vs Sadler and Moore (1). Referring to the maxim ex turpi causa non oritur actio Lord Wright observed that "this maxim, though veiled in the dignity of learned language, is a statement of a principle of great importance; but like most maxims it is much too vague and much too general to admit of application without a careful consideration of the circumstances and of the various definite rules which have been laid down by the authorities". Therefore, in deciding the question raised in the present appeal it would be necessary for us to consider carefully the true scope and effect of the maxims pressed into service by the rival parties and to enquire which of the maxims would be relevant and applicable in the circumstances of the case. It is common ground that the approach of the Court in determining the present dispute must be conditioned solely by considerations of public policy. Which principle would be more conducive to, and more consistent with, public interest, that is the crux of the matter. To put it differently having regard to the fact that both the parties before the Court are confederates in the fraud, which approach would be less injurious to public interest. Whichever approach is adopted one party would succeed and the other would fail, and so it is necessary to enquire as to which party 's success would be less injurious to public interest. Out of the two confederates in fraud respondent 1 wants a decree to be passed in his favour and that means he wants the active assistance of the Court in reaching the properties possession of (1) , 162. 750 which has been withheld from him by respondent 2 and ' the appellants. if the defense raised by the appellants is shut out respondent 1 would be entitled to a decree because there is an ostensible deed of conveyance which purports to convey title to him in respect of the properties in question; but, in the circumstances ', passing a decree in favour of respondent 1 would be actively assisting respon dent 1 to give effect to the fraud to which he was a party and in that sense the Court would be allowed to be used as an instrument of fraud and that is clearly and patently inconsistent with public interest. On the other hand, if the Court decides to allow the plea of ' fraud to be raised the Court would be in a position to hold an enquiry on the point and determine whether it is a case of mutual fraud and whether the fraud intended by both the parties has been effectively carried out. If it is found that both the parties are equally guilty and that the fraud intended by them has been carried out 'the position would be that the party raising the defence is not asking the Court 's assistance in any active manner; all that the defence suggests is that a confederate in fraud should not be permitted to obtain a decree from the Court because the document of title on which the claim is based really conveys no title at all It is true that as a result of permitting respondent 2 and the ' appellants to prove their plea they would incidentally be assisted in retaining their possession; but this assistance is of a purely passive character and all that the Court is doing in effect is that on the facts proved it proposes to allow possession to rest where it lies. It appears to us that this latter course is less injurious to public interest than the former. There can be no question of estoppel in such a case for the obvious reason that the fraud in question was agreed by both the parties and both parties have assisted 'each other ' in carrying out the fraud. When it is said that a person cannot 751 plead his own fraud it really means that a person cannot be permitted to go to a Court of Law to seek for its assistance and yet base his claim for the Court 's assistanceon the ground of his fraud. In this connection it would be relevant to remember that respondent 1 can be said to be guilty of a double fraud; first he joined respondent 2 in his fraudulent scheme and participated in the commission of fraud the object of which was to defeat the creditors of respondent 2, and then he committed another fraud in suppressing from the Court the fraudulent character of the transfer when he made out the claim for the recovery of the properties conveyed to him. The conveyance in his favour is not supported by any consideration and is the result of fraud; as such it conveys no titile to him. Yet, if the plea of fraud is not allowed to be raised in defence the Court would in substance be giving effect to a document which is void ab initio. Therefore, we are inclined to hold that the paramount consideration of public interest requires that the plea of fraud should be allowed to be raised ' and tried, and if it is upheld the estate should be allowed to remain where it rests. The adoption of this course, we think, is less injurious to public interest than the alternative course of giving effect to a fraudulent transfer. This question has been the subject matter of judicial decisions in most of our High Courts; and it appears that the consensus of judicial opinion with the exception of the Madras High Court is in favour of the view which we have taken. In Bombay the principle that in dealing with a contest between two participants in fraud possession should be allowed to remain where it rests appears to have been consistently accepted until Chief Justice Sir Lawrence Jenkins struck a note of dissent in Sidlingappa Bin Ganeshappa vs Hirwa Bin Tukasa (1). Thereafter the correctness of (1) (1907) 1.L. R. 752 this judgment was sometimes doubted in the subsequent decisions of the said High Court [Vide : Lakshman Balvant Khisti V. Vasudev Mohoniraj Pande(1)] and finally the Full Bench of the said High Court reversed the said decision of Sir Lawrence Jenkins in Guddappa Chikkappa Kurbar vs Balaji Ramji Dange (2). Since then the decision of the Full Bench has been consistently followed in the Bombay High Court. The same view has been accepted by the Calcutta, Allahabad, Nagpur and Patna High Courts [Vida : Preomath Koer vs Kazi Mahomed Shazid(3).Emperor vs Abdul Sheikh(4), Vilayat Husain vs Misran (5), Nawab Singh vs Daljit Singh (6), Qader Baksh vs Hakim (7), Bishwanath g/o Karunashanker Shukla vs Surat Singh alias Chhuttu Singh s/o Bhabhut Singh (s), and J. C. Field Electric Supply vs K. Agarwala (9) (Case of illegal contract)]. In Madras the earlier decisions of the High Court appear to have, taken the same view [Vide: Venkataramana vs Viramma (10), Yaramati Krishnayya vs Chundru Papayya (11) and Raghavalu Chetty vs Adinarayana Chetty (12)]. In the case of Vodiana Kamayya vs Gudisa Mamayya (13), however, a Division Bench of the Madras High Court upheld the view that a person who has conveyed property benami to another for the purpose of effecting a fraud on his creditors cannot, where the fraud has been effected, set up the benami character of the transaction by way of defence in a suit by the transferee for possession under the conveyance. Since then this view has prevailed in the Madras High Court [vide : Keppula Kotayyar Naidu vs Chitrapu Mahalak8hmamma (14) and Muthu K. R. A. R. P. L. Arunarhalam Chettiar vs Bangaswamy Chettiar (1.5)]. In our opinion (1) (2) I. L. R (3) (1903 4) 8 C. W. M. 620.(4) A. I. R. (5) All. 396.(6) (1936) 1.L. R. 58 All. 842.(7) (1932) 1.L. R. 13 Lab.(8) A.I. R. 3.(9)(1951) 1.R. 30 Pat.(10) (1887) 1.L. R.10 Mad.(11) (1 897) 1.L. R. (12) (1 909) 1.L. R. (13) (14) Mad.(15) Mad.753 the view taken by these subsequent decisions of the Madras High Court does not represent the true and correct approach to the question. In this connection we may incidentally refer to the observations made by the Privy Council in T. P. Petherpermal Chetty vs R. Muntandi Servai. In that case the Privy Council has no doubt dealing with the question on the basis that the purpose of the fraudulent conveyance had been defeated and so different principles naturally came into play. While discussing the problem in its broad aspect, however, Lord Atkinson, who delivered the judgment of the Board, cited with approval the observations made in Mayne 's Hindu Law which clearly support the view that we have taken. Says Mayne: 1 'The, fact that A has assumed the name of B in order to cheat X can be no reason whatever why a Court should assist or permit B to cheat A. But if A requires the help of the Court to get the estate back into his own possession, or to get the title into his own name, it may be very material to consider whether A has actually cheated X or not. If he has done so by means of his alias, then it has ceased to be a mere mask and has become a, reality. It may be very proper for a Court to say that it will not allow him to resume the individuality which he has once cast off in order to defraud others. If, however, he has not defrauded any one there can be no reason why the Court should punish his intention by giving his estate away to B, whose roguery is. even more complicated than his own This appears to be the principle of the English decisions. But where the fraudulent or illegal purpose has actually been effected by means of the colorable grant then the maxim applies In pari delicto potior est conditio possidentis. The Court will help neither party and let the estate lie where it falls (2)". Lord Atkinson has observed that this statement of the law is correct and in that sense (1) (1908) L. R. 35 1.A. 98.(2)Mayne 's Hindu Law, 7th Ed,p.595 para 446(35 I.A.p 102) 751 the view that we have taken may be said to be consistent with the opinion expressed by the Privy Council by approving the statement of the law made by Mayne. In support of the contrary view reliance is usually placed on an early English decision in Doe, Dem.Roberts against Roberts, Widow (1). In that case it was held that "ro man can be allowed to allege his own fraud to avoid his own deed; and, therefore, where a deed of conveyance of an estate from one brother to another was executed, to give the latter a colorable qualification to kill game. The document was as against the parties to it valid and so sufficient to support an ejectment for the premises". In dealing with the question raised Bayley, J. observed "by the production of the deed, the plaintiff established a prima facie title; and we cannot allow the defendent to be heard in a Court of Justice to say that his own deed is to be avoided by his own fraud;" and Holroyd, J., added that " 'a deed may be avoided on the ground of fraud, but then the objection must come from a person neither party nor privy to it, for no man can allege his own fraud in order to invalidate his own deed". This decision has, however, been commented on by Taylor in his "Law of Evidence". According to Taylor "it seems now clearly settled that a party is not estopped by his deed from avoiding it by proving that it was executed for a fraudulent, illegal or immoral purpose (2)". The learned Author then refers to the case of Roberts (1) and adds "in the subsequent case of Prole vs Wiggins (3) Sir Nicholas Tindal observed that this decision rested on the fact that the defence set up was inconsistent 'with the deed". Taylor then adds that ",the case, however, can scarcely be supported by this circumstance, for in an action of ejectment by the grantee of an annuity to recover premises. (1) (2) Taylor 's "Law of Evidence", Vol.I, 11th Ed.p. 97, paragraph 93.(3) 35; ; 43 R. R. 621.755 on which it was secured, the grantor was allowed to show that the premises were of less value than the annuity, and consequently, that the deed required enrollment, although he had expressly covenanted in the deed that the premises were of greater value. . . According to the learned author "the better opinion seems to be that where both parties to an indenture either know, or have the means of knowing, that it was executed for an immoral purpose, or in contravention of a statute, or of public policy, neither of them will be estopped from proving those facts which render the instrument void ab initio; for although a party will thus in certain cases be enabled to take advantage of his own wrong, yet this evil is of a trifling nature in comparison with the flagrant evasion of the law that would result from the adoption of an opposite rule" (P. 98). Indeed, according to Taylor, although illegality is not pleaded by the defendant nor sought to be relied upon by him by way of defence, yet the Court itself, upon the illegality appearing upon the evidence, will take notice of it, and will dismiss the action Ex turpi causa non oritur actio. No polluted hand shall touch the pure fountain of Justice" (P. 93). To the same effect is the opinion of Story:(1) "In general, where parties are concerned in illegal agreements or other transactions, whether they are mala prohibita or mala in se, Courts of Equity following the rule of law as to participators hi a common crime will not interpose to grant any relief, acting upon the known maxim In pari delicto potior est conditio defendentis et posidentis The old cases often gave relief, both at law and inequity, where the party would otherwise derive an advantage from his inequity. But the modern doctrine has adopted a more severely just and probably politic and moral rule, which is to leave the parties where it finds them giving no relief and no countenance to claims of this sort" '. (1) Story ' s Equity Jurisprudence, Vol.I. section 421; English edition by Randell, 1920, section 298.756 In judicial decisions where this question has been considered a passage from the judgment of Lord Mansfield, C. J., in Holman vs Johnson (1) is often quoted. If we may say so with respect the said passage very succinctly and eloquently brings out the true principles which should govern the decision of such cases. Said Lord Mansfield, C. J., "the objection that a contract is immoral or illegal as between plaintiff and defendant sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may say so. The principle of public policy is this ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff 's own stating or otherwise the cause of action appears to arise ex turpi causa or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff". On behalf of the respondents it was urged that the principles on which the appellants rely are applicable to contracts and not to conveyances. A conveyance, it is argued, rests on a different basis from a contract, and so the English decisions cannot be pressed into service by the appellants. We are not impressed by this argument. Even if respondent 1 has based his case on a conveyance the position still remains that as a result of the facts proved by respondent 2 and the appellants the conveyance is void ab initio. It is a document fraudulently executed and as such it conveys no title to the transferee at all. That being so we do not think that in giving effect to the considerations of (1) (1775) 1 Cowrer 341.757 public interest or policy it makes any difference that the deed on which the present suit is brought is one of conveyance. It is then contended that in deciding the point raised by the appellants we must look to the provisions of section 84 of the and nothing else. The is a comprehensive code and it is only in cases failing under section 84 that it would be permissible to the Court to apply the equitable principles or to invoke considerations of public policy as the appellants purport to do. Section 84 provides that where the owner of property transfers it to another for an illegal purpose and such purpose is not carried into execution, or the transferor is not as guilty as the transferee, or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law, the transferee must hold the property for the benefit of the transferor. We do not see how this section is material or can give any assistance in the decision of the point before us. In the present case the transferee is not in possession of the properties and the present case is not one of the three categories of cases contemplated by the section. If the argument assumes that the only cases where equitable principles can be invoked are cases falling under section 84 and section 84 is exhaustive in that sense, we have no difficulty in rejecting the said argument. Since the present case is entirely outside section 84 it inevitably falls to be considered on considerations of general policy, and as we have already held, judged in the light of such considerations it must be held that the public interest would be less injuriously affected if the property is allowed to remain where it lies. Therefore, we must hold that the High Court was in error in not giving effect to the finding recorded by the trial court that the fraud mutually agreed upon and contemplated by respondents 1 and 2 had been effectively carried out and that in the 758 carrying out of the fraud both the parties were equally guilty. The appeal must, therefore, be allowed and the suit instituted by respondent 1 must be dismissed. In the circumstances of this case we direct that the parties should bear their own costs, throughout. Appeal allowed.

The conveyance in suit was the result of a collusive plan between respondent 1 and respondent 2 to defraud the latter 's creditors. The agreement was that respondent 1 was to act as the benamidar for respondent 2 and his sons, the appellants. The fraud succeeded and the creditors of respondent 2 were in fact defrauded. Thereafter respondent 1 brought the present suit for declaration of title and recovery of possession against respondent 2 and the appellants on the basis or the conveyance. The latter resisted the suit on the ground that the conveyance was fraudulent, unsupported by consideration and passed no title. The High Court in second appeal held that the appellants and respondent 2 were estopped from pleading fraud in the suit and decreed the same. The question was whether the view taken by the High Court was correct and the ostensible owner was entitled to a decree. Held, that there could be no question of estoppel in a case where both the parties were guilty of fraud. 740 Where in a case, such as the present, one of the confederates in fraud seeks a, decree on a conveyance that resulted from such faud and the other takes plea 'of fraud in defence, the matter has to be decided on considerations of public policy. Since one of the parties must succeed in any event, the proper approach for the Court to adopt would be the one that was less injurious to public interest, namely, to allow the plea of fraud to be raised in defence and, if upheld, allow the properties to remain where they were, than to decree a suit based on a fraudulent claim. It could make no difference in such a case if the suit was based on a deed of conveyance and not a contract. Vodiana Kamayya vs Oudisa Kamayya, (1917) 32 M.J.J. 484, Kepula Kotayyar Naidu vs Chitrapur Mahalakshmama, Mad. 646 and Mutho K.B.A.R.P.L. Arunachalam Chettiar vs Rangaswamy Chettiar, Mad. 289, disapproved. Berg vs Sadler and Moore, , T. P. Petherperumal Chetty vs B. Muniandi Servai, (1908) L.R. 35 I.A. 98 and Holman vs Johnson, (1775) 1 Cowper, 34 1, referred to. Deo, Dem. Roberts against Roberts, Widow, (1819) 106 E. R. 401, considered. Case law reviewed. Section 84 of the is not exhaustive in its provisions and since the present case falls outside of that section, it has to be decided on considerations of general policy.

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]

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.

The mortgagee of the property in dispute bad obtained a mortgage decree and in execution purchased it. in 1942, he sold the property to the appellant. After the introduction of section 37 A into the Bengal Agricultural Debtors Act, 1936, by the Amendment Act of 1942, the respondents who were the owners of the property, applied under the section, to the debt Settlement Board, for getting back possession of the property. They succeeded in their application and obtained possession, but their possession was disturbed by the appellant. Therefore, 'the respondents field ,he suit to remove the cloud on their title and to obtain possession in case it was found that they were not in possession. The suit was decreed by the trial court, but the appellate court allowed he appeal. The High Court on further appeal, restored the decree of the trial court. In his appeal to this Court, the appellant contended that, (1) the Board had no jurisdiction in the matter as the decree, in the mortgage suit was for more than Rs. 5,000, and (ii) Section 37 A did not apply to a bona fide purchaser for value from the auction purchaser. HELD : (i) The contention ,is to jurisdiction on the ground of value should be rejected as the point was not taken in the trial court, for, if it had been raised, the respondents would have been able to show that, even if the deal was over Rs. 5,000, the previous sanction of the Collector had been taken by the Board before it dealt with the matter as permitted by the proviso to r. 144 framed under the Act. [932 F] (ii) Reading the wide language used in section 37A.(8) with section 37A,(1)(c), it is clear that once the sale is set aside, even alienees from 'he decreeholder would be liable to be ejected and would be covered by the words "any person" used in the latter part of section 37A(8), unless they were alience, of the four kinds mentioned in section 37A(1) (c). [936 E] When an award in favour of the debtor was made under section 3SA(5) and where a copy of the award was presented to the Civil Court or Certificate officer at those order the property was sold, section 37 A(8) imperatively enjoins on the Civil Court or the Certificate Officer to ,set aside the sale. it follows that where a sale is set aside, whoever may have purchased the property in the sale whether the decree holder him self or somebody else will have to give up possession. for the right of the person who hid purchased the property. to remain In possession, would only exist so long as the sale subsists. On the same reasoning if the auction purchaser, whether he be the decree holder or somebody else, his parted with the property subsequently in favour of any person that person would be equally liable to ejectment, for his right to remain in possession only flows from the sale which is ordered to be set aside. Further, The word 'decree holder" has been given an inclusive definition and so, it cannot be said Sup. C.1.165 16 930 that it is confined only to the decree holder auction purchaser. Also, under section 37 A(1)(c) only four kinds of transfers, including bona fide transfers for valuable consideration (excepting a mortgage) before 20th December 1939, are excepted, and so an application could be made under the section even where there was an alienation of any kind by the decre holder, so long as the alienation was after 20th December 1939. Therefore, there is no doubt that section 37A(8) intends that the sale should be set aside whoever may be auction purchaser, and it also intends that after setting aside the sale the property should be delivered back to the debtor, whoever may be in possession thereof at the time of the delivery back, except in the case of an under riyat under certain conditions. [934 D H; 935 A B, D; 936 A C]

The appellant created a trust in 1955 by transferring certain securities held by him to a bank as trustee. One of the beneficiaries of the trust was the appellant 's minor daughter M. The income accruing to M under the trust during the previous years relevant to the assessment years 1957 58, 1958 59, 1959 60 and 1960 61 was included in the assessments made on the appellant as an individual for those years by applying the provisions of section 16(3)(b) of the Indian Income Tax Act 1922. In the assessment for the year 1960 61 the Income tax Officer had also to deal with the appellant 's claim for the allowance under section 9(2) off the said Act in respect of two separate houses owned by the appellant and maintained by him for residential purposes in New Delhi. The Income tax Officer allowed the claim only in respect of one of the houses. The appellant 's appeals. before the authorities under the Act failed. The High Court decided the questions referred to it against the appellant. In appeals before this Court on certificate the contentions of the appellant which fell for consideration were : (i) (a) that section 16(3) (b) must be strictly construed; (b) that the assets covered by the trust deed not having been transferred to the wife or minor daughter but to a bank as trustee, section 16(3) (b) of the Act had no application; (c) even if section 16(3) (b) of the Act applied, what was to be included in computing the total income of the appellant was not the in come that had been received by the minor daughter under the trust deed but only so much of the income of the trustee as arose from the assets transferred to the trustee for the benefit of the minor child; (ii) that a reading of the first and second provisos to section 9(2) of the Act clearly showed that the allowance to an assessee is not confined only to one residential house HELD : (i) (a) it is true that section 16(3) (b) creates an artificial liability and must therefore be strictly construed. But in construing section 16(3)(b) Courts cannot ignore the clear and unambiguous expressions contained therein and all those expressions must receive a proper interpretation.[9 C D] C.I.T. Bombay vs Manual Dhanji, , C.I.T.,. Gujarat vs Keshavlal Lallubhai Patel, and; C.I.T., West Bengal II vs Prem Bhai Parekh (b) The contention that section 16(3) (b) applies only to those cases where ultimately the corpus of the trust property is also transferred to the wife or the minor child, must be rejected. The provisions of section 16(3)(b) are very clear, and, the only requirement so far as this aspect is concerned is that the assets Must be transferred. to, any person or association of persons and that transfer of assets must be for the benefit of the wife or the 2 minor child or both. In this connection it is pertinent to note the wordings of section 16(3) (a) (iii) and section 16(3) (a) (iv). The former provision clearly refers to assets transferred directly or indirectly to the wife by the husband and the latter provision refers to assets transferred directly or indirectly to the minor child not being a married daughter. But in cl. (b) of section 16(3) the transfer of assets is not to the wife or the minor child or both but to any person or association of persons. Therefore it is clear that when the legislature intended to provide for a direct transfer of assets either to the wife or to the minor child, it has used the expressions as are found in section 16(3) (a) (iii) and section 16(3) (a) (iv). The different phraseology used in cl. (b) of section 16(3) makes it clear that the transfer of assets need not be to the wife or the minor child. Nor does the said clause require that the corpus of the property so transferred to any person or association of persons should ultimately vest in the wife or the minor child [9G 1OB] C.I.T. Bombay vs Sir Mahomed Yusuf Ismail, [1944] 12 I.T.R. 8 approved. (c) From a plain reading of section 16(3) (b) it is clear that what is to be included in computing the total income of the assessee is that part of the income of the trust which is received for the benefit in this case of the minor daughter. It is the share income which has accrued to or has been received by the minor daughter under the trust deed in the relevant accounting year, that has to be included in the total income of the father, the assessee. The expression "so much of the income" occurring in this clause also makes it clear that the said provision relates to the share income of the minor daughter, in this case, and not that of the trustee bank. [11 B C] Tulsidas Kilachand and ors. vs C.I.T. Bombay City 1, and C.I.T. Bombay vs Manilal Dhanji, applied. (ii)A reading of the second proviso to sub section (2) of section

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

The property of the appellants continued to remain under requisition by virtue of the several amendments made to the and the compensation payable in respect of it was required to be revised for a period of 5 years from 7.3.75 to 6.3.1980. As there was no agreement between the parties on the question of compensation payable for the said period, the said question was referred to an arbitrator under section 8 of the Requisitioning Act to determine the compensation payable. The arbitrator by his award fixed the compensation payable for the property at Rs.21,000 per month as against the claim of Rs.77,270 per month made by the appellants. Aggrieved by the decision of the arbitrator the appellants filed an appeal before the High Court of Madras under s.11 of the Requisitioning Act. The Registry of the High Court raised an objection regarding the amount of court fee paid on the memorandum of appeal. The matter was placed before the Division Bench of the High Court and it held that the appellants were liable to pay court fee on the memorandum of appeal under section 51 of the Tamil Nadu Court Fees and Suits Valuation Act 1955 (for short, the Act) ad valorem on the amount of compensation which was in dispute in the appeal. In appeal to this Court, the appellants contended that the amount 755 of court fee payable on a memorandum of appeal filed under section 11 of the Requisitioning Act should not be computed in accordance with section 51 of the Act as a fixed court fee was payable under the residuary provision, that is, article 3 (iii) (A) (1) (a) of Schedule II of the Act. In support of this contention the appellants raised two points; (i) that since there is no transfer of title to the property which is requisitioned from its owner to the Government, the said transaction is not an acquisition and hence those provisions of the Requisitioning Act under which the property is requisitioned do not constitute a law providing for acquisition of property and therefore, section 51 of the Act would not be applicable because it relates only to appeals filed against an order relating to compensation under any Act for the time being in force for the acquisition of land; and (ii) that the award made by the arbitrator under section 8 of the Requisitioning Act not being an 'order ' as defined in the Code of Civil Procedure 1908, the appellants cannot be called upon to pay court fee in accordance with section 51 of the Act since section 51 refers to court fee payable on a memorandum of appeal against an 'order '. Dismissing the appeal, ^ HELD: 1. The appeal before the High Court filed under section 11 of the Requisitioning Act falls squarely under section 51 of the Act. Therefore, the court fee has to be paid on ad valorem basis as provided in article 1 of Schedule I to the Act. It follows that the residuary Article, that is, article 3(iii) (A) (1) (a) of Schedule II to the Act is not attracted. [769E F] 2(i) Section 3 of the Act states that in the Act 'unless the context otherwise requires ' the words and expressions defined in that section shall carry the meaning given to them in various clauses in that section. It is relevant to note that in section 51 of the Act which arises for consideration the word 'order ' does not appear in isolation. The section states that the fee payable under the Act on a memorandum of appeal against an order relating to compensation in any Act for the time being in force for the acquisition of property for public purposes shall be computed on the difference between the amount awarded and the amount claimed by the appellants. The 'order ' referred to in section Sl of the Act need not be an 'order ' of a civil court as defined in section 2(14) of the Code of Civil Procedure but should be an 'order ' relating to compensation under any Act for the time being in force for the acquisition of property for public purposes. [768G H; 769A C] 2(ii) There is no doubt that the award passed by the Arbitrator 756 under the Requisitioning Act is a formal expression of a decision made by a competent authority which is binding on the parties and it relates to compensation payable under an Act for the time being in force for the acquisition of property for the public purposes. Therefore, even though the expression 'order ' simpliciter has to be understood in the sense in which that expression is defined in section 2 (14) of the Code of Civil Procedure, the word 'order ' found in section 51 of the Act bas to be read differently having regard to the words which qualify that expression in that section, namely, 'relating to compensation under any Act for the time being in force for the acquisition of properties '. The said order need not be an order of a civil court only. It can be of any statutory authority. But it must determine compensation for a property acquired under a law of acquisition of property for public purpose. In the instant case, the award made under section 8 of the Requisitioning Act satisfies these tests. [769C E] Sahadu Gangaram Bhagade vs Spl. Deputy Collector, Ahmedanagar & Anr., ; , relied upon. Y. Venkanna Choudhary vs Government of India, by Military Estates officer, Madras & Anr., AIR 1976 Madras 41, Laxshminarayana Rao & Ors. vs Revenue Divisional officer, Kakinada & Ors., A.I.R. 1968 Andhra Pradesh 348, M. Ramachandran & Ors. vs State of Madras represented by the Collector, Coimbatore, 87 Law Weekly Madras 791, Balakrishnan Nambiyar & Ors. vs Kanakathidathil Madhavan & Ors., & Ghouse Saheb vs Sharifa Bi & Ors., A.l. R. 1977 Karnataka 181, approved. Hirji Virji Jangbari vs Government of Bombay, A.I.R. 1945, Bombay 348, Kanwar Jagat Bahadur Singh vs The Punjab State, Crown 's case, A.l. R. 1957 Punjab 32 Crown vs Chandrabhanlal and Ors., AIR. 1957 Nagpur 8 and Mangal Sen vs Union of Indian A.l.R., 1970 Delhi 44, disapproved. 3(i) The expression 'acquisition ' is not defined in the Act. Sections 3 to 6 of the Requisitioning Act deal with the powers of the Government in respect of requisitioning of property and section 7 of that Act confers power on the Government to acquire a property which has been requisitioned. Whenever a property is requisitioned by the competent authority it is entitled to call upon the owner or any other person who may be in possession of the property to surrender possession thereof to the Government. Section 5 of the Requisitioning Act provides that all properties requisitioned under section 3 shall be used 757 for such purposes as may be mentioned in the notice of requisition. Such requisitioned property may be released from requisitioning under section 6. The title to property requisitioned under the Requisition Act continues to rest with the owner, the Government being entitled to only the possession of such property. [761 B E] 3(ii) Not only is a right to possession a right of property, but where the subject of proprietary rights is a tangible thing, it is the most characteristic and essential of those rights. Possession, it is said, is nine points in law. An owner without possession has only a mere shell while the person in possession enjoys the property in many ways. In this situation, it is difficult to say that there cannot be deprivation of property without deprivation of title also. Deprivation of possession for an indefinite period is acquisition of property during that period though the title may continue to rest with the owner. That is why the requisitioning law also had to satisfy article 19(1) (f) and article 31 of the Constitution when they were in the Constitution. [764B D] 3(iii) The Supreme Court has treated both requisitioning of property and acquisition of property as meaning the acquisition of property in the large sense and there is no reason to depart from the views expressed by the two Constitution Benches of this Court in the State of West Bengal vs Subodh Gopal Bose and Ors,. ; and Dwarkadas Shrinivas of Bombay vs The Sholapur Spinning & Weaving Co. Ltd. and Ors. , ; The Minister of State for the Army vs Dalziel, ; , referred to.

The appellant, who was a Matadhipati, moved the High Court for a writ quashing the notice served on him in 1952 by the Executive Officer to band ever to the latter the administration and the properties 253 of the Mutt in enforcement of a scheme framed in 1939 under section 63 of the Madras Act 11 of 1927. The predecessor of the appellant had filed a suit in the District Judge 's Court to set aside that scheme. The suit failed and the scheme was confirmed subject to minor modifications. In 1951 the Madras Hindu Religious and Charitable Endowments Act, 1951, repealed and replaced the Madras Act 11 of 1927. It was urged on behalf of the appellant in the High Court that the scheme contravened his fundamental rights guaranteed by the Constitution. The single Judge who heard the matter found in his favour and held that the scheme contravened article 19(1)(f) of the Constitution. On appeal by the respondent, the Division Bench reversed the decision of the Single Judge. The High Court granted certificate to the appellant to appeal to this Court. It was contended that although the scheme was valid as framed tinder the earlier Act, it incumbent under section 103(d) of the Act of 1951 that the validity of the all the provisions of the scheme must be tested in the light of its provisions. Held:Section 103(d) of the Madras Hindu Religious and Charitable Endowments Act, 1951, properly construed, merely meant that earlier schemes framed under Madras Act It of 1927 would be operative as though they were framed under the Act of 1951. It was not intended by the section that those schemes must be examined and reframed in the light of the relevant provisions of the Act. Section 62(3)(a) of the Act which provided for the modification of such schemes made this amply clear. Unless the schemes could be modified under that section they must be deemed to have been validly made under the Act of 1951 and enforced as such. East End Dwellings Co. Ltd. vs Finsbury Borough Council, , considered. Although the scheme in question had not been completely implemented before the Constitution, that was no ground for examining its provision in the light of article 19 of the Constitution. The fundamental rights conferred by the Constitution are not retrospective in operation and the observation made by this Court in Seth Shanti Sarup vs Union of India, are not applicable to the present case. Seth Shanti Sarup vs Union of India, A.I.R. 1955 S.C. 624, explained and distinguished.

80, 80A. 81 and 116 to 213 of 1960. Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights. section V. Gupta, M. C. Bhandare, section N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioners. H. N. Sanyal, Additional Solicitor General of India, D. N. Mukherjee and P. D. Xenon, for the respondents. Porus A. Mehta, J. R. Gagrat, and G. Gopalakrishnan, for the interveners. August 11. The judgment of Gajendragadkar, Hidayatullah, Shah and Raghubar Dayal, JJ., was delivered by Hidayatullah, J., Subba Rao,:J., delivered a separate judgment. 112 HIDAYATULLAH, J ' These writ petitions raise identical questions, and a common argument was addressed to the Court in all of them. Petitions Nos. 80 and 80A of 1960 have been filed by two petitioners. One petitioner holds a permanent ' licence and the other, a temporary licence renewable triennially, to work as Dalal 's at New. Customs House, Bombay. In the other petitions also, petitioners Nos. 1 to 50 hold permanent licences, and petitioners Nos. 51 to 99 hold temporary but renewable licences. Some of the permanent licences were issued in 1936, and some of the temporary licences were issued as far back as 1944. These licences, whether permanent or temporary, were issued under s.202 of the , prior to its amendment by the Sea Customs 'Amendment) Act, 1955 (Act 21 of 1955). They were issued after a brief enquiry and subject to the fulfilment by the applicant of the following conditions : "(1) He must produce at least 2 certificates of character each from a Justice of Peace or other persons of known respectability. (2) He must certify that he has not been convicted of any criminal offence. (3) He must declare that he will have no claim to any accommodation in the Custom House. (4) He must also give a security of Rs. 2000 in cash or Government paper having an equivalent market value and execute a Bond for Rs. 2000 on It fifteen rupees Stamp Paper in the attached form. " In 1955, by the amending Act, s.202 was substituted by another section. The section now reads : "202. (1) With effect from such date as the Central Government may, by notification in the Official Gazette specify, no person shall act as an agent for the transaction of any business relating to the entrance or 113 clearance of any vessel or the import or export of goods or baggage in any Custom house unless such person holds a licence granted in this behalf in accordance with the rules made under sub section: (2). (2) The Chief Customs authority may make rules for the purpose of carrying out the provisions of this section and in particular such rules may provide for (a) the authority by which a licence may be granted under this section and the period of validity of any such licence; (b) the form of the licence and the fees payable therefor; (c) the qualifications of persons who may apply for a licence (d) the :restrictions and conditions (including the furnishing of a security by the licensee) for his faithful behaviour as regards the custom house regulations and officers) subject to which a licence may be granted ; (e) the circumstances in which a licence may be suspended or revoked; and (f) the appeals, if any, against an order of suspension or revocation of a licence, and the period within which such appeals shall be filed. " As A result of the enactment of this section, the original licence, whether permanent or temporary. would have become ineffective after. the date to be specified by the Central Government. It became necessary for the petitioners and others to apply for licences granted in accordance with the rules framed under sub section These rules were framed, and public notices were issued. inviting applications ; but the dates were postponed 114 till the rules were published in the Gazette on May 14, 1960. It is not necessary to refer to the prior history of these rules and to the many representations that were made, as they are not relevant. On June 18 1960, a public, notice (No. 87) was issued fixing June 25, 1960 as the last date for making applications for the new licences, and the persons affected were informed that the. operation of the new licences under the rules would commence on July 14, 1960. On June 27, 1960, Writ Petitions Nos. 80 and 80A of 1960 were filed, followed by Writ Petitions Nos. 81 and 116 to 213 of 1960 filed on July 12 1960. An ex parte ad interim stay of the revocation of the existing licences was obtained from this Court, and subsequently, the respondents undertook to issue to the petitioners special temporary licences renewable yearly till the disposal of these petitions. Prior to the. Custom House Agents Licensing Rules, 1960, there were four classes of Agents. They were (1) Clearing Agents, (2) Dalals., (3) Muccadams and (4) Baggage Clearing Agents. According to the petitioners, there were, 100 licensed Clearing Agents, 200 licensed Dalals, 270 Muccadams and about 15 Baggage Clearing Agents. The duties and functions of these four classes of agents were different. Whether these distinctions were always maintained and whether they grew out of regulations or usage is hardly necessary to enquire. By the Rules of 1960, these classes were merged into one, and all licensed agents were placed on an equal footing. In other words, there is to be hereafter one class of agents ' Though the petitioners holding "permanent ' licences and the petitioners holding 'temporary" licences with a term to run out have relied upon the fact that their licences are still valid, there was no serious attempt to deny that under section 202(1) they would be rendered ineffective after the date to be fixed by Government. The "permanent ' licences 115 also are not in a favourable position in this regard. If the first sub section requires that fresh licences to work as Custom House Agents be obtained, the distinction between permanent and temporary licences ceases to be material. No part of s.202 was challenged as being void or ultra vires. In these petitions, only the Rules &ire challenged as in breach of the fundamental rights under articles 14 and 19 of the Constitution and Also as being in excess of the rule making power conferred by sub section (2) of section 202. Form prescribed under the Rules for taking security from the approved agents is also questioned as being in excess of the power to make rules and contrary, in certain respects, to the itself. It may be mentioned that the petitioners in all the Writ Petitions are Dalals; but at the hearing, certain Clearing Agents obtained permission to intervene, and were also heard. Since the , ' in general and section 202, in particular were. not challenged in the petitions, we must start with the premise that the authority to insist , on fresh licences under the Rules in the case of all the operators was properly exercised. The first question to consider is whether the Rules, speaking generally, were validly framed and the next question to consider is whether any of the. Rules individually challenged goes beyond the , or offends against the Constitution. In questioning the Rules generally, the petitioners submit that these Rules could only be framed for the purpose of carrying out the purposes of s.202 [ provide sub section (1) ], or, to provide for the, matters 'mentioned in cls. (a) to (f) of section 202(2). Some of the Rules. it is submitted, go beyond the general purpose of the section, which is to license agents and the special 'topics mentioned there, and seek to further some of the purposes of other parts of the Act. Mention in this connection 116 is made specially of Form 'O ' prescribed by the Rules, under which the agents personally and the security furnished by them have been made liable for short collection of Customs duty, etc. The question whether the agents are liable, in any event,. for such short collection under section 39 is a question, which will have to be examined on merits separately, but for repelling the argument in its present from, it is sufficient to say that it is robbed of all its force by a. 9 of the . under section 202(2), the Chief Customs authority is empowered to make rules for the purposes of t hat section. That purpose is the licensing of agents and the regulation of their conduct and functions. But the Chief Customs authority is also empowered by section 9 to make rules consistent with the " 'generally to carry out the provisions of this Act". The power to make rules under section 202 is not the only power which the Chief Customs authority can exercise, and it is only too clear that power can also be derived from section 9, if there be need. Thus, if it is necessary that the agents must carry out certain provisions of the Act, a rule can be made in the exercise of the two powers together. Though the impugned Rules are headed as framed under s.202 of the ., they cannot be questioned, if they carry out not only the special purposes of s.202 but also certain other purposes of the Act, because the two powers will concur to sustain them. It is only when a rule or rules are pointed out, which subserve neither the special purpose of the section nor the general purposes of the Act that they can be successfully questioned. In short, therefore, the petitioners ' case on the individual Rules alone remains to consider. The first contention is that under the impugned Rules, the number of licences to be granted at the Customs House can be limited by the Customs. collector, and that applications can only be made, if the Customs collector publishes a notice inviting 117 applications. This restriction, it is contended, is unconstitutional, as it interferes with the right of all the petitioners to carry on their profession or a vocation freely as contemplated, by Art, 19. The Rules bearing upon these matters are rr.4 and 8. The latter Rule says that the number of licences to be granted would be fixed by the Customs collector, having regard to the volume of import and export business transacted through the Customs House, and the number is capable of being revised from time to time. The former empowers the Customs collector to invite applications, as and when he considers it necessary. It cannot be said that the Rules are not designed to advance public interest, because even a processions or trade has sometimes to be limited in the public interest, When we pointed out to Mr. Gupta that this kind of limitation on the number of persons allowed to hold licences is common, as, for example, porters in a railway station, taxicab drivers and so on, he stated that at least during the transitional period, the old operators might have been given licences on production of proof that they held licences previously. The argument is really not one based upon the interests of the public but upon the interests of the present holders of the licences. Public interests in the context must override private interests. It cannot be said that all the present operators are equally desirable, and if their number exceeds the requirement of the Customs House, it is obvious that some retrenchment in their numbers may legitimately be made, Every one has an equal chance of applying for the. existing vacancies, but he must stand in. competition with the others. There is no limitation on the number of applications that can be made, and thus, every operator will get ' a chance to have his case examined. It is to be expected that the most exprienced and the most efficient will get preference, and. no claim can be made on behalf of the incompetant and the inefficient that they should 118 receive equal treatment. Once the number is limited to the requirements of the business, it is manifest that the Customs collector will invite applications only, as and when occasion demands. These Rules, in our opinion, cannot be said to ' offend against the Constitution. The next contention is about rr.6(a), (b) and (c), which require the applicant to furnish to the Customs collector satisfactory evidence as to his respectability, reliability and financial status, and that he would be in a position to muster sufficient clientele and business in the event of his being granted the licence. The applicant has also to furnish an income tax clearance certificate. These conditions are challenged as being unreasonable restrictions upon the right to carry on a profession or avocation. Serious attempt was not made to establish that the condition about respectability and reliability was unconstitutional. It was, however, pointed out that evidence about financial status created a class barrier between the rich and the poor and only the rich were to be preferred. By the words financial status" is not meant that the applicant must be a wealthy person; what is required is that he should not be financially embarrassed, and proof that he is in easy circumstances. It is obvious that the agents under the Act deal with vast sums of money and valuable articles, and it may be necessary to scrutinise the financial position the applicant to find out whether or not he would be exposed to temptations. A person heavily indebted or insolvent cannot be trusted in the same way as a person who is not so embarrassed, and an enquiry into financial status is so much in the public interest, that we cannot say that the condition must necessarily be unreasonable. Similarly, the argument. that new entrants would find it difficult to assure that they would have sufficient clientele and business and would thus be discriminated against, is not correct. The Customs House is not a place where persons can allowed to learn a 119 profession or to take a chance. The movement of goods, the due performance, of the duties and functions under the and observance of the regulations are not easy matters for a person, who is not sufficiently experienced and who has not got the backing of a certain amount of business and the experience which such business affords. It may be necessary for a person to apprentice himself for some time to get to know the importers and exporters, and to prove to the Customsauthority that by reason of his apprenticeship and his business connections lie would be in a position to handle the work in the Customs House from the moment he is licensed. The Rule is designed to avoid entry into the Customs House premises of persons who, being there, are unable to do business, and merely add to the number of persons present. The last condition is the production of an income tax clearance certificate. The petitioners rely upon a decision of the Madras High Court reported in K. Raman and Co. vs State of Madras (1). In that case, it was hold that the fact that a person was in arrears of income tax was not germane to the issue of a licence under the Yarn Dealers Control Order, and that the insistence on the production of an income tax clearance certificate was extraneous to the carrying on of the business. The position of an agent who handles other persons ' moneys and goods is different from that of a dealer who deals with goods on his own behalf. As part of an enquiry into an applicant 's respectability, reliability and financial status, an enquiry can also be made to see whether he has discharged his debts to the State. If a person is liable to income tax and pays it punctually, he would have no difficulty in proving it. If, however, for some good reason the payment has been delayed, there would be nothing to prevent. him from proving it. (1) A.I.R. 1953 Mad '. 8A. 120 insistence upon the production of the certificate is, in our opinion, connected with the enquiry into his respectability and financial status. to find out if he can be trusted with other persons ' money and goods. The next Rule which is questioned is r. 9, which provides for an examination of the applicant. This examination follows a scrutiny of the application under the other Rules, and embraces questions on various subjects. The duties of the agents require them to handle goods, and the examination is designed to find out whether a candidate knows the elements of the law relating to the arrival, entry and clearance of vessels and goods. Objection is not raised to the examination as a whole but only to cl. (p) of r. 9 (2) under which a candidate is supposed to know the procedure in the matter of refund of claims, appeals and revision petitions under the . It is contended that these are matters in which an agent is not interested as an agent, but are matters for the owner and the Castoms authorities to know. It is true that the curriculum for the examination is somewhat extensive ; but it is also, clear that what is expected of the candidate is knowledge, not necessarily exhaustive but sufficient, of the laws relating to the arrival, entry and clearance of vessels and goods. We do not think that it is wrong for the. authorities to insist upon at least a working knowledge of the laws applicable to the kind of work the agents are required to do. When licences are issued under other laws, a candidate is sometimes required to answer questions relating to the law under which the licence is issued. One well known example is the questioning of a candidate about the rules of the road when he is issued a licence to drive a mechanically propelled vehicle. These Rules advance efficiency, and the additional know, ledge about refunds, appeals and revisions under the Act may be necessary where an agent handles 121 goods of a principal, who is himself not present to file appeals or revisions or to claim refunds. The Rule, in our opinion, is perfectly valid. Rule 10 is the next subject of attack. It provides that the Customs collector shall reject an application, for the grant of a licence (a) if the candidate fails to pass the examination, or (b) the number of vacancies do not justify the grant of such licence, or (c) the applicant is not otherwise considered suitable. Objection is taken to cl. It is said to confer a very wide discretion on the Customs collector, and reference is made to sub r.(2), in which it is provided that no appeal shall lie from the order. of the Customs collector rejecting an application. It is further pointed out that in July, 1960, the Rules were amended by the addition of r. 25, under which an appeal is to lie to the Chief Customs authority against every order of the Customs collector (i) rejecting an application for the renewal of a licence granted under these Rules; (ii) rejecting a fresh application made in accordance with r. 17 ; and (iii) refusing the grant or renewal of a special temporary licence under r. 24. It is argued that even though an appeal has been provided for these matters. , no appeal has been provided for the rejection under r. 10(1)(c). No doubt, other reasons may exist for rejecting the application of a candidate, as for example, when he is found to be a leper or an epileptic ; but one would expect that an order of this kind would ' be backed by reasons to be recorded in writing. It must be remembered that there is first a scrutiny of the application and an enquiry into the respectability, reliability and financial status of the candidate. follows an examination, If a ' candidate satisfies 'all the above condition 's, there would hardly be any ground left. for rejecting his application, except probably his physical unfitness to. the work, The Rule which: is framed is so gel general that it leaves to discretion of the 122 Customs collector to reject a. candidate for a trumpery reason (which he need not state), even though the candidate may be otherwise suitable. In out opinion, if a candidate is found fit under the other Rules and has successfully passed the examination, he should only be rejected under a rule which requires the Customs collector to state his. reasons for the rejection, and the rules must provide for an appeal against that order, as they do in the other cases. As the Rule stands, it cannot be considered to be a reasonable restriction upon the right of the successful candidate to carry on his avocation. The next Rule which is questioned is r. 11, which enjoins the payment of a fee of Rs. 50 both for a fresh application as well as renewal of the licence. In so far as the fee for the grant of a licence in the first instance is concerned, it cannot be said that the charge is exorbitant. It is not disputed that a fee is an amount collected to reimburse the Government for the expenses of licensing. It must reasonably be measured against the cost which may be entailed in the process of granting licences. In the initial stage, the Customs authorities have to scrutinise applications, subject the candidates to an examination, and provide them with licences to carry on their work. A fee of Rs. 50 initially may not be considered unreasonable, regard being had to the services involved. The same, however, cannot be said in the case of renewals. It is pointed out in the petition that formerly the charge was only 50 nP. It is averred in the petition that all that the licensing authority does, is to make an endorsement on the licence that it is renewed for a further period. It has been ruled in this Court that under the guise of a fee there must not be an attempt to raise revenue for the general funds of the State. In our opinion, a renewal fee of Rs. 50 does not entail services which can be reasonably said to measure against the charge. It may be pointed out that, though this averment was made in the petition, 123 No. attempt was made by the answering respondents to traverse it. In our judgment the renewal fee of Rs. 50 ceases to be a fee, and is, in its nature, a tax to raise revenue. Such an impost cannot be justified ' as a fee, and we accordingly, hold that this charge is improper. It would, however, be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances. The next objection is to sub r.(g) and sub r.(k) of Rs. 15. Sub rule (g) requires a Custom House Agent to pay over to Government all sums received for payment and to account to his client for monies in his hands. Sub rule (k) requires him to maintain accounts in such form and manner as may be directed from time to time by the Castoms collector, and submit them for inspection to the Customs collector or an officer authorised by him. No exception can be taken to sub r.(g) which only states what must be regarded as an inevitable obligation on the part of the Agent. Sub rule (k) is said to be excessive control on the part of the Customs authorities of the way in which the agent may keep his own account. :The licensing of an agent creates an assurance,, in the minds of the prospective clients, and the Rule is designed to ensure that the monies which the agents handle are properly accounted for. In our opinion, these Rules are salutary, and further the control over the agents, who stand in a fiduciary capacity both in regard to their own clients and the Government. Rule, 17, which enjoins upon a firm which acts as a licensee to report to the Customs collector as early as possible and, in any event, within a period of three days of a change in the constitution of the firm, is next challenged. It is said that the period of three days is too short ; but it" must be remembered that 'a large number of transactions may go through without the licensing authority being aware that the constitution of a firm has changed. The Rule is designed to bring promptly to the notice 124 of the Customs collector the change in the constitution of the firm, so that he may be in a position to decide for himself whether the licence in the changed circumstances should be allowed to operate or be suspended or revoked. In our judgment, this Rule, cannot be questioned. Mr. Porus Mehta who argued the case on behalf of the Clearing Agents, stated that the newly constituted firm is required to make a fresh application which is to be dealt with in accordance with the provisions of rr. 6 to 13. According to him, every change in the, constitution of the firm requires the firm to go through the entire process of scrutiny and examination, which he ' terms unnecessary. The rule is designed to ensure that the new members of firm answer the requirements which have been laid down is Rules 6 to 13, and these requirements may be necessary, if new,entrants come in. It is to be noticed that pending the disposal of the application, the Customs collector is authorised by the rule in his discretion to allow the existing firm to carry on the business of Custom ' House Agents. This softens the rigorous of the rule, because the work of the agents in proper cases would not be hampered, and the application would stand over for disposal to a later date. Rule 19 which also enjoins the maintenance and inspection of accounts by a firm was criticised in the same manner as was r. 15, and for the reasons which we have given, we hold it to be conducive to the proper control of the financial activities of a firm as licensee. Rule 22 deals with the cancellation of the licence for failure of the agent to comply with Any conditions of the bond executed by him, under "the Rules, for failure to comply with any of the, provisions of the Rules and for misconduct on. his part which, in the opinion of the Customs colloctor renders him unfit, to transact business in the 125 Customs House. It is contended that,the rules are so exhaustive and numerous thatno agent would ever be able to keep out of theoperation of that Rule, and that he would be ' perpetually exposed to the penalty of suspension or revocation of his licence. Rules are made for compliance and not for breach, and even though strict, they are all designed to ensure efficient and proper working on the part of the agents. A rule insisting upon such compliance with the other rules on pain of penalty _cannot be said to be outside the rulemaking power of the Customs authorities. Every order of suspension or revocation is subject to appeal, and there is thus room for interference if the Customs collector acts arbitrarily or perversely. In our: opinion, with the existence of an appeal, the rigour of the rule, if any, is taken away except in those flagrant cases, where suspension or revocation of the licence would be merited. Lastly, it is contended that the Rules control a licensed agent in a manner which makes him an unpaid servant ' of the Customs authorities. This is one way of looking at the matter. The right way to look at it is that a profession is being regulated, and the profession is one in which an agent deals with the property of another and by the law is deemed to be owner of the property. A person in such a high fiduciary position must, of necessity, be subjected to strict control, and the licensing authority in holding him forth to the prospective principals as a reliable and trustworthy person must see that persons acting on the faith of the assurance of the licence are in no way damning. The Rules, therefore, subserve a very salutary and necessary principle, and, in our judgment, are designed to advance public interest and cannot be questioned, unless a person wishes to act, dishonestly and wants to avoid control. It is wellknown that many underhand practices are common at Customs Houses, and 'the Customs authorities 126 have to be vigilant in preventing them. They must, therefore, see that they do not license the wrong type of person is and in the interests of the Revenue and more so, in the inte rests of persons who employ licensed agents, these Rules have, been framed. Looking at the Rules generally, we are of opinion that though they, are strict, they axe Absolutely necessary, and their strictness would be felt only by persons, who, are not otherwise honest. The main argument in the case is upon r.12 read with From It, which is the bond which every applicant has to executive in favour of the President of India, and its enforcement against the applicant under certain 'circumstances. Under r. 12, it is provided that before a licence is granted under the Rules, the Customs collector shall require the applicant to enter into a bond in Form 'C ' for the 7 due observance of these Rules. and the conditions of his licence and also to furnish a security of Rs. 3,000 in cash or securities and a solvent surety for a sum of Rs. 2,000. The surety is required to execute ' a separate bond in, Form 'D '. A proviso added to the 'Rule says that the security may be: increased or, decreased by the Customs collector at any time, should he, consider it necessary to do so, having regard to the volume and type of the business which the applicant will transact as Custom House Agent. It may be mentioned here, that the four classes of agents which had grown in the past have now been fused into one, and an agent under the Rules may not confine his activities to those of any one or more of the four classes previously existing. Objection, however, is taken to the basic figure of security and particularly, the cash security of Rs 3000, which are innovations under the present Rules. Reference is made to the provisions of Form 'C ', in which it is provided as follows: 127 "It is also agreed and declared that the President of India may apply the above sum of Rs. . in making good wholly or in part, any short collection of duty or other charges in respect of any transactions made by the said. on behalf of importers in the event of such sums remaining unpaid,, even after issue of demands under section 39 of the . " The petitioners contend. that the increased security, particularly, in cash, puts an unreasonable restriction upon the right to carry on the profession or avocation. They point to the fact that in the, past a security of Rs. 2,000 had been considered adequate, and from 1937 onwards, that security alone was demanded. They also contend that as Dalals they are only required, to present the shipping bills and the assessment or appraisement of the customs duty is the function of the Customs Officer. If any mistakes are made, due to an error on the part of the Customs authority, or even due to a wrong declaration of the real value of the goods by the importer, the collection of duty should be made from the owner of the goods and not from them. They also contend that this is the meaning and intent of section 39, which, in terms, makes the owner of the goods liable to make up for the short collections and puts no responsibility on the agents. They further. contend that the last clause of the bond, quoted earlier, makes the agent liable for payment of the balance of the duty before any attempt is made to recover it from the owner or importer. The last point need not detain us long, because it is raised on the existence of the ' word " 'even" in the clause "even after issue of demands under section 39 of the ". The word "even" does not mean that the agent 's security can be touched before the notice is given. It rather indicates that the security would be utilised to make up the deficit only when a notice 128 is given and if even after notice there is no compliance. This would indicate that before the ,security is so utilised, a notice must go to the agent or his principal, and the bond makes the notice a sine qua non of an action to recoup the deficit duty from the security amount. The larger question whether the agent can be made responsible for the short collection of duty under s.39 may be deferred for the moment. Previous to the promulgation of the Rules, there were, as already stated, four classes of Agents, and their duties, by custom and usage, were also different. It is now contemplated to make a single class of agents and also to restrict the number of such agents. It is quite clear, therefore, that the amount of business which would be done by the agents who are licensed, would grow significantly. Also, each agent would be entitled to do all kinds of businesses which were handled separately. This justifies the demand for increased security, and it should be noticed that there is room for the reduction of the duty in individual cases, if the amount of business which the agent would carry on, would be small. Similarly, there is provision for demanding increased security from a person who does or is expected to do a much larger amount of business as an agent. There is thus no room for a proper adjustment of the amount of security to be obtained from each individual licensed agent, commensurate with the volume and type of business which he will transact. We do not, therefore, consider that r. 12 is defective on this ground. Before we deal with section 39, it is necessary to review certain other sections of the . Under the , it is not obligatory upon a principal to appoint a licensed agent. An importer or exporter, as the case may be, can also appoint any person with the approval of the Customs collector as 129 his agent, who need not be a licensed agent. (R.3). The Rules are me ant to control action of agents, particularly the licensed agents. Under the Act, the position of an agent, whether licensed or not, is indicated in section 4, which reads "When any person is expressly or impliedly authorized by the owner of any goods to be his agent in respect of such goods for all or any of the purposes of this Act. and such authorization is approved by the Customs collector, such person shall, for such purposes be deemed to be the owner of such goods." , One of the duties of the ' owner of the goods is to make a declaration of the real value of the goods in a bill of entry or shipping bill. Under section 29, on the importation into, or exportation from, any customs port of any goods, whether liable to duty or not, the owner of such goods must, in his bill of entry or shipping bill as the case may be, state the real value, quantity and description of such goods to the best of his knowledge and belief, and must subscribe a declaration of the truth of such statement at the foot of such bill. Under the same section, the Customs collector may require the production of invoices, broker 's note, policy of insurance or other document to satisfy himself about the real value, quantity or description of such goods. The Customs Collector is also authorized to inspect the goods for the same purpose. Under sections 29A and 29B, there may be an assessment of duty prior to the examination of the goods and a provisional assessment of duty and its payment even prior to, the production of the documents above mentioned or the inspection of the goods. Section 30 of the Act defines "real value" and that is the value on which the assessment of the goods takes place. That section is not dependent upon the 'declaration of the owner, but defines "real value" in terms of a formula which, on its application determines of the real value, apart from any declaration. 130 Section 31 provides for the examination of ad valorem goods, and if the real value such goods is correctly stated in the bill of entry or shipping bill, the goods are assesssed in accordance therewith. Section 32 provides for the procedure, if it appears that such goods are properly chargeable. with a higher rate or amount of duty than that to which they were subject according to the value stated in the bill of entry or shipping bill. The Officer may then detain the goods and collect the proper duty. Sections 33, 34A and 35 deal with abatement allowed or disallowed under certain circumstances. Sections 36, 37 and 38 deal with the alteration of import and export duties or tariff valuations. When the proper duty has been paid according to the checks and inspections, if any, the goods are allowed to be cleared. Section 39, as the marginal note, shows correctly, deals with payment of duties not levied, short levied or erroneously refunded. , The first subsection, provides as follows : "(1) When customs duties or charges have, not been levied or have been short levied through inadvertence, error, or collusion or misconstruction on the part.of the Officers of Customs, or through misstatement as to real value, quantity. or description on the part of the owner or when any such duty or charge, after having been levied, or has been, owing to any such cause, erroneously refunded, the person chargeable with the duty or charge which has not been levied or which has been so short levied or to whom such refund has erroneously been made, shall pay the duty or charge or the deficiency or repay the amount paid to him in excess., on a notice of demand being issued to him within three months from the relevant date as defined in sub section (2); 131 and the Customs collector may refuse to pass any goods belonging to such person until the said duties or charges or the said deficiency or excess be paid or repaid," ' The second sub section need not be quoted, because ,it does not bear upon the controversy. The contention of the Petitioners is that although in the first paragraph of section 39(1) the word "owner" may comprehend an agent who is deemed to be an_owner, if authorised under the Act, the, section does not use the word "owner" in the latter part, and speaks of "the person chargeable with the duty", meaning thereby a change over to the real owner of the goods in contradistinction to the agent. They urge that this is even more apparent from the words of the fourth paragraph of the first sub,section which authorises the Customs collector to refuse to pass any goods belonging to ",such person" which must mean the goods belonging to the real owner, who is properly chargeable with the duty. It is contended, therefore, that as the agent is not within the reach of s.39, the demand of duty from him cannot be made, and that the provisions of the bond by which the agent and his security are made liable, are beyond the provisions of section 39 and thus invalid. One, thing is clear that the Customs authorities may have no dealing with the real owner of the goods where the agent has been authorised to deal with them for the purposes of the or any of its provisions. Section, 4 clearly lays down a fiction, that if the agent is authorised by the real owner in respect of any of the matters in the Act, the Customs authorities would deal ' with the agent as if he were the owner. The effect of the fiction is, therefore, to make an agent answerable to the Customs authorities within the four corners of his authorisation. The fiction operates only within those limits. An agent may be authorised 132 to declare the real value and to pay the customs duty or other charges. If an agent is authorised in this manner, under the fiction created by section 4 he would be regarded as the owner and would be dealt with as such, by the Customs authorities. It bar, already been pointed out that the real value, quantity and description of the goods have to be declared in the bill of entry or the shipping bill. A form was shown to us at the bearing in which the declaration has to be made either by the real owner or the agent. The form emphasis also that all responsibility for the declaration and for the payment of the proper duty and charges may be taken by an agent. Once an agent has made a declaration and has also been authorised to pay the duty etc. , it is to him that the Customs authorities would look for payment or additional payment, and it is to him that refunds would be, made. The Customs authorities would not deal with the real owner, and that is the scheme of the Act. When section 39 says that where customs duties or charges have not been levied or have been short levied through inadvertence, error collusion or misconstruction on the part of the officers of Customs, or through misstatement as to real value, quantity or description on the part of the owner, it refers not only to the real owner,, but also to an agent, if the latter can be deemed to be the owner. , This is indeed, conceded by the petitioners. The question then arises, what does the section mean when it speaks of " 'the person chargeable with the duty or charge which has not been levied or Which has been so short levied, or to whom such refund has erroneously been made"? Obviously enough, the person to be charged, in so far as the Customs authorities are concerned, is not the, real owner but the agent, a fictional owner of the goods. If a 'fictional owner, can be read into the first part 133 of the section there is no reason why the words "the person chargeable with duty" cannot also be applied to him. In the circumstances in which the agent makes a declaration with authorisation from the real owner, the agent is the person chargeable with the duty. Otherwise, for the duty chargeable in the first instance the agent would be the person charge able with the duty and 'for any short payment he would cease to be such a person and the Customs authorities would have to deal with the real owner, who made no declaration or payment. The words "the person chargeable with the duty. ", therefore, have advisedly been used not to exclude the agent but to describe in a neutral way the person from whom such a demand can be made. They are wide enough in their ambit to take in, not only the real owner but also a "deemed owner" under the Act. So far, there is no difficulty, and the objection of the learned counsel for the petitioners that a simpler method would have been to use the word " 'owner" in this part of the section ,is without substance, because the legislature may express its meaning and intention in different ways. The critical argument, however, is, on the. fourth paragraph of section 39(1). There, it is provided that if the excess charge is not paid, "the Customs collector may refuse to Pass any goods belonging to 'such person ' until the said duties or charges or the said deficiency or excess be paid or repaid". It is contended that an agent deals with numerous owners at the same time, and if this paragraph is applied literally, then the Customs collector would be entitled to refuse to pass the goods belonging to other Owners, handled by the same agent. This argument, in our opinion, does not represent the true state of the law. An agent, when he works for different owners with authorisation, undoubtedly becomes a fictional owner of the goods belonging to them; but he does not become. a single, owner in respect of the good belonging to 134 different clients. He becomes an owner quoad each client and his ownership of the goods is diversified and is not one. The agent, therefore, stands in the shoes of several persons at the same time, and is himself a multitude of owners. It is only when short payment has been made in his capacity as one fictional owner, that he can be asked to pay that which he ought to have paid in the first instance. He is exposed to the penalty of having his goods detained in the, same capacity as owner quoad his defaulting client, and the goods within his control for the same client will be detained until the duty has been paid. It is only the goods of the defaulting owner in respect of which he is also the deemed owner, that would suffer the penalty of detention but not the goods of a different owner, even though the agent may be authorised to deal on his behalf. It is in this way that the section must be read ' without contradiction in its several parts, because to read it as suggested by the petitioners, creates a contradiction between the first paragraph and the other paragraphs that follow. An authorised agent is an owner for all purposes of the Act (including payment of duty). If one were to say that in the other paragraphs of section 39(1) he is not included, then the fiction which is created by section 4 would cease to be worked out to its logical limits. Once it is held that the words ", 'the person chargeable with the duty. . . are apt to describe not only the real owner but also his authorised agent (and there is no reason why these words should be restricted), the fourth paragraph falls in line with the others, and the ownership of the agent is, therefore, limited to one client at a ' time, and the goods of that client of which the agent is also the deemed owner, are exposed to the. penalty of detention. It must be remembered that the Act makes the 'goods ' liable to duty and the payment of duty by owners clears the goods. The law goes further, and says that other goods of the owner are also liable for an deficit, if the 135 liable to duty are 'cleared. ' before the full duty has been paid. The condition in the bond is limited by the operation of s.39 to the transactions of one constituent at a time, and the for feature of security is also limited to the constituent in default. The bond prescribes for recouping of the deficiency in the customs duty or charges from the security, even after notice is given. This notice must be given within three months from the relevant date as demand in the section. The limit of three months also applies to the agent as the deemed owner in the same way as it does to the real owner. If no notice. is given, then the bond, on its own terms, cannot be enforced. In our opinion, the contentions of the petitioners are not, sustainable. In the result, the petitions must fail except to the extent that we declare r. 10(c) to be an unreasonable restraint upon the right of the petitioners to carry on their avocation and r.11 when it prescribes a renewal fee of Rs. 50, invalid inasmuch as it has provided not for a fee but for a tax. Subject to this, the petitions are dismissed. The petitioners will pay the costs of the other side (one set only), as they have lost substantially. SUBBA RAO, J. I have, had the advantage of ', perusing the judgment prepared by my learned brother, Hidayatullah, J. I agree with him except in regard to r. 6(c) of ' the Custom House Agents Licensing Rules, 1960 (hereinafter called the Rules). Rules 6(c) says : "An applicant for a licence shall furnish an income tax clearance certificate. " The Rules were made to regulate the conduct of the clearing agents so that they may discharge their duties to the satisfaction of not only the Customs Authorities but also the public. In my view, the production of income tax clearance certificate is extraneous to the issue, of a licence to a customs house agent. How ' does the 'production of such a certificate improve the credentials of an applicant 136 for selection as a customs house agent, An applicant may be financially sound and also otherwise duly qualified; he may have discharged all his debts, and paid all his taxes except a small portion of his income tax: he may not have paid the income tax for good reasons. Yet, if he goes. not produce the income tax clearance certificate, he is disqualified. What is. the reasonable nexus between the production of such a certificate and a person 's right to do business as a clearing agent ? There is none, except a remote and fanciful presumption that a man who pays the income tax. may also pay the dues payable to the Customs Authorities. In K. Raman & Co., Tellicherry vs State of Madras (1), in the context of issue of a licence under the Yarn Dealers Control Order, as Judge of the Madras High Court,, I have held, "the fact that a person is in arrears of income tax is not germane to the issue of a licence under the Yarn Dealers Control Order. It is a, circumstance extraneous to the petitioner 's right to carry on his business. The Income tax Act provides an adequate machinery for realising the arrears due from an assessee. I am of the view that the restriction imposed is unreasonable and is not in the interests of the general public. " I still adhere to that view. Every taxing Act has a machinery for collecting the tax imposed by it, but the said rule, in effect and substance, provides for an additional machinery for collection of income tax. I would, therefore, hold that the nonproductive of an income tax clearance certificate is not germane to the issue of a licence under the said Rules. I would therefore strike out r.6(c) of the Rules on the ground that it constitutes an unreasonable restriction on the right of an applicant to do business as customs, house agent, (1) A.I.R. 1953 mad. 137 BY COURT: In accordance 'with the opinion, of the majority, the petitions must fail except to the extent that we declare r.10 (c) to be: an unreasonable restraint upon the right of the, petitioners to carry on their avocation, and r.11, when it prescribes a renewal fee of Rs. 50, invalid inasmuch as it has provided not for a fee but for a tax. Subject to this, the petitions are dismissed. The petitioners will pay the costs of the other side (one set only), as they have lost substantially.

The petitioners were working as Dalals at New Customs 109 House, Bombay, under licences issued under section 202 of the Sea Customs Act, 1 878. In 1955 by an amending Act, section 202 was substituted by another section and, by sub s.(1) of section 202 it was enacted : "no person shall act as an agent for the transaction of any business relating to the entrance or clearance of vessel or the import or export of goods or baggage in any custom house unless such person hold '$ a licence granted in this behalf in accordance with the rules made under sub section (2) ". By sub section (2) the Chief Customs authority was empowered to make rules for the purpose of carrying out the provisions of the section. Section 4 provided that "when any person was . authorised by the owner of the goods to be his agent in respect of such goods for all or any of the purpose, of thisAct. such person shall for such purposes be deemed to be the owner of such goods". The petitioners who, after the enactment of the news.202, had to apply for licences to be granted in accordance with 'the rules framed under sub s(2), challenged the validity of certain of the rules on the ground that they contravened articles 14 and 19 of the Constitution of India and also that they were in excess of the rule making power conferred by s.202 (2). In particular, they questioned power validity or r. 12 under which inter alia the agent was required to enter into a bond in Form C by which he was made liable for short collection of customs duty under section 39 and also to furnish security which might be increased or decreased by the Customs collector. Held : (1) that the rules in question though they were headed as framed under section 202 of the , cannot be impugned on the ground that some of them go beyond the special purposes of that section and seek to further some of the general purposes of other parts of the Act, since the Chief Customs authority is also empowered under section 9 of the Act to make. rules consistent with the Act "generally to carry out the provisions of the Act." (2) that rr. 4 and 8 under which the Customs collector could limit the number of licences to be granted at the Customs House and applications could only be made if the Customscollector published a notice inviting applications, do not contravene article 19 of the Constitution, as they are only designed to advance public interest. (3) that rr. 6(a) and 6(b) which require the applicant, to furnish to the Custom 's collector satisfactory evidence as to his respectability, reliability and financial status and that he would be in a position to muster sufficient clientel, 110 and business in the event of his being granted the licencee, are reasonable restrictions within the meaning of article 19(6) and are valid. (4) that cl. (p) of r. 9(2) whicn requires the licensee to have a working knowledge of the procedure in the matter of refund of claims, appeals and revision petitions under the , is valid, since it is necessary where an, agent handles goods of the principal. (5) that r. 10 (1)(c) which gives the Customs collector a wide discretion to reject an application for the grant of a licence, if he considers the applicant to be not suitable, is an unreasonable restriction upon the right of the successful candidate to carry on his avocation, and is invalid. If a candidate is found fit under the other rules and has successfully passed the examination, he should only be rejected under a rule which requires the Customs collector to state his reasons for the rejection, and the rules must provide for an appeal against the order. (6) that r. 11, in so far as it prescribes a renewal fee of Rs. 50,is invalid inasmuch as it has thereby provided not for a fee but for a tax to raise revenue. It would be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances. (7) that rr. 15(g), 15(k), 17 and 19, are designed to have a control over agents, including firms which act as agents, who stand in a fiduciary capacity both in regard to their own clients and the Government, and are valid. (8) that r, 22 which enables the Customs collector to cance a licence for non compliance by the agent with the other rules or for misconduct on the part of the agent, which in the opinion of the Customs collector, renders him unfit to transact business in the Custom House, is within the rule. making power of the Customs authorities and is valid. (9) that the words "the person chargeable with the duty or charge" in section 39(1) of the. Act are wide enough. in their ambit to take in, not only the, real owner but also a "deemed owner" within the meaning of s.4 of the Act. (10) that on its true construction of s.39(1) it is only the goods of the defaulting owner in respect of Which, the agent is also the deemed owner that would suffer the penalty of detention, but not the goods of a different owner, 111 even though the agent may be authorised to deal on his behalf. (11) that r. 12 read with Form C, which makes an agent liable for short collection of customs duties under section 39, is valid and the rule is not invalid on the ground that it enables the Customs authorities to make a proper adjustment of the security to be obtained from each individual agent commensurate with the volume and type of business which he might transact. Held, further (Subba Rao, J. dissenting,) that r. 6(c), which requires the applicant to produce an income tax clearance certificate, is connected with the enquiry into his respectability and financial status to find out if fie can be trusted with other persons ' money and goods, and is valid. K. Raman and Co. vs State of Madras, A. I. R. 1953 Mad. 84, distinguished. Per Subba Rao, J. Non production of an income tax clearance certificate is not germane to the issue of a licence under the Custom House Agents Licensing Rules, 1960, and the principle in K. Raman and Co. vs State of Madras, A. I.R. , is applicable. Accordingly, r. 6(c) constitutes an unreasonable restriction on the right of an applicant to do business as Custom house agent, and is invalid.

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 petitioner and its predecessors had licence for distillery at Ujjain to manufacture rectified spirit and the last of such licence held by the petitioner was for the period 1.4.1976 to 31.3.1981. For the licensing period commencing from 1.4.1981 to 31.3.1986, the petitioner was unsuccessful and the licence was granted in favour of Rajd hani Distillery Corporation. The petitioner impugned the same but failed both before the High Court as also before the Court. Thereafter, the petitioner filed a writ petition in the High Court claiming restitution of the distillery but failed and an appeal against the High Court 's order was preferred before this Court, which has been disposed of whereby this Court has declined to grant restitution but directed that the petitioner should move an application before the State Government to have the value of the plants licence on February 19,1982 and reiterated his request by number of reminders including the one in November 3, 1986. In the interregnum, the Government policy was changed by a cabinet sub committe policy decision dated 30.12.1984, whereby they decided to grant licence to the existing licen sees of the distilleries and that they should construct the factories at their expenses on the land allotted by the State Government or acquired and allotted by the State Government and that they shift the business to new factories and the licence would be for a period of five years. Several writ petitions including the one by the petitioner were filed in the High Court challenging the policy. The High Court quashed part of the policy decision. Against that order, petitions were filed by the State and the unsuccess ful petitioners including the petitioner in this Court. Those petitions were disposed of by this Court by its judg ment in the case of State of M.P.v. Nandlal Jaiswal and Ors. , ; The court upheld the validity of the Government policy. During the course of the arguments, the Attorney General of India conceded that if the petitioner makes an application for grant of licence, it would be considered by the Govern 493 ment and disposed of quickly. Pursuant thereto the petition er made an application on December 25, 1987. The State Government rejected the application by letter dated February 8, 1988, which among other things is impugned in this peti tion under Article 32 of the Constitution. It is contended on behalf of the petitioner that the intention behind the solemn undertaking given by the State in Nandlal Jaiswal 's case clearly showed that the intention was to grant the licence to the petitioner rejection is contrary to the undertaking and violating the fundamental right of the petitioner to establish and trade in the manu facture and distribution of the liquor; further it is dis criminatory is as much as licences have been issued to others similarly placed. Alternatively, it is contended that if it is not found feasible to grant licence for Ujjain, the same be granted for Ratlam Distillery. Counsel for the State urged that it has not been found feasible to grant licence to the petitioner due to grounds stated in the order which are in confermity with the change in policy and the court should not interfere. On behalf of Rajdhani Distillery Corpn. it was urged that unless there is cut in the supply area of the operation of the existing licences and a sepa rate supply area is carved out, no licence could be issued to the petitioner; that new policy is in vogue for the succeeding licensing period of 1991 to 1993, and the li cences having been issued to persons, who are not represent ed in this court, the court should not grant the relief asked 1or in the writ petition. Dismissing the writ petition, this Court,

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 first petitioner, who had migrated to West Pakistan, applied to the High Court of Madhya Bharat for a writ of abeas corpus for directions to produce petitioners 2 and 3, his minor children, before the Court on the allegation that they were wrongfully confined and, upon the dismissal of the said application, applied to the District Judge of Ratlam under the Guardian and Wards Act for his appointment as guardian of the person and property of the said minors. The District judge rejected he application and appointed the second respondent as such Guardian. The first petitioner appealed to the High Court against the said order of the District judge but that appeal was Dismissed. He applied for special leave to appeal to this Court but that application was also rejected. Thereafter the first Petitioner, as natural guardian of petitioners 2 and 3, filed the present petition under article 32 of the Constitution. His casee in substance was that the interest of the second respondent was adverse to that of the minors, that he had misappropriated their property and that the first respondent, the State of Madhya Bharat, was bound to take steps to protect the property of the minors which it had failed to do and had thus rendered itself liable to make good the loss sustained by the minors in consequence. Held, that the petition was wholly misconceived, and must be dismissed. The Court can exercise jurisdiction under article 32 of the Constitution only in enforcement of the fundamental rights guaranteed by Part III of the Constitution. Where on account of the decision of a court of competent jurisdiction, the right alleged by the petitioner does not exist and therefore its infringement cannot arise, this Court cannot entertain a petition under that Article for protection of the alleged right. A claim as to denial of equality before the law or the equal protection of the laws can be made against executive action or against legislative process but not against the decision of a court of competent jurisdiction. Nor can an order of this Court rejecting an application for special leave under article 136 of the Constitution be circumvented by an application for a writ under article 32.

The petitioner challenged his detention under the Jammu were sent to him by way of an annexure to the District Magistrate 's order of detention. The petitioner was informed that, if he so desired, he could make a representation to the Government against the alleged order of detention. It was argued on behalf of the petitioner that some of the grounds of detention were so vague that he did not find it possible to exercise his fundamental right of making a representation under article 22(5) of the Constitution and that some of the grounds were irrelevant for the purposes of making an order under section 8. ^ HELD: The argument that only the "preamble" of the order of detention was vague but not the grounds is not tenable. [264B] "Preamble" has been defined "as an introductory paragraph or part in a statute deed, or other document setting forth the grounds and intention of it". The preamble thus betokens that which follows. The respondents ' counsel did not, however, find it possible to point out where the preamble could be said to begin, or to finish, and which of the paragraphs could be said to constitute the grounds of detention as such. [262 G H, 263A] This Court has disapproved of vagueness in the grounds of detention because that impinges on the fundamental right of the detenu under article 22(5) of the Constitution to make a representation against the order of detention when the grounds on which the order has been made or communicated to him. The purpose of the requirement is to afford him the earliest opportunity of seeking redress against the order of detention. But, as is obvious, that opportunity cannot be said to be afforded when it is established that a ground of detention is so vague that he cannot possibly make an effective representation. Reference made to paragraphs which were held to be vague. [263E, H, 264 B D] State of Bombay vs Atma Ram Sridhar Vaidya ; , Tarapada De and Ors. vs The State of West Bengal, ; , Dr. Ram Krishan Bhardwaj vs State of Delhi and Ors. ; , Shibban Lal Saxena vs State oj Uttar Pradesh ; , Rameshwar Lal Patwari vs State of Bihar and Ors., ; , and Pushkar Mukherjee and Ors. vs State of West Bengal, ; 259 It is equally well settled that a ground is said to be irrelevant when it has no connection with the satisfaction of the authority making the order of detention under the appropriate law and taking any such ground into consideration vitiates the order of detention. It was held that irrelevant grounds were, nevertheless, taken into consideration for making the impugned order, and that was quite sufficient to vitiate it. [267A B] Keshav Talpade vs The King Emperor, , Satya Brata Ghose vs Mr. Arif Ali, District Magistrate Shibsagar, Jorhat and Ors, , and K. Yadava Reddy and Ors. vs The Commissioner of Police, Andhra Pradesh, Hyderabad and Anr., I.L.R. 1972 Andhra Pradesh 1025, affirmed. Chinnappa Reddy, J. (Concurring) ^ HELD: A law providing for preventive detention and action taken under such a law, to pass muster, have to satisfy the requirements of both Articles 19 and 22 of the Constitution. [268D E] The interpretation of Article 22(5) consistently adopted by this Court is, perhaps, one of the outstanding contributions of the Court in the cause of Human Rights. The law is now well settled that a detenu has two rights under Article 22(5) of the Constitution (1) to be informed as soon as may be, of the grounds on which the order of detention is based, that is, the grounds which led to the subjective satisfaction of the detaining authority and (2) to be afforded the earliest opportunity of making a representation against the order of detention, that is, to be furnished with sufficient particulars to enable him to make a representation which on being considered may obtain relief to him. The inclusion of an irrelevant or non existent ground among other relevant grounds is as infringement of the first of the rights and the inclusion of an obscure or vague ground among other clear and definite grounds is an infringement of the second of the rights. In either case there is an invasion of the Constitutional rights of the detenu entitling him to approach the Court for relief. The reason for saying that the inclusion of even a single irrelevant or obscure ground among several relevant and clear grounds is an invasion of the detenu 's constitutional right is that the Court is precluded from adjudicating upon the sufficiency of the grounds and it cannot substitute its objective decision for the subjective satisfaction of the detaining authority. [269A D] The argument that only that allegation which was the immediate cause of the order of detention was to be treated as the ground of detention and all other allegations recited in the order of detention were to be treated as introductory and background facts cannot be accepted. The factual allegations contained in the document supplied to the detenu as furnishing the ground of detention cannot be so dissected. The last straw which broke the camel 's back does not make weightless the other loads on the camel 's back. [269 G H, 270E] The expression 'Naxalite ' conveys different meanings to different persons depending on the class to which one belongs, his political hues and ideological perceptions. It is as vague or as definite as all words describing ideologies such as "democracy" etc. It is a label which may be as misleading as any other. [270F G, 271A] Expressions like 'revolt ' and 'revolution ' are flung by all and sundry in all manner of context and it is impossible to attach any particular significance to 260 the use of such expressions. Every turn against the establishment is called 'revolt ' and every new idea is labelled as 'revolutionary '. Without specification of the particular form of revolt and revolution which was advocated, the ground of detention must be held to be irrelevant and vague. [271 C D] A. K. Gopalan vs State of Madras, ; R. C. Cooper vs Union of India, ; distinguished.

The respondent sought special leave to appeal to the High Court under section 417(3) of the Code of Criminal Procedure, 1898 against the acquittal of the petitioner by the trial court. The application was made beyond the period of limitation but the High Court condoned the delay under section 5 of the . In their application for special leave to appeal to this Court the petitioners contended that the time limit of 60 days prescribed under section 417(4) was mandatory and as such the High Court had no jurisdiction to extend the time limit by resort to section 5 of the . Dismissing the special leave petitions, ^ HELD: (1) The order granting special leave was not an order outside the power of the High Court. In a case where an application for special leave to appeal from an order of acquittal is filed after the coming into force of the , section 5 would be available to the applicant and if he can show that he had sufficient cause for not preferring the application within the time limit of 60 days prescribed in sub section (4) of section 417, the application would not be barred and despite the expiration of the time limit of sixty days, the High Court would have the power to entertain it. [265B C] (2) Since under the section 5 is specifically made applicable by section 29(2) it could be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation. It is only if the special or local law expressly excludes the applicability of section 5 that it stands displaced. Section 29(2) (b) of the Limitation Act, 1908 specifically excluded the applicability of section 5 while section 29(2) of the 1963 Act in a clear and unambiguous terms provides for applicability of section 5. [264F, E] Kaushalya Rani vs Gopal Singh ; , explained.

These petitions by the holder of Kavalappara Sthanam, his wife, daughters and soil challenged the constitutional validity of the Madras Marumakkathayam (Removal of Doubts) Act, 1955 passed by the Madras Legislature soon after the Privy Council had declared the properties in possession of the Sthanee to be Sthanam properties in which the members of the tarwad had not interest. Section 2 Of the Act, which contained the substantive provision, was as follows: " 2. Notwithstanding any decision of Court, any sthanam in respect of which: (a) there is or had been at any time an intermingling of the properties of the sthanam and the properties of the tarwad, or (b) the members of the tarwad have been receiving main. tenance from the properties purporting to be sthanam properties as of right, or in pursuance of a custom or otherwise, or (c)there had at any time been a vacancy caused by there being, no male member of the tarwad eligible to succeed to the Sthanam, 888 shall be deemed to be and shall be deemed always to have been a Marumakkathayam tarwad and the properties appertaining to such a sthanam shall be deemed to be and shall be deemed always to have been properties belonging to the tarwad to which .he provisions of the Madras Marumakkathayam Act, 1932 (Mad. XXII of 1933), shall apply. " The question for decision was whether the impugned Act infringed the fundamental rights of the petitioners guaranteed by articles 4, 19(1)(f) and 31 of the Constitution. Held (per Sinha, C. J., Subba Rao and Shah, JJ.) that the three tests laid down by the Act were contrary to the well settled principles of Marumakkathayam Law with regard to which there could be no scope for doubt and as such not only not germane but extraneous to the object it sought to achieve. They were a device to deprive the sthanam of its properties and vest them in the tarwad and as such directly hit by article 19(1)(f) and could not be saved by article 19(5). Assuming that the Sthanam properties were held in janmam right and as such were estates within the meaning of article 31A, the impugned Act was immune from challenge. That Article, properly construed, envisages agrarian reform and provides for the acquisition, extinguishment or modification of proprietary and various other kinds of subordinate rights in a tenure called the estate solely for that purpose and must be limited to it. Although it may not be permissible to refer to the statement of objects and reasons of its amendment for purposes of construction, it can be referred to for the limited purpose of ascertaining the conditions prevailing at the time and purpose underlying the amendment. Aswini Kumar Ghose vs Arabinda Bose, [19531 S.C.R. 1, con sidered. There is no substance in the argument that since the impugned Act seeks to regulate the rights of the Sthanee and the junior members of the tarwad inter se it falls within by cl. (2)(b) of article 31A. That clause has to be read with cl. (1)(a) of the Article and since the impugned Act does not contemplate any agrarian reform or seek to regulate the rights inter se between landlords and tenants or modify or extinguish any of the rights appertaining janmam right, leaving all its characteristics intact, it does not come within the purview of article 31A of the Constitution. Sri Ram Ram Narain vs State of Bombay, [1959] SUPP. 1 S.C.R. 489, and Atma Ram vs State of Punjab, [1959] SUPP. 1 S.C.R. 748, referred to. Fundamental rights have a transcendental position in the Constitution and before an Article embodying a fundamental right can be construed to exclude another every attempt should be made to harmonize them and not until it is found impossible to do so, can one be made to yield to the other. Barring such exceptional cases, any law that infringes any of the fundamental rights must be void. 889 The word 'law ' in article 31(1) must mean a valid law, and such a law must satisfy two tests, (1) that the legislature must be competent to enact it and (2) that it must not infringe any fundamental rights. A law that deprives a citizen of his property must, therefore, be invalid if it infringes article 19(1)(f) of the Constitution. Deep Chand vs State Of U. P., [1959] SUPP. (2) S.C.R. 8, and Basheshway Nath vs Commissioner of Income tax, Delhi, [1959] Supp. 1 S.C.R. 528, referred to. Article 31 Of the Constitution, since its amendment by the Constitution (Fourth Amendment) Act, 1955, is no longer a selfcontained Article providing for a subject different from that dealt with by article 19, but deals with two different subjects, CIS. (2) and (2A) dealing with acquisition and requisition and cl. (1) with deprivation of property by authority of law, and can no longer be construed on the analogy of article 2 1 so as to exclude the operation of article 19. The State of West Bengal vs Subodh Gopal Bose, [1954] S.C.R. 587, A. K. Gopalan vs The State of Madras, ; , referred to. State of Bombay vs Bhanji Munji and Any., [1955] 1 S.C.R. 777, held inapplicable. Nor does article 31(1) deal with police power. Although such power, as understood in America, is no arbitrary power divorced from social control and public good, there can be no need of importing such a doctrine into the Indian Constitution. The word 'law ' used by article 31(1) indicates its limitation and refers back to article 19 and any law made under article 31(1) can be sustained only if the restrictions it imposes are reasonable and in the interest of the general public. The Constitution does not confer on the Indian Parliament the same power which the Parliament of England possesses and while it does contemplate a welfare State, that has to be brought about within its frame work of the Constitution itself. The correct approach should, therefore, be first to ascertain the fundamental right and then to see whether the law infringes that right. If ex facie it does so, it has to stand the test of article 19(5). In certain circumstances, however, deprivation of fundamental right to property may also amount to a reasonable restriction under the Article. Narendra Kumar vs The Union of India, [196O] 2 S.C.R. 375, referred to. Individual proprietary rights being ordinarily inviolable unless a clear case is made out for restricting them, there must be a harmonious balancing between the fundamental rights declared by article 19(1) and social control permitted by article 19(5). It is implicit in the nature of restrictions that no inflexible standard can be laid down and each case must be decided on its own facts. But the restrictions must not be arbitrary and must have a reasonable relation to the object sought to be achieved and shall be in the interest of the general public. 890 State of Madras vs V. G. Rao, ; , Henry Webster vs Peter Cooper, ; , and The Citizens ' Savings and Loan Association and Cleaveland, Ohio vs Topeka City, ; , referred to. Although the redress of a real and genuine grievance of a section of the community may be in public interest, it is impossible to hold that the impugned legislation was either justified or in such public interest. Iswari Prosad vs N. R. Sen, A.I.R. 1952 Cal. 273, held in applicable. Marumakkathayam Law is a body of customs and usages that have received judicial recognition, and is fundamentally different from Hindu Law, being a matriarchal system. The family, called tarwad, consists of all the descendants of one common ancestor. It consists of a mother and her male and female children and the children of those female children and so on. Only the senior most male member can attain the sthanam, which is a position of dignity with specific properties attached to it. When he does so and becomes the Sthanee he ceases to have any interest in the tarwad properties. Occasionally a female member also becomes the Sthanee. Like a Hindu widow or an impartible estate holder the Sthanee has an absolute interest in the income of the Sthanam properties or acquisitions therefrom. A member of the tarwad has no right to maintenance from out of the Sthanam properties nor can such property be converted into tarwad property by the grant of such maintenance by custom or otherwise or intermingling of the Sthanam properties with the tarwad properties by the Sthanee. His position approximates to that of a member separated from a Hindu family and there can be no scope for the application of the doctrine of blending. Like the Sthanee who ceases to have any present proprietary interest in the tarwad, the members of the tarwad also can have no present proprietary interest in the sthanam property. They continue to be blood relations with a contingent right of succession to each others ' property that is no more than a spies successions. The right of a subsequently born male member of the tarwad to succeed to the Sthanam and its property is judicially recognised. Case law reviewed. Per Imam and Sarkar, JJ. The impugned Act is protected by article 31A and is not open to question in the ground that it violates articles 14, 19(1)(f) and 31(1) Of the Constitution. There is no basis for the contention that article 31(1)(a) contemplates a law relating to agrarian reform only. The Article makes no mention of any such reform and there can be no doubt that under it a janmam right may be acquired, extinguished or modified whether the land held in such right is agricultural or not. It is not permissible to refer to the objects and reasons stated in the Bills, by which the Acts amending article 31A of the Constitution were introduced, for the construction of the statute and, therefore, the word 'law ' in article 31A(1) cannot be read in relation to sub cl. (a) only as a law intended to achieve agrarian 891 reform on the basis of the supposed object of the Legislature in enacting article 31A. Aswini Kumar Ghose vs Arabinda Bose, ; referred to. It is not correct to say that the impugned Act does not effect any modification of janmam rights and therefore it does not come within article 31A. When the Article speaks of modification of janmam rights, it does not speak of such rights in the abstract but contemplates the modification of such rights held by a person. It would be as much modification of janmam rights, if such rights held by one person are directed to be held by a number of persons jointly, as when the incidents of such rights are altered. Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 S.C.R. 489, and Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748, relied on. It is not correct to say that the Legislature in giving the provisions of the impugned Act retrospective operation or in providing that they should prevail notwithstanding any decision of the court to the contrary, was acting judicially and not in a legislative capacity and that the Act was on that ground invalid. The rule obtaining in America that legislative action cannot retract on past controversies and reverse decisions of courts and the relevant American decisions can have no application in India. Piare Dusadh 's case, , referred to.

Criminal Appeal No. 118 of 1961. Appeal by special leave from the judgment and order dated May 10, 1961, of the Punjab High Court (Circuit Bench) at Delhi in Criminal Misc. No. 256 D of 1961. , C. K. Daphtary, Solicitor General of India, Bepin Behari Lal, T. M. Sen and R. H. Dhebar, for the appellant. N. C. Chatterjee, Mehar Singh Chaddah A. K. Nag and I. section Sawhney, for the respondent. 623 1961. September 14. The Judgment of, the Court was delivered. by WANCHOO, J. The respondent Jagjit Singh along with two other 's ' was prosecuted for conspiracy and also under sections 3 and 5 of the Indian Official Secrets Act, No. XIX of 1923, (hereinafter called the Act). The respondent is, a former captain of the Indian Army and was at the time of. his arrest in December, 1960, employed in the delegation in India of a French company. The other two persons were employed in the Ministry of Defence and the Army Headquarters, New Delhi. The case against the three persons was that they in conspiracy had passed on official secrets to a foreign agency. The respondent applied for bail to the Sessions Judge; but his application was rejected by the Additional Sessions Judge, Delhi. Thereupon the respondent applied under section 498 of the Code of Criminal Procedure to the High Court, and the main contention urged before the High Court was that on the facts disclosed the case against the respondent could only be under s 5 of the. Act, which is bailable and Dot under section 3 which is not bailable. The High Court was of the view that it was hardly possible at that stage to go into the question whether section 3 or section 5. applied ; but that there was substance in the suggestion on behalf of the respondent that the matter was arguable. Consequently the High Court took the view that as the other two persons prosecuted along with the respondent had been released on bail, the respondent should also be so released, particularly as it appeared that the trial was likely to take a considerable time and the respondent was not likely to abscond. The High Court, therefore, allowed bail to the respondent. Thereupon the State made an application for special leave which was granted. The bail granted to the respondent was cancelled by an interim order by. this Court, and the matter has now come up before us for final disposal. There is in our opinion a basic error in the order of the High: Court. Whenever. an application for bail is made to a court, the first question that 624 it has to decide is whether the, offence, for which the accused is being prosecuted is bailable or otherwise. If the offence, is bailable, hail will be granted, under section 496 of the Code of Criminal Procedure without more ado ; but if the offence is not bailable, further considerations will arise and the court will decide the question of grant of bail in the light of those further considerations. The error in the order of the High Court is; that it did not consider whether the offence for which the respondent was being prosecuted was a bailable one or otherwise. Even if the High Court thought that it would not be proper at,, that stage, where. commitment proceedings were: to take place, to express an opinion on the question whether the offence in this case fell under section 5 which is bailable or under: section 3 which is not bailable, it should have proceeded to deal with the application on the assumption that the offence was under section 3 and therefore not bailable. The High Court, however, did not deal with the application, for bail on this footing, for in the order it is said that the question whether the offence fell under section 3 or section 5 was arguable. It follows from this observation that the High Court thought it possible that the offence might fall under section 5. This, in our opinion, was the basic error into which the High Court fell in dealing with the application for bail before it, and it should have considered the matter even if it did not consider it proper at that stage to decide the question whether the offence was under s.3 or s.5, on the assumption that the case fell under section 3 of the Act. It should then have taken into account the various considerations, such as, nature and seriousness, of the offence, the character of the evidence, circumstances which axe peculiar to the accused, a reasonable possibility of the, presence of the accused not being secured at the trial, reason , able apprehension of witnesses being tampered with, the larger interests of the public or, the State, similar other considerations, which arise when, court is asked for bail in a non bailable offence. It is true that under section 498 of the Code, of Crime 625 Procedure, the powers of the High Court in the matter of granting bail are very wide; even so where the offence is non bailable, various considerations such as those indicated above have to be taken into account before bail is granted in a non bailable offence. This the High Court does not seem to have done, for it proceeded as if the offence for which the respondent was being prosecuted might be a bailable one. The only reasons which the High Court gave for granting bail in this case were ' that the other two persons had been granted bail, that there was no likelihood of the respondent absconding, he being well connected, and that the trial was likely to take considerable time. These are however not the only considerations which should have weighed with the High Court if it had considered the matter as relating to a non bailable offence under section 3 of the Act. The first question therefore that we have to decide in considering whether the High Court 's order should be set aside is whether this is a case which falls prima facie under section 3 of the Act. It is, however, unnecessary now in view of what has transpired since the High Court 's order to decide that question. It appears that the respondent has been committed to the Court of Session along with the other two persons under section 120 B of the Indian Penal Code and under sections 3 and 5 of the Act read with section 120 B. Prima facie therefore, a case has been found against the, respondent under section 3, which is a non bailable offence. It is in this background that we have now to consider whether the order of the High Court should be set aside. Among other considerations, which a court has to take into account in deciding whether bail should be granted in a non bailable offence, is the nature of the offence; and if the offence is of a kind in which bail should not be granted considering its seriousness, the court should refuse bail even though it has very wide powers under section 498 of the Code 626 of Criminal Procedure. Now a. 3 of the Act erects an offence which is prejudicial to the safety or interests of the State and relates to obtaining, collecting, recording or publishing or communicating to any other person any secret official code or paw word or any sketch, plan, model, article or note or other document or information which is calculated to be or might be or is intended to be, directly or indirectly, useful to an enemy. Obviously, the offence is of a very serious kind affecting the safety or the interests of the State. Further where the offence is committed in relation to any work of defence, arsenal, naval, military or air force establishment, or station, mine, minefield, factory, dockyard, camp, ship or aircraft or otherwise in relation to the naval, military or air force affairs of Government or in relation to any secret official code, it is punishable with fourteen years ' imprisonment. The case against the respondent is in relation to the military affairs of the Government, and prima facie therefore, the respondent if convicted would be liable upto fourteen years ' imprisonment. In these circumstances considering the nature of the offence, it seems to us that this is not a case where discretion, which undoubtedly vests in the court, under section 498 of the Code of Criminal Procedure, should have been exercised in favour of the respondent. We advisedly say no more as the case has still to be tried. It is true that two of the persons who were prosecuted along with the respondent were released on bail prior to the commitment order; but the case of the respondent is obviously distinguishable from their case inasmuch as the prosecution case is that it is the respondent who is in touch with the foreign agency and not the other two persons prosecuted along with him. The fact that the respondent may not abscond is not by itself sufficient to induce the court to grant him bail in a case of this nature. Further, as the respondent has been committed for trial to the Court of Session, 627 it is not likely now that the trial will take a long time. In the circumstances we are of opinion that the order of the High Court granting bail to the respondent is erroneous and should be set aside. We therefore allow the appeal and set aside the order of the High Court granting bail to the respondent. As he has already been arrested under the interim order passed by this Court, no further order in this connection is necessary. We, however, direct that the Sessions Judge will take steps to see that as far as possible the trial of the respondent starts within two months of the date of this order. Appeal allowed.

The respondent who was a former Captain of the Indian Army and was employed in the delegation in India of a French Company was prosecuted along with two others for conspiracy and passing on Official Secrets to a foreign agency under ss.3 and 5 of the Official Secrets Act. His application for bail was rejected by the Sessions judge but the High Court allowed bail on the ground inter alia that his case might fall only under s.5 which was bailable and not section 3 which was not bailable. It did not express any opinion whether the case fell under section 5 or section 3 in view of the commitment proceedings which were going on at the time. On appeal by the State. Held, that the High Court should have proceeded to deal with the application for bail on the assumption that the offence was under section 3 and therefore not bailable. It should have then taken into account the various considerations such as, nature and seriousness of the offence, the character of the evidence circumstances peculiar to the accused, possibility of his absconding, tampering with witnesses larger interests of the public. and the State and similar other considerations Which arise When bail is asked for in a non bailable offence. The fact that the applicant for bail might not abscond was not by itself a sufficient ground for granting bail.

The respondent, a displaced person from Pakistan was allotted 55 80 Standard Acres of land in lieu of the land left by him in Pakistan. While determining the surplus area, the appellant State interpreting the phrase "as the case may be" in proviso (ii)(a) to Section 2(3) of the Punjab Security of Land Tenures Act, 1953, left with the respondent 100 ordinary acres equivalent to 29.81 Standard Acres and treated 25.99 standard acres equivalent to 78.57 ordinary acres as surplus. The respondent preferred an appeal contending that the surplus should be 5.80 standard acres on a true interpretation of the proviso, which failed. The revision before the Financial Commissioner met with the same fate. The contention of the respondent was upheld by the High Court while allowing the Writ Petition filed by him. The Letters Patent Appeal filed by the State was dismissed. On an appeal by special leave, the Court, while dismissing it, ^ HELD: (i) The contention that the words "as the case may be" in proviso (ii)(a) to section 2(3), gives a discretion to the authorities to determine the permissible area either in standard or in ordinary acres is not correct. [212 B C] (ii) On a plain reading, proviso (ii)(a) indicates that where the land allotted to a displaced person was in standard acres and its area exceeded 50 standard acres, the permissible area would be 50 standard acres, and where the land was allotted not in standard acres, the permissible area would be 100 ordinary acres. The nature of the original allotment whether it was in standard acres or in ordinary acres is the determinating factor. [212 C D] (iii) The meaning given to proviso (ii)(a) by the Full Bench of the Punjab & Haryana High Court, in Khan Chand vs State of Punjab A.I.R. 1966 Punjab 423, is correct It is only construed this way that the words "as the case may be" acquire a significance, otherwise they would be mere surplusage. [212 D E] Khan Chand vs State of Punjab, A.I.R. 1966 Punjab 423, approved.

The appellant was convicted along with two other accused under section 302 I.P.C. and sentenced to death while the other two were sentenced to life imprisonment. In appeal to this Court against the orders of the High Court confirming the death sentence imposed, the special leave was granted limit ed to sentence. Allowing the Criminal Appeal No. 337 of 1976 in part and modifying the death sentence to one of life imprisonment, the Court, HELD: (1) The object of section is to give a fresh opportunity to the convicted person to bring to the notice of the court such circumstances as may help the court in awarding an appropriate sentence have regard to the per sonal, social and other circumstances of the case.[712 D] (2) Failure to give an opportunity under s" 235(2) Cr. P.C. will not affect the conviction under any circum stance. In a murder case where the charge is made out the limited question is as between the two sentences prescribed under the Penal Code. If the minimum sentence is imposed. question of providing an opportunity under section 235 would not arise. [712 F] (3) The hearing contemplated by section 235(2) is not con fined merely to hearing oral submissions but extend giving an opportunity to the prosecution and the accused to place before the court facts and materials of sentence and;if they are contested by either side then to produce evidence for the purpose of establishing the same. [712 G] Santa Singh vs State of Punjab A.I.R. 1976 S C 2386, reiter ated. (4) To save time and expense and help produce prompt justice, it may be more appropriate for the appellate court to give an opportunity to the parties in terms of section 235(2) to produce the materials they wish to adduce instead of going through the exercise of sending the case back to the trial court. 1713 A] In the instant case, the Court modified the death sen tence to one of life imprisonment in view of the facts: (i) The death sentence has been inflicted nearly two years ago, and the agony of such a sentence has been an exCruciating experience suffered by the convict for a long period; (ii) The appellant had two other assailants with him who have been awarded life imprisonment; (iii) There was no motive for the appellant to kill the innocent child; and (iv) The other circumstances present indicate that the ends of justice would be met by awarding life imprisonment. [713 G E] E. Annamma vs State of Andhra Pradesh ; , referred to

The appellant Board cancelled the declaration of the result of the respondent in the High School Certificate Examination held in 1960 accepting the findings of the subcommittee appointed by it to enquire into the charges made against the respondent and another candidate of having used unfair means in answering the English, Mathematics and Hindi papers. The charges were based upon the fact that in the Hindi 3rd paper set at the said examination, the respondent gave wrong answers to Question No. 4 in precisely the same form in which the answers had been given by the candidate whose Roll number was consecutive with that of the respondent. The High Court interpreting the charge as confined to that the respondent had copied either from the answer book of the candidate bearing the consecutive Roll Number or from a common source held that the findings of the enquiry committee were based on no evidence and quashed the cancellation of the result. On appeal by special leave. Held, that in the circumstances of the case, the identity of the wrong answers given by the respondent with that of the other candidate bearing the consecutive Roll Number rendered the charge of the respondent having employed unfair means highly probable and that the findings of the enquiry committee based upon such probabilities and circumstantial evidence could not be said to be based on no evidence as in such matters direct evidence quite often cannot be available. Held, further, that in dealing with cases like those of educational institutions dealing with matters of discipline like employing unfair means, the problem faced by the educational institutions should be appreciated by the 'High Court and so long as the enquiry held is fair and affords the candidate an opportunity to defend himself, the matter should 768 not be examined with the same strictness as applicable to criminal trials in the ordinary courts of law.

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.

The appellant was charged under section 120 B of the Indian Penal Code and section 167(8i) of the Sea Customs Act, i878, which were bailable offences, and was released on bail by the Chief Presidency Magistrate under section 496 of the Code of Criminal Procedure. An application made subsequently by the complainant for cancellation of the bail was dismissed by the Magistrate on the ground that under section 496 he had no jurisdiction to cancel the bail. The complainant invoked the inherent power of the High Court under section 561A of the Code and the High Court took the view that under that section it had inherent power to cancel the bail,and finding that on the material produced before the Court it would not be safe to permit the appellant to be at large, it cancelled the bail. On appeal to the Supreme Court: Held, that though under section 496 of the Code of Criminal Procedure a person accused of a bailable offence is entitled to be released on bail pending his trial, if his conduct subsequent to his release is found to be prejudicial to a fair trial, he forfeits his right to be released on bail and such forfeiture can be made effective by invoking the inherent power of the High Court under section 561A of the Code. But the inherent power has to be exercised sparingly, carefully and with caution and only where such exercise is justified by the tests specifically laid down in the section itself. Lala jairam Das & Others vs King Emperor, (1945) L.R. 72 I.A. 120, distinguished.

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

The respondent lodged a complaint before the Sub Divisional Magistrate alleging that the appellants assaulted him with lathis and forcibly took away currency notes from his pocket. After completing the examination under section 200 of the Code of Criminal Procedure, the Magistrate made the following order "Examined the complaint on s.a. The offence is cognizable one. To S.I. Baikunthpur for instituting a case and report by 12.12.56. " Ultimately, a charge sheet was submitted by the police and the appellants were committed to the court of sessions but the trial ended in acquittal. On appeal by the respondent under section 417(3) of the Code of Criminal Procedure, the order of acquittal was set aside by the High Court and the appellants were convicted under section 395 of the Penal Code and sentenced to two years rigorous imprisonment. It was mainly urged on behalf of the appellants that in this case no appeal lay to the High Court under section 417(3) as the case against them was not instituted on any complaint but on a police report. Held: (i) When on a petition of complaint being filed before him a Magistrate applies his mind for proceeding under the various provisions of Chapter XVI of the Code of Criminal Procedure, he must be held to have taken cognizance of the offences mentioned in the complaint. When however he applies his mind not for such purpose but for purposes of ordering investigation under section 156(3) or issues a search warrant for the purpose of investigation. he cannot be said to have taken cognizance of any offence. R.R. Chari vs State of U.P., ; and Gopal Das vs State of Assam, A.I.R. 1961 S.C. 986, applied. In the present case, as it is clear from the very fact that the Magistrate took action under section 200 of the Code of Criminal Procedure, that he had taken cognizance of the offences mentioned in the complaint, it was open to him to order investigation only under section 202 and not under section 156(3) of the Code of Criminal Procedure. Therefore, it must be held that though the Magistrate used the words "for instituting a case" in his order he was actually taking action under section 202 of the Code, that being the only section under which he was in law entitled to act. 38 Cognizance having already been taken by the Magistrate before he made the order there was no scope of cognizance being taken afresh of the same offence after the police officers ' report was received. Thus the case was instituted on complaint and not on the police report submitted later. The contention therefore that the appeal d d not lie under section 417(3) must be rejected. (ii) The order of the Magistrate asking the police to institute a case and to send a report should properly and reasonably be read as one made under section 202 of the Code of Criminal Procedure. So the contention that he acted without jurisdiction cannot be accepted. At most it might be said that in so far as he asked the police to institute a case he acted irregularly, but there is no reason to think that it has resulted in any failure of justice.

minal Appeal No. 248 of 1960. Appeal by special leave from the judgment and order dated October 31, 1960, of the Rajasthan High Court in D. B. Criminal Appeal No. 290 of 1960 and D. B, Criminal Murder Reference No 7 of 1960. 591 R. L. Anand, C. L. Sareen and B. L. Kohli, for the appellants. S.K. Kapur and T. M. Sen, for the respondent 1961. September. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave from the judgment of the Rajasthan High Court. It arises out of an incident in which Bhimsen was murdered on May 8, 1959 at Mandi Pili Bangan shortly before 3 P.m. The prosecution story briefly was, that there was bad blood between Ramratan appellant and the members of the family of Bhimsen on account of panchayat elections in which they had supported rival candidates. Another cause for. enmity was that some time before the occurrences Ramratan appellant was prosecuted under section 307 of the Indian Penal Code and Bhimsen was cited as a prosecution witness in that case and Ramratan did not like that. Bhimsen and his father brought some gram for sale on the night between May 7/8, 1959, to Pili Bangan. Bhimsen returned to the village to bring more grain and came back at about10/11 A.M. on the 8th on his tractor trolly along with his brother Ram Partap. The gram was to be sold 'through Roopram and was stacked in front of his shop in the mandi. Ram Partap was apparently not interested in the sale; and had wandered away leaving his father Jawanaram and his brother Bhimsen at the shop. Shortly before 3 p.m. while the gram was being weighed by Lekhram weighman, the three appellants and two others (namely, Moman and Ramsingh) came up there armed with ,guns. Ramratan shouted that the enemy should not be allowed to escape as Bhimsen was trying to enter the shop of Roopram to save himself on seeing these persons. Before, however, Bhimsen could enter the shop of Roopram, Ramratan came in between and fired at him from a distance 592 about 5 feet. Bhimsen got injured and fell down and died soon after. Jawanaram raised his hands and asked the assailants not to kill Bhimsen but Hansraj appellant fired at him causing a wound on his left hand,. which resulted in a compound fracture. Maniram also fired at. Jawanaram but he dropped on the ground and pellets hit Lekhram weighman who was standing behind Jawanaram. Thereafter all the assailants ran away. Roopram had shut up his shop when the incident took place and he only came out When everything was over. Jawanaram asked him to send telegram to police station Suratgarh and told him the names of the five assailants. Thereafter jawanaram started for the police outpost in Pili Bangan to make a report; but Ramsingh constable met him on the way at a short distance from the shop of Roopram. Thereupon Jawanaram made a report (exhibit P 1) to Ramsingh then and there. While this report was being recorded, Ram Partap also turned up. After the report had been recorded, Jawanaram was sent to the hospital where his injuries were examined at 3 30 P.m. Ramsingh constable went to the spot after recording the report and found the dead body of Bhimsen lying in front of Roopram 's shop It appears that head constable gone outside and returned at 5 P.M. and started investigation thereafter. The Sub inspector arrived on the scene at about 6 p.m. and took over the investigation and. completed it. Thereafter the three appellants and two others who have been acquitted by the Sessions Judge were prosecuted for this murder. The case of the appellants was that they had not committed this offence and that they had been implicated on account of enmity They examined no evidence in defence. The main prosecution evidence consisted of the statements of Jawanaram, his son Ram Partap, Roopram and Lekhram as to what happened at the spot. Jawanaram related the whole story as given above, Ram Partap said that he had come near 593 the spot on seeing the assailants going that way and hid himself at some distance and saw the incident from there. Roopram 's statement was that he shut up his shop as soon as he heard some noise outside and did not see the assailants. When he came out, however, he was told by Jawanaram the names of the five assailants and saw Bhimsen lying dead. He had also heard three reports of gunshots from inside his shop. He saw Jawanaram and Lekhram were also there injured and Jawanaram went away shortly after for making the report. Sometime thereafter the police came to the spot and started investigation. Lekhram stated that he was there weighing the gram. Four or five persons armed with guns came there and shouted and fired two or three times with the result that Bhimsen, Jawanaram and he were injured and Bhimsen died immediately. But he was unable to say whether the five persons in the dock were the assailants. Because of certain answers that he gave in cross examination this witness was treated as hostile by the prosecution. The Sessions Judge relied on the statement of Jawanaram and convicted the three appellants. He however, gave the benefit of doubt to the other two assailants and acquitted them. He did not rely on the statement of Ram Partap as he was of the view that Ram Partap did not arrive in the Mandi till about 6 P.m. He also did not rely on the statement of Lekhram, which in any case was useless in so far as the connection of the appellants with the crime was concerned. As to Roopram he held that his statement that Jawanaram had told him the names of the assailants immediately after the incident was over when he came out of his shop could not be used as corroborate on of the statement of Jawanaram under section 157 of the Indian Evidence Act, as Jawanaram had not said in his statement in Court that he had told Roopram the names of the five assailants He was also doubtful whether the report (exhibit P 1) was 594 recorded at 3 P.m. and thought that it might have been recorded any time up to 6 P.m. But even so he placed full reliance on the evidence of Jawanaram only and convicted the three appellants, sentencing Ramratan to death and the other two to imprisonment for life. This was followed by an appeal to the High Court by the convicted persons. The Sessions Judge also made a reference for the confirmation of the sentence of death passed on Pamratan. The High Court dismissed the appeal. It also accepted the evidence of Jawanaram in the main. The High Court was further of opinion that Ram Partap was in Pili Bagan when the incident took place having come there with his brother Bhimsen at about10/11 A.M.; but the High Court did not think it fit to rely on his evidence as to the actual incident, for it thought that he had not been able to see it properly from where he said he was hiding. Further the High Court did not consider the evidence of Lekhram of much value as if, did not connect the appellants with the crime. But the High Court was of the opinion that Roopram 's statement that Jawanaram had told him immediately after the occurrence the names of the five assailants was admissible in evidence and could be used to corroborate the statement of Jawanaram. The High Court thought that this statement of Roopram was admissible under section 6 as well as under a. 157 of the Evidence Act. The High Court therefore upheld the conviction on the evidence of Jawanaram corroborated as it was by the evidence of Roopram. The High Court having refused to grant a certificate, the appellants applied to this Court for special leave which was granted; and that is how the matter has come up before us. Two main contentions have been urged before, us on behalf of the appellants. In the first place, it is urged that the High Court was not right in the view that the statement of Roopram was 595 admissible under section 6 and section 157 of the Indian Evidence Act and went to corroborate the statement of Jawanaram. Secondly, it is urged that once the statement of Roopram is ruled out as inadmissible there is only the statement of Jawanaram left to connect the appellants with the crime and in the circumstances of this case that solitary evidence should 'De held insufficient to bring home the guilt to the appellants. The first question therefore that arises in the appeal is whether the statement of Roopram to the effect that Jawanaram told him immediately after the incident, when he came out of his shop that the appellants and two others were responsible for the murder of Bhimsen and the injuries to Lekhram and himself, is admissible, either under section 6 or under section 157 of the Indian Evidence Act. We (lo riot think it necessary to consider whether this statement of Roopram is admissible under section 6 of the Evidence Act and shall confine ourselves to the question. whether it can be admitted under section 157 as corroboration of Jawanaram 's state ment. Learned counsclfor the appellants in this connection relies on Mt. Misri vs Emperor (1), and Nazar Singh vs The State (2) which support him and lay down that unless the witness to be corroborated says in his statement in court that be, had told certain things immediately after the incident to another person, that other person cannot give evidence and say that the witness bad told him certain things immediately after the incident. The argument is that the corroboration that is envisaged by section 157 is of the statement of the witness in court that he had told certain things to the person corroborating the witness 's statement, and if the witness did not say in court that he had told certain things to that person, that person cannot state that the witness had told him certain things immediately after the incident and (1) A.I.R. 1934 Sind 100, (2) A.I.R. 1931 Pepsu 66. 596 thus corroborate him. We are of opinion that this contention is incorrect. Section 157 is in these terms: ",In order to corroborate the testimony of a witness, any former statement made by such witness relating to the same fact, or at about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved. " It is clear that there are only two things which are essential for this section to apply. The first is that a witness should have Riven testimony with respect to some fact. The second is that he should have made a statement earlier with respect to the same fact at or about the time when the fact took place or before any authority legally competent to investigate the fact. If these two things are present, the former statement can be proved to corroborate the testimony of the witness in court. The former statement may be in writing or may be made orally to some person at or about the time when the fact took place, if it is made orally to some person at or about the time when the fact took place, that person would be competent to depose to the former statement and corroborate the testimony of the witness in court. There is nothing in section 157 which requires that before the corroborating witness deposes to the former statement the witness to be corroborated must also say in his testimony in court that he had made that former statement to the witness who is corroborating him. It is true that often it does happen that the witness to be corroborated says that he had made a former statement about the fact to some person and then that person steps into the witness box and says that the witness to be corroborated had made a statement to him about the fact at or about the time ",hen the fa ct took place. But in our opinion it is not necessary in view of the words of section 157 that in order to make corroborating evidence admissible, the witness to be corroborated must also say in his evidence that he had made such 597 and such statement to the witness who is to corroborate him, at or about the time when the fact took place. As we have said already what section 157 requires is that the witness to be corroborated must give evidence in court of some fact. If that is done, his testimony in court relating to that fact can be corroborated under section 157 by any former statement made by him relating to the same fact, and it is not necessary that the witness to be corroborated should also say in his statement in court that he made some statement at or about the time when the fact took place to such and such person. The words of section 157 are in our opinion clear and require only two things indicated by us above in order to make the former statement admissible as corroboration. We are therefore of opinion that the Sind and Pepsu cases were wrongly decided. Now let us see what happend in this case. Jawanaram was examined in court and stated about a certain fact (namely, that the assailants of Bhimsen, Lekhram and himself were five persons whom he named). The testimony of Jawanaram to be corroborated is his statement in court with respect to the fact that five persons attacked Bhimsen, Lekhram and himself. Section 157 makes his former statement with respect to the same fact admissible provided that the statement was made at or about the time when the fact took place or before any legal authority competent to investigate the fact. In this case we are concerned with the first of the two conditions necessary, namely, whether he had made that former statement relating to the same fact. at or about the time when the fact took place. The former statement which can be used as corroboration must be about the fact namely that Jawanaram had seen five persons attacking Bhimsen, Lekhram and himself and must have been made at or about the time when the fact took place i. e., when the attack was made. Now Roopram says that Jawanaram 598 had made the statement immediately after the incident was over that five persons including the three appellants had attacked Bhimsen, Lekhram and himself. This was therefore a former statement of Jawanaram at or about the time when the fact took place, namely, the attack by five persons on Bhim sen and others. This former statement can be proved by the person to whom it was made and can be used as corroboration of the evidence of Jawanaram. It was not necessary before the statement of Roopram as to what he heard from Jawanaram can be admissible for Jawanaram also to say in his testimony in court that he bad told Roopram immediately after the incident the names of the five assailants of Bhimsen and others. The former statement which can be used as corrobo ration is the, statement at or about the time the fact took place about which evidence has been given in court by the witness to be corroborated. Section 157 does not contemplate that before the; former statement can be proved in corroboration, the witness to be corroborated must also say in his testimony that he had made the, former statement. Of course if the witness to be corroborated also says in his testimony that he had made the former statement to someone that would add to the weight of the evidence of the person who gives evidence in corroboration, just as if the witness to be corroborated says in his evidence that he had made no former statement to anybody that may make the statement of any witness appearing as corroborating witness as to the former statement of little value. But in order to make the former statement admissible under section 157 it is not necessary that the witness to be corroborated must also, besides making the former statement at or about the time the fact took place, say in court in his testimony that he had made the former statement. We are therefore of opinion that even though Jawanaram did not say in his statement in court that he had told Roopram the names of the five assailants, Roopram 's 599 evidence that Jawanaram had made such a statement would be admissible under section 157 in corroboration of Jawanaram 's testimony as to the fact that five persons had attacked Bhimsen and others. As to the value to be attached to this corroboration in the present case, it is enough to say that Roopram is an independent witness and even though Jawanaram may not have said in evidence that he had told the names of the assailants to Roopram (perhaps by inadvertence as the High Court seems to think), we agree with the High Court in accepting the statement of Roopram that Jawanaram had immediately named the five persons who had attacked Bhimsen, Lekhram and himself. Thus the statement of Roopram corroborates the statement of Jawanaram in two ways : firstly, that there was an incident in front of his shop in which Bhimsen was murdered and Jawanaram and Lekhram were injured, arid secondly, proves the former statement of Jawanaram as to the persons who took part in the incident, thus corroborating his statement in court under s.157. This is not therefore a case where there is no corroboration of the testimony of Jawanaram, even if he were the solitary witness of the incident itself. As to the second point, namely, that we should not accept the solitary testimony of Jawanaram in the circumstances of this case, learned counsclrelies on Vemireddy Satyanarayan Reddy vs The State of Hyderabad (1). In that case there was the solitary testimony of one witness and it was urged that he was an accomplice. This Court hold that he was not an accomplice but remarked that "we would still want corroboration on material particulars in this particular case, as he is the only witness to the crime and as it would be unsafe to hang four people on his sole testimony unless we feclconvinced that he is speaking the truth. " The reason why this Court said so in that (1) ; 600 case was that though the witness was not an accomplice his position was considered somewhat analogous to that of an accomplice though not exactly the same. It was in those circumstances that this Court said that corroboration in material particulars would be required in the circumstances of that case. We are of opinion that those observations cannot be divorced from the context of that case. In the present case Jawanaram is neither an accomplice nor anything analogous to an accomplice; he is an ordinary witness who was undoubtedly present at the time the incident took place. '.rho case of such a solitary witness was considered by this Court in Vadivelu Thevar vs The State of Madras (1) and after referring to the earlier case it was held that as a general rule a court may act on the testimony of a single witness, though uncorroborated. It was further held that unless corroboration is insisted upon by statute, courts should not insist on corroboration except in cages where the nature of the testimony of the single witness itself requires as a rule of prudence, that corroboration should be insisted upon, and that the question whether corroboration of the testimony of a single witness was or was not necessary, must depend upon facts and circumstances of each case. These are the general principles which we have to apply in the case of the testimony of a single witness, like Jawanaram. But as we have held that in the present case there is corroboration of Jawanaram 's statement by his former statement deposed to by Roopram, it is not a case of altogether uncorroborated testimony of a single witness. In any case the evidence of Jawanaram has been considered by both the Sessions Judge and the High Court, and the Sessions Judge was prepared to convict the appellants on the sole testimony of Jawanaram while the High Court has also accepted that testimony, though it has added that it is corroborated by the statement of Roopram. In (1) ; 601 the circumstances when the evidence of Jawanaram has been accepted by both the courts, with or without corroboration, we see no reason to disagree with the conclusion of the two courts as to the value of Jawanaram 's evidence. The criticism made against the acceptance of the evidence of Jawanaram has been considered by the two courts and in spite of that criticism the two courts have come to the conclusion that the evidence of Jawanaram is reliable. We agree with the estimate of that evidence by the two courts and hold that Jawanaram 's evidence can be relied on in the circumstances of this case. Two main points are urged in this connection to shake the testimony of Jawanaram. It is said that Jawanaram has introduced Ram Partap in the first information report and that the Sessions Judge at any rate did not believe that Ram Partap was in Pill Bangan before 6 P.m. though the High Court held otherwise. Secondly, it is said that Jawanaram did not make the first report at about 3 P. M. and the Sessions Judge at any rate held that the report could have been made at any time upto 6 P.m. though the High Court held otherwise. We have been taken through the evidence in this connection and we agree with the High Court that even though Ram Partap might not have actually seen the incident he had definitely come to Pili Bangan at about II A.M. with his brother Bhimsen. There is the evidence of Ram Singh constable who says that Ram Partap came there when the report (exhibit P 1) was being written at about 3 P.m., which is supported by the fact that Ram Partap 's presence is mentioned in the report. The defence relied on a statement in the inquest report (Ex. P 4) in which it is mentioned at the end that Ram Partap son of Jawanaram also arrived during the course of the completion of the inquest report and was sent along with the corpse. This means that Ram Partap was not present when the inquest proceedings began and arrived there when they 602 were coming to an end. From this it cannot be inferred that Ram Partap was not in Pili Bangan at all before 6 P.m. There. is ample evidence, which the High Court has rightly believed, to show that Ram Partap had come to Pili Bangan at about 10 or 11 A. M. The other criticism with respect to the time when the report (exhibit P.1) was made is also in our opinion unjustified and the High Court was right in the view it took in that connection. There is no doubt that Jawanaram reached the hospital at 3 30 P.m. as deposed to by Dr. Sudershan Singh and that he was sent by the police. It is obvious therefore that Jawanaram had contacted the police before 3 30 P.m. It stands to reason that if he had contacted the police before 3 30 P.m. be must have made a report of the incident also and that is what exactly Ram Singh constable deposes. We agree with the High Court that in the circumstances there is no reason to disbelieve the statement of Ram Singh constable. The Sessions Judge was doubtful of the evidence of Ram Singh because he was of the view that documentary evidence from the police outpost at Pili Bangan had not been produced in support of Ram Singh 's statement. Ram Singh was asked about it and stated that though exhibit P 1 did not bear the despatch number as it was not sent to the outpost at all, he must have made entries in the diary of the outpost about his starting from there and his return and also about the occurrence, though he did not remember about it. After this statement of Ram Singh, the Sessions Judge was not right in disbelieving him because of the non production of the entries from the outpost. It would have been better if the prosecution had produced those entries ; but even if the prosecution rested upon the oral testimony of Ram Singh, the Sessions Judge could and should himself have sent for those entries, if he was inclined to disbelieve the oral testimony of Ram Singh constable who appears 603 to be a reliable witness. In the circumstances we are of opinion that the view of the High Court that the report was written at 3 P. m. as stated by Ram Singh constable is correct. The evidence of Jawanaram therefore cannot be rejected on these two grounds. Lastly it was urged that Jawanaram bad named five assailants and at least two have been acquitted, and that shows that Jawanaram is not wholly reliable. It is enough to point out that the Sessions Judge gave the benefit of doubt so far as two accused persons were concerned. He did not hold that Jawanaram 's evidence was false with respect to those two persons. Apparently those two persons did not take any active part in the incident and that may have led the Sessions Judge to give them the benefit of doubt; that is, however, no reason for disbelieving the testimony of Jawana ram. We are therefore of opinion that the two courts below were right in relying on Jawanaram. His evidence is corroborated undoubtedly by other witnesses to the extent that the incident did take place at the shop of Roopram; his statement that the three appellants and two others were the assailants is corroborated by his former statement made immediately after the incident was over and deposed to by Roopram. In the circumstances we are of opinion that the appellants have been rightly convicted. Two of the appellants (namely, Maniram and Hansraj) have been sentenced to imprisonment for life while Ramratan has been sentenced to death. The reason why Ramratan has been sentenced to death is that he was the man who shot Bhimsen. He was also the leader of this group and the enmity was directly between him and the members of the family of Jawanaram. We agree with the High Court that there are no extenuating 604 circumstances which would justify the reduction of sentence of death passed on Ramratan. The appeal therefore fails and is hereby dismissed. Appeal dismissed.

The appellants were convicted on a charge of murder on the sole testimony of one witness. Another prosecution witness deposed that the former witness told him immediately after the incident that the appellants were responsible for the murder. The question which arose was whether it was necessary for the former witness also to depose in Court that he had told the names of the murderers to the other witness immediately after the occurrence or whether his former statement be proved under s.157 of the Indian Evidence Act to corroborate his. testimony without his deposing about it in Court. Held, that it was not necessary under section 137 of the Evidence Act that the witness to be corroborated must also say in his testimony in court that he had made the former statement to the witness who was corroborating him. What s.157 required was that the witness to be corroborated must give evidence in court of some fact and if that was done his testimony in court relating to that fact could be corroborated by any former statement made by him relating to the same fact. Mt. Misri vs Emperor, A.I.R. 1934 Sind 100 and Nazar Singh vs The State, A.I.R. 1951 Pepsu 66, held as wrongly decided. As a general rule a court may act on the testimony of a single witness, though uncorroborated and the question whether corroboration of the testimony of a single witness was or was not necessary must depend on the circumstances of each case. Vemireddy Satyanarayan Reddy vs The State of Hyderabad, ; , distinguished. Vedivelu Thevar vs The State of Madras, ; , followed.

The respondent as principal entered into several forward contracts for the purchase and sale of bullion through the appellant 's firm at Indore who worked as commission agents for the respondent. The transactions resulted in a loss and the appellants who had to pay the amount of loss to third parties on behalf of the respondent as the agents brought the suit for recovery of the amount in the Court in Jodhpur where the respondent resided. It was pleaded by the respondent that according to. the law prevalent there as contained in the notification of the Marwar Government dated the 3rd June, 1943, all forward business contract in bullion in which the date fixed for delivery exceeded 12 days were 440 illegal and therefore a suit on the basis of these transactions was not maintainable. Held, that, the suit was really not one to enforce any contract relating to the purchase or sale of bullion which comes within the prohibition of the notification but was one by an agent claiming indemnity against the principal for the loss which the agent had suffered in carrying out the directions of the principal. The right to such indemnity was founded on the statutory provision contained in section 222 of the Indian Contract Act and the acts of payment made by the plaintiffs on behalf of the defendant were lawful acts as all the transactions took place and the payments were made outside Marwar and therefore the suit was not hit by the notification.

The appellant was convicted along with two other accused under section 302 I.P.C. and sentenced to death while the other two were sentenced to life imprisonment. In appeal to this Court against the orders of the High Court confirming the death sentence imposed, the special leave was granted limit ed to sentence. Allowing the Criminal Appeal No. 337 of 1976 in part and modifying the death sentence to one of life imprisonment, the Court, HELD: (1) The object of section is to give a fresh opportunity to the convicted person to bring to the notice of the court such circumstances as may help the court in awarding an appropriate sentence have regard to the per sonal, social and other circumstances of the case.[712 D] (2) Failure to give an opportunity under s" 235(2) Cr. P.C. will not affect the conviction under any circum stance. In a murder case where the charge is made out the limited question is as between the two sentences prescribed under the Penal Code. If the minimum sentence is imposed. question of providing an opportunity under section 235 would not arise. [712 F] (3) The hearing contemplated by section 235(2) is not con fined merely to hearing oral submissions but extend giving an opportunity to the prosecution and the accused to place before the court facts and materials of sentence and;if they are contested by either side then to produce evidence for the purpose of establishing the same. [712 G] Santa Singh vs State of Punjab A.I.R. 1976 S C 2386, reiter ated. (4) To save time and expense and help produce prompt justice, it may be more appropriate for the appellate court to give an opportunity to the parties in terms of section 235(2) to produce the materials they wish to adduce instead of going through the exercise of sending the case back to the trial court. 1713 A] In the instant case, the Court modified the death sen tence to one of life imprisonment in view of the facts: (i) The death sentence has been inflicted nearly two years ago, and the agony of such a sentence has been an exCruciating experience suffered by the convict for a long period; (ii) The appellant had two other assailants with him who have been awarded life imprisonment; (iii) There was no motive for the appellant to kill the innocent child; and (iv) The other circumstances present indicate that the ends of justice would be met by awarding life imprisonment. [713 G E] E. Annamma vs State of Andhra Pradesh ; , referred to

The appellants were convicted and sentenced to suffer imprisonment for life for the murder of a person by the name of Kunwar Bahadur in the village of Bamori Kalan, District Jalaun on July 18, 1971. Based on a news item carried by a Hindi daily called 'Nav Bharat ' on June 3, 1983, that the dead body of one Kunwar Bahadur Singh was found in Vidisha in suspicious circumstances and that a letter purported to have been written by one Kunwar Bahadur Singh was recovered from the person of the deceased, the appellants filed a petition before the High Court of Madhya Pradesh, praying for their acquittals contending that Kunwar Bahadur Singh for whose murder they were convicted in 1971 was alive for twelve years thereafter and, therefore, their conviction was illegal. The High Court dismissed the petition. Hence the appeal by Special Leave of the Court. Dismissing the appeal, the Court, ^ HELD; 1:1. When a person convicted of murder raised the question that he has material to show that he was convicted for a murder that had never taken place, as, for example, by showing that the person who was alleged to have been murdered is in fact alive the Supreme Court has the jurisdiction, in appropriate cases, to call for further data from the concerned authorities in order to examine the contention of the convict. This jurisdiction on which the Supreme Court can exercise, though with circumspection, is in order to do complete justice in any matter which is pending before it or which has been disposed of by it. [863G H, 864A] 1: 2. The instant case, however, is an example of what an incredible amount of ingenuity is exercised by the people to secure false acquittals. The two reports called for from the District Magistrate, Vidisha, and the two photographs of 863 the two dead bodies found in 1971 and 1983, respectively make it clear that, (1) Kunwar Bahadur Singh for whose murder the appellants were convicted thirteen years ago is not the same person whose dead body was found on June 2, 1983 in Vidisha and (2) The letter which was found on the person of the dead body on June 2, 1983 is a forged and fictitious document manufactured for the purpose of obtaining false acquittals. [863D, 864E, 865E F]

The Rajasthan Children Act, 1970, provides that any person below the age of 16 years should be presumed to be a child and that a delinquent child should be tried by a Children 's court in accordance with the procedure laid down therein. The appellant was charged under sections 364 and 302, I.P.C., in connection with an occurrence that took place in Tonk district on March 12, 1973. A preliminary objection that the Sessions Judge was not competent to try the case of The appellant as he was a child under the provisions of the Children Act was overruled by the trial court. The revision filed by the appellant against the decision of the trial court was dismissed by the High Court which held that the Children Act was not applicable to the appellant as that Act had not been enforced in Tonk district on the date of the occurrence. The High Court further held that the appellant had failed to prove that he was below the age of 16 years. On being directed by this Court to ascertain the actual date of birth, the High Court held that the date of birth of the appellant was September 22, 1956; and, therefore, he was over 16 years on the date of the occurrence. The High Court rejected the documents produced from the first two schools attended by the appellant which showed his date of birth to be June 22, 1957, for the reason that those documents had not been kept or made by a public officer; it relied on an affidavit furnished by the father of tho appellant while admitting him to the third school in which the date of birth had been changed to September 22, 1956. The explanation of the appellant 's father that the date of birth had been changed to fulfil the requirement of age under the Rajasthan Board of Secondary Regulations to enable the appellant to appear in the Higher Secondary Examination at the appropriate time was not accepted. Allowing the appeal, 584 ^ HELD: 1. (a) The relevant date for applicability of the Rajasthan Children Act, 1970 so far as the age of the accused, who claims to be a child, is concerned, is the date of the occurrence and not the date of the trial as is clear from the provisions of sections 3 and 26 of the Act. [594 C] (b) At the time of the occurrence, the appellant was undoubtedly a child within the provisions of the Act. [592 H] (c) The question whether the appellant could be tried as a child if he had become more than 16 years by the time the case went up to the court, does not survive as the Act has now been enforced in the entire State. A combined reading of sections 3 and 26 clearly shows that the statute takes care of contingencies where proceedings in respect of a child were pending in any court on the date on which the Act came into force. Section 26 in terms lays down that the court should proceed with the case but after having found that the child has committed the offence it is debarred from passing any sentence but is obliged to forward the child to the Children 's court for passing orders in accordance with the Act. [592 H; 593 A; 593 F G] (d) The judgment of the Sessions Judge as affirmed by the High Court be set aside and the Additional Sessions Judge, Jaipur, be directed to try the accused and if he gave a finding that the accused was guilty, he shall forward the accused to the Children 's court for receiving sentence in accordance with the provisions of the Act. [594 E] 2. There is no legal requirement under section 35 of the Evidence Act that the public or other official book should be kept only by a public officer; all that is necessary is that the document should be maintained regularly by a person whose duty it is to maintain the document. [588 G; 589 C] Mohd. Ikram Hussain vs State of U.P., [1964] 5 S.C.R. 86, 100 & Abdul Majid vs Bhargavam, A.I.R. 1963 Ker. 18 referred to. The Rajasthan Children Act being a piece of social legislation is meant for the protection of infants who commit criminal offences and, therefore, its provisions should be liberally and meaningfully construed so as to advance the object of the Act. The Children Act was enacted to protect young children from the consequences of their criminal acts on the footing that their mind at that age could not be said to be mature for imputing mens rea as in the case of an adult. [524 D; 593 H; 594 A] In the instant case there are two documents of two different schools showing the date of birth of the appellant as June 22, 1957 and both these documents have been signed by his father and were in existence ante litem motam. Hence, there could be no ground to doubt the genuineness of these documents. At the time when the age of the appellant was first mentioned in the admission form, there was absolutely no dispute about the date of birth and there could Dot have been any motive on the part of the parents to give a false date of birth because it was his first admission to a school at a very early age. The school to which the appellant was admitted enjoyed good reputation of authenticity. 585 there had been any element of suspicion, the admission register and the scholar 's register would have been corrected by the headmistress of the school. [591 D; 590 D; 590 H] M/s. Gannon Dunkerlay & Co. Ltd. vs Their Workmen, referred to. The appellant 's father has given a cogent reason for changing the date of birth and there is no reason for not accepting his explanation particularly because the offence was committed seven years after changing the date of birth. [592 C]

The respondent admitted the execution of two Hundis in suit which were tendered and marked as exhibits but denied consideration and raised the plea that the hundis exhibited were inadmissible in evidence as at the time the suit was filed in 1949 they had not been stamped according to the Stamp Law. When the hundis were executed in December, 1946, the Marwar Stamp Act of 1914 was in force and sections 9 and 11 of that Act authorised the court to realise the full stamp duty and penalty in case of unstamped instruments produced in evidence, whereupon the documents were admissible in evidence. The High Court pointed out that after coming into force of the Marwar Stamp Act, 1947, (Similar to Indian Stamp Act) which had amended the 1914 Act, the hundis in question could not be admitted in evidence in view of the provision of section 35 proviso (a) of the Marwar Stamp Act, 1947, even on payment of duty and penalty and the appellant could not take advantage of section 36 of the 1947 Stamp Act, because 'the admission of the two hundis was a pure mistake as the Trial Court had lost sight of the 1947 Stamp Act and the appeal Court could go behind the orders of the Trial Court and correct the mistake made by, thAt Court. Held, that once the Court, rightly or Wrongly decided to 43 334 admit the document in evidence, so far as the parties were concerned, the matter was closed. The court had to judicially determine the matter as soon as the document was tendered in evidence and before it was marked as an exhibit in the case, and once the document had been marked as an exhibit and the trial had proceeded on that footing section 36 of the Marwar Stamp Act, 1947, came into operation, and, thereafter, it was not open either to the trial court itself or to a court of appeal or revision to go behind that order. Such an order was not one of those judicial orders which are liable to be revised or reviewed by the same court or a court of superior jurisdiction. Ratan Lal vs Dau Das, I.L.R. , disapproved.

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.

Accepting the plea of self defence, the Sessions Judge held that the accused was entitled to the protection of Section 96 Penal Code and had therefore committed no offence. However the ordered confiscation to Government of M.O. 1, the licensed gun surrendered by the accused. A revision petition filed against the said direction having failed before the Kerala High Court, the appellant obtained special leave from this Court. Allowing the appeal, the Court ^ HELD: 1. The impugned order of confiscation of the gun being arbitrary and unjust, cannot be sustained. (a) The Sessions Judge did not give any reason, whatever, for directing confiscation of this licensed gun admittedly belonging to the appellant accused. There was no material before him indicating the special circumstances which would warrant a departure from the general rule. There was nothing on the record to show that the Sessions Judge had, before passing the order of confiscation, given an opportunity of being heard to the accused specifically with regard to this matter; (b) there was absolutely no material before the High Court to show that in the past twenty years during which the appellant had been in lawful possession of this gun under a licence, he had ever used or attempted to use this gun for commission of any offence from which, in the event of the gun being restored to the appellant, a likelihood of his misusing the gun "again" could be reasonably predicated or even suspected. [232B D & E F] Pushkar Singh vs State of Madhya Bharat, A.I.R. 1953 SC 508, followed. Lalluram Mohanlal vs State of Gujarat, A.I.R. 1967 Guj. 268, approved. An analysis of the provision in Section 517 of the Code of Criminal Procedure, 1898 would show that it refers to property or document (a) which is produced before the Court, or (b! which is in the custody of the Court, or (c) regarding which any offence appears to have been committed, or (d) which has been used for the commission of any offence. Then, at the conclusion of the enquiry or trial, the disposal of any] class of the property listed above, may be made by (i) destruction, (ii) confiscation, or (iii) delivery to any person entitled to be possession thereof. [231D E] In the instant case, the gun in question does not fall either under class (c) or class (d) because it is neither property "regarding which any offence appears to have been committed", nor "which has been used for the commission of any 229 offence". The acquittal of the accused on the ground that this gun was used in causing the fatal injury to the deceased, only in self defence, necessarily involved a finding that the gun was not used in the commission of any offence for which the accused was tried. The gun was obviously property falling under class (b). [231 E G] 3. The words "may make such order as it thinks fit" in the section, vest the Court with a discretion to dispose of the property in any of the three modes specified in the Section. But the exercise of such discretion is inherently judicial function. The choice of the mode or manner of disposal is not to be made arbitrarily, but judicially in accordance with sound principles founded on reason and justice, keeping in view the class and nature of the property and the material before the Court. One of such well recognised principles is that when after an inquiry or trial the accused is discharged or acquitted, the Court should normally restore the property of class (a) or (b) to the person from whose custody it was taken. Departure from this salutary rule of practice is not to be lightly made when there is no dispute or doubt as in the instant case that the property in question was seized from the custody of such accused and belonged to him. [231G H, 232 A B] Arjun Padhy and Ors. vs State of Orissa & Anr. A.I.R. 1965 Orissa 198; disapproved.

Appeal No. 92 of 59. Appeal from the judgment and order dated August 31, 1956, of the Orissa High Court in second appeal No. 1.5.1 of 1951. A. V. Viswanatha Sastri and T. V. R. Tatachari, for the appellant. M. section K. Sastri, for respondents. 674 1961. September 20. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This is an appeal by a certificate granted by the High Court of Orissa and it raises a short question about the scope and effect of the provisions of section 7 (1) of the Orissa Tenants Protection Act, 1948 (Act III of 1948) (hereafter called the Act). The appellant Magiti Sasamal sued the respondents Pandab Bissoi and others in the Court of the District Munsiff, Berhampur, for a permanent injunction restraining them from entering the suit lands belonging to the appellant. The appellants case was that the suit lands belonged to him and were in his personal cultivation for many years. In the year of the suit the appellant had cultivated the said lands as usual, manured and raised paddy crop thereon after spending a large amount in that behalf According to the appellant the respondents had no manner of right or title to the said lands and had never cultivated them. From the notice given by them to the appellant, however, it appeared that the respondents wanted to enter upon the lands forcibly and to remove the standing crop therefrom. This they desired to do by setting up a false claim that they were the tenants of the lands and as such were entitled to the protection of the Act. The appel lant alleged that the respondents were local rowdies and were known for their high handed action in the neighbourhood. On these allegations the appellant claimed a permanent injunction against the respondents. The respondents admitted the title of the appellant to the lands in suit but pleaded that they were the tenants in respect of separate portions of the said lands. Their version was that they had cultivated their holdings and raised the paddy crop thereon in the year in question. According to them they had been in cultivating possession of their respective holdings as tenants long before September 1, 1947, and so they were entitled to remain in possession as such tenants under the 675 they had filed petitions under the Act before the Sub Collector, Berhampur, claiming appropriate relief against the appellant. They urged that they were ever ready and willing to pay the Rajabhag as provided by the Act and they contended that the Suit was not maintainable in a civil court. On these pleadings the learned trial judge framed appropriate issues. Three issues of law had been framed by him on the pleas raised by the respondents. These issues were, however, not pressed at the hearing, One of them, namely issue 5, refers to the jurisdiction of the Court to try the suit in view of the provisions of the Act. Thus, it if; clear that the issue of jurisdiction was not pressed by the respondents at the trial. On the merits the learned trial judge considered the evidence and held that though the appellant was the owner of the property the respondents had proved that they were the tenants in possession of their respective holdings and that their possession was long before September 1, 1947. On these findings the learned judge came to the conclusion that the appellant was not entitled to claim an injunction against the respondents and so he dismissed his suit. The matter was then taken by the appellant before the District Judge, Ganjam, Nayagarh. The learned District Judge considered the evidence led by the parties and reversed the conclusions of the trial court. He held that the onus was on the respondents to prove their possession of their respective holdings as tenants on or before the specified date, and according to him they had failed to dis charge that onus. The question of jurisdiction was not raised before the appellate court by the respondents. Having held against the respondents on the merits the learned District Judge allowed the appeal, set aside the decree passed by the trial court and directed that an injunction should be issued against the respondents as claimed by the appellant. 676 The respondents then moved the High Court by second appeal ; and the main point which they urged before the High Court was that the learned trial judge had no jurisdiction to entertain the suit having regard to the provisions of section 7 (1) of the Act. The appellant pointed out to the High Court that this question of jurisdiction bad not been pressed before the trial court and had not been raised before the lower appellate court. Even so the High Court allowed the point to be raised and decided it in favour of the respondents. As a result of the finding that the civil court bad no jurisdiction to entertain the suit the second appeal preferred by the respondents has been allowed and the appellant 's suit dismissed with costs throughout. It is against this decree that the appellant has come to this Court with the certificate granted by the High Court; and the short point which has been raised before us on his behalf by Mr. Viswanatha Sastri is that in holding that the present suit is outside the jurisdiction of the civil court the High Court has misconstrued the scope and effect of the Provisions of section 7(1) of the Act. The Act received the assent of the Governor General on February 5, 1948 and was published on February 14,194S. It is a temporary Act and by s.1(4) it has been provided that it shall cease to have effect on April 15, 1949 except is respects things done or omitted to be done before the expiration thereof. It has been passed in order to provide for temporary protection to certain classes of tenants in the Province of Orissa. Legislature thought that the said tenants deserved protection and so as a beneficent measure the Act has been passed. Section 2(c) of the Act defines landlord and section 2(g) defines a tenant. The main operative provision of the Act is contained in section 3. This Section provides that not withstanding anything contained in any other law for the time being in force, or any express or implied agreement to the contrary, but subject to the provisions of this Act, 677 a person who, on the first day of September 1947, was cultivating any land as a tenant shall continue to have the right to cultivate such land and it shall not be lawful for the landlord to evict the tenant from the land or interfere in any way with the cultivation of such land by the tenant. It would thus be seen that the Act purports to provide protection to tenants who were in possession of lands on the appointed day which is September 1, 1947. The other sub sections of section 3 make material and subsidiary provisions in regard to the said protection. Section 7(1) reads thus: " 'Any dispute between the tenant and the landlord as regards, (a) tenant 's possession of the land on the 1st day of September, 1947 and his right to the benefits under this Act. or (b) misuse of the land by the tenant, or (c) failure of the tenant to cultivate the land properly, or (d) failure of the tenant to deliver to the landlord the rent accrued due within two months from the date on which it becomes payable, or (e) the quantity of the produce payable to the landlord as rent, shall be decided by the Collector on the application of either of the parties". The appellant contends that section 7(1) covers disputes between landlords and tenants which are specified under cls. (a) to (e) but it does not cover a dispute between the parties as to whether the relationship of landlord and tenant 'exists between them. It is only where such a relation ship is either admitted or established in a civil court that the specified disputes fall within the exclusive jurisdiction of the Collector on the other hand the respondents ' case is that the dispute as to the status of the tenant is also included under section 7(1). The High Court has upheld the respondents ' interpretation, and Mr. Viswanatha Sastri contends that this interpretation is based on a misconstruction of the section. It is true that having regard to the beneficent object which the Legislature had in view in passing the Act its material provisions should be liberally 678 construed. The Legislature intends that the 'disputes contemplated by the said material provisions should be tried not by ordinary civil courts but by tribunals specially designated by it, and so in dealing with the scope and effect of the jurisdiction of such tribunals the relevant words used in the section should receive not a narrow but a liberal construction. While bearing this principle in mind we must have regard to another important principle of construction, and that is that if a statute purports to exclude the ordinary jurisdiction of civil courts it must do so either by express terms or by the use of such terms as would necessarily lead to the inference of such exclusion. As the Privy Council has observed in Secretary of State vs Mask & Co., (1) "it is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied". There can be no doubt that ordinarily a dispute in regard to the relationship between the parties such as that between a landlord and a tenant would be a dispute of a civil nature and would fall within the competence of the civil court. If the respondents contend that the jurisdiction of the civil court to deal with such a civil dispute has been taken away by section 7 (1) we must enquire whether section 7(1) expressly takes away the said jurisdiction or whether the material words used in the section lead to such an inference or the scheme of the Act inescapably establishes such an inference. The relevance and materiality of both these principles are not in dispute. Let us then revert to section 7. It would be noticed that a. 7(1) has expressly and specifically provided for five categories of disputes which are within the jurisdiction of the Collector and which must therefore be taken to be excluded from the jurisdiction of the civil court. On a reasonable construction of section 7(1) a dispute specified by section 7(1)(a) would be a dispute between a tenant and a landlord in regard (1) (1940) L. R. 67 1. A. 222, 236. 679 to the former 's possession of the land on September 1, 1947. It is clear that the dispute to which section 7(1)(a) refers is a narrow dispute as to the possession of the tenant on a specific date and his consequential right to the benefits of the Act. The same is the position with regard to the other categories of the dispute specified by section 7(1). In none of the said categories is a dispute contemplated as to the relationship of the parties itself. In other words section 7(1) postulates the relationship of tenant and landlord between the parties and proceeds to provide for the exclusive jurisdiction of the Collector to try the five categories of disputes that may arise between the landlord and the tenant. The disputes which are the subject matter of section 7(1) must be in regard to the five categories. That is the plain and obvious construction of the words "any dispute as regards". On this construction it would be unreasonable to hold that a dispute about the status of the tenant also falls within the purview of the said section. The scheme of section 7(1) is unambiguous and clear. It refers to the tenant and landlord as such and it contemplates disputes of the specified character arising between them. Therefore, in our opinion, even on a liberal construction of section 7(1) it would be difficult to uphold the argument that a dispute as regards the existence of the relationship of landlord and tenant falls to be determined by the Collector under section 7(1). In this connection it would be relevant to take into consideration the provisions of section 7(2). This clause provides that the Collector may, after making such enquiries as he may deem necessary, order the tenant, by a notice served in the prescribed manner and specifying the grounds on which the order is made, to cease to cultivate the land. It is significant that the making of the enquiry and its mode are left to the discretion of the Collector. If a serious dispute as to the existence of the relationship of landlord and tenant between the parties had been covered by section 7(1) it is difficult to imagine that the 680 Legislature would have left the decision of such an important issue to the Collector giving him full freedom to make such enquiries as he may, deem necessary. As is well known, a dispute as to the existence of the relationship of landlord and tenant raises serious questions of fact for decision, and if such a serious dispute was intended to be tried by the Collector the Legislature would have provided for an appropriate enquiry in that behalf and would have made the provisions of the Code of Civil Procedure applicable to such an enquiry. Section 7(2) can be easily explained on the basis that the relationship between the parties is outside section 7(1) and so the disputes that are covered by section 7(1) are not of such a nature as would Justify a formal enquiry in that behalf The provisions of sub sections (3), (6) and (7) also indicate that the relationship between the parties is not, and cannot be, disputed before the Collector. The parties arrayed before him are landlord and tenant or vice versa, and it is on the basis of such relationship between them that he proceeds to deal with the disputes entrusted to him by section 7(1). It is true that when the relationship of landlord and tenant is proved or admitted the disputes falling within the five categories enumerated in section 7(1) will have to be tried by the Collector. Let us take the present case itself to illustrate how section 7(1) will operate. In the suit filed by the appellant against the respondents the issue about the status of the respondents was framed and so it had to be tried by the civil court. In such a suit if the civil court holds that the relationship between the landlord and the tenant had not been established it may proceed to deal with the suit on the merits. If, however, it holds that the said relationship is established then the civil court cannot deal with the dispute between the parties if it falls within any one of the categories specified by section 7(1). In such a case, having made the finding about the relationship between the parties the civil court will either dismiss the suit on the ground that it can give no relief to 681 the landlord, or may, if it is permissible to do so, return the plaint for presentation to the Collector. What course should be adopted in such a case it is unnecessary for us to decide in the present appeal. All that we wish to emphasise is that the initial dispute between the parties about the relationship subsisting between them will still continue to be tried by the civil court and is outside the purview of section 7(1). In support of the argument that a dispute as to the existence of relationship as landlord and tenant should be taken to be included under section 7(1) reliance is placed on the provisions of section 8(1) of the Act. Section 8(1) provides that subject to the provisions of section 7 all disputes arising between landlord and tenant shall be cogniscible by the revenue court and shall not be cogniscible by the civil court. It must be pointed out that we are really not concerned with section 8(1) in the present appeal because even according to the respondents the present dispute between the parties attracted section 7(1.) and should have been tried by the Collector and not by 'the civil court. However, the question about the construction of section 8(1) has been incidentally raised before us. In appreciating the scope and effect of section 8(1) it is necessary to bear in mind the provisions of section 13 of the Act. The said section provides that the Act shall, as far as may be, read and construed. as forming part of the Madras Estates Land Act, 1908, or as the case may be, of the Orissa tenancy Act, 1913. Therefore reading the provisions of section 8(1) and section 13 tog other it follows that all that section 8 (1) provides is that except for the disputes covered by section 7 (1) all disputes arising between landlord and tenant shall be cogniscible by the revenue court and to the trial of such disputes by the revenue court the relevant provisions of the Orissa Tenancy Act, 1913 would apply. It is true that disputes to which section 8(1) applies are entrusted to the exclusive jurisdiction of the revenue courts and are excluded from the jurisdiction of civil courts, but the effect of this 682 the other relevant provisions of the parent Act of which this temporary Act forms a part. Now, if we turn to some of the relevant provisions of the, parent Act it would be clear that when the revenue courts are given jurisdiction to try the disputes the enquiry held by them purports to be a formal enquiry to which the provisions of the Code of Civil Procedure may apply (Vide: section 192 of the Orissa Tenancy Act, 1913). Similarly, the provisions of section 204(1) which provides for appeals contemplate appeals to the District Court and the High Court where questions of title are involved. These provisions illustrate the point that where serious disputes about title are entrusted to special tribunals usually the Legislature contemplates a formal en quiry and makes the provisions of the Code of Civil Procedure applicable to such an enquiry and provides for appropriate appeals. Now, in regard to the order passed by the Collector under section 7(1) the only provision about appeals is that made by section 11 which provides that an appeal shall lie to the prescribed superior revenue authority whose decision shall be final, and shall not be subject to any further appeal or revision. Departure made by the Legislature in providing only one appeal and that too in every case to the prescribed superior revenue authority clearly brings out that the disputes which are entrusted to the Collector under section 7(1) axe the simple disputes specified in the five categories and do not include a serious dispute like that of the relation,ship between the parties as landlord and tenant. , If such a dispute had been intended to be tried by the Collector the Legislature would have provided for a formal enquiry and would have prescribed appropriate appeals on the lines of sections 192 and 204 of the parent Act. In this connection we may in passing refer to the provisions of section 126 of the parent Act. This section deals with the jurisdiction of civil courts in matters relating to rent. Section 126(3) provides for the institution of suits in civil courts on the 683 grounds specified by cls. (a) to (g). Clause (c) deals with the ground that the relationship of landlord and tenant does not exist. This clause shows that if a dispute arose between the parties as to the existence of the relationship of landlord and tenant a suit in a civil court a.% contemplated is prescribed by section 126(3) (c). That also has some bearing on the construction of section 7(1); and it is for that limited purpose that we have referred to it. Therefore, we are satisfied that the High Court was in error in holding that under a. 7(1) of the Act it was competent to the Collector to try the issue between the appellant and the respondents whether or not the Respondents were the tenants of the appellant and that the civil court had no jurisdiction to entertain the said dispute. In the result, the appeal must be allowed, the order passed by the High Court set aside and that of the District Court restored with. costs throughout. Appeal allowed.

The appellant filed in the Civil Court a suit for permanent injunction restraining the respondents from entering the lands in suit on the allegation that the lands belonged to him and were in his cultivatory possession for many years and that the respondents had no right or title to them and had never cultivated them. The respondents contended that they were tenants of portions of the said lands and were in cultivating possession of the same as tenants. The question which arose for decision was whether having regard to the provisions of section 7(1) of the Orissa Tenants Protection Act, 1948, the Civil Court had jurisdiction to entertain the suit which involved a dispute as to the relationship of landlord and tenant between the parties. Held, that even on a liberal construction of section 7(1) of the Act it cannot be held that disputes as regards the existence of the relationship of landlord and tenant fall to be deter mined by the Collector under that section. Disputes which are entrusted to the Collector under section 7(1) are the simple disputes specified therein in the five categories and do not include a serious dispute as to the relationship between the parties as landlord and tenant. In the present case the suit was therefore within the jurisdiction of the Civil Court. Secretary of State vs Mask & Co. (1940) L.R. 67 I.A. 222, referred to.

A notice was served by the appellant State inviting the attention of the respondents to the fact that the agricultural lands of which they were the owners had remained fallow, and intimating to them that the appellant would resume management of the said lands under section 65 of the Bombay Tenancy and Agricultural Laws Act unless the respondents took steps to bring them under cultivation in the following agricultural season. It appears that later, an enquiry was made under the orders of the Deputy Collector as a result of which he passed an order under section 65 directing that the lands should be resumed by the State for cultivation. Having failed in their efforts to get the order of the Deputy Collector altered, the respondents filed a suit for a declaration that the order passed by the Deputy Collector was illegal and void and that it could not dispossess them of the lands which belonged to them. 'Me suit was dismissed. The respondents appealed to the High Court and it found that on a fair and reasonable construction of section 65(l) read with section 83, the appellant could delegate its powers prescribed by section 65(l), but could not delegate its duty incidental to the exercise of the said power, and as it reversed the decree passed by the trial Court. On appeal by special leave : HELD : (i) Section 83 authorises the delegation not only of the powers mentioned by it, but also the duties or functions which are incidental to the existence of the powers and are integrally connected with them [216 A B] Edward Liso Mungoni V. Attorney General of Northern Rhodesia, , referred to. (ii) Section 65(l) does not require that the Deputy Collector mini himself go to the agricultural fields and enquire on the spot whether they were lying fallow. He may, if he so desires, record evidence himself, or the recording of the evidence and the actual inspection on the spot can be left to some subordinate officer. The report of such local inspection and the record of the evidence collected in that behalf would be forwarded to the Deputy Collector, and that would be the material oil which he would hold the enquiry himself. This procedure does not involve any delegation at all. [217 H; 218 B; 217 G H]. Allingham V. Minister of Agriculture and Fisheries, [1948] 1 AB. E.R. 780, distinguished. Nathubhai Gandabhai Desai V. State of Bombay & Ors. I.L.R. , referred to.

It appears that proceedings under r. 12(5) of the Central Sales Tax (Orissa) Rules 1957 and under sub section (4) of section 12 of the Orissa Sales Tax Act, 1947 were initiated against the petitioners for the assessment year 1980 81 in relation to assessment of tax on sales in the course of inter state trade and commerce under the and inside sales effected during the year in question under the Orissa Sales Tax Act, 1947. Despite repeated opportunities to get themselves ready for the assessment of tax and to produce their account books and other documents, they sought adjournments on the one pretext or another. Eventually the Assistant Sales Tax Officer, Cuttack II circle, Cuttack before whom the assessment proceedings were pending, refused to grant any further adjournment and proceeded to best judgment assessment and treated the gross turnover of Rs. 7,13,94,903.63 p. as returned by the petitioners for purposes of the to be their taxable turnover. Similarly, he treated the gross turnover of Rs. 2,02,07,852.65 p returned by the petitioners as representing inside sales vis a vis the State of Orissa to be their taxable turnover. After allowing adjustment of Rs. 27,88,388.47 p paid by the petitioners, the learned Sales Tax Officer raised a demand for the payment of a sum of Rs. 43,57,101.89 p towards tax on sales in the course of inter State trade and commerce payable under the and after allowing adjustment of Rs. 1,08,480.11 p paid by the petitioners, he raised the demand for payment of a sum of Rs. 13,06, 069.60 p as tax payable under the Orissa Sales Tax Act, 1947. Thus the petitioners were faced with a total demand of Rs. 56,57,171.49 p for the assessment year 1980 81. The petitioners instead of preferring appeals under sub s (1) of section 23 of the Act filed petitions before the High Court under article 226 of the Constitution challenging the validity of the two orders of assessment. The High Court was not satisfied that this was a case of inherent lack of jurisdiction or any violation of principles of natural justice and accordingly held that they were not entitled to invoke the extraordinary jurisdiction of the High Court under article 226 of the Constitution, Dismissing the Petitions, ^ HELD: In the provenance, of tax where the Act provides for a complete machinery which enables an assessee to effectively raise in the courts the question of the validity of an assessment denied an alternative jurisdiction 744 to the High Court to interfere under article 226 of the Constitution. The phrase "made under the Act" describes the provenance of the assessment; it does not relate to its accuracy in point of law. The use of the machinery provided by the Act, not the result of that use, is the test. [748 G H; 749 A] Under the scheme of the Act, there is hierarchy of authorities before which the petitioners can get adequate redress against the wrongful act complained of. They have the right to prefer an appeal before the prescribed authority under sub section (1) of section 23 of the Act. If they are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub section (3) of section 23 of the Act, and then ask for a case to be stated on a question of law for the opinion of the High Court under section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under article 226 of the Constitution. [751 F H] Raleigh Investment Company Limited vs Governor General in Council, 74 IA 50, followed. K.S. Venkataraman & Co. vs State of Madras ; and State of Uttar Pradesh vs Mohammad Nooh ; ; distinguished. The question whether a provision is ultra vires or not cannot obviously be decided by any of the authorities created by the Act and therefore cannot be the subject matter of a reference to the High Court or a subsequent appeal to this Court. No such question arises in a case like the present where the impugned orders of assessment are not challenged on the ground that they are based on a provision which is ultra vires. This is a case in which the entrustment of power to assess is not in dispute and the authority within the limits of his power is a Tribunal of exclusive jurisdiction. The challenge is only to the regularity of the proceedings before the learned Sales Tax Officer as also his authority to treat the gross turnover returned by the petitioners to be the taxable turnover. Investment of authority to tax involves authority to take transactions which in exercise of his authority the taxing officer regards as taxable and not merely authority to tax only those transactions which are, on a true view of the facts and the law, taxable. There is no justification for extending the principles laid down in Raleigh Investment Company 's case or Mohammad Nooh 's case to a case like the present where there is an assessment made by the learned Sales Tax Officer under the Act. [749 E H; 753 A B] The question whether another adjournment should have been granted or not was within the discretion of the learned Sales Tax Officer and is a matter which can properly be raised in an appeal under sub section (1) of section 23 of the Act.[751 D] The rule laid down in Mohammad Nooh 's case which requires the exhaustion of alternative remedies is a rule of convenience and discretion, rather than a rule of law. [751 E] 745 The Act provides for an adequate safeguard against an arbitrary or unjust assessment. The petitioner have a right to prefer an appeal under sub section (1) of section 23 of the Act subject to their payment of an admitted amount of tax as enjoined by the proviso thereto. As regards the disputed amount of tax, they have the remedy of applying for stay of recovery to the Commissioner of Sales Tax under cl. (a) of the second proviso to sub section (1) of section 13 of the Act. It is for the Commissioner to decide whether or not there should be such stay on such terms and conditions as he thinks fit, looking to the nature of the demand raised in the facts and circumstances of the present case. [752 E F; 753B C]

The respondent, a displaced person from Pakistan was allotted 55 80 Standard Acres of land in lieu of the land left by him in Pakistan. While determining the surplus area, the appellant State interpreting the phrase "as the case may be" in proviso (ii)(a) to Section 2(3) of the Punjab Security of Land Tenures Act, 1953, left with the respondent 100 ordinary acres equivalent to 29.81 Standard Acres and treated 25.99 standard acres equivalent to 78.57 ordinary acres as surplus. The respondent preferred an appeal contending that the surplus should be 5.80 standard acres on a true interpretation of the proviso, which failed. The revision before the Financial Commissioner met with the same fate. The contention of the respondent was upheld by the High Court while allowing the Writ Petition filed by him. The Letters Patent Appeal filed by the State was dismissed. On an appeal by special leave, the Court, while dismissing it, ^ HELD: (i) The contention that the words "as the case may be" in proviso (ii)(a) to section 2(3), gives a discretion to the authorities to determine the permissible area either in standard or in ordinary acres is not correct. [212 B C] (ii) On a plain reading, proviso (ii)(a) indicates that where the land allotted to a displaced person was in standard acres and its area exceeded 50 standard acres, the permissible area would be 50 standard acres, and where the land was allotted not in standard acres, the permissible area would be 100 ordinary acres. The nature of the original allotment whether it was in standard acres or in ordinary acres is the determinating factor. [212 C D] (iii) The meaning given to proviso (ii)(a) by the Full Bench of the Punjab & Haryana High Court, in Khan Chand vs State of Punjab A.I.R. 1966 Punjab 423, is correct It is only construed this way that the words "as the case may be" acquire a significance, otherwise they would be mere surplusage. [212 D E] Khan Chand vs State of Punjab, A.I.R. 1966 Punjab 423, approved.

A complaint was filed against the appellant and one Bose before the Sub Divisional Magistrate, Darjeeling. Under the W.B. Criminal Law Amendment (Special Courts) Act, 1949 the case was allotted to Mr. Dutta Gupta, Special judge, Alipur, who by order dated July 11, 1951, acquitted the appellant but convicted Bose. Bose appealed to the High Court which held the Act to be ultra vires and quashed the conviction. The Act was amended and another complaint was then filed against the appellant and Bose before Mr. Lodh, Special judge, Alipur. The appellant pleaded the bar of section 403 Code of Criminal Procedure on account of his acquittal by Mr. Dutta Gupta but the Special judge overruled the plea. The appellant went to the High Court in revision and on March 19, 1953, Chunder, J., held that the acquittal was not by a competent Court as the Act creating the court had been declared ultra vires and dismissed the application. In the meantime the case was withdrawn from Mr. Lodh and was allotted to the Special judge, Darjeeling, and a fresh complaint was filed against both accused. On an application made by Bose the High Court quashed these proceedings and directed the proceedings pending in the Court of the Sub Divisional Magistrate, Darjeeling, to be disposed of in accordance with law. By this time the Supreme Court had held in Kedar Nath Bajoria vs The State of West Bengal that the Act was intra vires. The appellant again raised the plea of the bar of section 403 Code of Criminal Procedure, contending that in view of the decision of the Supreme Court his acquittal was by a competent Court. The plea was rejected by the Magistrates and a revision application was dismissed by the High Court on the ground that the appellant was bound by the decision of Chunder, J., holding that the acquittal was by a Court not of competent jurisdiction. The appellant appealed by special leave. Held (Sarkar, J., dissenting), that in view of the decision of the Supreme Court in Kedar Nath Bajoria 's case the trial before Mr. Dutta Gupta, Special judge was a lawful one and the acquittal of the appellant which was never set aside was a bar to another trial. It was open to the appellant to challenge in this appeal the order made by Chunder, J., on March 19, 1953. Except 59 where the statute so required, it was not imperative upon a party to appeal against every error, defect or irregularity in any order by which he may be aggrieved and by not doing so he did not forfeit his right to have the matter considered by the Supreme Court. So far as the Supreme Court was concerned it made no difference whether the intermediate order complained of was passed by the Trial Court and was not taken to the High Court or it was taken to the High Court and was confirmed by it. Kedar Nath Bajoria vs The State of West Bengal, ; , followed. Maharaja Moheshur Singh vs The Bengal Government, (1859) 7 M.I.A. 283, Alexander John Forbes vs Ameeroonissa Begum, (1865) 10 M.I.A. 340, Sheonath vs Ram Nath, (1865) 10 M.I.A. 413 and Shah Mukhun Lal vs Baboo Sree Kishen Singh, (1868) 12 M.I.A. 157, referred to. Sambasivam vs Public Prosecutor, Federation of Malaya, and Pritam Singh vs The State of Punjab, A.I.R. 1956 S.C. 415, applied. Sarkar J. The judgment of Chunder, J., prevented the appel lant from raising the question that the Court of Mr. Dutta Gupta was a court of competent jurisdiction. That decision was a final judgment and it did not lose its force as such because a Superior Court in a different case subsequently took a view which showed that the judgment was wrong. That decision was not an interlocutory order as it decided that the appellant had no right not to be prosecuted again. The principle of finality of judgment obtained in criminal law as well as it did in civil law. In re May, , Sambasivam vs Public Prosecutor, Federation of Malaya, and Ram Kirpal Shukul vs Mussumat Rup Kuari, (1883) L.R. 11 I.A. 37, referred to.

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.

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 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]

Appeal No. 563 of 1960. Appeal by special leave from the judgment and decree dated March 20, 1959, of the Patna High Court in Election appeal No. 8 of 1958. J. C. Sinha, D. P. Singh, M. K. Ramamurthi, R. K. Garg and section C. Agarwala, for the appellant. B. C. Ohosh and R. C. Datta, for respondent No. 1. Udaipratap Singh and P. C. Agarwala, for respondent No. 2. 1961. September 22. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. Badri Narain Singh, the appellant, and four other persons including Kam Deo Prasad, respondents, were candidates to the Bihar Legislative Assembly during the last general election held in 1957. Two of those candidates withdrew before the relevant date. The appellant secured the largest number of votes and was declared elected on March 14, 1957. Respondent No. 2 secured larger number of votes than 761 Kam Deo Prasad, respondent No. 1, who filed an election petition under sections 80 and 81 of the Representation of the People Act, 1951 (Act XLIII of 1951) challenging the election of the appellant, on the ground that the nomination of the appellant and respondent No. 2, who, as Ghatwals, held an office of profit, was against the provisions of section 7 of the Act, and that the appellant had also committed corrupt practices. Kam Deo Prasad, by his election peti tion, not only prayed for the declaration that the ,election of the appellant was void, but also for the declaration that he himself was duly elected. The appellant denied the allegations against him. The Election Tribunal held that Badri Narain Singh, the appellant, was guilty of corrupt practices and that a Ghatwal was not a holder of an office of profit under the State of Bihar. It therefore set aside the election of the appellant, but did not grant the dec laration that Kam Deo Prasad was a duly elected candidate. The appellant filed Election Appeal No. 7 of 1958 in the High Court of Judicature at Patna, against the order of the Election Tribunal setting aside his election, and prayed that the order of the Election Tribunal be set aside and that it be held that he had been duly elected. Kam Deo Prasad also filed Election Appeal No. 8 against the order of the Election Tribunal not declaring him to be the duly elected candidate and prayed for a declaration that he, had been duly elected. The grounds of appeal questioned the correctness of the finding of the Election Tribunal that Badri Narain Singh and respondent No. 2, as Ghatwals, were not the holders of offices of profit and that Kam Dec) Prasad could not be declared duly elected. Both these appeals were disposed of by the High Court by one judgment. It did not accept the finding of the Election Tribunal that Badri Narain Singh had committed any corrupt practice and accepted the contention for respondent No. 1 that Badri Narain Singh and respondent No. 2 held 762 offices of profit under the Bihar Government as they were Ghatwals. It was in this view of the matter that it confirmed the order of the Election Tribunal setting aside the election of the appellant and allowing the appeal of respondent No. 1, declared him duly elected. The concluding portion of the judgment of the High Court may be usefully quoted here : "To conclude, the election of the returned candidate is not valid, and the order of the Tribunal is, therefore, right, though on different grounds. Further, there, was only one seat, and three persons contested it, namely, the petitioner and the two respondents. The two respondents were disqualified for being chosen as, and for being, members of Legislative Assembly or Legislative Council of the State, and, therefore, their nomination papers were not validly accepted. If their nomination papers are rejected, and it cannot but be rejected, the only person left in the field was the petitioner Kam Deo Prasad Singh, and, therefore, be must be declared to be duly elected. In the result, Election Appeal No. 7 of 1958 is dismissed, and Election Appeal No. 8 of 1958 is allowed, and Kam Deo Prasad Singh is declared to be duly elected to Bihar Legis lative Assembly from the Sarnath State Assembly Constituency in the district of Santal Parganas. " As a result of this order, separate decrees were As a result of this order, separate decrees were As a result of this order, separate decrees were prepared in the two appeals. Decree in Election Appeal No. 7 said, 'It is ordered and decreed that this appeal be and the same is hereby dismissed '. The decree in appeal No. 8 said, 'It is ordered and decreed that this appeal be and the same is hereby allowed and Kam Deo Prasad Singh is declared to be duly elected to the Bihar Legislative Assembly from the Sarnath State Assembly constituency in the District of Santhal Parganas '. 763 The appellant has filed this appeal by special leave against the order in Election Appeal No. 8 of 1958. All the grounds of appeal relate to the finding of the High Court that the office of a Ghatwal is an office of profit. The petition for special leave to appeal does not mention the relief the appellant seeks from this Court. Presumably, he prays for the setting aside of the order in Appeal No. 7 confirming the order of the Election Tribunal setting 'aside his election and also the order in Appeal No. 8. A preliminary objection has been taken on behalf of respondent Kam Deo Prasad Singh that this appeal is incompetent as barred by the principle of res judicata inasmuch as the appellant did not appeal against the order of the High Court in Appeal No. 7 whose dismissal by the High Court confirmed the order of the Election Tribunal setting aside the election of the appellant. It is urged that the order setting aside the appellant 's election having become final, it cannot be set aside and that the finding arrived at in that appeal about a Ghatwal being a holder of an office of profit operates as res judicata in this appeal and therefore no appeal against the order in Appeal No. 8 declaring respondent No. 1 to be the duly elected candidate can be pressed on the ground that the view of the High Court about the appellant 's holding an office of profit is wrong. If the correctness of that view cannot be challenged, the correctness of the declaration in favour of respondent No. 1 cannot be challenged in this appeal on any other ground when no other ground had been taken in the application for special leave. The contention in effect, therefore, is that it is not open to the appellant in this appeal to question the correctness of the finding that he held an office of profit under the Bihar Government, a finding which formed the basis of the dismissal of Appeal No. 7 and the confirmation of the order setting aside his election. 764 The learned counsel for the appellant relied on the judgment of this Court in Narhari vs Shankar(1) in support of his contention that the judgment in Election Appeal No. 7 cannot operate as res judicata in this appeal. That case is distinguishable on facts and is with respect to the interpretation of section 11 of the Code of Civil Procedure. In the suit. , in that case, the plaintiffs claimed possession over 2/3rds of the plot No. 214. They claimed 1/3rd which was in the possession of ' one set of defendants, namely, defendants ,Nos. 1 to 4 and the other 1/3rd was in possession of another set of defendants, namely, defendants Nos. 5 to 8. Each set of defendants claimed that they were entitled to the land in their possession as their share of the family property and denied the allegations of the plaintiffs that the senior branch was under custom entitled to exclusive possession of the plot which was Inamland. The suit was decreed by the trial Court. Each set of defendants then filed an appeal claiming 1/3rd of the plot. The first appellate Court allowed both the appeals and dismissed the plaintiffs suit by one judgment and ordered a copy of the judgment to be placed on the file of the other connected appeal. Naturally, it decided the one point of contention common to both the appeals, namely, that the senior branch was not entitled to exclusive possession of the plot. This was the finding in each of the appeals. The plaintiffs thereafter filed two appeals to the High Court, one against the decree in the appeal filed by defendants Nos. 1 to 4 and the other against the decree in the appeal filed by defendants Nos. 5 to 8. The latter appeal was filed beyond limitation and the High Court refused to condone the delay. It was contended at the hear ing of the appeal that the second appeal was filed (1) ; 765 beyond the period of limitation and was not maintainable and that when it was dismissed as not maintainable the first appeal would we barred by the principle of res judicata. The High Court agreed with the contention, dismissed the second appeal as time barred and the first on the ground that the judgment in the appeal by the defendants Nos. 5 to 8 operated as res judicata. The plaintiffs then filed two appeals to the Judicial Committee of the Hyderabad State and, ultimately, they were disposed of by this Court in view of article 374(4) of the Constitution. The plaintiffs had impleaded all the defendants as respondents in their first appeal to the High Court. They had paid the full court fee necessary for an appeal against the dismissal of the entire suit. Their prayer covered both the appeals. This indicated that it was sought to be an appeal against the dismissal of the entire suit. It is not clear whether the common judgment passed by the first appellate Court specifically stated that ,it dismissed the plaintiffs suit with respect to one third of the plot by its order allowing one appeal and dismissed the suit with respect to the other one third by its order allowing the second appeal. Possibly it just said that as a result of its finding the appeals are allowed and the plaintiffs ' suit is dismissed and that such an order led the plaintiffs to actually file one appeal against all the defendants and against the dismissal of the entire suit. The prayer in the first appeal covered the subject matter of both the appeals. Thus the first appeal was really a consolidated appeal against the decrees in both the appeals and could have been split up for the purposes of record into two separate appeals. This Court itself felt that the circumstances of the case were such that the High Court should have allowed the benefit of section 5 of the Limitation Act to the appellant. 766 It was in these circumstances that this Court observed, at page 757 : "It is now well settled that where there has been one trial, one finding, and one decision, there need not be two appeals even though two decrees may have been drawn up. " This does not mean that whenever there be more than one appeal arising out of one suit, only one appeal is competent against the order in Any. of those appeals irrespective of the fact whether the issues for decision in those appeals were all common or some were common and others raised different points for determination. The existence of one finding and one decision mentioned in this observation simply contemplates the presence of common points in all the appeals and the absence of any different point in those appeals, and consequently of one decision on those common points in all the appeals. This Court, further observed at page 758: "The question of res judicata arises only when these are two suits. Even when there are two suits it has been held that a decision given simultaneously cannot be a decision in the former suit. When there is only one suit, the question of res judicata does not arise at all and in the present case, both the decrees are in the same case and based on the same judgment, and the matter decided concerns the entire suit. As such there is no question of the application of the principle of res judicata. " These observations do not apply to cases which are governed by the general principles of res judicata which rest on the principle that a judgment is conclusive regarding the points decided between the same parties and that the parties should not be vexed twice over for the same cause. We are therefore of opinion that both in view of the facts of the case and the provision of law 767 applicable to that case, that case can be no guide for determining the question before us in this appeal. It is true that both the appeals Nos. 7 and 8 before the High Court arose out of one proceeding, before the Election Tribunal. The subject matter of each appeal was, however, different. The subject matter of appeal No. 7 filed by the appellant related to the question of his election being bad or good, in view of the pleadings raised before the Election Tribunal. had nothing to do with the question of right of respondent No. 1 to be declared as duly elected candidate. The claim on such a right is to follow the decision of the question in appeal No. 7 in case the appeal was dismissed. If appeal No. 7 was allowed, the question in appeal No. 8 would not arise for consideration. The subject matter of appeal No. 8 simply did not relate to the validity or otherwise of the election of the appellant. It related to the further action to be taken in case the election of the appellant was bad, on the ground that a Ghatwal holds an office of profit. The decision of the High Court in the two appeals, though stated in one judgment, really amounted to two decisions and not to one decision common to both the appeals. It is true that in his appeal No. 8, the respondent No. 1 had referred to the rejection of his contention by the Election Tribunal about the appellant and respondent No. 2 being holders of an office of profit. He had to challenge the finding on this point because if he did not succeed on it, he could not have got a declaration in his favour when respondent No. 2 was also in the field and had secured a larger number of votes. He could, however, rely on the same contention in supporting the order of the Election Tribunal setting aside the election of the appellant and which was the subject matter of Appeal No. 7. This contention was considered by the High Court in Appeal No. 7 in that context and it was therefore that even though the 768 High Court did not agree with the Election Tribunal about the appellant 's committing a corrupt practice, it confirmed the setting aside of his election on the ground that he held an office of profit. The finding about his holding an office of profit served the purpose of both the appeals, but merely because of this the decision of the High Court in each appeal cannot be said to be one decision. The High Court came to two decisions. It came to one decision in respect of the invalidity of the appellants election in Appeal No. 7. It came to another decision in Appeal No. 8 with respect to the justification of the claim of respondent No. 1 to be declared as a duly elected candidate, a decision which had to follow the decision that the election of the appellant was invalid and also the finding that respondent No. 2, as Ghatwal, was not a properly nominated candidate. We are therefore of opinion that so long as the order in the appellant 's appeal No. 7 confirming the order setting aside his election on the ground that he was a holder of an office of profit under the Bihar Government and therefore could not have been a properly nominated candidate stands, he cannot question the finding about his holding an office of profit, in the present appeal, which is founded on the contention that finding is incorrect. We therefore accept the preliminary objection and dismiss the appeal with costs. Appeal dismissed.

The Election Tribunal on the petition of the first res pondent set aside the election of the appellant holding that the appellant as a Ghatwal, was not a holder of office of profit, and t hat he was guilty of corrupt practices. The Election Tribunal however did not entertain the first respondent 's prayer to declare him as duly elected. The ' appellant and the first respondent, both went up in appeal to the High Court. Appellants appeal being No ' 7 was against the order setting aside his election. The first respondent 's appeal being No. 8 was against the order not declaring him to be duly elected. Both the appeals were disposed of by the High Court by one judgment. The appellant 's appeal No. 7 was dismissed holding that the appellant was not guilty of corrupt practices and that be, as a Ghatwal, held an office of profit. The respondent 's appeal No. 8 was allowed declaring him as duly elected. Two separate decrees were prepared in the two appeals. The appellant filed this appeal by special leave from the order in Appeal No. 8 by the first respondent. All the grounds of the appeal related to the finding of the High Court that the office of Ghatwal was an office of profit. A preliminary objection was taken on behalf of the first respondent that this appeal was incompetent as barred by the principle of res judicata inasmuch as the appellant did not appeal against the order of the High Court in Appeal No. 7 whose dismissal by the High Court confirmed the order of the Election Tribunal setting aside the election of the appellant; and that it was not open to the appellant to question the correctness of the finding that he held an office of profit, which was the basis of the dismissal of appeal No. 7. Held, that where two appeals arose out of one proceeding, but the subject matter of each, appeal was different, the 760 decision of the High Court in the appeals though stated in one judgment, really amounted to two decisions and not to one derision common to both the appeals. The subject matter of Appeal No 7 filed by the appellant related to the question of his election being bad or good. The subject matter on appeal No. 8 did not relate to the validity or otherwise of the election of the appellant. It related to the further action to be taken in case the election of the appellant was bad, on the ground that ' a Ghatwal holds an office of profit. The High Court came to two decisions, one in respect of the invalidity of the appellant 's election in appeal No. 7. It came to another decision in appeal No. 8 with respect to the justification of the claim of the first respondent to be declared as a duly elected candidate. That so long as the order in the appellant 's appeal No. 7 confirming the order setting aside his election on the ground that he was a holder of an off ice of profit stands, he cannot question that finding in the present appeal, preferred against the decree in the first respondent 's appeal No. 8. Narhari vs Shankar ; , distinguished.

The respondent was Head Assistant in the Panchayat Department of the Punjab Government. While he was officiating as Superintendent in the Department, he was appointed Panchayati Raj Election Officer, which was an ex cadre post. On the reorganisation of the State, the respondent was allocated to the appellant State and he continued to work as Panchayati Raj Election Officer in the appellant State. In 1972, the State Government abolished the post of Panchayati Raj Election Officer and the services of the respondent were dispensed forthwith. He challenged the order and it was quashed by the High Court. In appeal to this Court, ^ HELD: Since the order of the appellant abolishing the post of Panchayati Raj Election Officer did not suffer from any infirmity, the High Court was in error in quashing it; but on the abolition of that post, under r. 3.14 of the Punjab Civil Service, Rules, the lien of the respondent on the post of Head Assistant stood revived. [1040 F G] (1)(a) Whether a post should be retained or abolished is essentially a matter for the Government to decide, and as long as the decision is taken in good faith, it could not be set aside by the Court but, if it is found that the abolition was not in good faith, but was a cloak or device to terminate the services of an employee, then the abolition of the post may be set aside. [1037 H 1038 C] M. Ramanatha Pillai vs The State of Kerala & Anr. ; , followed. (b) In the present case, the decision to abolish the post was taken because of administrative reasons. The Government re organised the Panchayat Department, and all those duties which had nothing to do with the job of Panchayati Raj Election Officer were given to other officers. The only work left with the Panchayati Raj Election Officer was that of conducting elections of Panchayat Raj Bodies, and, as this work was of a periodical nature, the appellant abolished that post because of financial stringency. [1038 G 1039 C] (c) Whether greater economy could have been brought about by adopting some other course is not for the Court to go into. The fact that some of the functions which were being previously performed by the respondent are now being performed by others, whose posts have not been abolished, would not show that the decision to abolish was not taken in good faith. In deciding which post to abolish, the appellant took into account the relative usefulness of each post, and as this matter was within the administrative discretion of the appellant and as the decision was taken in good faith, the Court cannot interfere with it. [1039 C 1039 F] (d) The fact that the post which was abolished was held by a person who is confirmed in that post and the posts which were not abolished were held by persons who were not permanent would not also affect the legality of the decision to abolish the former, if the decision was taken in good faith. [1039 F G] 1035 (2) Under r. 3.14(a), a competent authority shall suspend the lien of a Government servant on a permanent post which he holds substantively, if he is appointed in a substantive capacity, to a permanent post outside the cadre on which he was borne; and under r. 3.15, in the absence of the written request by the employee, the lien cannot be terminated. Under r. 3.14(e), the Government servant 's lien which has been so suspended shall revive as soon as he ceases to hold a lien on the ex cadre post. In the present case, since there was no request by the respondent for terminating his lien on the post of Head Assistant, his lien on that post should be held to have immediately revived as soon as the post of Panchayati Raj Election Officer which was an ex cadre post was abolished. [1039 H 1040 C] T. R. Sharma vs Prithvi Singh & Anr. [1976] 2 S.C.R. 716, followed. [It was for the Government to pass all consequential orders regarding his seniority, pension etc.] [1040 C]

i Section 123 Allegation of Corrupt Practice made in an election petition How should be established Whether on basis of preponderance of probabilities as in civil litigation or "proof beyond reasonable doubt" as in Criminal trials. ii Section 116A(1) Election appeal Nature of findings of facts If could be interfered with by Supreme Court. iii See. 123 (2) Corrupt Practice of "Undue influence" Nature and proof of Whether disturbing election meeting a corrupt practice section 123 (2) Whether appointment by the returned candidate of a person charged for murder as his polling agent amounts to exercise of "undue influence". iv Sec. 123 (1) (A) Corrupt Practice of "Bribe" Whether ameliorating grievances of the public while canvassing for votes amounts to corrupt practice. The appellant was declared elected on May 31, 1980 to the Punjab Legislative Assembly from a constituency known as Non shehra Pamuan Assembly Constituency. Respondent Nos. 1 and 2, two voters of the Constituency challenged his election before the High Court on two grounds, namely, (1) that the appellant 's supporters disturbed a meeting of the Akali Party by using fire arms and fatally injuring one and otherwise inflicting injuries on many others and thus he committed a corrupt practice of "undue influence" section 123 (2) of the Representation of the Peoples Act 1951; and (2) that the appellant in order to get the votes of one Bagicha Singh Chakiwala and his family members as also of his brotherhood, promised to Bagicha Singh to get the uncovered electric wires, which were dangerously passing over his house, removed after paying its expenses etc. and so he approached the Punjab State 1060 Electricity Board employees, put pressure on them and got the amount of expenses deposited and the wires removed on 30th May 1980 i.e. One day before the poll. Thus, the appellant had committed a corrupt practice of 'Bribery ' section 123 (1) (A) of the Act. The High Court declared the election of the appellant void holding that both the corrupt practices had been committed by the appellant himself or through others with his consent and were covered by ss 123 (1) (A), (B) and (2) of the Act. Hence this appeal, The respondent petitioners in addition to the above mentioned two grounds of challenge contended (i) that the charges of corrupt practice should be allowed to be established on the basis of preponderance of probabilities as in civil litigation and not by asking for proof of the allegation beyond reason able doubt as in a criminal case; (ii) that it was the practice of the Supreme Court in election appeals not to enter into re appreciation of evidence and disturb findings of fact reached by the High Court and therefore the Supreme Court should not attempt a re appreciation of the evidence while dealing with this appeal; and (iii) that the appointment of Gurdial Singh who had disturbed the Akali Meeting and had also been charged for murder, by the appellant as his polling agent in the Gandiwind Polling Booth amounted to exercise of "undue influence" within the meaning of the Act. Allowing the appeal, ^ HELD: (1) Section 116 C makes it clear that an appeal to the Supreme Court under the Act is to be treated as a Civil appeal and the jurisdiction to be exercised is as extensive as in the case of an appeal from a matter disposed of in exercise of original civil jurisdiction of the High Court Section 116 A (I) of the Act clearly indicates that the appeal to this Court has to be disposed of by exercising the same jurisdiction as is exercised in an appeal against the original judgment of the High Court In this view of the matter there can really be no rule, whether statutory or evolved by this Court by long usage as alleged, that the Court would not interfere with the findings of fact reached at the trial stage. Ordinarily a finding reached on assessment of the evidence particularly when it is oral would not be interfered with but where the Court is satisfied that on account of a wrong approach to a matter, injustice has been done to one of the parties before it, it would not only be within the powers of the Court but it would be its obligation to rectify the mistake and do justice to the party.[1066E G,1070G H ] Ramabhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji & Ors. [1965] I S.C.R. 712, Bhanu Kumar Shastri vs Mohan Lal Sukhadia & Ors. ; Mohd. Yasin Shah vs Ali Akbar Khan [1977] 2 S.C.C. 23. Laxminarayan vs Returning Officer [1974] I S.C.R. 822 & Sh. Raghbir Singh Gill V. section Gurcharan Singh Tohra & Ors. , relied upon. Sarju Prasad vs Raja Jwaleshwari Pratap Narain Singh & Ors. ; Wart vs Thomas 1947 A. 484. Narmada Prasad vs Chagan Lal [1966] 1 S R. 499. Prabodh Chand vs Mohinder Singh AIR 1971 SC 257. Sumitra Devi v; Sheo Shankar Prasad Yadav ; , Chand Singh vs Shiv Ram 1061 AIR 1975 SC 403, Vital Nagaraj vs R. Dayanand Sagar, ; and Laxmi Narain vs Chander Singh [1977] 2 S.C.R. 412 referred to. By a catena of decisions of this Court it has by now been very well settled that allegations of corrupt practice are quasi criminal charges and the proof that would be required in support of such allegations would be as in a criminal charge. Therefore, charges of corrupt practice are to be equated with criminal charges and proof thereof would be not preponderance of probabilities as in civil action but proof beyond reasonable doubt as in criminal trials. [1071A B; 1075D C] Dr. M. Chenna Reddy vs V. Ramchandra Rao & Onr. Magraj Patodia vs R.K. Birla & Ors. ; , Mohan Singh vs Bhanwar Lal & Ors. ; Guruji Shrihar Baliram Jivatode vs Vithalrao & Ors. ; Mehant Shreo Nath vs Choudhry Ranbir Singh , Abdul Hussain Mir vs Shamsul Huda & Onr. ; , Ch. Razik Ram vs Ch. Jaswant Singh Chouhan & Ors. , Surya Kant Roy vs Imamul Hak Khan , Nizamuddin Ahmed vs Narbada Prasad & Ors. , D. Venkata Reddy vs R. Sultan & Ors. ; Bir Chandra Barman vs Anil Sarkar & Ors. , Ramji Prasad Singh vs Ram Bilas Jha & Ors. ; , Lakshmi Raman Acharya vs Chandan Singh & Ors. [1977] 2 S.C.R. 412, Amolak Chand Chhazed vs Bhagwandas Arya & Ors. , Ramanbhai Nagjibhai Patel vs Jasvant Singh Udesingh & Ors. , Haji C.H Mohammad Koya vs I. K .S. M. A. Muthukoya ; , A. Younus Kunju vs R.S. Unni & Ors. [1984] 3 SCC 346 & Manmohan Kalia vs Yash & Ors. ; ; followed. Election disputes are not cases at common law or equity but are strict statutory proceedings and result of an election is not available to be interfered with lightly, [1076B] Jagannath vs Jaswant Singh & Ors. D. Venkata Reddy vs R. Sultan & Ors. ; ; followed. Section 123 (2) of the Act defines 'undue influence '. Any direct or Indirect interference or attempt to interfere with free exercise of the electoral right by a candidate, his agent or any person with his consent or the candidate 's election agent has been made a corrupt practice u/s 123 (2) of the Act. Chapter II of the Act deals with agents and refers to appointments of election agent, polling agent and counting agent. Section 79 (d) defines "Electoral Right" to mean ' the right of a person to stand or not to stand or to withdraw or not to withdraw from being a candidate or to vote or refrain from voting at any election. [1080G H; 1079D] (5) The fact that firearms were freely used first by Gurdial Singh and his party and then by way of retaliation by Akali workers and gun shots resulted in the death of Daya Singh and thus a grave situation arose is really not very material unless that would amount to a corrupt practice within the meaning of 1062 section 123 (2) of the Act. Undoubtedly, disturbing the meeting as alleged is ont covered under sub section (2) of section 123 of the Act and is clearly an electoral offence dealt with by section 127 of the Act. [1079H; 1080A] (6) The High Court clearly overlooked the fact that disturbing the election meeting by itself did not constitute undue influence. For establishing the link between the disturbance of the meeting and the returned candidate the evidence is wholly oral in character and has to be scrutinised with greater rigour. Merely on the statements of some of the witnesses who were essentially Akali Party workers or supporters a charge of corrupt practice could not have been taken as proved. The approach of the learned trial judge to the matter is contrary to law as settled by decisions of this Court relating to corrupt practice and proof thereof. [1084B C] (7) It is the admitted position that neither the Akali candidate section Ranjit Singh nor the appellant who was another contesting candidate came to the place of the meeting so held on 20.5.80. There is evidence that the meeting so convened was disturbed. The disturbance to the meeting is said to have been caused by a group of people consisting of Gurdial Singh, Hardial Singh, Rachhpal Singh, Kulwant Singh and Gurnam Singh. There is no specific plea that these five persons were agents of the appellant. Admittedly, by May 20, 1980, none of these persons was an agent of any of these classes of the returned candidate. The only other aspects by which the appellant would be liable for the action of these five people would be if their act of disturbing the meeting was with his consent. Consent is the life line to link up the candidate with the action of the other person which may amount to corrupt practice and unless it is specifically pleaded and clearly proved in view of the fact that all ingredients have to be proved beyond reasonable doubt the appellant cannot be charged for the action of Gurdial Singh and his group. [1078B D; 1083B] (8) In the instant case, though there is some oral evidence to implicate the appellant, even for what followed the disturbance to the meeting, this Court does not think in the absence of the plea such evidence can be entertained for any effective purpose. The fact that protection had been extended by the appellant to his supporter Gurdial Singh and members of his family even by raising quarrel with the local police inspector would not lead to a backward presumption of consent for the acts of Gurdial Singh. [1081F; 1083A B] (9) It is difficult to accept the submission of the respondent that by appointing a person charged for murder as polling agent the appellant had exercised undue influence. There is clear evidence also that voting was free and quite a large percentage of the voters had exercised their electoral right. These are circumstances which clearly militate against the allegation of the election petitioners that voters had been threatened and their free exercise of electoral right had been affected. Moreover, in the absence of requisite pleading, want of any contemporaneous complaint in writing or otherwise to the public officers within the polling booth and the nebulous nature of the oral evidence placed from the side of the election petitioners, it cannot be said that any objection could really be taken to the election on account of Gurdial Singh having acted 1063 as polling agent in the particular electoral booth. [1083E G; (10) A candidate is entitled to canvass for votes. One who is in the field to be an electoral representative is also entitled to nourish his constituency. Amelioration of grievances of the public is innocuous and cannot be construed against a candidate. We agree that while nourishing is a legitimate activity, it is of paramount importance that nourishing should not transgress the limit so as to corrupt the electoral process. The appellant was already in the field as a candidate for the legislature and was entitled to help the people in his constituency in a legitimate way. [1087E G] (11) There was no clear plea in the election petition that the money had been deposited by the appellant though in paragraph 8 it was stated that on 28.5.1980 appellant had told Bagicha Singh that he (Bagicha Singh) should not bother about the expenses involved. There is no oral evidence even to suggest that the appellant caused the amount to be deposited. There is a presumption that the person in whose name the receipt has been drawn up was the payer of the amount and burden lay on him who wanted to contend that the facts were otherwise. In these circumstances, it cannot be accepted that the appellant had got the estimated demand deposited with the authorities of the Board. Once the allegation that the appellant had deposited the amount of Rs. 944 is discarded, his taking up of the cause of Bagicha Singh for early shifting of the electric wires over hanging the first floor of his house would not amount to 'bribe '. At any rate, the evidence on record is only of PW.12. That evidence even if accepted as a whole would not be sufficient to establish the charge of corrupt practice on this score. Oral evidence, particularly, coming from a tainted source cannot form the sole basis of proof of corrupt practice. Therefore, the High Court was wrong in accepting the case of the election petitioners that the appellant had committed corrupt practice for procuring the votes of Bagicha Singh, members of his family and his friends by getting the over hanging electric wires removed. After all, if there be any scope for doubt, it must resolve in favour of the appellant who was facing a quasi criminal charge. [1087B D; G H; 1088E F]

In the two election petitions E. P. No. 18/78 and E. P. No. 20/78 filed by the defeated candidates, allegation of corrupt practice, namely "indulgence in promoting hatred rousing religious sentiments by speeches made at certain places" was made against the appellant, a successful candidate. After the election petitioner closed his evidence and the High Court directed the appellant to file the list of his witnesses, the appellant filed two applications before the High Court namely, one for summoning witnesses Nos. 6, 8, 15 and 16 and another for amendment of his counter. The High Court however refused to summon these witnesses on the ground that no foundation for the facts on the basis of which these witnesses were sought to be cited or for the points on which they were to be, examined was laid in the counter. Similarly, the High Court rejected the application for amendment of the counter on the same grounds. The High Court was of the view that in the absence of any specific plea of alibi, having been taken in the counter, the appellant could not be allowed to examine the witnesses or amend the counter. Hence the two appeals, by special leave. Allowing the appeals the Court, ^ HELD: 1. Under the provisions of the Representation of People Act, the onus lies entirely on the petitioner to prove the corrupt practices alleged against the elected candidate. The necessary facts and particulars and the statements of facts etc. are to be pleaded by the election petitioner with exactitude and precision. It is now well settled by a large catena of the authorities of this Court that a charge of corrupt practice must be proved to the hilt, the standard of proof of such allegation is the same as a charge of fraud in a criminal case. [442B C] D. Venkata Reddy vs R. Sultan and Ors., [1976] 2 section C. C. followed. So far as the elected candidate is concerned, he is merely to rebut the allegations made by the petitioner in accordance with the provisions of the Civil Procedure Code as far as practicable. In the instant case, the appellant had taken an express plea in his counter that he did not make any speech at the places alleged by the election petitioner. He also stated that tape records or the cassets alleged to contain his speech were fabricated. One of the ways of proving this plea could be by showing that the appellant was not physically present at the places where the speeches are alleged to have been made as he was present at that time, at some other place. This is what the appellant sought to do through the proposed amendment and by summoning 440 the witnesses. Thus it was clearly open to the appellant to have proved facts in order to rebut the allegations made by the petitioner that he was not present at the places where he is said to have made speeches. [442E G] 3. Under section 116 of the Representation of the People Act an election petition has to be tried as nearly as possible according to the procedure applicable under the Civil Procedure Code to the trial of suits. Under O.VIII R. 2 the defendant must raise by his pleading all matters which show that the suit is not maintainable, or that the transaction is either void or voidable in point of law, and all such grounds of defence, as, if not raised, would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the plaint. Having expressly denied the allegation of having made the speech, the appellant was fully justified in raising this defence. [442G H, 443A] In the instant case, it cannot be said that the witnesses sought to be examined by the appellant or the plea which he claimed in his counter by virtue of the amendment would spring surprise on the election petitioner because the appellant had already denied in clear terms that he never made any speeches at the places mentioned in the election petition. There was no corresponding duty on the appellant to give full particulars or detailed statement of fact which the petitioner had to do in order to set at naught the electoral process which resulted in the election of the appellant. [443A C] 4. So far as the discretion vested on the High Court by Section 87 of the Representation of the People Act, 1951 to refuse to summon any witness lies only when it is of the opinion that the evidence of the witness is not material or that the party tendering such witness is doing so on frivolous ground or with a view to delay the proceedings. [443D E] In the instant case none of these conditions are present. In order to repel the plea of the election petitioner, the appellant was entitled to lead evidence to show that he did not make any speech as he was physically incapable in doing so at the time and place as alleged by the petitioner. By virtue of the amendment the appellant sought to insert a plea that he could not have made the speeches as alleged by the election petitioner because he was at that time out of station and was present in Adoni 180 miles from the places where he is said to have delivered speeches. In fact, witnesses Nos. 6, 8, 15, 16 and 17 were summoned to prove the fact that this appellant was in Adoni. [441G H, 442A, 443E]

The appellant was elected to the Municipal Board under the U. P. Municipalities Act, 19i6. He was in arrears in the payment of Municipal tax in excess of one year 's demand, to which section 166 of the Act applied, at the time of the filing of nominations, but made the payment before the date of the poll. Under section 13D, cl. (g) of the Act "a person shall be disqualified for being chosen as, and for being, a member of a board if he is in arrears in the pay ment of Municipal tax or other dues in excess of one year 's demand to which section 166 applies, provided that the disquali fication shall cease as soon as the arrears are paid. " On an election petition filed by a defeated candidate, the elec tion was set aside by the Election Tribunal on the ground that the appellant was not entitled to the benefit of the proviso to section I3 P. cl. (g) of the Act. It was contended for the appellant that the relevant date for the operation of the disqualification was the date of the poll and that, in any case, he did not come within the mischief of the disqualification clause in that section, as a bill for payment of the tax was not presented to him, nor a notice of demand served on him under section 168. Held:(1) that if a person is disqualified on the date of nomination, he cannot be chosen as a candidate within the meaning of section 13 D of the U. P. Municipalities Act, 19i6, because the disqualification attaches to him on that date and the process of choosing consists of a series of steps starting with nomination and ending with the announcement of the election. The wiping off of the 419 disqualification has no retrospective effect, and the dis qualification which subsisted on the date of the nomination cannot cease to subsist on that day by reason of a subse quent payment of the arrears of Municipal tax. Chatturbhuj Withaldas jasani vs Moreshway Parashram and Others, ; , N. P. Ponnuswami vs The Returning Officer, Namakkal Constituency and Others, ; and Harford vs Linskey, , relied on. Ahmed Hossain vs Aswini Kumar, A.I.R. 1953 Cal. 542, ap proved. (2)that the expression "to which section 166 applies" in section 13 D, cl. (g) of the Act merely describes the nature or type of dues mentioned in that section and that the effect is that the demand referred to in section 13 D, cl. (g) must be of that nature or type. (3)that the word 'demand" in section 13 D, cl. (g) of the Act means "claim" or "due" and only refers to the amount of arrears or dues on which the disqualification depends and does not attract the operation of section 168.

Sub section (2) Of section 30 of the Ajmer Merwara Municipalities Regulation, 925, as amended, provided that " every person who would be entitled under the Representation of the People Act, 1950 (XLIII of 1950) to be registered in the electoral roll for a Parliamentary Constituency if that Constituency had been co extensive with the Municipality, and whose name is registered in the electoral roll for the Parliamentary Constituency comprising the Municipality, shall be entitled to be enrolled as an elector of the Municipality"; and section 43 enabled the Chief Commissioner to make rules consistent with the Regulation for the preparation and revision of electoral rolls and the adjudication of claims to be enrolled and objections to enrolment. In exercise of this power the appellant framed Rules which, inter alia, provided that the electoral roll for the particular Municipality shall be the same as the final printed roll for the Parliamentary Constituency representing the area covered by the Municipality. He notified an election programme and also authenticated and published an electoral roll on August 8, 1955. The respondent whose father 's name was recited wrongly in the electoral roll applied for rectification of the mistake in the Parlia mentary Electoral Roll, on August 10, 1955, but it was rejected on the ground that the roll of the Municipal elections had been finally published on August 8, 1955, and therefore no correction could be made. The respondent challenged the validity of the notification and the electoral roll. Held, that under section 30 (2) Of the Ajmer Merwara Municipalities Regulation, 1925, the electoral roll for the Parliamentary constituency was only treated as the basis for the electoral roll of the Municipality and that the rules in so far as they made no provision for the revision of the electoral roll, for the adjudication of claims to be included therein or for entertaining objections to such inclusion, were defective and, therefore, the electoral roll of the Ajmer Municipality which was authenticated and published by the appellant on August 8, 1955, was not in conformity with the provisions of section 30 (2) and the relevant,provisions of the Regulation 69 and could not form the basis of any valid elections to be held to the Ajmer Municipal Committee.

Respondent I filed an election petition challenging the election of the appellant. The security required to be deposited under section 117 Of the Representation of the People Act, 1951, was made in the following terms: " Security deposits for Election Petition of Bargi Assembly Constituency No. 97, Distt. Jabalpur, Madhya Pradesh. Refundable by order of the Election Commission of India, New Delhi. " Before the Election Tribunal the appellant made an applica tion alleging that there was non compliance with the provisions section 117 inasmuch as (i) the deposit was not in favour of the Secretary to the Election Commission, and (ii) the amount was only refundable to the depositor and would not be payable to appellant in case the petition was dismissed under section 90(3). The Tribunal upheld the objections and dismissed the petition under section 00(3). Respondent I preferred an appeal under section 116 A of the Act to the High Court. The High Court allowed the appeal, set aside ,the order of the Tribunal and sent back the petition for trial. The appellant contended that no appeal lay to the High Court and that there was non compliance with the provisions of s.117. Held, that, an appeal lay to the High Court under section 116 A of the Act against the dismissal of the election petition under section 90(3) by the Tribunal. The order passed by the Tribunal under section 90(3) was an order passed at the, conclusion of the trial of the petition and was in substance and in law one under section 98. Once an election petition was entrusted to the Tribunal the trial started and any order passed by the Tribunal which concluded the trial was an order at the conclusion of the trial. Harish Chandra Bajpai vs Tirloki Singh, ; , referred to. Gulsher Ahmad vs Election Tribunal, A.I.R. 1958 Madh. Pra. 224, approved. Held, further that, there had been substantial compliance with the provisions of section 117 of the Act. Section 117 was not to be strictly or technically construed and a substantial compliance with its requirements was sufficient. The security in this case 528 had been made in respect of the election petition in question and it had been credited towards the accounts of the Election Commission. The use of the words " refundable " would not prevent the Election Commission from making an order of payment of the amount to the successful party. Kamraj Naday vs Kunju Thevar, A.I.R. , applied.

Elections to the Madhya Pradesh Vidhan Sabha were held in the months of February/March 1985. The appellant and Respondent No. 1 were the contesting candidates from Niwadi Legislative Assembly constituency No. 34. Respondent No. 1 having secured majority of votes, was declared elected on 6.3.1985 to the Madhya Pradesh Vidhan Sabha. The appellant challenged the election of the respondent No. 1 in the High Court of Madhya Pradesh Jabalpur alleging that the first respondent was guilty of adopting corrupt practices within the meaning of sub sections (2), (3) and (3A) of Section 123 of the Representation of Peoples Act, 1951. Respondent No. 1 denied the allegations made in the election petition. The High Court dismissed the Election Petition holding that the appellant had not substantiated all the charges levered by him against respondent No. 1. Hence this appeal by the appellant. Before this Court the appellant pressed only issues 3, 4 and 5 and gave up the rest. Dismissing the appeal, this Court, HELD: An election petition where corrupt practices are imputed must be regarding as proceedings of a quasi criminal nature wherein strict proof is necessary. Since, a charge of corrupt practice, the consequence of which is not only to render the election of the returned candidate void, but in some cases to impose on him a disqualification it must be proved on appraisal of the evidence adduced by both the parties particularly by the election petitioner who assails the election of a returned candidate. [591B C] The element of bargaining is completely absent in the present case. Needless to say that it is necessary for the purpose of proving the corrupt practice of bribery to estab lish that there was an element of bargaining. [592C] 582 Dhartipakar Madan Lal Agarwal vs Rajiv Gandhi, [1987] Supp. SCC 93; Kona Prabhakara Rao vs M. Seshagiri Rao & Anr., ; Manphul Singh vs Surinder Singh, [1974] 1 SCR 52; Jamuna Prasad Mukheriya & Ors. vs Lachi Ram & Ors., ; ; Rahim Khan vs Khurshid Ahmed & Ors., ; ; Ram Sharan Yadav vs Thakur Muneshwar Nath Singh & Ors., ; ; Rahim Khan vs Khurshid Ahmed & Ors.; , ; Lakshmi Raman Acharya vs Chandan Singh & Ors., [1977] 2 SCR 412 and Ramji Prasad Singh vs Ram Bilas Jha & Ors., ; ; Mohan Singh vs Bhanwar Lal & Ors., ; ; Harjit Singh Mann vs section Umraon Singh & Ors., ; ; lqbal Singh vs section Gurdas Singh & Ors., ; ; Lalroukung vs Haokholal Thangam & Anr., ELR Vol , referred to.

Appeal No. 328 of 1961. Appeal by special leave from 'the judgment and order dated February 2, 1961, of the Punjab High Court (Circuit Bench), at Delhi 'in Civil Revision Application No. 135 D of 1957. Din Dayal Sharma and N, N. Keswami, for the appellant. K. Daphtary, Solioitor General of India, V. D. Mahajan and T.M. Sen, for the respondent. September 25. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The principal point which this appeal by special leave raises for our decision relates to the construction of sections 32 and 33 of the (10 of 1940) (hereafter called the Act). That question arises in this way. The respondent, Union of India, filed a petition in the Court of the First Class Sub Judge at Delhi against the appellant M/s J. Burman & Co., through its proprietor Jawahar Lal Burman under sections 33 and 28 of the Act. The respondent alleged that a concluded contract had been entered into between the parties on August 31, 1949 for supply of 170 1/2 Cwt. of cocoanut oil by the appellant to the respondent. The respondent had advertised in the Indian Trade Journal for the said supply and the appellant had submitted its tender No. SM I/1104524. 772 This tender was accepted by the respondent which concluded a contract between the parties. The respondent 's case 'was that the said contract was governed by general conditions of contract Form W. 'S.B. 133. , These conditions included an arbitration 'agreement, 'Disputes arose between the parties regarding the said contract, and so in pursuance of the arbitration agreement they were referred to the two arbitrators appointed by the parties. After ,the arbitration propeedings had gone. on for, a considerable time before the arbitrators the appellant objected to their jurisdiction to , deal. with the disputes on the ground: that there was No. concluded contract between the parties. This plea made it necessary for the respondent to move the Court for a decision of the question about the; existence and validity of the arbitration 'agreement. It, was on these allegations that the respondent in its petition claimed 'that it may, be held that there was a concluded contract between ': the parties containing a valid arbitration agreement. The petition having been made under section 28 along with section 33 the respondent prayed that suitable extension of time be granted to the Arbitrators for making the, award. The appellant pleaded in defence that no concluded contract had been made between the parties and that there was no jurisdiction: in the Court to grant extension under s 28. The, other allegations made by the respondent in its petition were also traversed. On these pleadings the learned trial judge framed, appropriate issues. He found that a concluded contract had been proved, between the parties as alleged by the respodent. that there was a valid arbitration agreement in the said contract and that the Court had jurisdiction, to. try the petition. Incidentally, it may be pointed out at this stage that no specific point had been raised in the pleadings of the appellant that, the Court had no jurisdiction to entertain the petition under section 33 or. section 32 of the Act,. In fact the trial judge has observed that it was not shown to him how the 773 application was incompetent. Consistently with the findings recorded by him the learned trial judge declared that there was a concluded contract between the parties under which the matter was duly referred to arbitration through an arbitration agreement clause in the contract. As a result of the declaration he held that there was a valid reference to arbitration between the parties. Consequently he granted a month 's time to the arbitrators to make their award. This decision was challenged by the appellant by its revision petition preferred in. the High Court of Punjab at Chandigarh. The High Court has confirmed the finding of the trial court that there was a concluded contract which contained an arbitration agreement. The question of 'jurisdiction under section 33 of the Act was argued before the High Court and its attention was drawn to the conflict of judicial decisions on. the point. The High Court, however, held that since the petition has been filed as a composite application under sections 28 and 33 it was open to the Court under a. 28 to enter upon the question of the existence or validity of the contract and so there was no substance in the point of 'jurisdiction raised by the appellant. In the result the appellant 's revision application was dismissed. It is against this decision that the appellant has come to this Court by special leave ; and on his behalf Mr. Din Dayal has raised the same two points for our decision. He contends that the High Court was in error in holding that the trial court bad jurisdiction to entertain the respondent 's petition, and he argues that even if the point of jurisdiction raised by him fails it should be held that there was no concluded contract between the parties and so. there was no scop or room for making any reference to arbitration. The first of these two contentions has been seriously pressed before us. Before dealing with, the question of jurisdiction it is necessary to recall the material facts which 774 have led to the present dispute. The appellant and the respondent nominated their arbitrators. The arbitrators heard the matter at length and the proceedings bad reached a stage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no concluded contract. Even then he refused to apply under section 33 and so a stalemate issued because the arbitrators ' were not entitled to proceed further with the arbitration proceedings in view of the point raised by the appellant. It is necessary to bear in mind this background of the dispute in considering the point of jurisdiction. The question of jurisdiction raised by the appellant has to be answered in the light of the construction which can be reasonably placed on the material provisions of sections 32 and 33 of the Act. It may be conceded at the outset that the question thus raised presents some difficulty. Sections 32 and 33 read thus: "32. 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. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, ' it may set down the application for hearing on other evidence 775 also, and it may pass such orders for dis covery and particulars as it may do in a suit. " In appreciating the effect of these two provisions it would be relevant to remember that the object of the Legislature in enacting the two sections quite clearly was to prevent the abuse of the process of the Court. Before the present Act was passed experience showed that unscrupulous and dishonest parties to the arbitration agreements frequently chose to deny the existence of the said agreements even after the arbitration proceedings had concluded and ended in awards and that tended to make all arbitration proceedings futile. More often than not these pleas ultimately failed but it meant considerable delay and waste of time and substantial expense. That is why sections 32 and 33 have been enacted with the object of bringing the relevant disputes for decision before the specified Courts in the form of petitions. It is significant that under s.31(2) of the 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. Indeed, s.2(c) defines a Court as meaning a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court. Therefore, stated broadly, it would be correct to assume that the main object of introducing the new provisions of sections 31, 32 and 33 was to entrust the decision of the relevant disputes to the specified Court and to require the parties to bring the ,said disputes for the decision of the said Court in the form of petitions. Remedy by a regular suit is intended to be excluded. 776 Section 32 creates a bar against the institution of suits, and it provides that if the existence effect or validity of an arbitration agreement or award is in dispute on any ground whatsoever no suit shall lie for the adjudication of the said dispute. It also provides that no suit shall lie to set aside, amend or modify or in any way affect an arbitration ' agreement or an award. It would be noticed that the clause "on any ground whatsoever" is very wide and it denotes, inter alia, that if the existence or validity of an arbitration agreement is questioned on any ground whatever it cannot be the subject matter of a suit; the said dispute shall be tried as provided in this Act. Thus there can be no doubt, that if a party affirms the existence of an arbitration agreement or its validity it is not open to the party to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity. Such a suit in terms is barred by section 32. This position is. not disputed. The bar to the suit thus created by section 32 inevitably raises the question as to what remedy it is open to a party to adopt in order to obtain an appropriate declaration about the existence or validity of an arbitration agreement; and it is on the decision of this question that the parties are at issue before us. Before answering this question we may conveniently consider the scope of section 33 and its effect. Section 33 consists of two parts. The first deals with a challenge to the existence or validity of an arbitration agreement or an award, and it provides that the persons there in specified can apply to the Court to have a decision on its challenge to the existence or validity of an arbitration agreement or an award. In other words, there is no doubt that it is only persons who challenge the existence of the arbitration agreement that can apply under the first part of section 33. This position is also not disputed. The second part of the section refers to applications made to have the effect of either the arbitration agreement or the award determined. The question 777 which we have to consider is whether a person affirming an arbitration agreement can apply under the latter part of section 33. Even assuming that the requirement that an application can be made under the first part of section 33 only by persons desiring to challenge the arbitration agreement does not apply to its latter part, it is difficult to hold that an application to have the effect of the arbitration agreement determined can legitimately cover the dispute as to the existence of the said arbitration agreement. It is clear that the first part of section 33 refers to the existence or validity in terms and sections 31 and 32 also refer separately to the existence effect or validity. Therefore, the effect of an arbitration agreement is treated as distinct from the existence of the agreement, and where it was intended to refer to the existence as well as the effect of such an agreement both the words "existence and effect" have been specifically used. Thus, under the latter part of section 33 an application can be made to have the effect or purport of the agreement determined but not its existence. That means that an application to have the effect of the agreement can be made provided the existence of the agreement is not in dispute. Besides, if a person affirming the existence of an agreement is held entitled to apply to the Court under the latter part of s.33 for getting a declaration about the said existing agreement then the first part of section 33 would be wholly superfluous. Therefore, it seems to us that a party affirming the existence of an arbitration agreement cannot apply under section 33 for obtaining a decision that the agreement in question exists. In fairness we ought to add that the learned Solicitor General, who appeared for the respondent, did not dispute this position. If the party affirming the existence of an arbitration agreement cannot apply under s.33 what is the remedy open to him? This question takes us back to section 32. If section 32 has created a bar against the institution of a suit for obtaining 778 a declaration about the existence of an arbitration agreement, unless it is held that the creation of the said absolute bar itself involves the right to make an application under the Act it would lead to the anomalous result that a party is given no remedy to enforce the right ; and it is an ordinary rule of construction that such an unreasonable and unconscionable result should as far as possible be avoided because the Legislature could not have intended such a result. In our opinion, having regard to the scheme of sections 31, 32 and 33 it would not be unreasonable to hold that in matters which fall within the bar created by s.32 if a suit cannot be filed it 119 necessarily intended that an application can be made and such an application can be made under the Court 's powers provided for by s.31 and impliedly recognised by section 32. On this construction section 33 cannot be treated as exhaustive of all cases where applications can be made. The Legislature has provided for the said cases under section 33 because it was thought that they represented the usual type of cases which arise under the arbitration agreements. 'A contrary view would lead either to a stalemate or would in substance compel the party affirming the existence of an agreement to forego the procedure prescribed by the said agreement and sue on the, contract itself. We are satisfied that a fair construction of sections 31, 32 and 33 does not lead to such an anomalous position. Mr, Din Dayal contends that there is really a lacuna in the Act inasmuch as having created a bar by section 32 the Legislature has failed to provide a remedy by way of an application. On reading sections 31, 32 and 33 together we do not think the Court is driven to the conclusion that there is a lacuna in the Act. In this connection it is material to remember that even in dealing with applications under the first part of section 33 the Court may accept the opponent 's plea and hold that the arbitration agreement exists if the challenge to the said existence set out in the petition is rejected. In other words, in many 779 cases applications made under the first part of a. 33 may end in the finding that the arbitration agreement exists. Similarly, in applications made under s.20 of the Act, if a dispute arose as to the existence of the arbitration agreement the Court may find in favour of the existence and make an order of reference as contemplated by a. 24. Thus, it is clear that in the applications expressly provided for by these two sections a party affirming the existence of the agreement would be entitled to prove the said existence, and if he succeeds he would obtain a decision to that effect. Therefore, in holding that section 32 impliedly recognises the inherent jurisdiction of the Court to entertain applications made by the parties affirming the existence of arbitration agreements we are bringing the provisions of s.32 in line with the provisions of sections 33 and 20. Indeed, section 33 is a corollary of section 32 and in a sense deals by way of illustration with the most usual type of cases arising in arbitration proceedings. Section 28 of the Act has no material bearing on the decision of this point. The power to enlarge time for making the award which is the subject matter of the provisions of section 28 cannot be hold to include a power to entertain petitions like the present. Indeed, the learned Solicitor General has not attempted to justify the conclusion of the High Court that s.28 confers such a power. Even if it is held that there is inherent jurisdiction in the Court to entertain an application in support of the existence of an arbitration agreement the question still remains whether an application can be made under such inherent jurisdiction for a declaration that the contract which includes the arbitration agreement as defined by section 2(a) includes cases where the arbitration agreement is made a part of the contract itself. The argument is that though an application may be made under the inherent jurisdiction of the Court to obtain a declaration about the existence or validity of an arbitration agreement, no such application can be 780 made to obtain a declaration about the existence or validity of the main contract itself. In dealing with this argument it would be necessary to have regard to the substance rather than the form of the matter. In the present case the respondent claims that there is a concluded contract between the parties and that the said contract contained a valid arbitration agreement. Looking *at the substance of the matter the prayer was first in regard to the existence and the validity of the main contract leading upto the second and principal prayer that there was a valid arbitration agreement. Quite clearly the decision of this question cannot depend merely on the words used in the petition. Where the challenge to the contract made by the appellant in defence to the claim of the respondent is a challenge common to both the contract and the arbitration agreement, the petition, like the One made by the respondent, must in substance be held to be a petition for a declaration as to the existence of a valid arbitration agreement; and a suit to obtain such a declaration is clearly barred by section 32. Therefore, in our opinion, the fact that an incidental declaration is claimed about the existence and validity of the main contract does not affect the essential character of the application. It is an application for obtaining a declaration about the existence and validity of an arbitration agreement. It is true that an arbitration agreement included in the contract itself is in one sense an integral part of the contract and in another sense it may be distinct from it. As observed by Lord Macmillan in Hayman vs Darwins, Ltd.(1), "the arbitration clause is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other hinc inde; but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement on both the parties that, if any dispute arises with regard to (1) section C. at p. 347. 781 the obligations which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution. Moreover, there is this very material difference that whereas in any ordinary. contract the obligations of the parties to each other cannot in general be specifically enforced and breach of them results only in damages, the arbitration clause can be specifically enforced by the machinery of the Arbitration Acts". It is, therefore, theoretically possible that a contract may come to an end and the arbitration agreement may not. It is also theoretically possible that the arbitration agreement may be void and yet the contract may be valid; and in that sense there is a distinction between the arbitration agreement and the contract of which it forms a part; but, as we have already pointed out, in the present case, the challenge to the contract itself involves a challenge to the arbitration agreement; if there is a concluded contract the arbitration agreement is valid. If there is not a concluded contract the arbitration agreement is invalid. In such a case a prayer for a declaration of the existence of the contract and its validity inevitably leads to the consequential prayer about the existence and validity of the arbitration agreement. If that is so, a suit cannot lie for a declaration that the arbitration agreement is valid because the prayers that the respondent has made in the present case fall directly within the clause ",on any ground whatsoever". Indeed, we apprehend that in a very largo majority of cases where the arbitration agreement is a part of the main contract itself, challenge to the existence or validity of one would mean a challenge to the existence or validity of the other. We would accordingly hold, though for different reasons, that the High Court was right in coming to the conclusion that the petition made by the respondent was competent under section 32 of the Act and has been properly entertained by the trial Court. 782 This question has been the subject matter of some judicial decisions to which reference may now be made. In Messrs. M. Grulamali Abdulhussain & Co. vs Messrs. Vishwambharlal Ruiya(1) a petition had been filed for a declaration that the respondents had entered into the contract with the petitioners for purchase of 500 bars of silver on or about January 30, 1948 according to the rules and regulations of the Marwari Chamber of Commerce, Ltd., and that the respondents were bound to have all disputes in connection with the same contract decided by the arbitrators as provided by the said rules and regulations. The competence of this petition and the jurisdiction of the Court to enter tain it were disputed. Both the learned trial judge and the Court of Appeal rejected the respondents ' contention and held that there was an inherent jurisdiction in the Court to entertain petitions in respect of matters covered by the bar raised by 32. On the other hand, in Bajranglal Laduram vs Agarwal Brothers(2) as well as in State of Bombay vs Adamjee Hajee Dawood & Co., a contrary view has been accepted. In the latter case, a suit had been filed on the Original Side of the Calcutta High Court claiming a declaration that a certain contract was not made between the parties and was not binding on the plaintiff. A further claim was also made that it should be declared that the defendant was not entitled to make any claim in respect of the said contract and that the contract be adjudged void and delivered up as cancelled. The learned trial judge construed the plaint as one for declaration that the arbitration agreement contained in the contract was invalid and on that view he held that under sections 32 and 33 of the Act the suit was not maintainable. On appeal it was held that the suit was not one for challenging the validity of the arbitration agreement merely; it (1) 1. L. R. (2) A. I. R. (3) 1. L. R. 783 covered other reliefs and so bar of sections 32 and 33 could not be pleaded. We are inclined to think that the decision of the Bombay High Court is substantially correct. That takes us to the next question as to whether there was a concluded contract between the parties or not. We have already noticed that in response to the advertisement published by the respondent in the Indian Trade Journal the appellant submitted its tender. It is common ground that the tender thus submitted was subject to the conditions of contract governing the Department of Supply Contracts which were set out in the Government Publication Form W. section B. 133. Clauses 4(a) and (b) of these conditions are relevant. They deal with the security deposit. Clause 4(a) provides that on acceptance of the tender the contractor shall at the option of the Secretary, Department of Supply and within the period specified by him deposit with him a security deposit therein specified. Clause 4 (b) provides that "if the contractor is called upon by the purchaser to deposit security and the contractor fails to provide the security within the period, such failure will constitute a breach of the contractor and the Secretary, Department of Supply, shall be entitled to make other arrangements at the risk and acceptance of the contractor". It is thus obvious that, the tender offered by the appellant submitted to these terms and that on these terms security deposit is a condition subsequent and not a condition precedent. Clause 4(b) makes it clear that the failure to make the deposit would be a breach of the contract itself. This position is not disputed; but Mr. Din Dayal contends that this position has been substantially varied by the Form in which the appellant 's tender was accepted by the respondent. His argument is that the material words used in the acceptance letter changed the preexisting position and made the security deposit a condition. precedent to the acceptance itself. If this contention is right it would necessarily mean 784 that there was no concluded contract. Thus the decision of this point depends upon the construction of the letter of acceptance issued by the respondent to the appellant after receiving its tender. In this letter written on August 31, 1949 the respondent stated as follows: "Dear Sirs, Ref : Your tender No. and date Nil. Your offer is hereby accepted for a quantity of 1704 Cwts. and 2 qrs. (One thousand seven hundred and four hundred weights and two quarters only) of Oil Cocoanut conforming to specification No. IM. 1370 (d) at Rs. 89/6/ (Rupees eighty nine and annas six only) per Cwt. packed in non returnable sound, strong 45 gallon drums, delivery ex godown at Calcutta, by 30 9 49 or earlier if possible subject to your depositing 10% as security. The security money which comes to Rs. 15,230/ (Rupees fifteen thousand two hundred and thirty only) should please be deposited immediately into a Government Treasury in favour of the Deputy Accountant General, I and section, Akbar Road, New Delhi and the Treasury Receipt forwarded to this office. This security money will be refunded to you after the completion of the contract. The contract is concluded by this acceptance and formal acceptance of Tender will follow immediately on receipt of Treasury Receipt. Kindly acknowledge receipt. Yours etc. " The whole argument is founded on the use of the clause " 'Subject to your depositing. 10% as security. " Prima facie this clause may justify the argument that it is intended to make the security deposit a condition precedent; but in construing the true 785 effect of this clause we must look at the whole of the letter bearing in mind the fact that it has been written not by a lawyer or in consultation with a lawyer but by a Government officer in the ordinary course of the discharge of his duties. The first sentence in the first paragraph clearly shows that the offer was accepted for the quantity therein specified. The second paragraph calls upon the appellant to see that the specified amount is deposited immediately into the Government Treassury. This paragraph is more consistent with clause 4(a) of the general conditions. It reads as if having accepted the tender the appellant is reminded that it has to deposit the amount under the relevant condition, and the letter ends with the categorical statement that the contract is concluded by this acceptance. Mr. Din Dayal is right when he contends that section 7 of the Contract Act requires that the acceptance of the offer must be absolute and unqualified, it cannot be conditional; but reading the letter as a whole we do not think that the Courts below have erred in Coming to the conclusion that this letter amounts to an absolute and unqualified acceptance of the tender or offer made by the appellant. While dealing with this question it may be pertinent to recall that the general conditions of the contract prescribed by Form W.S.B. 133 are made a part of the tender, and the contract itself was intended to be executed expeditiously. The tender shows that the appellant represented that the earliest date by which delivery could be effected would be within twenty days from the date of the receipt of the order and it also said that full quantity of cocoanut oil required was held by it. Therefore, to begin with the tender treated the security deposit as a subsequent condition, the contract was for the immediate supply of goods and the acceptance purports to be in accordance with the relevant government rules and uses the expression that the contract was concluded by the said acceptance. Therefore, in our opinion, reading the letter as a whole it would not be possible to 786 accept the appellant 's argument that the letter was intended to make a substantial variation in the contract by making the deposit of security a condition precedent instead of a condition subsequent. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

The appellant and the, respondent nominated their arbitrator who heard the matter at length and the proceedings had reached a stage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no, concluded contract. The appellant refused to apply under section 33 and so a stalemate issued because the arbi trators were, not entitled to proceed further, with the arbitration proceedings. , The respondent moved the court under section 28 along with section 33, for a decision of the question about the existence and validity of the. arbitration agreement and also prayed that extension of time be granted to ' the arbitrators for. making the award. The appellant pleaded in defence that ' there was no concluded contract, and there was no jurisdiction in the court to, grant extension under section 28 of the Act. The High Court confirmed the finding of the trial court that there was a concluded contract which contained a valid arbitration agreement. As for jurisdiction it held that since the petition had been filed as composit application under sections 28 and 33, it was open to the court under section 28 to enter upon the question of the existence or validity of the contract and so there was no substance in the point of jurisdiction raised by the appellant. It is against this decision that the appellant came up by special leave. Section 33 of the Arbitration, Act, :1940 consists of two parts the first part deals with a challenge to the existence or validity. of an arbitration agreement or an award and it provides that only persons who challenge the existence of the arbitration agreement that; can. apply under the first part of the section. The second. part of the section refers to the application made to have the effect of either the arbitra 770 an application can be made to have the effect or purport of the agreement determined but not its existence. That means that an application to have the effect of the agreement can be made provided the existence of the agreement is not disputed. The question is whether a person affirming an arbitration agreement can apply under the latter part of section 33 about the existence of the agreement or its validity. Held, that a party affirming the existence of an arbitration agreement cannot apply under section 33 for obtaining a decision that the agreement in question exists. An application to have the effect of the arbitration agreement determined can however, legitimately cover the dispute as to the existence of the said arbitration agreement. Section 32 of the Act creates a bar against the institution of suits with regard to an arbitration agreement or award on any ground whatsoever. Thus if a party affirms the existence of an arbitration agreement or its validity it is not open to the party to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity. The bar to the suit thus created by section 32. inevitably raises the question as to what remedy is open to a party to adopt in order to obtain a appropriate declaration about the existence or validity of an arbitration agreement. Held, that having regard to the scheme of sections 31, 32, 33 of the Act in matters which fall within the bar created by section 32, if a suit cannot be filed it is necessarily intended that an application can be made under the court 's powers provided for by section 31 and impliedly recognised by section 32 of the Act. Held, further that in holding that section 32 impliedly recogniscs the inherent jurisdiction of the court to entertain an application made by parties affirming the existence of an arbitration agreement the provisions of section 32 is brought it line with the provisions of sections 33 and 20 of the Act. Indeed section 33 is a corollary of section 32 and in a sense deals with the most usual type of cases arising in arbitration proceedings. A question arises whether an application ran be made under such inherent jurisdiction for declaration that the contract which includes the arbitration agreement includes cases where the arbitration agreement is made a part of the contract itself. Held, that where the challenge to the contract made in defence to the claim, is a challenge common to both the contract and the arbitration agreement, the petition in substance is a petition for a declaration as to the existence of a valid arbitration agreement and a suit to obtain such a declaration is clearly barred by section 32. The fact that an incidental declaration is claimed about the existence and validity of the main contract does not affect the essential 771 character of the application. It is an application for obtaining a declaration about the existence and validity of an arbitration agreement. Held, also that the powers to enlarge time for making the award which is the subject matter of section 28 does not include a power to entertain a petition for declaration that there was a concluded contract between the parties containing a valid arbitration agreement. Hayman vs Darwins. Ltd., , referred to. Messrs. M. Gulamali Abdulhussain & Co. vs Messrs. Vishwambharlal Buiya, I.L.R. , approved. Bajranglal Laduram vs Agarwal Brothers, A.I.R. 1950 Cal. 267 and State of Bombay vs Adamjeee Hajee Dawood & Co. Ltd. I.L.R. (1 952) , disapproved.

Two Trade Unions of Workmen function at appellant 's factory. The State Government made a reference under the Industrial Dispute Act, 1947 for adjudication of an Industrial Dispute between the appellant and its workmen regarding their demands. A joint charter of Demands was later submitted by the Unions raising certain other demands. On behalf of one of the union a negotiation committee was formed composed of some of the office bearers of that union to participate in the negotiations for a settlement. Ultimately a memorandum of settlement was signed. The members of the negotiation committee of aforesaid union who happened to be office bearers of that union signed the settlement for their union. The settlement covered the disputes mentioned in the reference and also certain other disputes between the management and workmen. A joint petition for passing an award in terms of the settlement was filed before the tribunal. A few days later the executive committee of the aforesaid Union rejected the agreement on the ground that the agreement had given rise to discontent among a section of the workers whose problems had not been satisfactorily solved. The question was whether the agreement was a settlement within the meaning of section 2(p) of the from which the Union could not resile. 30 The Tribunal by its award held that the agreement was not a settlement within the meaning of section 2(p) of the Act. Hence this appeal by special leave. It was argued on behalf of the appellants that as the agreement was signed in the manner prescribed by rule 62(2)(b) of the Industrial Disputes (Bombay) Rules, 1957 and as the requirements of rule 62(4) have been complied with, the agreement must be accepted as a settlement within the meaning of section 2(p) of the , and as such was binding on the Union under Section 18(1) of the Act. Dismissing the appeal, ^ HELD: 1. In this case it has been found that the office bearers who signed the agreement were not competent to enter into a settlement with the company and as such it cannot be said that an agreement was reached between the employer and the workmen represented by the Union. [35 E F] 2. What is binding as a settlement under section 18 (1) of the is an agreement between the employer and workmen and the Tribunal found that there was no agreement between the Management and the Union. [35 E F] Workmen of M/s Delhi Cloth & General Mills vs Management of M/s Delhi Cloth & General Mills ; referred to. The procedure prescribed by either rule 58 of the Central Rules or Rule 62 of the Bombay Rules pre supposes the existence of a valid settlement. But neither rule 58 of the Central Rules nor rule 62 of the Bombay Rules contains anything to suggest that any officer of a trade union who is entitled to sign a settlement reached between the parties must be deemed to have had the authority to enter into the settlement. Rule 62 only prescribes the form of memorandum of settlement and by whom it should be signed and the question whether the procedure has been complied with will arise only if there is in existence a valid settlement. [36 F H] The Sirsilk Ltd. and others vs Govt. of Andhra Pradesh 31 Hindustan Housing Factory Ltd. vs Hindustan Housing Factory Employees ' Union & Others approved.

The respondent was the Editor of the Deccan Herald, owned and published by the appellant, and the two contracts executed by the parties contained an arbitration clause that if in the interpretation or application of the contract any difference arose between the parties the same shall be referred to arbitration and the award shall be binding between the parties and also provided for, apart from his monthly salary, the payment of 10% of the profits to the respondent. Upon the termination of his services by the appellant, the respondent brought a suit for accounts and payment of the profits found due to him. The appellant by an 714 application pleaded that the suit ought to be stayed under section 34 of the , and the dispute referred to arbitration in accordance with the agreement between the parties. The trial judge refused to exercise his discretion in favour of the appellant and refused to stay the suit. On appeal the High Court confirmed the decision of the trial court. The appellant came up to this Court by special leave under article 136 of the Constitution: Held, that the power conferred on the court by section 34 Of the , is discretionary and even though the conditions specified therein were fulfilled no party could claim there under a stay of legal proceedings instituted in a court as a matter of right. But the discretion vested in the court is a judicial discretion and must be exercised as such in the facts and circumstances of each case. No inflexible rules can, therefore, be laid down f or its exercise and the court has to act according to common sense and justice. Gardner vs Jay, , referred to Where the discretion under the section has been properly and judiciously exercised by the trial court the appellate court would not be justified in interfering with such exercise of discretion merely on the ground that it would have taken a contrary decision if it had considered the matter at the trial stage. But if it appears to the appellate court that the trial court has exercised its discretion unreasonably or capriciously or has ignored relevant facts or has approached the matter unjudiciously, it would be its duty to interfere. Charles Osenton & Co. vs jhanaton, , referred to. The words " interpretation and application of the contract frequently used in arbitration clauses, as they have been in the contracts in question, cover not only disputes relating to the construction of the relevant terms of the contract but also their effect, and unless the context compels a contrary construction, a dispute relating to the working of the contract falls within such a clause. But the Supreme Court would not lightly interfere under article 136 of the Constitution with the concurrent exercise of dis cretion of the courts below under section 34 Of the Act. Before it can justly do so, the appellant must satisfy the Court, on the relevant facts referred to by the courts below, that they exercised their discretion in a manifestly unreasonable or perverse way which was likely to defeat the ends of justice.

The appellant filed a suit against the respondent for a decree for Rs. 8339/ on the ground that the said amount had been illegally recovered from it under the Madras General Sales Tax Act, 1939, for the years 1952 54. The respondent 753 resisted the claim on the ground that the suit was incompetent under section I 8 A of the Act. On the merits, it was contended that the transactions in regard to groundnuts on which sales tax was levied and recovered from the appellant were transactions of purchase and not of sale, and it was urged that the appellant having voluntarily made the return and paid the taxes, it was not open to it to contend that the transactions were not taxable under the Act. Besides it was argued that the appellant had not preferred an appeal either to the Deputy Commissioner of Commercial Taxes or to the Sales Tax Appellate Tribunal against the assessments and bence the suit was not maintainable. The suit was decreed by the trial court but the High Court reversed that decision and dismissed the suit on the ground that in view of the provisions of section 18 A of the Act, the suit was incompetent. Alternatively. it was found on merits that the claim made by the appellant was not justified. The appellant came to this Court by special leave. Held, that section 18 A excludes the jurisdiction of Civil Courts to set aside or modify any assessment made under the Act. There is no express provision in the Act under which the suit can be said to have been filed and it falls under the prohibition contained in this section. The prohibition is express and unambiguous and no suit can be entertained by a Civil Court, if by instituting the suit. the plaintiff wants to set aside or modify any assessment made under the Act. Where an order of assessment has been made by an appropriate authority under the provisions of the Act, any challenge to its correctness and any attempt either to have it set aside or modified must be made before the appellate or revisional forum prescribed by the relevant provisions of the Act. A suit instituted for that purpose is barred under section 18 A. When the appellant made its voluntary returns and paid the tax in advance to be adjusted at the end of the year from time to time, it treated the groundnut transactions as taxable. The appellant having conceded the taxable character of the transactions in question, no occasion arose for the taxing authorities to consider whether the said transactions could be taxed or not. Even after the impugned orders of assessment were made, the appellant did not choose to file an appeal and urge before the appellate authority that. the transactions were sale transactions and as such were outside the purview of section 5A (2). If an order made by a taxing authority under the relevant provisions of the Act in a case where the taxable character of a transaction is disputed, is final and cannot be challenged in a civil court by a separate suit, the position is just 754 the same where the taxable character of the transactions is not even disputed by the dealer who accepts the order for the purposes of the Act and then institutes a suit to set aside or modify it. The expression "any assessment made under this Act" is wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments arc correct or not. It is the activity of the assessing officer acting as such officer which is intended to be projected and as soon as it is shown that exercising his jurisdiction and authority under this Act, an assessing officer has made an order of assessment, that clearly falls within the scope of section 18 A. The fact that the order passed by the assessing authority may in fact be incorrect or wrong does not affect the position that in law the said order has been passed by an appropriate authority and the assessment made by it must be treated as made under this Act. Whether or not an assessment has been made under this Act will not depend on the correctness or accuracy of the order passed by the assessing authority. There is a general presumption that there must be a remedy in the ordinary civil courts to a citizen claiming that an amount has been recovered from him illegally and such a remedy could be held to be barred only on very clear and unmistakable indications to the contrary. The exclusion of jurisdiction of civil courts to entertain civil causes will not be assumed unless the relevant statute contains an express provision to the effect or leads to a necessary and inevitable implication of that nature. The mere fact that a special statute provides for certain remedies may not by itself necessarily exclude the jurisdiction of the civil courts to deal with a case brought before it in respect of some of the matters covered by the said statute. There is no justification for the assumption that if a decision has been made by a taxing authority under the provisions of a taxing statute, its validity can be challenged by a suit on the ground that it is incorrect on merits and as such it can be claimed that the provisions of the said statute have not been complied with. Non compliance with the provisions of the statute must be non compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. If an appropriate authority has acted in violation of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and that infirmily may affect the validity of the order passed by the authority in question. It is cases of this character where the 755 defect or infirmity in the order goes to the root of the order and makes it in law invalid and void that these observations may perhaps be invoked in support of the plea that the civil court can exercise its jurisdiction notwithstanding a provision to the contrary contained in the relevant statute. Secretary of State vs Mask & Co., (1940) 67 I.A. 222 and Reliegh Investment Co. Ltd. vs Governor General in 'Council, (1947) 74 I.A. 50, relied on. State of Andhra Pradesh vs Sri Krishna Coconut Co. (1960) 1 Andhra W.R. 279, overruled.

Despite several letters by the respondent to the Chief Engineer Public works Department the State did not appoint any Arbitrator as provided in Clause 25 of the agreement. Shri D.K. Roy Choudhry who was appointed as a sole Arbitrator by the learned Single Judge revoking the authority of the Chief Engineer to act as an Arbitrator under the agreement. On appeal by the State under Section 39(2) of the Act or under Letters Patent. The High Court dismissed the appeal as not maintainable. This appeal is against the judgment of the High Court. Appeal dismissed, HELD: 1.Section 39 of the came upon for consideration in U.O.I vs Mohindra Supply Company [1962]3 SCC 497 and the Court held that no Second Appeal lay under section 39(2) against a decision given by a learned Single Judge under Section 39(1). is a consolidating and amending act relating to arbitration, it must be construed without any assumption that it was not intended to alter the law relating to appeals. The Court held that in view of bar created by sub section (2) of Section 39 debarring a second appeal from an order passed in appeal under sub section (1) that the 'conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39 '. Therefore the maintainability of the appeal under Letters Patent it stands concluded by this 641 decision. (642 G H) 2. Sub section (1) of Section 39 of the is extracted below: "(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decisions of the Court passing the order. An order (1) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii) modifying or correcting an award; (IV) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi) setting aside or refusing to set aside an award; Provided that the provisions of this Section shall not apply to any order passed by a Small Causes Court. _ (2) No second appeal shall lie from an order passed in appeal under this Section, but nothing in this Section shall affect or take away any right to appeal to the Supreme Court". (643 D E GH) provides that an appeal could lie only from the orders mentioned in the sub Section itself. Since the order passed by learned Single Judge revoking the authority of the Chief Engineer on his failure to act as an Arbitrator was not covered in either of the six clauses mentioned in Section 39 it is obvious that no appeal could be filed against the order of the learned Single Judge. (644 642

The respondent delivered certain sums of money to the appellant bank at Lahore for transmission to Calcutta, with instructions to await his directions regarding the opening of accounts for keeping the money in fixed deposit in the Calcutta Branch of the bank which was proposed to be opened in the near future. The respondent did not however give any instruction for opening any account, fixed deposit or otherwise in regard to the amounts after they reached Calcutta. Within a few days after the opening of the Calcutta branch of the bank it ceased making payments and a moratorium for a limited period was declared under an ordinance issued by the Governor General restraining the bank from making payments to its depositors. After the expiry of the period of the moratorium the Calcutta branch of the bank raised objections to the respondent 's application for withdrawal of the amount 218 whereupon the respondent filed a suit in the Calcutta High Court for a decree for refund of the amount. During the pendency of the suit the High Court of East Punjab sanctioned a scheme under sections 153 and 153A of the Indian Companies Act, 1913 for settlement of the liabilities of the Bank. The courts below decreed the respondent 's suit. On appeal by the bank by special leave, the questions which arose for decision were whether the bank was a trustee for transmission of the amounts to Calcutta and whether in the absence of any instruction for opening a fixed deposit account the bank was liable to refund the full amount or a reduced amount according to the scheme sanctioned by the Punjab High Court. ^ Held, that when a person dealing with a bank delivers money to the bank an intention to create a relation of creditor and debtor between him and the bank is presumed, but the presumption may be rebutted by proof of special instructions. When money is paid to a bank with special instructions to retain the same pending further instructions, a trust is created and the presumption which ordinarily arises by reason of payment of money to the bank is rebutted. Held, further, that the money delivered by the Respondent remained in trust with the bank and was not held by it as a deposit subject to any scheme for the settlement of the liabilities of the bank sanctioned by the High Court under the Companies Act. The Official Assignee, Madras vs Natesam Pillai, I.L.R. , Arbuthnot vs D. Rajan Ayyar, I.L.R. and Farley vs Turner, , applied.

The appellant Union and the respondent company through their communications dated January 24,1957, April 24,1957 and May 1,1957 concluded an agreement relating to various items of industrial disputes which inter alia provided that the employer had agreed not to contest the issue whether field force including salesmen were not 'workmen ' within the meaning of the expression in the and that disputes of an All India nature could be raised only at Delhi. Two employees of the Respondent company who were salesmen and protected workmen with the meaning of the expression in the and who were office bearers of the union, were charge sheeted and after a disciplinary enquiry their services were terminated. The appellant union raised an industrial dispute contending that the termination of services of these two workmen were illegal and invalid, and that the enquiry was equally illegal, and improper, and that the action of the employer was an act of reprisal and victimization, because of their trade union activities. The Government referred the industrial dispute to the Industrial Tribunal. The employer contended that the two workmen were not 'workmen ' within the meaning of the expression in the Act and that the Government had no jurisdiction to refer the dispute to the Industrial Tribunal. It was further contended that the services of the workmen were terminated not by way of punishment but under the contract of service and that the disciplinary enquiry which was commenced was subsequently dropped. The appellant union however contended that the employer was estopped from challenging the status of the two workmen within the meaning of the expression 308 in the Act on account of the subsisting, valid, concluded agreement between the parties and that in view of the award of the Industrial Tribunal, Delhi in I.D. No. 46/66. The contentions about the existence of the agreement and the status of salesmen were res judicata and could not be reopened so long as the agreement was in force and operative. The Tribunal rejected the preliminary objections raised on behalf of the union and came to the conclusion that the three communications dated January 24,1957, April 24,1957 and May 1, , W 3, W 4 respectively did not spell out a complete, concluded agreement between the parties on the points mentioned therein but it was an inchoate agreement in the stage of negotiations and the employer was not bound to stand by its offer made in the communication dated January 24,1957 denying itself the right to contest the status of the field force including salesmen as not being workman within the meaning of the Act. The award of the Industrial Tribunal, Delhi in I.D. No. 46/66 in which it was held that there was a concluded agreement between the parties and therefore the industrial disputes raised therein could not be adjudicated at Delhi did not operate as res judicata because the issue in that award was not directly and substantially in issue in the present reference. The Tribunal set down the reference for further hearing. Allowing the Appeal: ^ HELD: 1. The Tribunal committed a serious error, apparent on record in holding that there was no concluded agreement between the parties as emerging from Exs. W 2, W 3, and W 4. [329 F] In the instant case, having meticulously examined various references pertaining to various industrial disputes between the parties at different centres in India since the agreement in 1957 it unquestionably emerges that the employer till the present reference never once even whispered that the agreement was not a concluded agreement or that it was an inchoate one left hanging at the stage of negotiations. It was only in the present reference the contention raised was that the agreement was not a concluded agreement. The employer which swore by the agreement and repeatedly succeeded in getting thrown out certain references at the threshold on account of the agreement contended that there was no concluded agreement, and ignoring the whole history, the Tribunal fell into an error in accepting this contention. The Tribunal wholly ignored the fact that it was a solemn agreement, of which effective and wholesome advantage had been taken by the employer and when it did not suit it, it wanted to turn round and not only repudiate it but disown it. No court of justice can ever permit such a thing to be done. [324 E 325 B] Hindustan Lever Ltd. vs Ram Mohan Ray & Ors., ; Western India Match Co. vs Their Workmen ; at 566; and Aluminium Factory Workers, Union vs Indian Aluminium Co. Ltd. , referred to 2. The Tribunal is directed to proceed to determine the dispute on merits without concerning itself with the consideration of the question whether the concerned workmen were workmen within the meaning of the expression under the Act. [332 E] 3. The concept of compulsory adjudication of industrial disputes was statutorily ushered in with a view to providing a forum and compelling the parties 309 to resort to the forum for arbitration so as to avoid confrontation and dislocation in industry. A developing country like India can ill afford dislocation in industrial production. Peace and harmony in industry and uninterrupted production being the demands of the time, it was considered wise to arm the Government with power to compel the parties to resort to arbitration and as a necessary corollary to avoid confrontation and trial of strength, which were considered wasteful from national and public interest point of view. A welfare State can ill afford to look askance at industrial unrest and industrial disputes. [326H 327B] Dahyabhai Ranchhoddas Shah vs Jayantilal Mohanlal. ,[1973] Lab. & Industrial Cases 967 referred to. The Act did not confer till the introduction of Chapters V A and V B, any special or enforceable benefits on the workmen. The Act was designed to provide a self contained Code to compel the parties to resort to industrial arbitration for the resolution of existing or apprehended disputes without prescribing statutory norms for varied and variegate industrial relation, so that the forums created for resolution of disputes may remain unhampered by any statutory control and devise rational norms keeping place with improved industrial relations reflecting and imbibing socioeconomic justice. If this is the underlying object behind enactment of the Act, the Court by interpretative process must strive to reduce the field of conflict and expand the area of agreement and show its preference for upholding agreements sanctified by mutuality and consensus in larger public interest, namely to eschew industrial strife, confrontation and consequent wastage. [327 C E] 5. It is inappropriate to usher in the technical concept of res judicata pervading the field of civil justice into the field of industrial arbitration. The principle analogous to res judicata can be availed of to scuttle any attempt at raising industrial disputes repeatedly in defiance of operative settlements and awards. But this highly technical concept of civil justice may be kept in precise confined limits in the field of industrial arbitration which must as far as possible be kept free from such technicalities which thwart resolution of industrial disputes. [326 D G] Shahdara (Delhi) Sharanpur Light Railway Co. Ltd. vs Shahdara(Delhi) Sharanpur Railway Workers Union, at 742; and Workmen of Straw Board Manufacturing Co. Ltd. vs M/s Straw Board Manufacturing Co. Ltd. ; referred to. Unilateral repudiation is distinct from termination and an agreement/settlement remains in force and binding till terminated and does not come to an end by unilateral repudiation. [328 E] In the instant case, the parties entered into a solemn agreement. It is not suggested that the agreement has been terminated. The only argument put forward on behalf of the employer was that the union has repudiated the agreement by raising disputes of an all India nature at a regional level and thereby committed breach of the agreement. This contention is entirety without merits. What has happened is that the Union raised certain disputes which according to the Union were of a regional nature and which it was not estopped from raising in the teeth of the terms of the binding agreement between the parties. On the other hand the employer contended that the disputes so raised were of an all India nature. Both sides swore by the agreement, the difference in approach being whether the dispute was of an all India nature or of regional nature. The divergence in approach 310 was as to the interpretation, the coverage, the ambit and the width of the agreement Both the parties swore by the agreement but differed in their approach and interpretation and the forum namely the Industrial Tribunal consistently upheld at the instance of the employer that there was a binding valid agreement subsisting between the parties. This constitutes adherence to agreement, performance of the agreement, implementation of the agreement and being bound by the agreement. This conduct in no sense can be said to constitute repudiation. [327 F 328 C] 7. The Tribunal derives its jurisdiction by the order of reference and not on the determination of a jurisdictional fact which it must of necessity decide to acquire jurisdiction. [330 G] 8. In industrial adjudication, issue are of two types: (i) those referred by the Government for adjudication and set out in the order of reference, and (ii) incidental issues involving mixed questions of law and facts. The Tribunal may frame preliminary issues if the point on which the parities are at variance, go to the root of the matter. But the Tribunal cannot travel beyond the pleadings and arrogate to itself the power to raise issues which the parties to the references are precluded from raising. If the employer does not question the statues of the workmen, the Tribunal cannot suo motu raise the issue and proceed to adjudicate upon the same and throw out the reference on the sole ground that the concerned workman was not a workman within the meaning of the expression under the Act. [331 G 332 A] 9. Whether a particular person is a workman or not depends upon factual matrix. Workman is defined in Sec. 2(s) of the Act. The ingredients and the incidents of the definition when satisfied, the person satisfying the same would be a workman. Negatively if someone fails to satisfy one or other ingredient or incident of the definition, he may not be held to be workman within the meaning of the expression in the Act. [330 C] 10. There is no provision in the Act which obliges the Industrial Tribunal or other forums set up under the Act to decide even in the absence of a contention from the employer, a preliminary issue whether the person who has invoked its jurisdiction is a workman or not. There is no such obligation cast statutorily on the Tribunal. If the employer does not raise the contention about the status of the workman approaching the Tribunal, the Tribunal has no obligation to decide. The status of the person whether he is a workman or not. The Tribunal must proceed on the assumption that no such contention is raised and is required to be adjudicated upon. [330 D F]

In accordance with the provisions of the and in terms of Para 2 of the contract of apprenticeship the appellants completed a one year apprenticeship under respondent No. 2, Punjab State Electricity Board. Contrary to the Instructions, noticed on March 23rd, 1983 and issued by of the Ministry of Labour and Rehabilitation, Department of Labour (D.G.E.T ) Government of India to all officers asking them to take necessary action to ensure that the trained apprentices are absorbed in industries upto a minimum of 50 per cent of direct recruitment vacancies, the Board advertised on July 27, 1983 50 posts of Junior Engineers II (Electrical) in its establishment for which the appellants had successfully completed a one year apprenticeship under it. The appellants, therefore, filed a writ petition in the High Court of Punjab and Haryana, challenging the issuance of the advertisement on the ground that under their respective letters of appointment, they were entitled to be appointed to 50 per cent of posts which were advertised by respondent No 2. The writ petition was dismissed by the High Court on the ground that the letters of appointment issued to the appellant did not contain any assurance or undertaking that they will be absorbed in the service of the Punjab State Electricity Board; that 47 per cent of the vacancies were already reserved for Scheduled Castes, Scheduled Tribes, backward classes, ex servicemen, etc, and that, if another 50 per cent of the posts were to be reserved for apprenticeship trainees, almost 100 per cent posts shall have been put in the reserved category which would be contrary to law. Hence the appeal by special leave Allowing the appeal, the Court, ^ HELD. 1. The object of Section 22(2) of the Apprentice Act 1961 is to guarantee to the extent of the existence of vacancies that the apprentices will not be rendered jobless after they complete their training. 153 2.1. Sub section (2) of section 22 leaves no doubt that, despite the A provision contained in sub section (1), the employer is under an obligation to offer suitable employment to the apprentice if the contract of apprentice. ship contains a condition that the apprentice shall serve the employer after the successful completion of the training. Indeed, when such an offer is made the apprentice on his part is bound to serve the employer in the capacity in which he was working as an apprentice. In a contract of apprenticeship, if a condition is not happily expressed the Court must take a broad and commonsense view of the terms of the employment. It in not proper in such cases to indulge in a hair splitting approach and find an escape for defeating the rights of employees. [155 F G] 2.2. Paragraph 2 of the letters of appointment is intended to convey the meaning that there is an obligation on the apprentices to serve the employer after the successful completion of the training. When paragraph 2 says that the apprentice "shall be absorbed in the department" the only reasonable interpretation to put upon that expression is that it creates reciprocal rights and obligations on the parties to the contract of apprenticeship, namely, the employee and the employer. "You shall be absorbed" is a double edged term of the contract. It binds the employer to offer employment to the apprentice (if there is a vacancy) and, equally, it binds the apprentice to accept the offer. In the context in which the expression "without any commitment" occurs, it only means that the obligation of the employer to offer employment to the apprentice and the corresponding obligation of the apprentice to serve the employer arises only if and when there is a vacancy in which the apprentice can be appointed. Paragraph 2 of the letters of appointment creates a binding obligation upon the employer to absorb the apprentices in the department on the successful completion of the training period, provided there is a vacancy in which the apprentices can be appointed. It would be contrary both to the letter and spirit of paragraph 2 of the letters of appointment to hold that even if there is a vacancy in which an apprentice can be appointed after the successful completion of his training, the employer is free not to appoint the apprentice and fill that vacancy by appointing an outsider Such a reading of the assurance contained in paragraph 2 will also frustrate the very object of the provision made by the legislature in section 22(2) of the apprentice Act. [157 B; E F] 3. The contention that the Executive Engineer, who sent the letters of appointment, had no authority to incorporate the particular condition in those letters cannot be accepted in as much as a senior officer in the position of an Executive Engineer would not incorporate a specific term in the contract of apprenticeship without being authorised to do so. [156 G H] 4. In the instant case, offering employment to the appellants to the extent of 50 per cent of the posts will not violate the law, as laid down by this Court, in regard to reservation of posts. The appellants are entitled to be appointed in the available vacancies not because of any reservation of posts in their favour but because of the provisions of section 22(2) of the 154 Apprertices Act and the contractual obligations arising under paragraph 2 of the letters of appointment. [157 H; 158 A]

Appeal No. 13 of 1952. Appeal from the Judgment and Order dated 18th January, 1950, of the High Court of Judicature at Madras (Satyanarayana Rao and Viswanaths Sastri JJ.) in Case Referred No. 28 of 1947. O. T. G. Nambiar (section N. Mukherjee, with him) for the appellant. M. C. Setalvad, Attorney General of India, and C.K. Daphtary, Solicitor General for India (G. N. Joshi and P. A. Mehta, with them) for the respondent. December 22. The Judgment of the Court was delivered by BOSE J. The following question was referred to the High Court of Madras by the Income tax Appellate Tribunal under section 66 (1) of the Indian Income tax Act, 1922 Whether on the facts and in the circumstances of the case when an assessment has been made under section 23 (1) of the Indian Income tax Act, determining the assessee company 's income as 'nil ' and when proceedings under section 34 were subsequently started to assess the income which the 450 Income tax Officer believed to have escaped assessment the assessee company is entitled to claim that the loss of profits and gains (including depreciation allowance) sustained by it in the previous year should be determined in the course of such proceedings. " We are concerned in this case with the assessment year 1941 42. The assessee is the Anglo French Textile Company, a company which is incorporated in the United Kingdom. It owns spinning and weaving mills at Pondicherry in French India and manufactures yarn and cloth there. The raw materials necessary for the manufacture, or at any rate much of it, such as cotton, used to be purchased in what was then the British India, through its agents Best & Company Ltd. of Madras. The bulk of its manufactured goods 'was ' also sold in British India, the rest being sold elsewhere. But in the year material to this case it did no business in British India and accordingly it submitted no return to the Income tax authorities. On 26th April, 1941, the Income tax Officer issued a notice to the assessee and called for a return. The assessee replied on 9th June, 1941, that it had ",at all times material to the assessment year no business in British India " and consequently no profits arose or accrued or were received in British India and therefore the assessee "was not liable to comply with the provisions of the Indian. Income tax Act. " The assessee added. In the Circumstances the company is not liable to make a return but with a view to preserve the right of the company to appeal against any order that may be passed by you, if necessary, we submit herewith without prejudice a nil return receipt of which kindly acknowledge. " Appended to the letter was a piece of paper which has been called a " nil" return. It is the usual printed form in which returns are, normally made but the only entry.in the whole form is the word " nil The following declaration was also added: 451 "I further declare that the company was not resident in British India during the previous year etc. " On 25th March, 1942, the Income tax Officer made the following order which he called an Assessment Order: "The company made a nil return of income obviously for the reason that it is not carrying on any business in British India . I accept the return of income filed by the company and declare it is not liable to tax for the year 1941 42. " A year later, namely, on 9th March, 1943, the Income tax Officer sent the assessee a notice under section 34 (1) (b) in the following terms: Whereas in consequence of the definite information which has come into my possession I have discovered that your income assessable to income tax for the year ending 31st March, 1942 has (a) escaped assessment. I therefore propose to assess the said income that has (a) escaped assessment. I hereby require you to deliver to me not later than . a return in the attached form of your total income and total world income assessable for the said year. " In reply to this the assessee again submitted the same CC nil " return and filed a statement showing a loss of Rs. 3,92,357 on its total world income. This was on 31st May, 1944. The Income tax Officer passed orders on this on 2nd June, 1944. He stated that the assessee was a non resident company and that during the year no sales were effected in British India and concluded as follows: As the net result for the world business is only a loss, there can be no question of profits attributable 452 co operations in British India under section 42 (1) and 42 (3) in respect of cotton purchases. The nil ' return filed is therefore accepted, Hence there is no assessment for 1941 42. As this is a non resident company, the loss need not be carried forward under section 24 (2) as that section in terms does not apply to non residents. " The last portion of the order is the one which occasions the assessee 'B grievance. It claims that the Income tax Officer having accepted its statement of loss was bound to record it and carry it forward. Appeals followed to the Appellate Assistant Commissioner of Income tax and the Income tax Appellate Tribunal and ultimately there was a reference to the High Court. The assessee has failed throughout.and now appeals here. The assessee 's contention is based on the following provision of section 34. The first sub section states that when a notice is issued under that section the Income tax Officer may proceed to assess or re assess such income, profits or gains or recompute the loss or depreciation allowance and that " the provisions of this Act shall, so far as may be, apply, accordingly as if the notice were a notice issued under [sub section (2) of section 22]. " This it is said attracts section 24 (2). We need not decide whether this contention is well founded, namely, whether the assessee can claim to reopen the proceedings, because, even if he can, we are of opinion that he cannot get what he asks for. There is no provision in the Act which entitles the assesses to have a loss recorded or computed, unless something is to be done with the loss. Thus, under section 24 (1) a loss can be set off against an income, profit or gain and under sub section (2) the balance of a loss can be carried forward to a following year on the conditions set out there. Except for this there is nothing else that can be called in aid. But under ' sub section (2) the loss can be carried forward when 453 "the loss cannot be wholly set. off under subsection (1) and in that event only the "portion not so set off " can be carried forward. We are therefore. thrown back o sub section (1). Sub section (1) provides that where an assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6 he shall be entitled to have the amount of the loss " set off against his income, profits or gains under any other head in that year." Therefore, before any question of set off can arise, there must be (1) a loss under one or more of the heads mentioned in section 6, and (2) an income, profit or gain under some other head. It follows that when there is no income under any head at all, there is nothing against which the loss can be set off in that year and unless that can be done sub section (2) does not come into play. Next, a set off Under section 24 (1) can only be claimed when the loss arises under one head and the profit against which it is sought to be set off arises under a different head. When the two arise under the same head, of course the loss can be deducted but that is done under section 10 and not under section 24 (1). See the decision of the Privy Council in Rm. Arunachalam Chettiar vs Commissioner of Income tax, Madras (1). In the present case, the loss is computed by striking a balance in the profit and loss account of just the one business and con sequently no question of different heads arises. On both these grounds, therefore, the assessee 's contention must fail because, unless the loss can be set off under sub section (1) of section 24, it cannot be carried forward under sub section (2) and if it cannot be carried forward the question of its determination and computation becomes irrelevant. The High Court proceeds on the ground that when proceedings are taken under section 34 the assesses (1) at 178 and 179. 454 is not entitled to reopen the whole proceedings as the further proceedings are limited to assessing that portion of the income which has escaped assessment. We need not express any opinion on this. The question we have to answer is confined to the facts and circumstances of this case and those circumstances are (1) that no return was filed at any stage of the case disclosing any income, profits or gains at all, (2) that proceedings were later taken under section 34, and (3) in the course of these proceedings the assessee claimed that a certain loss should be determined and recorded. Our answer is that cannot be done for the reasons we have given and that consequently the question referred was rightly answered in the negative by the High Court. The appeal fails and is dismissed with costs. Appeal dismissed.

An assessee submitted a return showing the income as "nil" and this return was accepted by the Income tax Officer, In the 449 next year the Income tax Officer sent a notice to the assessee under section 34 (1) (b) calling for a fresh return,. , The assesses submitted a return showing the income as nil " and a loss of Rs. 3,92,357 and claimed that the loss should be recorded and carried forward under section 24 (2) of the Income tax Act. The loss was arrived at by striking a balance in the profit and loss account of just one business: Held, that the assessee was not entitled to 'have the loss determined and carried forward for two reasons, first, because when there is no income under any head at all there is nothing against which the loss can be set off in that year under section 24 (1) and unless that can be done sub section (2) of section 24 does not come into play ; secondly, a set off under section 24 (2) can only be claimed when the loss arises under one head and the profit against which it is sought to be set off under a different head. Quaere: Whether when proceedings are taken under section 34 for the assessment of income which has escaped assessment, the assesses is entitled to re open the whole proceedings.

The assesses had made profits during the assessment year 1951 52 but after deduction of the depreciation allowance it was found to have incurred a loss for income tax purposes. In the same year the assesses declared dividends. The Income tax Officer treated this amount as 'excess dividend ' and levied additional income tax as provided in paragraph B of Part I of the First Schedule to the Indian Finance Act, 1951. The assesses contended that inasmuch as there was no income at all which was 954 taxable the words " on the total income " in paragraph B did not apply to it and no additional income tax could be levied. The appellant, relying on the proviso to paragraph B, contended that additional income tax was imposed on excess dividend and if excess dividend was paid out, the liability to tax arose: Held, that the assessee was not liable to pay additional incometax. The liability to tax was imposed by section 3 of the Income tax Act and the Finance Act merely laid down the rates at which tax was to be levied on the total income. If there was no income there was no question of applying a rate to the " total income " and no income tax or super tax could possibly result. The word " additional " in the expression "additional income tax " implied that there was a tax before. The expressions " charge on the total income " and " profits liable to tax " in paragraph B contemplated only those cases where there was income and not cases where there was loss. Consequently the expression " dividends payable out of such profits " could only apply when there were profits and not when there were no profits. The imposition of additional income tax was conditioned by the existence of income and profits. The legislature used language appropriate to income and applied the rate to the " total income ". Where there was no total income the law could not apply and the courts could not be asked to supply the omission made by the legislature or to delete or to modify any words. If the words of a taxing statute failed then so did the tax. The courts could not, except rarely and in clear cases, help the draftsman by a favourable construc tion. Curtis vs Stovin, , Commissioner of Incometax vs Teja Singh, S.C., Whitney vs Commissioners of Inland Revenue, , Special Commissioners of Income Tax vs Linsleys, Ltd., and Commissioners of Inland Revenue vs South Georgia Co. Ltd. , distinguished. The Cape Brandy Syndicate vs The Commissioners of Inland Revenue,(1620) and Wolfson vs Commissioners of Inland Revenue,(1949) , referred to. The proviso to paragraph B prescribed varying rates for varying circumstances; it dealt with rates alone and not with the chargeability to tax. There were no words in this proviso making the excess dividend into income or subjecting it to tax independently of the charge to tax on the total income.

The appellant assessee constructed a warehouse and let out different portions under different tenancies commencing on different dates. Later on a new lease was entered into between the assessee and her tenant for letting out of the entire warehouse and the assessee started receiving rent at the rate of Rs. 34,797/ per month in respect of the entire warehouse from 1st April, 1968. In the course of assessment of the assessee for the assessment years 1969 70 and 1970 71 the question arose as to how the "annual value" of the warehouse should be determined for the purpose of chargeability to income tax under the head "income from house property". The assessee claimed before the Income. Tax officer that on a proper construction of sub section (I) of section 23, it was not the actual rent received by her from the warehouse that was material for determining the annual value of the warehouse but the hypothetical amount for which the warehouse might reasonably be expected to be let from year to year, and since the Delhi Rent Control Act 1958 was applicable in the area in which the warehouse was situate, the warehouse could not reasonably be expected to be let from year to year at a rent exceeding the standard rent determinable under the provisions of that Act. The Income Tax officer rejected this claim and took the view that the actual rent received by the assessee provided the most accurate and satisfactory measure of the amount for which the warehouse might reasonably be expected to let from year to year and the annual value of the warehouse must therefore be taken to be the actual rent received by the assessee and he accordingly assessed the assessee to tax on the basis of the actual rent. The assessee 's appeals for each of the two assessment years to the Appellate Assistant Commissioner were unsuccessful. The Income Tax Tribunal took the same view on further appeals by the assessee and held relying on the decision of this Court in M. M. Chawla vs J. section Sethi that in the absence of fixation of standard rent, the agreed rent which is legally recoverable and not tainted by fraud, relationship or any other consideration must be taken to be the standard rent and hence the actual rent received by the assessee was rightly taken as the annual value of the warehouse. 310 The assessee 's applications to the Tribunal as well as to the High Court for the making of a reference under section 256 of the Income Tax Act, 1961 were also dismissed. Allowing the appeals to this Court, ^ HELD: 1. The annual value of the building according to the definition given in sub section (l) of section 23 of the Income Tax Act, 1961 is the standard rent determinable under the provisions of the Rent Act and not the actual rent received by the landlord from the tenant. [316 H 317 A] 2. In Dewan Daulat Rai Kapoor etc. vs New Delhi Municipal Committee ; a decision of this Court given on the interpretation of the , definition of 'annual value ' in the Delhi Municipal Corporation Act 1957 and the Punjab Municipal Act 1911 for the purpose of levy of house tax, it was held that even if the standard rent of a building has not been fixed by the Controller under section 9 of the Rent Act, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the provisions of the Rent Act and this would be equally so whether the building has been let out to a tenant who has lost his right to apply for fixation of standard rent by reason of expiration of the period of limitation prescribed by section 12 of the Rent Act or the building is self occupied by the owner, and that the standard rent determinable under the provisions of the Rent Act and not the actual rent received by the landlord would constitute the correct measure of the annual value of the building. [314 H, 316 A C] 3. This decision though given on the interpretation of the definition of 'annual value ' in the Delhi Municipal Corporation Act 1957 and the Punjab Municipal Act 1911 for the purpose of levy of house tax, would be equally applicable in interpreting the definition of 'annual value ' in sub section (I) of section 23 of the Income Tax Act, 1961 because these definitions are in identical terms and it is impossible to distinguish the definition of 'annual value ' in sub section (1) of section 23 of the Income Tax Act, 1961 from the definition of that term in the Municipal Corporation Act 1957, and the Punjab Municipal Act, 1911. In the instant case the annual value of the warehouse for the purpose of chargeability to income tax for the assessment years 1969 70 and 1970 71 would have to be determined on the basis of the standard rents of different portions of the warehouse determinable under clause (b) of sub section (2) and paragraph (b) of sub clause (2) of clause (B) of sub section (I) of section 6 of the Rent Act. [319 C]

The assessee was the Managing Director of a Company originally assessed on a total income of Rs. 43407/ for the assessment year 1959 60. Thereafter the Income Tax Officer came to know that the assessee had been withdrawing moneys from the Company and that those amounts were liable to be treated as dividend under section 2(6A)(e) of the Act, he re opened the assessment. In the assessment proceedings that followed, the assessee claimed that the accumulated profits of the Company amounted to Rs. 1050 only and that amount alone could be considered as dividend under section 2(6A)(e) of the Act. The figure was worked out on the basis that Rs. 11,000 as a provision for tax and Rs. 6,900 as a provision for dividend had to be adjusted against the balance of Rs. 18,950 in the Profit and Loss Account. The Income Tax Officer rejected the contention of the assessee. The Appellate Assistant Commissioner dismissed the appeal filed by the assessee. The Income Tax Appellate Tribunal in second appeal, upheld the claim of the assessee that the words "accumulated profits" in section 2(6A) (e) of the Act could not be construed as including current profit but it rejected the contention that the two sums of Rs. 11,000 and Rs. 6,900 had to be taken into account in determining the figure of the "accumulated profits". It determined the "accumulated profits" at Rs. 18,950. The Revenue obtained a reference to the High Court on the question: "Whether the Appellate Tribunal was legally correct in holding that the accumulated profit will not include "current profits" for the purpose of section 2(6A) of the Act. " A second question was referred to the High Court at the instance of the assessee : "Whether the Tribunal was right in holding that Rs. 18,950 constituted accumulated profits for the purpose of section 2(6A) of the Act. " The High Court answered both the questions in favour of the assessee, the first question in the affirmative and the second question in the negative. On appeal to this Court, ^ HELD: 1. "Current profits" that is to say, profits earned by the Company during the year in which the loans were advanced to the assessee cannot be regarded as included within the "accumulated profits" of a Company within the meaning of section 2(6A) (e) of the Act. [947G 948E] Commissioner of Income Tax, Madras vs M. V. Murugappan

The appellant company was a dealer in ghee and groundnut oil etc. The Deputy Commercial Tax Officer assessed it to sales tax for the year 1948 49 on a turnover of Rs. 28,69,151 and odd. Similarly for the year 1949 50 the appellant was assessed to sales tax on a turnover of Rs. 28,72,o83 and odd. The appellant challenged these assessments and its appeal before the Commercial Tax Officer having failed the two matters came up in second appeal before the Sales Tax Appellate Tribunal. In the Tribunal the appellant did not place any materials in support of its contentions and the two appeals were disposed of by the Tribunal holding that the appellant was correctly assessed to sales tax. In respect of the aforesaid orders of the Tribunal the appellant filed applications for review under section 12A(6)(a) of the Madras General Sales Tax Act, 1939 (Mad. Act IX Of 1939), taking the plea that in the first case the materials could not be placed before the Tribunal as there was none to instruct the appellant 's advocate in English or Telegu, and in the second case the relevant correspondence was mixed up with other records. The Tribunal rejected the applications for review on the ground that a failure to produce the necessary materials in support of a plea taken before it, due either to gross negligence or deliberate withholding, did not come within the reason of section 12A(6)(a) of the Act. The High Court upheld the decision of the Tribunal. On appeal by special leave in one case and a certificate of the High Court in the other: Held, that the provision in section 12A(6)(a) of the Madras General Sales Tax Act, 1939 (Mad. Act IX Of 1939), permits a review when through some oversight, mistake or error the necessary facts, basic or evidentiary, were not present before the Court when it passed the order sought to be reviewed, but a party was not 805 entitled to ask for a review when it had deliberately or intentionally withheld evidence in support of a claim made by it. State of Andhra vs Sri Arisetty Sriyamulu, A.I.R. 1057 Andhra Pradesh 130, not approved.

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 assessee firm carried on business at Bangalore in the State of Mysore, which at the relevant time was a Part B State. It was appointed as the sole selling agent for certain areas in Ceylon in respect of tiles and ridges manufactured by the principal at Feroke in British India. According to the agreement between the parties all prices quoted by the manufacturer were to be F.O.B. Beypore Port situated in taxable territory. Chartering and loading of vessels was done by one of the employees stationed at Calicut. The bills of lading were obtained by the assessee 's representative at Beypore and sent to Bangalore when the hundis together with the invoices and shipping documents were handed over by the assessee to a bank at Bangalore. Pursuant to the letter of credit opened ' by the purchaser in Ceylon, payments were made by the aforesaid bank to the assessee. In income tax proceedings for the assessment years 1951 52, 1952 53, and 1953 54 the assessee claimed that since its registered office was in Bangalore and as the agency agreement with the purchaser at Colombo was entered into in Bangalore the entire come should be treated as income accruing or 'arising in Part B State and concession regarding rates and allowances as provided in Part States (Taxation Concessions) Order, 1950 should be allowed to it. The income tax authorities and the Tribunal decided against the assessee. The High Court however held that since the profits were received in Part State at Bangalore, it could not be said that the entire profit accrued or arose within the meaning of el. (a) of sub section (1) of section 4 of the Income tax Act, 1922 in the taxable territories other than Part B State. According to the High Court the profits arose at Bangalore, Feroke, and Ceylon, of which only Feroke was in the taxable territories, and therefore, the assessee was entitled to the concession under the order in respect of the profits that could be apportioned under section 42(3) of the Act to the business operations conducted in Bangalore and Ceylon. The Revenue appealed to this Court contending that hardly any activity took place of such a nature as could be said to give rise to accrual of profits at Bangalore. HELD: The conclusion which the High Court arrived at must be upheld. The making of contracts pursuant to which all the subsequent activity in respect of the execution of those. contracts took place resulting in profits to the assessee was an integral part of the entire selling operations. The contracts in the present case having been entered into at Bangalore it could not be said that no part of the business activity which produced the profits took place there. [53 H] 56

The appellant was a company registered in the erstwhile Baroda State. In connection with the assessment year 1942 43 the Income tax Officer Ahemdabad held that certain sale proceeds were received by the appellant in British India and the profit thereon was taxable under the Indian income tax Act, 1922. One of the items in dispute related to the sale proceeds collected by collecting cheques on British India Shroffs and Merchants. In respect of the said item the Appellate Assistant Commissioner as well as the Appellate Tribunal decided against the appellant, and thereafter, reference was made to the High Court. The High Court felt that it required further facts to decide the reference and twice remanded the case to the Tribunal for investigation of those facts. The Tribunal after taking evidence submitted a supplementary Statement of Case on each occasion. Finally the High Court decided the question against the appellant, but granted it a certificate of fitness to appeal to the Supreme Court. It was contended on behalf of the appellant that the High Court had no jurisdiction to direct the Tribunal to collect additional material and make it a part of the supplementary Statement of Case under section 66(4) as had been decided by this Court in the cases of the Petlad Co. and the New Jahangir Mills. On behalf of the Revenue it was contended that these two cases required reconsideration. The Court therefore had to consider whether it should review and revise its earlier view taken in the said two cases. HELD : (i) The view contended for on behalf of the Revenue namely, that the High Court had power to ask the Tribunal to investigate further facts and submit a supplementary Statement of Case was a reasonably possible view. But on the other hand the opposite view taken by this Court in the Petlad Co. case and the New jahangir Mills case was also reasonably possible. The latter view had been followed by this Court on several occasions and it had regulated the procedure in reference proceedings in the High Courts ever since the decision in the New Jahangir Mills case was pronounced. Besides, no reported decision had been cited at the bar where the question about the constitution of section 66(4) was considered and decided in favour of the view con tended for by the Revenue. No case therefore was made out for a revision or review of the Court 's decisions in the Petlad Co. and New Jahangir Mills cases. [928 C F] Case law discussed. The New jahangir Vakil Mills Ltd. vs Commissioner of Income tax, Bombay North; , and ' The Petlad Turkey Red Dye 909 Works Co. Ltd. Petland vs Commissioner of Income tax, Bombay, Ahemdabad, [1963] Supp. 1 S.C.R. 871, affirmed. (ii) The principle of stare decisis cannot be pressed into service in cases where the power of this Court to reconsider and revise its earlier decisions is invoked, because that power is inherent in this Court; but nevertheless the normal principle that judgments pronounced by this Court would be final cannot be ignored. Unless considerations of a subs tantial and compelling character make it necessary to do so this Court should and would be reluctant to review and revise its earlier decisions. [923 B D] Bengal Immunity Company Ltd. vs State of Bihar , distinguished. (iii) If the Court is satisfied that its earlier decision was clearly erroneous, it should not hesitate to correct the error; but before a previous decision is pronounced to be plainly erroneous, the Court must be satis fied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified. It is not possible or desirable, and in any case it would be inexpedient to lay down any principles which should govern the approach of the Court in dealing with the question of reviewing and revising its earlier decisions. It would always depend upon several relevant considerations What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based ? On the earlier occasion, did some patent aspects of question remain unnoticed, or was the attention of the Court not drawn to any relevant and material statutory provision, or was any previous decision of this Court bearing on the point not noticed ? Is the Court hearing such plea fairly unanimous that there is such an error in the earlier view? What would be the impact of the error on the general administration of law or on public good ? Has the earlier decision been followed on subquent occasions either by this Court or by the High Courts ? And, would the reversal of the earlier decision lead to public inconvenience, hardship or mischief ? These considerations become still more significant when the earlier decision happens to be a unanimous decision of a Bench of five learned Judges of this Court [922 B F]

the matter of Mr. 'A ' an Advocate. The Advocate in person. H. N. Sanyal, Additional Solicitor General of India and T. M. Sen, for the Attorney General of India. September 25 and November 2. The Judgment of the Court was delivered by SINHA, C. J. The Advocate proceeded against for professional misconduct was enrolled as an advocate of the Allahabad High Court in December 1958. In January 1961, he was enrolled as an advocate of this Court. The proceedings against him were taken in accordance with the procedure laid down in O. IV A of the Supreme Court Rules. In March this year the Registrar of this Court received a letter, marked 'Secret ', from Secretary to the Government of Maharashtra, in the Department of law & Judiciary, to the effect that the "Advocate on Record" of the Supreme Court had addressed a post card, dated January 1, 1961, to the Minister of Law of the State of Maharashtra, which "constitutes a gross case of advertisement and solicitation for work. " The original post card was enclosed with the letter, with the request that the matter may be placed before the Chief Justice and the other Judges of the Supreme Court for such action as to their Lordships may seem fit and proper. The post card, which was marked as exhibit A in the proceedings which followed, is in these terms: Mr. 'A '. Advocate on Record. Supreme Court, Office and Residence B.9, Model Town, Delhi 9. Dated 19 1 61. 290 Dear Sir, Jai Hind. Your attention is drawn to the rule 20 of order IV of the Supreme Court Rules 1950 (as amended upto date) to appoint an Advocate on Record in the Supreme Court as according to this rule 'no advocate other than an advocate on Record shall appear and plead in any matter unless he is instructed by an Advocate on Record. ' You might have got an Advocate on Record in this court but I would like to place my services at your disposal if you so wish and agree. Hoping to be favoured. Thanks, Yours sincerely, Sd: 'A ' To The Minister of Law, Government of Maharashtra, Bombay. " When the matter was placed before the Chief Justice, he directed the Registrar informally to enquire from the Advocate concerned whether the post card in question had been written by him and bore his rubber stamp and signature. The Registrar called him, and in answer to his queries, the Advocate admitted that the post card bore his rubber stamp and signature and that it bad in fact been dispatched by him. He also informed the Registrar that he had addressed similar post cards to other parties. The Advocate added that he did not realise that in addressing those post cards he was committing any wrong or breach of etiquette. The Chief Justice, on receiving the aforesaid information, placed the matter before a Committee of three Judges of this Court, under r. 2, O. IV A. The Committee considered the matter referred to it, and 291 on receiving its opinion, the Chief Justice constituted a Tribunal of three members of the Bar, Shri Bishan Narain and Shri A. Ranganadham Chetty, Senior Advocates, and Shri I. N. Shroff, Advocate, with Shri Bishan Narain as its President, for holding the necessary enquiry into the alleged conduct of the Advocate proceeded against. In reply to the notice served on the Advocate, he chose to behave in a most irresponsible way by alleging that the complaint in question by the Government of Maharashtra "is false, mala fide and misconceived". He denied that he had written the letter in question, which he characterised as "the work of any miscreant". He added further that even if it were proved that the letter in question had been written by him, a mere perusal of it would show that there was nothing unprofessional or otherwise objectionable in it, and he added further that certainly it is not solicitation of work if one inquires from any person whether it requires or wishes and agrees to have the services of another advocate". The Advocate was examined as witness on his own behalf and the Tribunal put the post card to him. The following questions by the Tribunal and answers by the Advocate will show the determined way in which he denied what he had admitted to the Registrar. "Tribunal: This post card which has been brought to the notice of the court purports to be from you. Is this the post card which you have written ? Witness: No. Tribunal: Has it not gone from your office ? Witness: No. There is no doubt it bears the seal of my office, but it has not been affixed by me. 292 Tribunal: You say it does bear your name and that the rubber stamp which appears is of your office but that it has not been affixed by you. Witness: Yes. Tribunal: Is the hand writing which one find on this Postcard your hand writing ? Witness: No. Tribunal: And the signature which is at the foot of the letter, you say, is not your signature. Witness: No, it is not mine" The Tribunal pursued the matter further to find out as to how the post card had purported to emanate from his office, and then certain documents, marked Exs. B to E, were brought on the record with a view to comparing his admitted hand writing in those documents with that of the post card in question. The Tribunal also made him write a letter in the very terms in which the postcard is written, with a view to making a comparison of the handwriting on the post card with his admitted writing in identical terms, given by him in Court. The Tribunal then confronted him with his admissions made to the Registrar, as aforesaid, before the proceedings started. The following questions and answers will further indicate his attitude; "Tribunal: In what respects do you find any difference between your normal signature and this signature (signature on the post card is shown to him). Witness: It appears to be like my signature, but it is not my signature. Signature on exhibit A is not my signature. 293 Tribunal: In connection with this post card did you see the Registrar (Supreme Court) ? Witness: Yes, he called me. Tribunal: When? Do you know the date ? Witness: I do not remember. Tribunal: Did you say anything to him ? Witness: I did not make any statement. He showed me the post card. I told him, as I said here, that I held not written it; somebody else might have written it. Tribunal: Did you admit before the Registrar that this letter was written by you ? Witness: I did not admit it, but he told me that if I admitted it, the matter might be hushed up. Tribunal: Did you say to the Registrar that you did not realise that in so doing you were doing any thing wrong ? Witness: No. I did not say anything. Tribunal: Do you want to produce any evidence ? Witness: No, because I have not done anything; so, I do not want to produce any evidence. Even if it is found that I have written the post card, even then on merits, there is nothing in this Case". Finding that the Advocate was adamant in his denial that he wrote the post card or that he had made any statement before the Registrar, the Tribunal called the Registrar as a witness and examined him on solemn affirmation. The Registrar are his evidence and fully supported his previous 294 report that the Advocate had made those admissions before him. After recording the evidence, oral and documentary, the tribunal made the report that inspite of stout denial by the Advocate concerned, the Tribunal was satisfied that the post card in question had been written by him. The Tribunal was also of opinion that the Advocate did not realise that in writing the post card he was committing a breach of professional etiquette and of professional ethics. It also remarked that it was unfortunate that the Advocate chose to deny the authorship of the post card. The findings of the Tribunal, along with the evidence and record of the case, have been placed before us. 'the Advocate, on notice, has appeared before us and we have heard him. Before us also the Advocate first took up the same attitude as he had adopted before the Tribunal, but on being pressed by the Court to make a true statement as to whether he had written the post card and had admitted before the Registrar that he had done so, he answered in the affirmative. It is clear beyond any shadow of doubt that the Advocate had addressed the letter aforesaid to the Government of Maharashtra, soliciting their briefs; that he had admitted to the Registrar of` this Court that he had written the post card and other such post cards to other parties, and that he did so in utter disregard of his position as an Advocate of this Court. It is equally clear that his denial of having written the post card, and of having subsequently admitted it to the Registrar, was again in utter disregard of truth. He has, in this Court, condemned himself as a liar and as one who is either ignorant of the elementary rules of professional ethics or has no regard for them. In our opinion, the Advocate has mischosen his profession. Apparently he is a man of very weak moral fibre. If he is ignorant of the elementary 295 rules of professional. ethics, he has demonstrated the inadequacy of his training and education befitting a member of the profession of law. If he M knew that it was highly improper to solicit a brief and even then wrote the post card in question, he is a very unworthy member of the learned profession. In any view of the matter, he does not appear to be possessed of a high moral calibre, which is essential for a member of the legal profession. If anything, by adopting the attitude of denial which has been demonstrated to he false in the course of the proceedings before the Tribunal, he has not deserved well of the Court even in the matter of amount of punishment to be meted to him for his proved misconduct. In our opinion, he fully deserves the punishment of suspension from practice for five years. This punishment will give him enough time and opportunity for deciding for himself, after deep deliberation and introspection, whether he is fit to continue to be a member of the legal profession. In our view he is not. Let him learn that a lawyer must never be a liar.

Mr. A, an Advocate on Record of this Court, wrote letters soliciting clients. One of such letters, a post card was addressed to the Law Minister of Maharashtra and ended as follows, "You might have got an Advocate on Record in this Court but I would like to place my services at your disposal is you so wish and agree". To the Registrar of this Court he admitted having written the post card, but before the Tribunal stoutly denied having done so. The Tribunal found on evidence that the Advocate had written the post card. When the matter came up before the court, the Advocate at first denied having written the post card but on being pressed by the court to make a true statement admitted that he had written the postcard and had admitted that before the Registrar. ^ Held, that it is against the etiquette of the Bar and its professional ethics to solicit briefs from clients and an Advocate who does so must be guilty of grossly unprofessional conduct. There can be no doubt in the instant case that the Advocate concerned had written the post card soliciting briefs. It makes no difference whether he did so in ignorance of this elementary rule of the profession or in disregard of it, since his conduct in court showed that he had no regard for truth and, consequently, he deserved no sympathy of the court and must be suspended.

The appellant was born on January 7, 1915. He joined the Editorial Staff of the Civil and Military Gazette, Lahore, towards the end of 1938 and continued to serve the Civil and Military Gazette upto January 7, 1943, when he joined the Army. During the Second World War he was granted an Emergency Commission in the Army w.e.f March 7, 1943 with the rank of Lieutenant w.e.f June 3, 1948 but with seniority in that rank w.e.f. September 1944. Later, he, having been selected by the Special Recruitment Board as an Emergency Recruit from the "open market" was appointed to the Indian Administrative Service on August 7, 1950 and allocated to the Orissa Cadre. As regards Emergency Recruits from the open market the year of allotment was to be determined according to the "open Market Emergency Recruitment Scheme" called also 'N ' formula. The year of allotment in each case would be 1949 Y, where Y = N1 + 1/2 of N2. N2 means the period of previous experience. The previous experience is the number of completed years of actual experience of the officers after attaining the age of 25 and upto 31st December, 1948 as certified by the Special Recruitment Board. N1 means the period of continuous employment on a pay or income of not less than of Rs. 800/ per month before 31st December, 1944 and the 31st December 1948, inclusive. The larger the figure of "Y", the earlier the date of allotment and seniority. The period of previous experience (N2) in the case of the appellant worked out to 8 years 11 months 25 days rounded off to 8 years (i.e. 7 1 40 to 31 12 48). The figure of N1 was worked out taking the "protection pay" admissible to Army Officers as per F.R. 9(21)(b) i.e. excluding the Calcutta 25 compensatory allowance and lodging allowance. Therefore, by its letter dated June 11, 1952, the Ministry of Home Affairs fixed the year of allotment of the petitioner to the Indian Administrative Service as 1944. (1949 minus 5). The appellant held various posts in the Indian Civil Administrative Service cadre of Orissa and was also on deputation to the Government of India from 1952 to April 7, 1964. During this period, he was appointed as the Salt Commissioner and Managing Director, Hindustan Salt Ltd. with Head quarter at Jaipur. He held both these posts from September 11, 1953 to December 23, 1963, and only as Salt Commissioner till April 7, 1964, whereafter he was reverted to the State of Orissa. He was compulsorily retired by the Government on June 9, 1971. By its order dated September 1, 1977, the State Government gave him pay and allowances in the super time scale from November 29, 1967 to April 24, 1968 and thereafter selection grade from April 15, 1968 to June 9, 1971. Respondent 1 rejected his representation (a) for refixing his year of allotment by condoning the shortage of 6 days in determining N2 and by taking into consideration allowances for purposes of N1 (b) for granting the benefit of F.R. 49 and (c) for granting the benefit under F.R. 30. The appellant, therefore, filed a writ petition to the High Court claiming three reliefs, namely, (a) Refixation of the year of allotment as 1942 instead of 1944 in the Indian Administrative Service, alleging that by refusing to treat the Calcutta compensatory allowance and lodging allowance as pay under FR 9(21)(b) and to condone the six days ' shortage in determining the number of completed years of editorial experience under 'N ' formula, Respondent 1, by its order dated June 11, 1952, denied him seniority, (b) pay as admissible under FR 49 i.e. full salary of one post and additional salary upto a maximum of 50% of the second post, for the period from September 11, 1961 to December 23, 1963 during which he held both the posts of Salt Commissioner and Managing Director, Hindustan Salt Ltd. and (c) Placement in the super time scale w.e.f. July 24, 1962, i.e. the date when his junior Sri V.V. Ananta Krishnan was appointed to the super time scale, under the "Next Below Rule" implied in F.R. 30. The High Court refused to grant the reliefs, prayed for, and dismissed the Writ Petition. Dismissing the appeal by special leave, the Court ^ HELD: 1. In view of the categorical averment in his application for grant of special leave to this Court under Article 136 of the Constitution that "he was no longer interested in the relief for determination of the year of allotment, according to the 'N ' formula, since he was on the verge of retirement" the appellant cannot be heard to say that the Government of India had not arrived at a correct decision in assigning 1944 as the year of allotment to him. [33H 34A, 34G] (2) Normally the decision of the Government of India assigning a year of allotment to a particular officer under Rule 3 of the Indian Administrative Service (Regulation of Seniority) Rules, 1954, or, in accordance with orders and instructions issued by the Central Government in that behalf before the commencement of these Rules, is final and cannot be interfered by the Courts under Article 226 of the Constitution unless such decision was capricious or arbitrary or in breach of the said Rules. The same principle should apply to the assignment of a year of allotment under the 'N ' formula. [36F] 26 Even according to the appellant, he was not entitled, under the 'N ' formula as it stands, to a credit of more than 8 years. If that be so, the High Court quite properly declined to exercise its extra ordinary jurisdiction under Article 226 of the Constitution, inasmuch as no writ or direction could be issued, in a matter which was essentially in the discretion of the Government, to refix his seniority by giving credit for 9 years instead of 8 years as provided for, as admittedly the relevant instructions require "completed years of actual experience". [36E] There is no question of condoning the short fall of six days by relaxation of the relevant Rules under the powers vested in the Government of India by the All India Services (Conditions of Service Residuary Matters) Rules, 1960, since these Rules were not in force when the Government of India, Ministry of Home Affairs, by its letter dated July 19, 1951, issued a statement showing the years of allotment assigned to officers borne on the Indian Civil Administrative cadre of Orissa, wherein the year of allotment assigned to the petitioner was 1943 1/2, or even at the time when the Ministry of Home Affairs by its letter dated June 11, 1952 rejected his representation in that behalf, while revising his year of allotment to 1944. Further, the Government of India adopted a uniform policy in this regard and short falls of even less than 6 days have not been condoned so that there could be uniformity of taking note of "completed years of service" irrespective of the short fall of number of days in calculating the year of allotment in every case under the 'N ' formula. The Government of India have also held that the 'Recruitment Rules ' cannot be relaxed under Rule 3. [36H 37C, 38D] Even assuming there was a power to condone the deficiency, the matter rested entirely in the discretion of the Government of India. When a decision in a policy matter like relaxation is left to the absolute discretion of the Executive, courts cannot interfere and issue a direction to the Government of India to reconsider the matter afresh, after a lapse of more than 25 years. It would not only disturb the combined gradation list of the Officers belonging to the Indian Administrative Service, but also affect the seniority of many officers who have not been impleaded in these proceedings. [38G] (3) The definition of 'pay ' in the case of a military officer, introduced by F.R. 9(21)(b) is for 'protection pay ' when such officer is recruited in civil service under the employment of the Union of India, i.e., for fixation of his pay in such service, as is made clear by F. Rs. 2 and 3. F.R. 2 provides that the Fundamental Rules shall apply, subject to the provisions of F.R. 3, to all Government servants whose pay is debitable to civil estimates and to any other class of Government servants to which the President may, by general or special order, declare them to be applicable. F.R. 3 provides, that unless it be otherwise distinctly provided by or under the Rules, "Nothing in these Rules shall apply to Government servants whose conditions of service are governed by Army or Marine Regulations". F.R. 9(21)(b) had, therefore, no relevance in the matter of fixing the seniority of Emergency Recruits from the "Open Market" to the Indian Administrative Service, like the petitioner, even when they were drawn from the Army, but was applicable only in regard to fixation of their initial pay. [39E, D, G] The 'pay ' for purposes of determining the year of allotment under 'N ' formula of such recruits drawn from the Army was, as per the underlying principles set out in the Ministry of Home Affairs dated July 18, 1949, the 27 "basic pay" which necessarily exclude allowances. This concept of "basic pay" for fixation of initial pay is reflected in the Indian Administrative Service (Pay) Rules, 1954, which takes into account only the "initial pay". [40G] The rule which requires credit to be given for the period of continuous employment on pay or income not less than Rs. 800/ p.m., would apply uniformly to all recruits drawn from different sources, namely, persons who were previously lawyers, or employed in business houses or in Government service. Uniformity in such a case can only be attained by excluding allowances in every case, because the allowances which persons drawn from those different sources would be getting, would be varied in character. The Government of India, therefore, acted fully in consonance with Articles 14 and 16 of the Constitution. [41A C] The concept of 'pay ' under F.R. 9(21)(b) cannot be introduced for purposes of regulating the year of allotment under 'N ' formula, as it relates to fixation of seniority and not of pay. If the definition of 'pay ' in F.R. 9(21)(b) was to be taken note of, then Calcutta compensatory allowance and marriage allowance would also be included. Then, a rule which makes seniority dependent upon marriage allowance, and therefore, on whether the officer was married or not will be violative of Article 14 of the Constitution. The inclusion of 'pay ' as defined in F.R. 9(21)(b) in the 'N ' formula to include lodging allowance is not permissible as it was essentially compensatory in character. Any other construction will lead to manifest injustice as it would result in discrimination between persons similarly situated i.e., between an Army Officer in receipt of lodging allowance in lieu of rent free quarters and one in occupation of such rent free quarters, in the matter of seniority in the Indian Administrative Service. [41G H, 42D E] (4) The conditions of service of members of the Indian Administrative Service are regulated by the provisions of All India Services Act, 1951 and the various Rules and Regulations framed thereunder, such as Indian Administrative Service (Recruitment) Rules, 1954, Indian Administrative Service (Cadre) Rules, 1954, Indian Administrative Service (Pay) Rules, 1954, Indian Administrative Service (Regulation of Seniority) Rules, 1954, Indian Administrative Service (Appointment by Promotion) Regulation, 1955, All India Services (Discipline and Appeal) Rules, 1955, and 1969, All India Services (Conditions of Service Residuary Matters) Rules, 1960 etc. When there is specified provision made in regard to them on a particular subject regulating their conditions of service in the said Act and the Rules, the question of applicability of the Fundamental Rules does not arise. [42G 43A] Even assuming that the Fundamental Rules were applicable on August 7, 1950 i.e. at the time when the petitioner was appointed to the Indian Administrative Service, these Fundamental Rules ceased to be applicable on the coming into force of the aforesaid rules and regulations framed under the Act, unless the President by an order under F.R. 2 declared them to be so applicable. [43B] The provisions of F.R. 49 ceased to apply from the date on which the Indian Administrative Service (Pay) Rules 1954, were brought into force, as it makes no provision for 'additional pay '. Even if they were F.R. 49, in terms, provides that when a civil servant holds two posts, he is disentitled to draw the salary of both the posts. All that such a civil servant becomes 28 entitled to is the salary of the higher post, but no additional pay can be allowed for performing the duties of the lower post. Thus, the pay of one of the posts can be allowed. Even assuming that the provisions in the Fundamental Rules would continue to apply to a member of the Indian Administrative Service in regard to which no specific provision is made by framing a rule under the All India Services Act, 1951, and therefore, in the instant case, the appellant was still governed by F.R. 49, he had no claim to any additional salary, on the materials on record. [44A] (5) The intention underlying the second proviso to F.R. 30(1) which is commonly known as the "Next Below Rule" is the principle that when an officer in a post (whether within the cadre of his service or not) is for any reason prevented from officiating in his turn in a post on higher scale or grade borne on the cadre of the service to which he belongs, he may be authorised by special order of the appropriate authority proforma officiating promotions into such scale of pay and thereupon be granted the pay of that scale of grade, if they be more advantageous to him on each occasion on which the officer immediately junior to him in the cadre of his service draws officiating pay in that scale or grade. The principle behind the so called rule is evidently that an officer out of his regular line should not suffer by forfeiting acting promotion which he would otherwise have received had he remained in his regular line. [44G 45A] The State of Mysore vs M. H. Bellary, ; , referred to. The 'Next Below Rule ' is not a rule of any independent application. It sets out only the guiding principles for application in any case in which the President or the Governor proposes to regulate an officiating pay by special order under the second proviso to F.R. 30 (1). The condition precedent to the application of the 'Next Below Rule ' must, therefore, be fulfilled in each individual case before any action can be taken under this proviso. [45F] (6) The promotion to a post in super time scale involves an element of selection and is not by mere seniority. As a rule of universal application, the benefit of the "Next Below Rule" though available in the selection grade has never been extended when there is a promotion to a post in super time scale in the Indian Administrative Service for considerations of policy, namely, (1) the length of service which officers in States have to put in before they get promotion to super time scale is not uniform; (ii) Most of the States have got Divisional Commissioners, while some States do not have this post; (iii) The posts of Secretaries in some States carry pay in super time scale while in others these posts carry pay in the senior scale, and (iv) An officer might be good enough to be a Divisional Commissioner, but might not be good enough to be Joint Secretary to the Government of India. [45G,46B D] The process of appointment to the super time scale is by selection. When the element of selection comes in, this promotion must be subject only to the claims of exceptional merit and suitability, and is not a mater of right. Promotion to the super time scale is, therefore, not a matter of course. The Officer must stand the test of suitability and his integrity must be beyond doubt. For this purpose there is a Senior Selection Committee which pre 29 pares a select list of suitable officers which must be approved by the Union Public Service Commission. The Senior Selection Committee has to prepare a panel of names for each grade and submit the same for approval to the Union Public Service Commission as well as to the Government of India, Ministry of Home Affairs. The select list has to be reviewed and revised every year, and the Senior Selection Committee meets annually. The essence of holding Selection Committee meeting annually is that each annual proceeding is independent of the other. That is why as soon as the proceedings of the new Selection Committee are approved by the Union Public Service Commission, the proceedings of the earlier Selection Committee becomes inoperative. No manner of continuity can, therefore, be imputed to the proceedings of the various Selection Committees. [48 D F] In the instant case, the appellant cannot claim as a right the super time scale merely on the basis of his seniority among the members of the Indian Administrative Service belonging to the Orissa cadre, if he was 'consciously ' passed over by the Senior Selection Committee or Government of India, Ministry of Home Affairs. [48 C, G] Union of India vs M.L. Capoor, ; , referred to.

The petitioner filed a suit in the court of the Sub Judge claiming a decree for Rs. 10,665 and any balance ascertained as due to him on taking account, being proceeds of sales made by the respondents as the petitioner 's agents. The trial court passed a decree directing that an account be taken of the amount due and appointed a Commissioner for the purpose. In appeal the High Court reversed the decree and dismissed the suit. An application filed by the petitioner for a certificate under article 133 was rejected by the High Court. Upon a petition for special leave to appeal tinder article 136, it was contended on behalf of the petitioner, that the judgment of the High Court involved a claim or question respecting property of a value exceeding Rs. 20,000 and the petitioner was entitled as a matter of right to a certificate from the High Court under article 133(1)(b). HELD : Under cl. (a) what is decisive is the amount or value of the subject matter in the court of first instance and "still in dispute" in appeal to the Supreme Court; under el. (b) it is the amount or value of the property respecting which a claim or question is involved in the judgment sough, to be appealed from. The expression "property" is not defined in the Code, but having regard to the use of the expression " amount" it would apparently include money. The property respecting which the claim or question arises must be property in addition to or other than the subject matter of the dispute. If in a proposed appeal there is no claim or question raised respecting property other than the subject matter, cl. (a) will apply : if there is involved in the appeal a claim or question respecting property of an amount or value not less than Rs. 20,000 in addition to or other than the subject matter of the dispute el. (b) will apply. [754 B E] In, the present case, the claim in the court. of first instance did not reach Rs. 20,000, and therefore a certificate could not be granted under article 133(1)(a). [754 A] It could not be said that a judgment dealing with a claim to money alleged to be due from an agent for price of goods belonging to the principal, sold by the agent, involved a claim or question respecting the goods which had been sold. Furthermore, although the petitioner 's claim on appeal including interest exceeded Rs. 20,000, this was still the subject matter in dispute; the judgment did. not involve any claim or question respecting property in addition to or other than the subject matter of the suit. Article 133(1)(b) was, therefore, also not applicable. [754 G H; 755 A] 752

The petitioner, an Advocate facing trial under section 302 read with section 120 B, I.P.C. submitted that the prosecution case against him was being conducted by a galaxy of lawyers specially engaged by the State on large sums of fee but he did not have the means to engage a competent lawyer for his defence, that no lawyer of sufficient standing would find it possible to appear as amicus curiae on a fee of Rs. 24 per day fixed by the Delhi High Court; that while article 22(1) of the Constitution comprehends the right of an accused to be supplied with a lawyer by the State, under article 39 A, as a matter of processual fair play, it is incumbent on the State to provide him with a counsel on a basis of equal opportunity; and therefore, the respondent should be directed to give financial assistance to him to engage a counsel of his choice. Counsel for respondent contended that the petition under article 32 was not maintainable and that the remedy of the petitioner was to make an application under sub section (1) of section before the Court of Sessions. During the pendency of the petition the Court passed interim orders asking the petitioner to inform the Court of Sessions the name of the counsel who would be appearing for him and directing the State to make necessary arrangements for payment of the amount required to be expended on his fees. Dismissing the petition, ^ HELD (a) The petitioner is not entitled to the grant of writ of Mandamus for the enforcement of the Directive Principle enshrined in article 39 A by ordaining the respondent to give financial assistance to him to engage a counsel of his choice on a scale equivalent to, or commensurate with, the fees that are being paid to the counsel appearing for the State. As is clear from the terms of article 39 A, the social objective of equal justice and free legal aid has to be implemented by suitable legislation or by formulating schemes for free legal aid. [986 C E] (b) The traditional view expressed by this Court on the interpretation of article 22(1) that "the right to be defended by a legal Practitioner of his 983 choice" could only mean a right of the accused to have the opportunity to engage a lawyer and does not guarantee . an absolute right to be supplied with a lawyer by the State, has now undergone a change with the introduction of article 39 A in the Constitution, the enactment of sub section (1) of section and the later pronouncement of this Court. Read with article 21, the Directive Principle in article 39 A has been taken cognizance of by the Court to lead to certain guidelines in the administration of justice. One or these is that when the accused is unable to engage a counsel owing to poverty or similar circumstances, the trial would be vitiated unless the State offers free legal aid for his defence to engage a lawyer, whose engagement the accused does not object. [986 F H, 987 A C] Janardun Reddy & Ors. vs The State of Hyderabad & Ors. ; ; Powell vs Alabama, ; ; Maneka Gandhi vs Union of India, (1978) 2 S.C.R. 621; E.P. Royapa vs State of Tamil Nadu, ; ; R.D. Shetty vs The International Airport Authority of India & Ors., ; ; Keshavanand Bharti vs Union of India, (1973) 4 S.C.C. 225; M.H. Hoskot vs The State of Maharashtra, ; ; State of Haryana vs Darshana Devi & Ors. ; ; Hussainara Khatoon & Ors. vs Home Secretary, State of Bihar, Patna, ; ; Betts vs Brady, ; and Gideon vs Wainright, 9th L.Ed. 2D 799 referred to. In the instant case the remedy of the petitioner is to make an application before the Additional Sessions Judge for grant of free legal aid and if the latter is satisfied that the requirements of sub section (1) of section are fulfilled, he may make necessary directions in that behalf. The Additional Sessions Judge shall fix the amount of fee payable to Counsel appearing for the petitioner having regard to the interim orders passed by this Court. But if he feels that he is bound by the constraints of the rules framed by the Delhi High Court prescribing scales of remuneration for empanelled lawyers, he shall make a reference to the High Court and the High Court shall consider whether the scales of remuneration prescribed for empanelled lawyers appearing in Sessions trials are not grossly insufficient and call for a revision. The High Court has ample power to fix a reasonable amount as fee payable to counsel appearing for the petitioner in the facts and circumstances of the present case. In case the amount so fixed is lower than the scales of fee fixed by this Court by its interim orders, the excess amount paid to the petitioner in terms thereof shall not be recoverable. [990 A, 991 A F]

The appellant, who was a Ruler of a former Indian State, had money dealings with the respondent. They referred their disputes to an arbitrator who made his award directing the appellant to pay. a certain sum of money, in installments. The award also stated that the existing documents relating to debts on lands would remain as before and would remain as securities till the payment of debts The arbitrator filed the award into court and the court, after notice to the parties passed a decree in terms of a compromise modifying the award. The respondent started execution proceedings and the court passed a prohibitory order under O.XXI, r. 46 of the Civil Procedure Code, 1908, in respect of the sums payable to the appellant by the Central Government on account of the privy purse; but on the application of the appellant, that order was vacated. The appellant and respondent filed appeals in the High COurt, against the various orders, and the High Court decided all the appeals against the appellant. In the appeal to the Supreme Court, it was contended that, (i) as the award affected immovable property of the value of more than Rs. 100, and was not registered, a decree could not be passed in terms the award, (ii) the proceedings under the Indian , were incompetent in the absence of the consent of the Central Government under sections 86(1) and 87B of the Code, and therefore the decree passed in those proceedings was without jurisdiction and void and (iii) the amount receivable by the appellant as his privy purse was a political pension within the meaning of section 60(1)(g) of the Code, and not liable to attachment or sale in execution of a decree. HELD: (i)The award did not create or of its own force declare any interest in any immovable property and since it did not come within the purview of section 17 of the , was not required to be registered. [(204 H] (ii) A proceeding under section 14 read with section 17 of the , for the passing of a judgment and decree on an award, does not commence with a plaint or a petition in the nature of a plaint, and cannot be regarded as a suit and the parties to whom the notice of the filing of the award is given under section 14(2) cannot be regarded as "sued in any Court otherwise competent to try the suit" within the meaning of section 86.(1) read with section 87B of the Code. Neither are those provisions of the Code attracted by reason of section 41(a) of the or section 141 of the Code. It follows that the COurt was competent to entertain the proceedings under section 14 of the and pass a decree in those proceedings though no consent to the institution of the proceedings had been given by the Central Government. [205 G H; 206 B D] 202 (iii) The amounts of the privy purse of the appellant were not liable to attachment or sale in execution of the respondent 's decree. [209 C D] The periodical payment of money by the Government to a Ruler of a former Indian State as privy purse on political considerations and under political sanctions and not under a right legally enforceable in any municipal court is strictly a political pension within the meaning of section 60(1)(g) of the Code. The privy purse satisfies all the essential characteristics of a political pension, and as such is protected from execution under section 60(1) (g). [209 A C]

A single Judge of the Calcutta High Court, on an oral application made in his chamber on behalf of a person professing to be respondent No. 1, and on giving an oral undertaking to make a written application within 4 days, issued an interim order directing maintenance of status quo in regard to an auction of a liquor shop held in favour of the appellant. The said order did not make any attempt to indicate even briefly the facts, the question of law, if any, raised before the Judge and the reasons which prompted him to make such an interim order. On receiving the information about the said order, the appellant contacted the High Court and got the information that the subsequent writ petition filed by respondent No. I under Article 226 would be taken up for orders at 2. 30 p.m. On 3. 4. 1984. While the representatives of the appellant and their advocate were wailing in the court, they came to know that the matter had been mentioned in the chamber of the learned Judge who had earlier granted stay and that the order of statues quo had been extended until further orders. The appellant told the learned Single Judge that they were waiting in the Court and . were not informed that the matter was going to be mentioned in his chamber and in view of this they requested the learned Judge to reconsider his order. But, the Judge declined to do so. There upon the appellant filed a Writ Appeal. The Writ Petition filed by respondent No. I along with the Writ Appeal of the appellant were heard together by a Division Bench which set aside the auction and directed that a fresh auction be held on 19th April 1984. Aggrieved by the said order, the appellant has filed the present appeal. Disposing of the appeal, ^ HELD: There is hardly any justification for the entertainment of an oral application and the issuance of an interim order with no record whatever of what was submitted to the court of the reasons for the order made by the court. To permit a procedure by which oral applications may be made and internal orders obtained without any petition in writing, without any affidavit having been sworn to as prima facie proof of allegations and without any record before kept before the court may lead to very serious abuse of the process of the court. Therefore, this Court expresses its disapprobation and forbids the 25 practice of entertaining oral applications by any court in matters of consequence A without any record before it. [29E G] (2) This Court does not mean to suggest that oral application may never be made. Often during the course of the hearing of a case it becomes necessary to make applications of a formal nature and such application are permitted by the Presiding Judge. But in all such cases the court is already seized of the principal matter or dispute and there is a record pertaining to it before the 13 court. Again, this Court does not mean to suggest that other urgent oral applications may never be made. If urgent interim orders are imperative, at least skeletal applications setting out the bare facts and the questions invoked should be insisted upon. A detailed application could be permitted to be filed later. If the matter is so urgent as not even to brook any insistence upon a written application, the judge should at least take The trouble and the care to record in his order the facts mentioned to him and the submissions made to him. It is essential that there be a contemporaneous record. Otherwise the court ceases to be a court of record. [29G H; 30A B] (3) A sitting in chambers could be held when both sides are represented and the sittings are held openly so that members of the public, if they desire to attend, may have access even in the chamber. To grant interim orders on oral applications in chambers when the judge is otherwise sitting in open court for other matters would seriously reflect on the fairness of the procedure adopted by the courts and may have the unpleasant effect of undermining public confidence in courts. A public hearing is one of the great attributes of a court, and courts of this country are therefore required to administer justice in public. Otherwise, there is a risk that justice may even be undone. It is not 'as a matter of policy but as a matter of law ' that The hearing of a cause be public except in the limited class of cases. That rule was violated by the learned Single Judge in this case. [3lE;H; 32A.B] Naresh Shridhar Mirajkar & ors. vs State of Maharashtra PC 246 referred to.

The appellant, the respondent and four other candidates contested the election to a legislative assembly from a constituency reserved for Scheduled Castes. While the respondent was declared elected, the appellant secured the next highest number of votes and the difference in the number of votes secured by them was only 373. The appellant challenged the election of the respondent on the ground that the result of the election had been materially effected by the improper acceptance of the nomination of a third candidate who had secured 6710 votes. The Election Tribunal arrived at the finding that the candidate in question was not a member of the Scheduled Castes and hence is nomination had been improperly accepted, but nevertheless, refused to set aside the election of the respondent on the ground that the result of the election had not been shown to have been materially affected as a result of the improper acceptance of the nomination. Allowing the appeal, ^ HELD: Under section 100(1)(d) of the Representation of the People Act, 1951, the election of a returned candidate shall be declared to be void if the High Court is of the opinion that the result of the election, in so far as it concerns the returned candidate, has been materially affected by the improper acceptance of any nomination and the burden of establishing the same is on the person impeaching the election. Where the candidate whose nomination was improperly accepted has secured a larger number of votes than the difference between the number of votes secured by the successful candidate and the candidate securing the next highest number of votes, there is a possibility that a sufficient number of votes actually cast for the candidate whose nomination was improperly accepted might have been cast for the candidate who secured the highest number of votes next to the successful candidate so as to upset the result of the election. In such a situation, the answer to the question whether the result of the election could be said to have been materially affected must depend on the facts, circumstances and reasonable probabilities of the case. If the number of votes secured by the candidate whose nomination was improperly accepted is disproportionately large as compared with the difference 967 between the votes secured by the successful candidate and the candidate securing the next highest number of votes and if the votes secured by the candidate whose nomination was improperly accepted bears a fairly high proportion to the votes secured by the successful candidate, the reasonable probability is that the result of the election has been materially affected and one may venture to hold the fact as proved. [968 F G; 969 D F] Under the Evidence Act, a fact is said to be proved when after considering the matters before it, the Court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. If having regard to the facts and circumstances of a case, the reasonable probability is all one way, a court must not lay down an impossible standard of proof and hold a fact as not proved. [969 G H] In the instant case, the candidate whose nomination was improperly accepted had obtained 6710 votes, that is, almost 20 times the difference between the number of votes secured by the successful candidate and the candidate securing the next highest number of votes. Further, the number of votes secured by the candidate whose nomination was improperly accepted bore a fairly high proportion to the number of votes secured by the successful candidate it was a little over one third. In such a situation the result of the election may safely be said to have been affected. [969 H; 970 A B] Vashist Narain Sharma vs Dev Chandra, [1955] S.C.R. 509; and Samant N. Balakrishna vs George fernandes; , ; explained and distinguished.

The election of the respondent, who was returned to the Lok Sabha in a bye election in 1981, was challenged by the appellant under section 80 of the Representation of the People Act, 1951, on a number of grounds, including the allegations of corrupt practice of undue influence, hiring and procuring of vehicles for carrying voters and obtaining the assistance of Government servants and incurring expenses at the elec tion in excess of the permissible limit. Upon a preliminary objection raised by the respondent the High Court struck off the pleadings as vague, general, unnecessary, frivolous and vexatious within the meaning of Order VI Rule 16 of the Code of Civil Procedure and rejected the petition under Order VII Rule 11 read with section 87 of the Act on the ground that it did not disclose any cause of action. In the appeal under section 116 A of the Act against the order of the High Court, it was contended for the appellant that the High Court had no jurisdiction to entertain prelim inary objections under Order VI Rule 16 or to reject the election petition under Order VII Rule 11 of the Code before the respondent had filed his written statement to the peti tion, which deprived him of the opportunity of amending the petition by supplying material facts and particulars, that allegations contained in various paragraphs of the petition constituted corrupt practices which disclosed cause of action within the meaning of section 100 of the Act and the High Court committed error in holding that the petition was detective, on the premise that it did not disclose any triable issue, and that the election petition disclosed primary facts regarding corrupt practice and 370 if there was absence of any particulars or details the High Court should have afforded opportunity to the appellant to amend the petition. The respondent was subsequently returned to the Lok Sabha in the general election held in 1984 and the validity of that election has been upheld in Azhar Hussain vs Rajiv Gandhi, ; and Bhagwati Prasad vs Rajiv Gandhi, ; The relief of setting aside the impugned election had thus become infructuous by lapse of time as the subsequent election could not be set aside on the grounds raised in the petition. But since section 98 read with section 99 of the Act mandates investigation of charges of corrupt practice, if any, raised against the returned candi date, and as proof thereof entails incurring of disqualifi cation from contesting subsequent election for a period of six years, the Court heard the appeal at length. On the questions: Whether the High Court had jurisdic tion to strike out pleadings under Order VI Rule 16 of the Code of Civil Procedure and to reject an election petition under Order VII Rule 11 of that Code at the preliminary stage, even though no written statement had been filed by the respondent, whether in the instant case in entertaining the preliminary objections and rejecting the election peti tion the High Court deprived the appellant of an opportunity to amend the petition and to make good the deficiencies by supplying necessary particulars and details of the corrupt practices alleged in the petition, and whether the various paragraphs of the said election petition disclosed any cause of action. Dismissing the appeal, HELD: 1.1 Right to contest election or to question the election by means of an election petition is neither common law nor fundamental right, instead it is a statutory right regulated by the statutory provisions of the Representation of the People Act, 1951, which is a complete and self con tained Code. Outside the statutory provisions, there is no right to dispute an election. The provisions of the Civil Procedure Code are applicable to the extent as permissible by section 87 of the Act. [387H 388B] 1.2. The scheme of the Act shows that an election can be questioned under the statute as provided by section 80 on the grounds as contained in section 100. The pleadings are regulated by section 83, which lays down a mandatory provision in providing that an election petition shall contain a COncise statement of material facts and set forth full particulars of 371 corrupt practices with exactitude. [388C] 1.3 Since allegations of corrupt practice are in the nature of criminal charges, it is necessary that each and every corrupt practice must be clearly and specifically pleaded and it should be complete in itself so that the returned candidate may know the case he has to meet. If the allegations are vague and general and the particulars of corrupt practice are not stated in the pleadings the trial of the election petition cannot proceed for want of cause of action. [388DE] N.P. Ponnuswami vs Returning Officer, ; ; Jagan Nath vs Jaswant Singh, ; and Jyoti Basu vs Debi Ghosal, ; , referred to. 2.1 A combined reading of sections 81, 83, 86 and 87 of the Act makes it apparent that an election petition is liable to be dismissed in limine at the initial stage if it does not disclose any cause of action. Cause of action in questioning the validity of election must relate to the grounds speci fied in section 100 of the Act. If the allegations contained in the petition do not set out grounds of challenge as contem plated by section 100 and if the allegations do not conform to the requirement of sections 81 and 83 the pleadings are liable to be struck off under Order VI Rule 16 of the Code of Civil Procedure. If after striking out defective pleadings the Court finds that no cause of action remains to be tried it would be duty bound to reject the petition under Order VII Rule 11 of the Code. [382H, 386A C] Azhar Hussain vs Rajiv Gandhi, ; ; Bhag watii Prasad vs Rajiv Gandhi, ; ; Udhav Singh vs Madhay Rao Scindia, ; and Charan Lal Sahu to. 2.2 In the instant case, the appellant failed to plead complete details of corrupt practices which could constitute a cause of action as contemplated by section 100 of the Act. He also failed to give the material facts and other details of the alleged corrupt practices. The High Court, therefore, rightly exercised its power in rejecting the election peti tion under Order VII Rule 11 of the Code. [401G, 403G H] 3. I Order VI Rule 16 of the Civil Procedure Code per mits striking out of pleadings which are unnecessary, scan dalous, frivolous, or vexatious or which may tend to preju dice, embarrass or delay a fair trial at any stage of the proceedings. It does not admit of any exception that the respondent must file written statement before the 372 preliminary objections could be entertained. If, therefore, a preliminary objection is raised before commencement of the trial, the court is duty bound to consider the same. It need not wait for the filing of the written statement by the defendant and point out defects. Instead it can proceed to hear the preliminary objection and strike out the pleadings. [387BC, 386D, 383AB, CD] 3.2. The High Court, therefore, had jurisdiction in the instant case to strike out pleadings at the preliminary stage even though no written statement had been filed by the respondent. [382CD] K. Kamaraja Nadar vs Kunju Thevar & Ors., , referred to. Union of India vs Surjit Singh Atwal, ; , distinguished. Vidya Charan Shukla vs G.P. Tiwari & Ors., AIR 1963 MP 356 overruled. 4.1 The Court did not deprive the appellant of the opportunity to amend the petition and to make good the deficiencies by supplying the necessary particulars and details of the corrupt practices alleged in the petition. He was free to file amendment application, but at no stage did he express any desire to make any amendment application nor he made any application to that effect before the High Court. It was open to him to have made that application but he himself did not make any such application. [387DE] 4.2 The High Court was under no legal obligation to direct the appellant to amend pleadings or to suo moto grant time for the same. Moreover, the allegations of corrupt practice as required by Section 83 were not complete and did not furnish any cause of action. [387E] 5.1 The petition was drafted in a highly vague and general manner. Various paragraphs of the petition presented disjointed averments and it is difficult to make out as to what actually the petitioner intended to plead. [401H] 5.2 The allegations contained in paragraphs 1 to 7 contain narration of facts as to when the election took place and the petitioner 's desire to file his nomination paper and the obstruction raised by the authorities and the allegation that the police were shadowing the appellant do not make out any ground under section 100 of the Act. [388H] 5.3 The allegation in para 8 that food was given to the workers of the respondent at some places assuming to be true does not make out a 373 case of corrupt practice or any other ground of challenge under section 100 of the Act. A corrupt practice as contemplated by section 123(6) contemplates incurring or authorising expendi ture beyond the prescribed limit. The impugned allegation does not contain any averment that the respondent incurred or authorised expenditure beyond the prescribed limit. [389B D] 5.4 Paras 9 to 19 merely show that a number of vehicles were plying with party flags of the respondent in the con stituency on different dates which by itself do not consti tute any corrupt practice. The basic ingredients to make out a ground for challenging the election under section 100 of the Act in these paras were totally lacking. They, therefore, disclosed no cause of action. [389E G] 5.5 The allegations in paras 20 and 21 that the mother of the returned candidate, who was the Prime Minister, had toured the constituency alongwith him and in her speeches had appealed to the voters to vote for him do not constitute undue influence or any other corrupt practice. It is always open to a candidate or his supporters to appeal to the electors to vote for a particular candidate for the develop ment and progress of the area. This would be a legitimate appeal, [389H 390A] 5.6 The allegations in paras 22 to 26 of the petition relate to the relationship of the appellant with his agent. These do not make out any ground under section 100 of the Act. [390BC] 5.7 The statement in para 27 that the appellant as we11 as his election agent were being followed by police does not refer to any violation of law or rule or commission of any electoral offence by the returned candidate or his workers with his consent. [390C] 5.8 The allegation in para 28 that on the polling day a lady went to the polling booth alongwith a voter where he affixed stamp on ballot paper and returned with her does not amount to any corrupt practice with consent of the returned candidate unless it could be shown that it materially af fected the result of the election. [390D] 5.9 The allegation in para 29 that on the polling day drinking water and batashas were being distributed to the voters at the polling station does not show that it was being done with the consent of the respondent or that he spent money over it or that the said action influenced the voters or that it materially affected the result of the election. In the absence of such allegations it disclosed no cause of action. [390F] 374 5.10 The allegations in paras 31 to 35 that workers of the respondent helped voters to cast their votes in favour of the respondent, do not amount to any corrupt practice unless there was further allegation that it materially affected the result of the election. [390G] 5.11 The averments made in paras 37 and 38 contain narration of facts which have no bearing on any corrupt practice. [391A] 5.12 The allegations in paras 39 to 49 that neither the appellant nor his election agent had appointed any counting agents but a number of persons had acted as his counting agents in an unauthorised manner and that complaints made by him were not considered by the Returning Officer, even if assumed to be true do not make out any case of commission of corrupt practice. [391B] The High Court, was, therefore, justified in striking out all these paragraphs. 6.1 In order to constitute a corrupt practice as contem plated by sections 77 and 123(6) it is necessary to plead requi site facts showing authorisation or undertaking of reim bursement by the candidate or his election agent. A mere vague and general statement that the candidate and his workers with his consent spent money in election in excess of the permissible ceiling would not be sufficient to con stitute corrupt practice. [392G 393A] Rananjaya Singh vs Baijnath Singh, ; ; Smt. Indira Gandhi vs RaI Narain, and Kunwar Lal Gupta vs A.N Chawla, , referred to. 6.2 Any voluntary expense incurred by a political party, well wishers, sympathisers or association of persons does not fail within the mischief of section 123(6), instead only that expenditure which is incurred by the candidate himself or authorised by him is material for the purpose ors. [392B] Dr. P. Nalla Thampy Terah vs Union of India & Ors., [1985] Supp. SCC 189, referred to. 6.3 The allegations contained in various sub paras of para 50 merely allege that a number of vehicles were plying with the flags of the party to which the returned candidate belonged and food was served in connection with the election meetings, distribution of badges and 375 leaflets. There is no allegation that the returned candidate incurred or authorised incurring of expenditure for the aforesaid purposes. Unless the allegations are specific that the candidate or his election agent authorised the expenses before the money was actually spent and that the candidate or his election agent reimbursed or undertook to reimburse the same the necessary ingredient of corrupt practice would not be complete and it would provide no cause of action to plead corrupt practice. The High Court was justified in striking out the same. [393G 394A] 7.1 If some developmental activity was carried on in the constituency and if it was completed during the election period it could not amount to any gift or promise to the voters. [394G] 7.2 The allegation in para 53(1)(A) does not disclose any material fact or particular regarding the alleged cor rupt practice of making gift which may amount to bribery within the meaning of section 123(1)(A). It merely states that Amethi railway station was being constructed and during the election its work was speeded up which persuaded the voters to cast their votes in favour of the returned candidate. There is no allegation that ,he returned candidate or his workers with his consent made any gift, offer or promise to any elector to vote or refrain from voting at an election. [394EF] 8.1 A candidate, his workers and supporters have every right under the law to canvass for the success of a particu lar candidate saying that if elected he would work for the development of the constituency. Such a promise does not in any way interfere with the free exercise of electoral right of the electors. [395E] 8.2 The allegations in paras 53(1)(B) and (C) that the returned candidate, his mother and their workers with their consent made promise through newspapers, pamphlets and speeches that voters should cast their votes in favour of the respondent for the sake of progress and development of the constituency, merely amounts to a representation being made by the party leader and the returned candidate and his workers. Such a statement of promise is a legitimate one and it does not fail within the definition of bribery and undue influence under section 123(1)(A) or section 123(2). [395B, D] 8.3 Declaration of public policy or a promise of public action or promise to develop the constituency in general do not interfere with free exercise of electoral rights as the same do not constitute bribery or undue influence. [396B] 376 Shiv Kirpal Singh vs V.V. Giri, [1971] 2 SCR 197 and H.V. Kamath vs Ch. Nitiraj singh; , , referred to. 9.1 Hiring or procuring of a vehicle by a candidate or his agent or by any other person with his consent is the first essential ingredient of the corrupt practice under section 123(5), the second such ingredient is that the hiring or procuring of the vehicle must be for conveyance of the voters to and from the polling station, and the third that conveyance of electors is free from any charge. If any of the three ingredients is not pleaded to make out a case of corrupt practice under section 123(5) the charge must fail. [397E, 399C] 9.2 The allegations contained in para 30 and 53(1)(D) conspicuously do not contain any pleading regarding hiring and procuring of the vehicles by the returned candidate or any of his workers with his consent for conveyance of the voters to and from polling station free of cost. No particu lars of any kind have been ' specified. The paras, therefore, do not make out any charge of corrupt practice as contem plated by section 123(5) and the High Court was justified in striking out the same. [399G 400A] Joshbhai Chunnibhai Patel vs Anwar Beg A. Mirza, ; ; Ch. Razik Ram vs Ch. J.S. Chouhan & Ors., ; Balwant Singh vs Lakshmi Narain, ; ; Dadasaheb Dattatraya Pawar & Ors. vs Pandurang Raoji Jagtap & Ors., ; ; Dharmesh Prasad Verma vs Faiyazal Azam, ; ; Rajendra Singh Yadav vs Chandra Sen & Ors., AIR 1979 SC 882 and Balwan Singh vs Prakash Chand & Ors., ; , referred to. 10.1 In order to constitute a corrupt practice under section 123(7), it is essential to clothe the petition with a cause of action which would call for an answer from the returned candidate and it should, therefore, plead mode of assist ance, measure of assistance and all facts pertaining to the assistance. The pleading should further indicate the kind or form of assistance obtained and in what manner the assist ance was obtained or procured or attempted to be procured by the candidate. for promoting the prospect of his election. The petitioner must state with exactness the time of assist ance, the manner of assistance and the persons from whom assistance was obtained or procured by the candidate. [400DE] 10.2 The allegations in sub paras 1, 2 and 3 of para 53(1)(E) that though the appellant had not appointed any counting agent but still 377 certain persons acted as his counting agents and the return ing officer did not hold any inquiry into his complaint, in sub para 4 that there was fear psychosis and it looked as if the police and other government officials wanted to help the returned candidate, in sub para 5 of certain persons helping the voters to cast their votes on the polling day and that some persons cast votes 100 to 200 times and their signa tures were not obtained do not make out any charge of cor rupt practice within the provisions of section 123(7). [400FG] 11. The allegations in para 53(2) that the presiding officers did not perform their duties in accordance with law inasmuch as they failed in their duty to remove the posters and other propaganda material from the polling booth and that the election symbol of the returned candidate was displayed within 100 metres of the polling booth in viola tion of the rules do not make out any charge of corrupt practice. If at all, it could be a ground under section 100(1)(d)(iv) for setting aside election on the ground of its being materially affected but no such plea was raised. [401EF] 12. The allegation in para 52 that the returned candi date had polled cent per cent votes in his favour in certain villages of the constituency do not make out any corrupt practice or any ground of challenge under section 100 and it was rightly struck off by the High Court. [394B] 13. Order VI Rule 17 of the Code of Civil Procedure permits amendment of an election petition but the same is subject to the provisions of the Act. Section 81 prescribes a period of 45 days from the date of the election for pre senting election petition calling in question the election of the returned candidate. After the expiry of that period no election petition is maintainable and the High Court or this Court has no jurisdiction to extend the period of limitation. An order of amendment permitting a new ground to be raised beyond the time specified in section 81 would amount to contravention of these provisions and is beyond the ambit of section 87 of the Act. A new ground cannot, thus, be raised or inserted in an election petition by way of amendment after the expiry of the period of limitation. [402CD] In the instant case, the election petition was presented to the Registrar of the High Court on the last day of the limitation. The amendments claimed by him are not in the nature of supplying particulars instead those seek to raise new grounds of challenge. Various paras of the election petition which are sought to be amended do not disclose 378 any cause of action. Therefore, it is not permissible to allow amendment after expiry of the period of limitation. [402A, E] 14.1 Court should not undertake to decide an issue unless it is a living issue between the parties, for if an issue is purely academic in that its decision one way or the other would have no impact on the position of the parties, it would be waste of public time to engage itself in decid ing it. [380D] Sun Life Assurance Company of Canada vs Jervis, , referred to. 14.2 Election is the essence of democratic system and purity of elections must be maintained to ensure fair elec tion. Election petition is a necessary process to hold inquiry into corrupt practice to maintain the purity of election. But there should be some time limit for holding this inquiry. [381E] 14.3 Parliament should consider the desirability of amending the election law to prescribe time limit for in quiry into the allegations of corrupt practice or to devise means to ensure that valuable time of this Court is not consumed in election matters which by afflux of time are reduced to mere academic interest. [381D]

Appeal No. 354 of 1957. Appeal from the judgment and decree dated October 7, 1955, of the Patna High Court in Misc. Judicial Case No. 422 of 1954. L. K. Jha, D. P. Singh., R. K. Garg, M. K. Ramamurthi and section C. Agarwala, for the appellants. B. K. P. Sinha and A. G. Ratnaparkhi, for respondent. September 22. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal by the State of Bihar challenges the correctness of an order made by the High Court at Patna in an application by the respondent under article 226 of the constitution. The respondent was inducted as a tenant oil a tract of land measuring 245.69 acres in village Singpur by the then proprietor in November 1945, and continued to remain in possession after the Zemindari interest of the proprietor became vested in the State of Bihar in consequence of a notification under the Bihar Land Reforms Act (Bihar Act XXX of 1952) on the 30th December, 1952. In 1945 this area was forest land. On September 15, 1946, a notification was published under section 14 of the Bihar Private Forest Act, 1946 declaring the Government 's intention of constituting the forest a private protected forest. By the same notification the Governor further ordered that until the publication of a notification under a. 30 of the Act all the rights to out, collect and remove trees or any class of trees in or from the forest shall cease to exist subject to conditions and specifications specified in the Second Schedule. The result of this notification was that immediately on its publication in the Government Gazette the respondent 's right to cut, collect and remove trees 729 ceased so long as this forest continued to be a private forest. On the 6th April, 1948, a notification under the proviso to section 30 of the Bihar Private Forest Act, was published. After the forest land became vested in the State on the 30th December, 1952, there was a notification on January 22, 1953, which both parties agree, was in substance under the proviso to section 29 of the . It is the common case of both the parties that in consequence of this notification the forests in Singpur Village became a protected forest. On May 29, 1953, a further notification under section 30 of, the was made prohibiting the breaking up or clearing the ,land of this and certain other "protected forests" for cultivation. As local employees of the Forest Department acting under the Divisional Forest Officer, Gaya, started interfering with the agricultural operations carried on behalf of the petitioner apparently on the strength of this notification of May 29, 1953, the respondent sought the per mission of the Collector of Gaya to start reclamation and cultivation of lands. On April 22, 1954 the Collector of Gaya gave the petitioner permission "to go ahead with the work of reclamation and cultivation in this area. " The Forest Officer however disregarded the Collector '& orders and made the petitioner to stop: reclamation. On being approached by the appellant the Collector called upon the Forest Officer to furnish an explanation as to why he had flouted deliberately the Collector 's orders. Ultimately, the Bihar Government sent a telegram to the Collector, Gaya, on June 10, 1954 desiring that the order issued by the Collector on April 22, permitting the respondent "to go ahead with the reclamation should be withdrawn pending the decision of the Government in the matter". The Collector forwarded a copy of this telegram to the respondent for information and necessary action on June 11, 1954. 730 It does not appear that any further order has been made by Government in the matter. On August 2, 1954 the respondent made his application to the High Court of Judicature at Patna praying that an appropriate writ be issued for cancellation by the Government of Bihar of the directions given on June 10, 1954 to the Collector and for restraining the Government of Bihar and the Forest Officer from interfering with the petitioner 's possession over this land in village Singpur. The petitioner 's case was that the forest having become a protected forest under Chapter IV of the the Collector was the proper and competent authority to give permission to clear or break up for cultivation, land in this forest under Rule 8 of the rules made by the Government of Bihar in exercise of the power conferred by section 32 of the and that neither the Forest Officer nor the Government of Bihar itself could in law interfere with what he was doing on the strength of that permission. In opposing the petition the State of Bihar contended that the Collector 's order was of no avail in the face of rule 4 of the rules made by the Government of Bihar under section 32 which provides that " 'no person shall out, convert, or remove from the said forest or otherwise deal in trees etc., of the forest" except in accordance with Rules I, II and III. At the hearing of the petition it was further argued on behalf on the State that the right of the petitioner to the land in dispute had been extinguished under section 19 of the Bihar Act IX of 1948, on the publication of a notification by the Government of Bihar under the proviso to section 30 of that Act. The High Court rejected this argu ment, being of the opinion that extinction could take place only when the final notification under section 30 was published and as this final notification was not published section 19 had no application 731 to the case. The High Court also held that in a case where a Collector grants permission under Rule 8 of the 1 Bihar Protected Forest Rules the Divisional Forest Officer had no power to interfere by virtue of Rules 1,to 4 of the same Rules. Accordingly the High Court allowed the petition and made an order quashing the State Government 's order conveyed in their telegram of the 10th June and the order of the Forest Officer dated the let May, by which this Officer had prohibited reclamation of the disputed land by the petitioner. In this Court, Mr. Jha raised both the points on which the petition was resisted before the High Court, viz., (1) that the petitioner 's right to the land had ceased under section 19 of the Bihar Private Forests Act and (2) that, the order passed by the Forest Officer on the basis: of Rule 4 of the Bihar Protected Forests Rules should prevail over the permission granted by the Collector under r. 8. Mr. Jha 's first contention on the first point was that when a notification is made under the proviso to section 30, no further notification under section 30 need be made at all. In our opinion, there is no force in this contention. The provisions of the Bihar Private Forests Act, 1947 in respect of private Protected Forests are contained in Chapter II of the Act. The scheme of these provisions is that the State Government on being satisfied that it is necessary in the public interest to apply the ' provisions of the chapter to any private forest, may constitute such forest a protected. forest in the manner laid down; the first step that has to be taken is the issue of a notification under section 14 declaring that it is proposed to constitute a forest a private protected forest and calling for objections ' of all landlords whose interests are 'likely to be, affected. The hearing of objections is provided for in section 15, sub section 3 of which section further provides that if no objection is presented or when objection is so ' presented and 732 finally disposed of the Government may issue a notification declaring its decision to constitute the area a private forest and appointing an officer "to enquire into and determine the existence, nature and extent of any rights other than landlord 's rights, alleged to exist in favour of any person in or over any land in the forest". Section 16 provides that on the issue of such a notification under sub section 3 of s.15 the Forest Settlement Officer shall publish a proclamation fixing a period of not less than three months from the date of such proclamation for claims to be made by all persons as regards rights other than landlord 's rights. Section 17 empowers the Forest Settlement Officer to enquire into all claims preferred in response to the notification and also into the existence of any rights mentioned in sub s.3 of section 15 and not claimed under a. 16. Section 22 of this Chapter deals with the procedures for dealing with claims of forest contractors and grantees. Section 23 provides that in the case of claim to a right in or over any land other than a right of way or right of pasture or a right to forest produce or water course the Forest Settlement Officer shall pass an order admitting or rejecting the same in whole or in part subject to the provisions of sections 25 and 26. Section 27 gives a right of appeal to any person who has made a claim under section 16 or section 22 against the order passed by the Forest Settlement Officer under as. 22, 23, 24 or 26. Section 30 provides for the final action to be taken by the Government in the matter of constituting a private protected forest. The main portion of the section is in these words: "Where the following events have occurred, namely, (a) the period fixed under section 16 for preferring claims has elapsed and all claims, if any, made under sections 16 and 22 have been disposed of by the forest settlement officer, and 733 (b) if any such claim has been made, the period limited by section 27 for appealing from the orders passed on such claims has elapsed, and all appeals (if any) presented within such period have been disposed of by the appellate officer, the State Government shall publish a notification in the Official Gazette specifying. definitely according to boundary marks erected or otherwise,. the limits of the forest which is to be constituted a private protected forest, and declaring the same to be a private protected forest, from the date fixed by the notification and from the date so fixed such forest shall be deemed to be a private protected forest". It is followed by a proviso in the following words: "Provided that, if in the case of any forest in respect of which a notification under section 14 has issued, the State Government consider that the inquiries, procedure and appeals referred to in this Chapter will occupy such length of time as to cause undue delay in the forest being declared a private protected forest, such delay, in the opinion of the State Government being prejudicial to the public interest, the State Government may, pending the completion of the said enquiries, procedure and appeals, declare by a notifica tion containing the particulars specified in this section, such forest to be a private forest". It is abundantly clear that the notification under the proviso is not intended to amount to a final constitution of the private forest as a private protected forest. The notification under the proviso is to be made only ,pending the completion of the said enquiries procedure and appeals". Quite clearly, these enquiries, procedure and appeals are not stopped the declaration under the proviso. They have to 734 be completed and it is only after their completion that a notification ban be made by the Government under the main part of the section. , On a reasonable reading of the section it is therefore abundantly clear that even where the: Government thinks fit to make a declaration under the proviso, this will have effect only so long as the period fixed under section 16 for preferring, claims (i) has not expired;, (ii) claims under ss.16 and 22 have not, been disposed of, (iii) the periods limited by section 27 for appealing from the orders passed in respect of those claims have not elapsed; and (iv) all appeals preferred against such orders have been disposed of. Turning now to section 19 of this Chapter we find it laying down that "rights (other than landlord 's rights) in respect of which no claim has been preferred under section 16 and of the existence of which no knowledge has been acquired by enquiry under section 17, shall be extinguished, unless before the noti fication under section 30 is published, the person claiming them satisfies the Forest Settlement Officer that he had sufficient cause for not preferring such claim within the period fixed under section 16. " The appellant 's argument is that the words "notification under section 30 is published" includes a notification made under the proviso to that section and that consequently when a notification under the proviso to section 30 has been published all rights other than landlords rights, in respect of which no claim has been preferred and of the existence of which no knowledge has been acquired by an enquiry under section 17, shall be extinguished. This argument is in our opinion wholly unacceptable. Considered in the background of the provisions in the Act for claims to be made under section 16, for enquiry into these by the Forest Officer and thereafter for appeals from the decision of the Forest Officer, after the completion of all of which only 'the final notification constituting the private forest a private protected 'forest can be 735 made, it is clear that rights "other than landlord 's rights" in respect of which no claim has been preferred under a. 16 or which have not been disclosed by enquiry under section 17 were intended by the legislature to be extinguished only after the final notification is made. It is to be noticed that three months ' time from the date of the proclamation under section 16 is to be allowed for making claims. The enquiry under section 17 can start only after these claims have been made and some more time must elapse before an enquiry can be completed into the existence of rights which have not been claimed under section 16. A notification under the proviso of section 30 can however be made at any time after the notification under section 14 has issued. It is meaningless to speak of rights in respect of which no claim has been preferred under s.16 and of the existence of which no knowledge has been acquired by an enquiry under section 17, before the period for the enquiry under section 17 has expired. Again, there will be no extinction of rights. under section 19, if the person claiming the rights, satisfies the Forest Settlement Officer that he hid sufficient cause for not preferring the claim within the period fixed under section 16. The question of thus satisfying the Forest Settlement Officer can clearly not arise before the period fixed under section 16 has expired. All this clearly shows that the extinction of rights under section 19 can take place only after the final notification under section 30 has been published. It is necessary to consider next the apparent conflict between the powers of the Officers of the Forest Department under rr. 1 to 4 and the powers of the Collector under r. 8 of the Protected Forest Rules. Under r. 1 persons who are bona fide residents of Khasmahal lands may cut, convert and remove to their homes for their own domestic use certain trees but the Forest Officer can in his discretion withdraw this privilege Certain other trees as specified in the Rule may 736 be out by such bona fide residents with the previous permission of the Forest Officer. Under r. 2 the Forest Officer may by an order in writing authorise in certain circumstances villagers of adjacent villages also to cut and remove trees mentioned in r. 1. Rule 3 provides that the Divisional Forest Officer may grant license to any inhabitant of a town or village in the vicinity of a forest to take trees, timber, or other produce for his own use to any person whatsoever authorising him to fell or remove trees for the purpose of trade on payment of fees at current rates as may be sanctioned by the Chief Conservator of Forests. Rule 4 on which special reliance is placed on behalf of the State is in these words : "No person shall cut, convert or remove from the said forest or otherwise deal with any trees, timber or other forest produce of the said forest. . except as provided in Rules 1, II and III. Rule 8 under which the Collector gave permission runs thus : "No land in the said forest shall be cleared or broken for cultivation or any other purpose without the written permission of the Collector". There is an apparent conflict here between the provisions of r. 4 and r. 8 ; for, while under r. 4 no cutting, conversion or removal of trees can be made except under license issued under r. 3 or permission granted by the Forest Officer under r. 2 or under the provisions of r. 1, all this can be set at naught if a written permission is granted by the Collector for clearing or breaking up the land for cultivation or any other purpose necessarily involving the cutting and removal of trees. On behalf of the appellant State Mr ' Jha argued that r. 8 has no operation so long as trees are standing and it is only if trees have been cut or removed under the provisions of rr. 1, 2 and 3 and only stumps of those trees are standing that the Collector can give permission for clearing the forest land or breaking it up for cultivation. We are unable to persuade ourselves that in making 737 these rules the Government intended to give such limited authority only to the Collector. It is obvious that while Rules 1, 2, 3 and 4 were made under clauses a, b, c and d of section 32, Rule 8 has been made under clause g of section 32 which is for the definite matter of "clearing and breaking up of land for cultivation or any other purpose" in a protected forest. The reasonable way of reading Rules 1 to 4 and Rule 8 appears to us to be that Rules 1 to 4 apply to the cutting or removal of trees where in spite of such cutting the forest would continue to be a forest; but cutting of trees which is necessary for clearing the land for cultivation or any other purpose is not controlled by Rules 1, 2, 3 or 4 but only by Rule 8. That seems to us to be the only way of harmonious construction of Rules 4 and 8 and that must, in our opinion, have been intended by the rule making authority. In the present case therefore when the tenant on the land asked for permission to clear the land for cultivation and it was this clearing which involved the cutting and removal of trees Rules 1 to 4 had no application and Rule 8 under which the Collector acted applied. It may be mentioned here that though Rule 8 is in the negative form, it is what has been called a pregnant negative, saying on the one hand that land in the forest may be cleared or broken for cultivation or any other purpose with the written permission of the Collector and on the other hand that without such permission no such clearing or breaking up for cultivation or any other purpose shall take place. The permission given in the present case by the Collector was therefore in accordance with law and neither the Forest Officer nor the Government had any authority in law to interfere with that permission. The last argument advanced by Mr. Jha is that the prohibition by the State Government of clearing or breaking up for cultivation or for any other purpose of any land in a protected forest by the notification dated May 29, 1953, under section 30 of 738 the India Forest Act, 1927, must prevail over the permission, given by the Collector. It is to be noticed that whereas section 30 empowers the State Government inter alia to prohibit such breaking up or clearing for cultivation of any land in a protected forest, section 32 empowers the State Government to make rules to regulate inter alia "the clearing and breaking of land for cultivation or any other purpose" in a protected forest. Even if the legislature had said nothing else in this matter, it would have been plausible to argue that the prohibition under the notification would yield before any permission given under the Rules under a. 32. All doubts are however set at rest by section 34 of the Act which runs thus : "Nothing in this Chapter shall be deemed to prohibit any act done with the permission in writing of the Forest Officer, or in accordance with rules made under section 32, or except as regards any portion of a forest closed under section 30, or as regards any rights the exercise of which has been suspended under section 33, in the exercise of any right recorded under section 29". It follows clearly and necessarily from section 34 that the prohibition by notification of the clearing of land would be ineffective where such clearing is being made in accordance with Rule 8 of the Rules made under section 32. All the contentions raised in the appeal therefore fail. We are of opinion that there is no legal authority for the State Government to interfere with the clearing or cultivation of land by the respondent which is proposed to be done in accordance with the written permission granted by the Collector under Rule 8 of the Protected Forest Rules, 1953. It appears that through some oversight the High Court ordered the issue of a writ of certiorari, though a writ in the nature of mandamus was 739 prayed for. It is clear that the appropriate writ in the circumstances of the present case is a writ in the nature of mandamus and we modify the order made by the High Court to this extent that a writ in the nature of mandamus be issued directing the appellant Government to cancel its order on the Collector made on June 10, 1954 and restraining the Government and the Forest Officer from inter fearing with the petitioner 's possession over 245.69 acres of land in village Singpur which he possesses as tenant. The appeal is dismissed with costs. Appeal dismissed.

The respondent was the tenant of a tract of land which formed part of a forest and continued to remain in possession thereof after the Zermindari interest of the proprietor became vested in the State Government under the Bihar Land Reforms Act, 1952. The Government notified its intention to constitute the forest a private protected forest and by a subsequent notification under section 30 of the Indian Forest Act prohibited the breaking up or cleaning the land of this and certain other "protected forests" for cultivation whereupon the employees 'of the Forest Department started interfering with the agricultural operations carried on by the respondent. The respondent then sought the permission of the Collector to start reclamation and cultivation of this area and the Collector gave him permission to "go ahead with the work of reclamation and cultivation of this area. " The forest officer disregarded the Collector 's order and made the respondent stop reclamation. Ultimately the Government interfered insisting on the withdrawal of the Collector 's order. The questions which arose for decision in this case was whether (1) the order passed by the Forest officer on the basis of rule of the Bihar Protected Forest Rules,which prohibited the cutting or removal of trees without the permission of the Forest Officer should prevail over the permission granted by the Collector under r. 8 and (2) whether the respondent 's right to the land had ceased under section 19 of the Bihar Private Forests Act. Held, that rr. 1 to 4 apply to the cutting or removal of trees where inspite of such cutting the forest would remain a forest but those rules did not control the cutting of trees which would be necessary for clearing the land for cultivation or any other purpose which was controlled only by r. 8. In the present cast the permission given by the Collector under r. 8 was in accordance with law and neither the Forest Officer nor the Government had any authority in law to interfere with that permission for the clearing or cultivation of the land. The extinction of rights under section 19 of the Act could take place only after the publication of the final notification 728 under section 30 and not by a notification under the proviso thereof pending the completion of enquiries under the provisions of the Act.

The plaintiff respondent claimed that before the U.P. Zamindari Abolition and Land Reforms Act, 1950 came into force, his father was a sub tenant under defendants 3 to 25 and after his father 's death, the other 3 sons separated from the plaintiff and consequently he has become the sole tenant. According to him, his father was recorded occupant of Khasra 1356 Fasli (1.7.1948 to 30.6.1949) and was in cultivatory possession in Khasra 1359 Fasli (1.7.1951 to 30.6.1952) as a result of which he had acquired adhivasi rights and sirdari rights, and the rights of defendants 3 to 25 extinguished under section 240 A of the said Act. He alleged that in 1968, defendants I and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the said land and started interfering with his possession. He, therefore, filed a suit for permanent injunction. The suit was contested by some of the defendants who pleaded that neither the plaintiff nor his father was in possession of the said land at any point of time and there was no question of sub tenancy or acquiring of adhivasi/sirdari rights. The trial court dismissed the suit. The appeal preferred by the plaintiff respondent was dismissed by the first appellant court. The trial court as also the first appellate court held that the respondent was not entitled to become an adhivasi under section 20(b)(i) of the Act since his father died in 1951 before the date of vesting i.e. 1.7.1952. Both the courts also held that his father was not in cultivatory possession of Khasra 1359 Fasli and, therefore, he could not get adhivasi rights under section 3 of the U.P. Land Reforms (Supple 165 mentary) Act, 1952. It was also held that there was no contract or sub tenancy in the name of his father. The plaintiff respondent preferred an appeal before the High Court which allowed the appeal and granted a decree reversing the decision of the courts below. Aggrieved, the appellants have flied the present appeal contending inter alia that since there were concurrent findings of facts by the trial court and the first appellate court, and in the absence of any substantial question of law, the High Court had no jurisdiction under section 100 C.P.C. to disturb the concurrent findings of facts. Dismissing the appeal, this Court, HELD: 1. Section 100(1)(c) of the Code of Civil Proce dure refers to a substantial error or defect in the proce dure. The error or defect In the procedure to which the clause refers is not an error or defect in the appreciation of evidence adduced by the parties on the merits. Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded inconsequence is grossly erro neous, that cannot be said to introduce a substantial error or defect in the procedure. If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure. When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure. So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequent matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision. [168H; 169A C] Madan Lal vs Gopi, ; relied on. V. Ramachandra Ayyar & Anr. vs Ramalingam Chettiar & Anr., AIR 1963 SC 302 referred to. Section 20(b)(1) of the Act eliminates enquiries into possession in accepting the record in the Khasra. In the instant case the Khasra entry for 1356 Fasli showed that the appellant 's father was the subtenant. It is not for the appellant to prove that this entry Is incorrect. It was for the defendants to show that the entry had been introduced 166 surreptitiously out of ill will of hostility. In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the appellant 's father. The Khasra entry of 1371 Fasli and 1372 show the appellant 's name as person in possession. It is clear indication that possession of the sub tenant con tinued with the appellant. The rent receipts of the year 1929 and subsequent years are not required to be proved by the appellant as pointed out by the learned Judge. These furnish evidence of possession as sub tenant. The lower appellate court was not justified in ignoring these docu ments. The High Court was, therefore, well within its power in appreciating the evidence and arriving at its own conclu sion. [170B, E G] Amba Prasad vs Abdul Noor Khan & Ors., ; and Nath Singh & Ors. vs The Board of Revenue & Ors., ; relied on. Though the revenue courts had exclusive jurisdiction, the civil court had jurisdiction to try the suit for injunc tion when the question of title arose only incidentally. [171B] 4. The High Court was right in holding that the appeal did not abate on account of non filing of substitution application after the death of certain defendants. [170H] The State of Punjab vs Nathu Ram, ; relied on.

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 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.

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.

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.

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.

% A piece of land had been purchased for the construction of a five star hotel. In the sanctioned development plan the said land was shown in the residential zone and a contiguous parcel of land was shown as green belt. When the plan was submitted to the Municipal Corporation for the construction of a five star hotel, the Commissioner rejected the plan on the ground that it was proposed to earmark the said land as a recreational ground with suitable internal network of roads during the revision of the development plan which was in the offing. Aggrieved by the rejection, an appeal was preferred to the State Government under sec. 47 of the Maharashtra Regional and Town Planning Act, 1966. The appeal was heard by the Minister of State for Urban Development. The appellants herein, members of various ecological groups and rate payers of the Municipal Corporation, appeared and opposed saying that the land should be kept reserved for a green belt or recreational ground in the interest of the general public. However, the Minister set aside the order of the Municipal Commissioner and directed the sanctioning of the plan on certain conditions. The Municipal Corporation accepted the appellate order and did not challenge it. But the appellants filed a Writ Petition challenging the legality of the order. The writ petition was dismissed by the High Court. The present appeal by special leave is against this dismissal. Meanwhile the Municipal Corporation passed a resolution extending the park reservation by including the remaining area of the land in question. By another resolution the first resolution was modified limiting the reservation for the park to 7,000 sq. yards out of the dis 920 puted land. Thereafter the State Government exempted the disputed land under section 20 of the Urban Land (Ceiling and Regulation) Act, 1976. The resolutions and the order were challenged in the High Court. The petitions were dismissed by a Single Judge of the High Court and later by the Division Bench on appeal. The Review Petitions also met the same fate. The petitioners have not challenged the judgment of the High Court passed on the review applications, but filed before this Court the two special leave petitions challenging the legality and validity of the two resolutions and the order of Government giving exemption under section 20 of the Urban Land (Ceiling and Regulation) Act. Dismissing the appeal, and the special leave petitions, this Court, ^ HELD: 1.1 In allowing the appeal and directing sanction of the development plan, the Minister observed that in view of the clear provisions of sections 46 and 31(6) of the Act and having regard to the position that in the sanctioned plan of 1966, the said land was included in the residential zone and no proposal to exclude it therefrom in the draft revised development plan had been published, the Municipal Commissioner was not justified in rejecting the application for approval of the plan on the ground that the Bombay Municipal Corporation had decided to revise the 1966 Development Plan. The Minister was of the view that the Planning Authority could only take into consideration any draft or final plan or proposal which had been published by means of notice, or sanctioned under the Act. When Municipal Commissioner rejected the plan, there was no draft revised development plan in existence. It was in contemplation. If there had been such a plan, the Municipal Commissioner would be entitled to rely upon the same in rejecting the plan. The Commissioner was not justified in merely relying upon a proposal for the preparation of a draft revised plan. An order rejecting a development plan submitted by the owner of the land should be supported by some concrete material. In the absence of any such material, it will be improper to reject the plan on the ground that there is a proposal for revision of the draft plan or that such a revision is under contemplation. Therefore, the ground for rejecting the plan was not tenable and the appellate authority was justified in allowing the appeal. [923H; 924A B, H; 925A C] 1.2 The Municipal Corporation has, subsequent to the judgment of the High Court, prepared and published a draft revised development plan. The plan is not inconsistent with the draft revised development plan. There is no material on record to show that the Municipal Corporation which is the Planning Authority, had prepared the draft revised 921 plan in accordance with the direction of the Minister. The Minister has acted in public interest by imposing the conditions. The conditions would show that considerable area out of the disputed land has been reserved for recreational ground or green belt. The plan, as sanctioned with the conditions imposed, has been shown in the draft revised plan. It was open to the Municipal Corporation to accept the verdict of the appellate authority and it has done so by not challenging it in the High Court or before this Court. [926E H] 2. The contention of the petitioners against the validity of the resolution is no longer tenable, regard being had to the fact that the draft revised development plan has since been published and the plan submitted and conditioned by the Minister is not inconsistent with the draft revised plan. The petitioners have also not seriously pressed the validity of the said resolution. [928C D] 3. This Court is not called upon to decide the legality or otherwise of the order granting exemption. These have been considered by the High Court in its judgment disposing of the review applications. The petitioners have not challenged the judgment on review applications. The petitioners are only interested in seeing that sufficient area is kept reserved for a park or recreation ground for the benefit of the members of the public, and are not concerned with the question as to the legality or otherwise of the exemption granted by the Government. The question whether or not sufficient quantity of land has been kept reserved for park and recreation ground has been adequately considered and taken into account by the High Court. [928G H; 929A]

Appeals Nos. 408 to 410 of 1960. Appeals from the judgment and order dated September 11, 1958, of the Madras High Court in Writ Petition Nos. 384 of 1957 and 660 of 1958. WITH Criminal Appeals Nos. 38, 126 and 123 of 1959. Appeals by special leave from the judgments orders dated May 16, 1958, June 19, 1959 and April 14, 1959, of the Punjab High Court in Criminal Revisions Nos. 290 of 1958 and 144 of 1959 and Criminal Appeal No. 677 of 1958 respectively. AND Civil Appeal No. 511 of 1960. Appeal from the judgment and order dated March 20, 1959, of the Bombay High Court (Bench) at Nagpur in Special Civil Application No. 322 of 1958. AND Petition No. 118 of 1958. Petition under article 32 of the Constitution of India for ' enforcement of Fundamental Rights. C. K. Daphtary, Solicitor General of India, H. J. Umrigar and P. M. Sen, for the appellant in 790 C. As. Nos. 408 and 409 of 1960 and respondent in C. A. No. 410 of 1960. N. A. Palkhivala, section R. Vakil, R. J. Joshi. section J. Sohrabji, J. B. Dadachanji, section N. Andley, Rameshwar Nath, and P. L. Vohra, for the respondents in C. As. Nos. 408 and 409 of 60 and appellant in C. A. No. 410 of 1 960. R. section Narula, for the appellant in Cr. A. No. 38 of 59. C. K. Daphtary, Solicitor General of India, N. section Bindra and D. Gupta, for the respondent in Cr. A. No. 38 of 1959. T. M. Sen, for Intervener No. 1 in Cr. A. No. 38 of 59. K. N. Keswani, for intervener No. 2 in Cr. A. N o. 38 of 59. R. section Narula and R. L. Kohli, for the appellant in Cr. A. No. 126 of 1959. C. K. Daphtary, Solicitor General of India, H. J. Umrigar and D. Gupta, for the respondent in Cr. A. No. 126 of .1959. N. C. Chatterji, section K. Kapur and Ganpat Rai, for the, appellant in Cr. A. No. 126 of 1959. A. section Bodbe, Shankar Anand and Ganpat Rai, for the appellant in C. A. No. 511 of 1960. C. K. Daphtary, Solicitor General of India, H. J. Umrigar and T. M. Sen, for the respondent in ,C. A. No. 511 of 1960. section Venkatakrishnan, for the petitioner in Petn. No. 118 of 1958. C. K., Daphtray, Solicitor General of India, H. J. Umrigar and R. H. Dhebar, for the respondents in Petn. No. 118 of 1958. September 25. The Judgment of the Court was delivered by AYYANGAR, J. The (Act 8 of 1378) (referred to hereinafter as the 'Act), 791 was amended by section 14 of Act 21 of 1955 by the introduction of section 178A reading: "178A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. (2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigarettes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf. (3) Every notification issued under Sub section (2) shall be laid before both Houses of Parliament as soon as may be after it is issued. " It is the constitutional validity of this section that is the common point which arises in these several cases which have been heard together. We have heard on the merits only Civil Appeals 408 to 410 of 1960 and the other cases were posted before us in order that Counsel appearing for the parties in them,. might have an opportunity to be heard upon the common question mentioned earlier. We shall, therefore, refer only to the fact,% of Civil Appeals 408 to 410 of 1960 in dealing with these petitions. Civil Appeals 480 to 410: These appeals come before us on a certificate granted by the High Court of Madras under Arts.132(1) and 133(1)(c) of the Constitution and are directed against the judgment and order of the High Court in two Writ Petitions filed before it by Nathella Sampathu Chetty the sole proprietor of a business in gold and silver, bullion, jewellery etc. carried on in the name of Nathella Sampathu 792 Chetty & Sons (referred to hereafter as the respondent). The facts giving rise to these appeals are briefly as follows : On the morning of June 26, 1956, one Nandgopal an employee of the respondent alighted at the Central station in Madras from the Bombay Express. Nandgopal was intercepted and questioned by a Head Constable of the State Police Service attached to the Prohibition Intelligence Department. Nandgopal admitted that he was in possession of gold which he was bringing for his firm the respondent from Bombay. The Head Constable immediately contacted the officers of the Preventive Section of the Customs Department who were on duty at the Central station who interrogated Nandgopal and Eeized from him four blocks of gold weighing in all about 1,000 tolas. Enquiries were made to verify the story narrated by Nandgopal as to the source from which he obtained the gold and thereafter the Collector of Customs being prima facie of the view that the gold seized had been smuggled, issued notice to the respondent to show cause why the said gold should not be confiscated. The respondent offered his explanation but the Collector held that the respondent had not discharged the onus of proving that the gold was not smug led an onus Customs Act and directed the confiscation of the gold. The respondent thereupon filed a petition (Writ Petition 384 of 1957) under article 226 of the Constitution before the High Court of Madras for the issue of a writ of certiorari or other appropriate writ for quashing the order of the Collector of Customs on various grounds to which we shall advert later, including the constitutional validity of a. 178A. While this writ petition was pending, the respondent filed another petition (,Writ Petition 660 of 1958) for a writ of mandamus directing the Collector to return the gold seized and confiscated by him. 793 The two writ petitions were heard together and by an order dated September 11, 1958, the learned Judges of the High Court held, allowing Writ Petition 384 of 1957, that section 178A of the was void under article 13 of the Con stitution. They further held that even if section 178A were valid, the condition precedent for invoking the rule as to the burden of proof prescribed by the section had not been complied with, in that the customs officer who effected the seizure which preceded the adjudication did not entertain "a reasonable belief that the gold was smuggled", with the result that the order of confiscation was invalid. Besides, the learned Judges were also of the view that section 178A of the could not be invoked in adjudicating a contravention of a notification under the Foreign Exchange Regulation Act which imposed restrictions on the import of gold. Though on these conclusions the order of the Collector confiscating the gold was set aside, the learned Judges held that the respondent was not entitled to an order for the return of the gold, but only to a direction to the Collector to hear and determine the question about the gold seized being smuggled gold without reference to the rule as to onus of proof enacted by section 178A. The appellant, the Collector of Customs, Madras, obtained leave from the High Court under articles 132 and 133 of the Constitution, to appeal to this Court against the orders in writ petition No. 384 of 1957 and No. 660 of 1958 (Civil Appeals 408 and 409) and a similar order was passed in an application for a certificate by the respondent who felt aggrieved by the refusal of the Court in Writ petition No. 660 of 1958 to direct an immediate return of the gold seized (Civil Appeal 410). The three appeals have been consolidated as they arise out of the same transaction. We shall first take up for consideration Civil Appeals 408 and 409 of 1960 filed by the Collector of Customs, because unless those appeals fail there would be no need to decide the relief to which the 794 respondent would be entitled in Civil Appeal 410 of 1960. In order to appreciate the contentions, raised, it would be necessary to set out the statutory provisions which form the background of the impugned provision section 178A of the . The Foreign Exchange Regulation Act, 1947 (Act ' 7 of 1947), was brought into force on March 25, 1947, by a notification issued by the Central Government under section 1(3) of that Act. The preamble to the Act recites: "It is expedient in the economic and financial interests of India to provide for the regulation of. the import and export of currency and bullion. " Section 8 of this Act refers to the import of gold the commodity with which these appeals are concerned. It enacts: "8(1). The Central Government may, by notification in the official Gazette, order that subject to such exemptions, if any, as may be contained in the notification, no person shall except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign, Explanation. The bringing or sending into any port or place in India of any such article as aforesaid intended to be taken out of India without being removed from the ship of conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into India of that article for the purposes of this section. " Gold is defined in section 2(f) of this Act thus: " 'gold ' includes gold in the form of Coin, whether legal tender or not, or in the form of bullion or ingot, whether refined or 'not and 795 Jewellery or articles made wholly or. mainly of gold. " These provisions have to be read in conjunction with the provisions of the which form, as it were, integrated provisions in relation to the import and export of, among other commodities, gold, and section 23A of the Foreign Exchange Regulation Act which was introduced by an amendment of 1952 effects this co ordination. This section reads: "23A. Without prejudice to the provisions of section 23 or to any other provision contained in this Act the restrictions imposed by sub sections (1) and (2) of section 8, subsection (1) of section 12 and clause (a) of sub sec tion (1) of section 13 shall be deemed to have been imposed under section 19 of the , and all the provisions of that Act shall have effect. accordingly, except that section 183 thereof shall have effect as if for the word shall ' therein the word "may ' were substituted. " Turning now to the . section 167(8) enacts "167. The offenses mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offenses respectively: Section of this Act to Offenses which off Penalties ence has re ference. If any goods, 18 & 19 Such goods the importation of shall be liable which is for the to confiscation; time being prohi and bited or restricted 796 by or under Chapter any person concerned IV of this Act, be in any such offence imported into or shall be liable to a exported from India penalty not exceeding Contrary to such three times the value prohibition or res of the goods, or not triction; or exceeding one thousand rupees. if any attempt be made so to import or export any such goods; or if any such goods be found in any package produced to any officer of Customs as containing no such goods; or if any such goods or any dutiable goods, be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in India; or if any goods, the exportation of which is prohibited or restricted as aforesaid, be brought to any wharf in order to be put on board of any vessel for exportation contrary to such prohibition or restriction, 797 Section 19 referred to here reads "19. The Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any customs frontier as defined by the Central Government. " The other provisions which have a bearing upon the points arising for discussion with reference to the validity of the impugned section 178A of the are : "section 178. Any thing liable to confiscation under this Act may be seized in any place, in India either upon land or water, or within the Indian Customs waters, by any officer of Customs or other person duly employed for the prevention of smuggling. " "Is. When anything is seized, or any person is arrested, under this Act, the officer or other person making such seizure or arrest shall, on demand of the person in charge of the thing so seized, or of the person so arrested, give him a statement in writing of the reason for such seizure or arrest." "section 182. In every case, except the cases mentioned in section 167, Nos. 26, 72 and 74 to 76, both inclusive, in which, under this Act, anything is liable to confiscation or to increased rates of duty; or any person is liable to penalty, such confiscation, increased rate of duty or penalty may be adjudged (a) without limit, by a Deputy Commissioner or Deputy Collector of Customs, or a Customs collector; (b) up to confiscation of goods not exceeding two hundred and fifty rupees in value and imposition of penalty or increased 798 duty, not exceeding one hundred rupees, by an Assistant Commissioner or Assistant Collector of Customs; (c) up to confiscation of goods not exceeding fifty rupees in value, and imposition of penalty or increased duty not exceeding ten rupees, by such, other subordinate officers of customs as the Chief Customs authority may, from time to time, empower in that half in virtue of their office: Provided that the Chief Customs authority may, in the case of any officer performing the duties of a Customs collector, limit his powers to those indicated in clause (b) or in clause (c) of this section, and may confer on any officer, by name or in virtue of his office, the powers indicated in clauses (a), (b) or (c) of this section." "183. Whenever confiscation is authorized by this Act, the officer adjudging it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit. " Immediately the Foreign Exchange Regulation Act came into force in March, 1947, a notification was issued on March 25., 1947, under section 8(1) placing a ban on the importation of gold except with the permission of the Reserve Bank. This notification was superseded and replaced by a fresh one dated August 25, 1948, also issued under the powers conferred by sub section (1) of section 8 of the Foreign Exchange Regulation Act and this is the notification which continues in force up to this date and which is relevant to the proceedings against the respondent. The notification ran: "(1) Restrictions on import of gold and silver. In 1 exercise of the powers conferred by 799 sub section 1 of section 8 of the Foreign Exchange Regulation Act, 1947 (Act 7 of 1947) and in supersession of the notification of the Government of India in the late Finance Department No. 12(11) FI/47, dated the 25th March 1947, the Central Government is pleased to direct that except with the general or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India (a) any gold coin, gold bullion, gold sheets or gold ingot whether refined or not; or (b) any silver bullion. . It would be noticed that on the law as it stood upto 1952 before section 23A was inserted in the Foreign Exchange Regulation Act, the importation of gold in contravention of the notification of August 1948 issued under section 8(1) of the Foreign Exchange Regulation Act would have been an importation contrary to section 19 of the , with the result that any person concerned in the act of importation would have been liable to the penalties ,specified in the third column of section 167(8) and the imported gold would have been liable to confiscation under the opening words of that column. The gold being "a thing" liable to confiscation could have been seized by any officer of the Customs under section 178 of the with an obligation on the officer effecting the seizure to give to the person from whom the gold was seized a "statement in writing of the reason for such seizure" (section 181). Thereafter the officers specified in section 182 would have adjudged the confiscation of these goods subject to the option mentioned in section 183 with the modification to this provision enacted by section 23A of the Foreign Exchange Regula tion Act. It would further be manifest that at that date before the gold seized was liable to be dealt with under the third, column of a. 167(8) by 800 an officer adjudicating on the matter under section 182, the burden of proving that the gold was smuggled lay upon the department and unless the adjudging officer who was acting quasi judicially was reasonably satisfied on that point, the confiscation or the imposition of the penalty could not have been ordered. The effect of the imposition of the severe restrictions on the import of gold into this country by the notifications under the Foreign Exchange Regulation Act with a view to defend and conserve the economy of the country in conjunction with the circumstance that the internal production of gold was very little, resulted in a great disparity between the price of gold in India and outside India i.e., in the international markets. This naturally gave a great incentive to smuggling which besides depriving the State of its revenue, also posed a grave threat to national economy. It is only necessary to add that gold was not the only commodity which gave rise to this problem. But as these appeals are concerned with gold, we are confining our examination to that article. Taking these matters into account the Taxation Enquiry Commission, which submitted its report to the Government of India in 1954, recommended a tightening of the law in order effectively to prevent smuggling. After dealing with the administrative problems in regard to the levy and enforcement of Customs duties in Ch. VII of the report the Committee recommended inter alia the amendment of the so as "(1) to make smuggling a criminal offence, and (2) to transfer the onus of proof in respect of offenses relating to smuggling to the person in whose possession any dutiable, restricted or prohibited goods are found. " In pursuance of these recommendations the was mended by Act 21 of 1955 and 801 among others section 178A whose terms we have set out, was introduced into it. As the question of the constitutionality of section 178A has been the subject of elaborate consideration in a few decided cases to which reference was made during the arguments. we consider that it would be convenient if we deal with them before setting out and discussing teh precise grounds on which the challenge to the validity of the provision was rested before us. Very soon after a. 178A was enacted its constitutional validity was challenged by an original petition filed in this Court (Petition 98 of 1956)Babulal Amthalal Mehta vs The Collector of Customs) Calcutta (1).The goods involved in the case were diamonds. Four hundred and seventy five diamond pieces which had been seized from the petitioner, were directed to be confiscated holding them to be smuggled, by the application of the burden of proof laid down in is. The validity of the confiscation was challenged before this Court on the ground that 3. 178A was unconstitutional as being violative of Art.14 of the Constitution and the contention was rejected. It has been urged by the learned Solicitor General, for the appellant, that the points regarding the constitutional validity of B. 178A raised in the present appeal are concluded in his favour by this judgment. We shall, therefore, have to examine the exact scone of this decision in detail which we shall do later, but for the present it is sufficient to state that the case dealt mainly with an objection based on a violation of article 14 of the Constitution which the following extract from the head note would indicate: "Section 118A of the which places the burden of proving that any of the goods mentioned in the section and reasonably believed to be smuggled are not really so on the person from whose possession (1) 802 they are_ seized, is nor,, discriminative in character and does not violate equal protection of law guaranteed by Art.14 of the Constitution". The validity of the section was next attacked before. the High Court of Bombay in a Writ Petition filed under article 226 of the Constitution on the ground that it violated article 19(1)(f) and (g) of the Constitution . M. G. Abrol vs Amichand(1). The article involved, in that case was gold which had been seized from the petitioner and directed to be confiscated by an adjudicating officer under section 182 of the . The case came up for hearing before K. T. Desai, J., and the learned Judge held that section 178A was unconstitutional as being an unreasonable restriction on the citizens ' right to hold property and to trade and also that even assuming the provision to be constitutionally valid, the requirements of the section had, not been complied with in the case before him inasmuch as the seizing officer had not at the moment of seizure, "reasonable belief that the gold seized was smuggled". The next decision in order of date is that of the Bench of the Madras High Court dated March 11, 1957, which is now under appeal before us in Civil Appeals 408 to 410 of 1960. The reasoning of the learned Judges of the Madras High Court is on the same lines as that of K.T. Desai, J., in the judgment just now referred '. Subsequently the Nagpur Bench of the Bombay High Court had to consider the same question and their decision is reported in Pukhraj Champalal Jain vs D. R. Kohli (2). There the learned Judges dissented from the decision of K. T. Desai, J., in M. G. Abrol vs Amichand (1) and of the Madras High Court in Nathella Sampathu Chetty vs The Collector of Customs(&). It may be mentioned that the arguments of the learned Solicitor General on behalf of the appellant were in substance the reasoning on which the decision of the Nagpur Bench rests. To complete (1) at p. 1046, (2) (1959) 61 Bow. L.R. 1230, (3) A I.R. , 803 the narrative it is only necessary to add that an appeal was preferred by the Customs authorities from the decision of K. T. Desai, J. The appeal [however was dismissed on the ground that even if section 178A were valid as held by that Court previously, its terms were not attracted to the particular case, because of the non fulfilment of an essential condition requisite for the application of the section [See M. G. Abrol vs Amichand (1)]. We shall now proceed to deal with the points Urged by learned Counsel for the respondent in support of his plea that the impugned provision violates the fundamental right to hold property under article 19(1)(f) and the right to carry on trade or business under article 19(1)(g) and was not saved by cls. (5) & (6) respectively of article 19. Before we do so, however, it is necessary to advert to the points upon which learned Judges have, in the judgment under appeal. allowed the petition of the, respondent, because in deciding these appeals we have necessarily to pronounce upon them also. Besides holding a. 178A of the which was called in aid by the Collector of Customs to direct the confiscation of the gold seized to be unconstitutional and therefore void under article 13, the learned Judges also upheld two further contentions urged on behalf of the respondent in support of their petition : (1) that section 178A was not attracted to the determination of a question raised in relation to the confiscation of an article imported in contravention of a notification under section 8(1) of the Foreign Exchange Regulation Act, (2) that section 178A required as a pre condition of its applicability, that the goods which were the subject of adjudication must have been seized ",in the reasonable belief that they are smuggled goods" and that in the instant case the Customs Officer effecting the seizure did not or could not entertain such a belief. We consider it Would be convenient if we deal with these two points after examining the constitutional validity of section 178A. (1) 804 Before embarking on this enquiry it is necessary to deal with the argument of the learned Solicitor General that every point about the constitutional validity of section 178A is concluded in his favour by the judgment of this Court in Babulal Amthalal Mehta vs The Collector of Customs, Calcutta (1). we have already extracted the head note of the report in the Supreme Court Reports which would appear to indicate that this Court considered only the impact of article 14 of the Constitution on the provision. Nevertheless, there are some passages in this judgment, which would be immediately referred to on which reliance was placed by the learned Solicitor General in support of his contention that this judgment is an authority for the position not merely that section 178A does not violate article 14 but that it impliedly. if not expressly decides that the restriction imposed by it on the right to hold property or to engage in the business of dealing in gold was a reasonable restriction within article 19(5) & (6) of the Constitution. We will quote these passages in order to examine whether this contention is made out. That judgment after setting out a summary of the provisions of the relating to seizure, the adjudication of confiscation, the imposition of penalties, appeals from the orders of the Customs authorities to the higher revenue authorities and the terms of section 178, proceeds: "No doubt the content and import of the section are very wide. It applies not only to the actual smuggler from whose possession the goods are seized but also to those who came into possession of the goods after having purchased the same after the same has passed through many hands or agencies. For example, if the Customs authorities have a reasonable belief that certain goods in the possession of an innocent party are smuggled goods and the same is seized under the provisions of this Act, then the person from whose possession (1) [1957] S.C.R.1110. 805 the goods were seized, however innocent he may be, has to prove that the goods are not smuggled articles. This is no doubt a very heavy and onerous duty cast on an innocent possessor who, for aught one knows, may have bona fide paid adequate consideration for the purchase of the articles without knowing that the same has been smuggled. The only prerequisite for the application of the section is the subjectivity of the Customs officer in having a reasonable belief that the goods are smuggled. " This passage is followed by an examination of the matters with reference to article 14 expressing the opinion that the petition did not show in what manner there had been a violation of that Article, and the judgment continues: "But Mr. Chatterjee argues that the burden of proof enunciated therein is opposed to fundamental principles of natural justice, as it gives an unrestricted arbitrary and naked power to the customs authorities without lay ing down any standard or norm to be followed for exercising powers under the section. . It is a heavy burden to be laid upon the shoulders of an innocent purchaser who might have come into possession after the article has changed many hands and this, it is alleged, invokes discrimination between him and other litigants and deprives him of the equal protection of the law guaranteed by article 14 of the Constitution. A large number of cases have been cited at the Bar in support of the respective contentions of the parties. " This is followed by a citation from the decisions of this Court in which the scope and content of article 14 were discussed and in particular a passage in the judgment in Budhan Chaudhury vs The State of Bihar(1) where, the principle that article 14 (1) ; , 1048 1049. 806 does not forbid classification on a reasonable and rational basis is extracted. The judgment proceeds: " A cursory perusal of section 178A will at once disclose the well defined classification of goods based on an intelligible differentia. It applies only to certain goods described in sub a. (2) which are or can be easily smuggled. The section applies. only to those goods of the specified kind which have been seized under the Act and in the reasonable belief that they are smuggled goods. It is only those goods which answer the threefold description that come under the, operation of the section. The object of the Act is to prevent, smuggling. The differentia on the basis of which the goods have been classified and the presumption raised by the section obviously have a rational relation to the object sought to be achieved by the Act. . . The impugned section cannot be struck down on the infirmity either of discrimination or illegal classification. " We are therefore satisfied that the decision of this Court considered the validity of section 178A only with reference to article 14 and that it is not a decision regarding the impugned legislation being or not being obnoxious to article 19(1)(f) & (g). It is only necessary to add that at the beginning of the discussion, Govinda Menon, J., specifically points out that he was not considering any attack on section 178A based on an infringement of article 19(1)(f) & (g), for 'he said : "Though Mr. Chatterjee faintly argued that the provisions of article 19(1)(f) & (g) and article 31 of the Constitution had been violated, he did not seriously press those contentions. The main point of the attack was centered on the contention that section 178A was violative of principles of equal protection of the laws guaranteed under article 14 of the Constitution. " 807 We cannot accept the further submission either that, even if this Court did not in terms consider the validity of section 178A with reference to article 19 (1) (f) & (g), still the reasoning by which it rejected the contention that it violated article 14 would be sufficient to cover the former also. No doubt, there are situations when the points regarding a violation of Art; 14 and an objection that a restriction is not reasonable so as to conform to the requirements of article 19(5) or (6) may converge and appear merely as presenting the same question viewed from different angles. Such, for instance, are cases when the denial of equality before the law is based on the ground that the power vested, say, in an administrative authority to affect rights guaranteed to a citizen is arbitrary, being unguided or uncanalised. The vesting of such a power would also amount to the imposition of an unreasonable restriction on the exercise of the guaranteed right to trade or carry on a business etc. Where however, there is guidance and the legislation is challenged on the ground that the law with the definite guidance for which it provides has out stepped the limits of the Constitution by imposing a restraint which is either uncalled for or unreasonable in the circumstances, the scope and content of the enquiry is far removed from the tests of conformity to rational classification adopted for judging whether the law has contravened the requirement of equal protection under article 14. It is therefore necessary for us to consider whether section 178A is obnoxious to the rights guaranteed by article 19(1)(f) & (g) which is the ground upon which the section has been held unconstitutional by the judgment of the Madras High Court under appeal. We have already set out what one might term the historical background and the surrounding circumstances ' which necessitated the enactment of this provision. As already indicated, since the commodity with which the present appeals are concerned is gold, we are referring to that in particular, though the circumstances attendant on the 808 other commodities referred to in section 178A might be similar. As pointed out I already, the disparity between the internal and external price of gold became, by 1948, so great a" to provide considerable incentive to smuggling by making it very profitable. This as, assisted by the very long coast line which India has, coupled with the extensive land frontiers both on the east as well as on the west ignoring for the moment the very small pockets of foreign territory within the subcontinent. Notwithstanding the efforts of the Customs authorities and the Preventive Staff of that department, a considerable volume of the yellow metal did 'seep into the country and efforts had therefore to be made to tighten the law in this regard. It was in pursuance of this endeavour that section 178A was introduced into the in 1955. Ex facie, the impugned provision enacts a rule of evidence and the ratio underlying it is not far to seek,. and it is that the person in possession of the gold would, with certainty in most cases, be in a better position to prove that it was legally within the country than the Customs authorities. In this connection reference may be made to the observations by Lord Goddard, C. J., in B. vs Fitzpatrick (1). Speaking of section 259 of the V. K. Customs Consolidation Act, 1876, which enacted "If in any prosecution in respect of any goods seized for non payment of duties, or any other cause of forfeiture, or for the recovering any penalty or penalties under the Customs Acts, any dispute shall &rise whether the duties of customs have been paid in respect of such goods, or whether the same have been lawfully imported or lawfully unshipped, or concerning the place from whence such goods were brought, then and in every such case the proof thereof shall be on the defendant in such prosecution." (1) , 772. 809 the learned C. J. said "The onus is put on the defendant when there is a dispute in the proceedings whether duty has been paid or whether the goods were lawfully imported. The obvious reasons for this provision is that the facts must be within the knowledge, and often within the exclusive knowledge of the defendant. If, for instance, it is found that he has dealt in prohibited goods, if he can show that he acquired them in the ordinary course of business obviously he would not be guilty of dealing in them with intent to avoid the prohibition. He can prove the positive and, unless he had to undertake the proof, the Crown would generally have to undertake the proof of a negative. Mr. Palkivala, learned Counsel for the respondent, stated that if the impugned section, section 178A, had contented itself with laying down the principle enunciated in the above observations of Goddard, C. J., he would not contend that it was an unreasonable restraint on the citizen 's rights to hold property or on his right to do business guaranteed by article 19 (1) (f) & (g). His submission, however, was that the burden cast upon the person from whom gold were seized transcended the limits of what that person could reasonably be called on to prove and that as the burden cast by section 178A was impossible of being discharged, it amounted not to a law laying down a rule of evidence, but operated virtually to effect a confiscation of the property of a citizen without affording him any real opportunity to establish his right to it. To appreciate properly this argument about the real effect of the provision it is necessary to set out a few facts relating to gold as an article of trade in this country. Learned Counsel on either side agreed that the matters stated in relation to gold and the trade in gold referred to in the following *sage in the judgment of K. T.Desai, J., 810 correctly sums up the position. The learned Judge summarised the position thus: "It is common knowledge that India produces very little gold and that most of the gold available in India is imported gold. A statement has been put in by consent showing the official figures of India 's imports and exports of gold from 1851 to 1956. it shows a net import in the country, after deducting exports, of 353 crores and three lakhs worth of gold. Restrictions on the import of gold were for the first time introduced in India by Finance Department (Central Revenues) Notification No. 53, dated September 4, 1939. By that notification the Central Government in the exercise of the powers conferred by s.19 of the prohibited the bringing or taking by sea or land into British India from any place other than Burma or out of British India to any Place other than Burma gold coin, gold bullion or gold ingots, whether refined or not, except on the autho rity of a licence granted in that behalf by the Reserve Bank of India Till April 1, 1946, gold remained duty free. Thereafter duty was levied on the import of gold bullion, gold plate, gold manufactures etc Gold besides being a store of value, is anarticle of adornment and investment. It is capable of being split and there can be a fusion of diverse quantities of gold. It is easily changeable in form size and shape. The gold available in the market hardly bears any identification mark. It is impossible for person looking at gold to say whether duty has been paid thereon or not or 'whether it has been smuggled. It is precisely the difficulty experienced by the the customs officers with the whole machinery of Government at their disposal in proving that the gold has been smuggled which is itself made a reason for throwing the burden upon the citizens 811 to establish that the gold is not smuggled. Gold an such has no earmark. It is impossible to identify gold in the possession of a person with the gold mentioned in the Bill of Entry of any importer of gold. . Gold has been imported through centuries into this country and it is virtually impossible for a person to establish that any particular quantity of gold in his possession was the gold imported in, the country at a particular time without resort to smuggling. The proof required presupposes the existence of gold in an identifiable form from the time of its import to the time of its ultimate sale to the person from whose possession the same has been seized." Mr. Palkivala, learned Counsel for the respondent, explained to us the special features attaching to gold as a commodity and as a store of value, and of the difficulties, if not impossibility, of identifying one piece of gold from another in the absence of a requirement of marking, and basing himself on this :factual position submitted six grounds in support of his contention that the restriction imposed by section 178 A was unreasonable and we shall deal with these points in the same order : (1) Section 178A, no doubt, on its face purports to be a rule of evidence, but in reality is not so. The purpose of the enquiry by the adjudicating officer is to find out whether the gold seized from a person had been smuggled, and in such an enquiry the fact to be proved, viz., that the gold had been smuggled is statutorily established not as an inference from. basic facts, which would indicate the smuggled character of the Gold seized, but from the mere belief of the seizing officer that the gold seized was smuggled, (2) It was said on the other side that the requirement in section 178 A that the officer seizing the gold must entertain " 'a reasonable belief" that the gold was smuggled provided an adequate safeguard 812 to the person affected which would render the restriction imposed reasonable within cls. (5) & (6) of article 19. This argument is untenable. If the reasonable belief was a matter for the subjective satisfaction , of the seizing officer, as seems to be implied from the observations of this Court in Babulal Amthalal Mehta vs The Collector of Customs, Calcutta (1), it provides no safeguard at all for the person from whom the gold is seized. Even if, on the other hand, the test is objective, in the sense that at the stage of the adjudication under section 182 the grounds upon which the belief was entertained could be the subject matter of enquiry it furnishes no safeguard either, because the "reasonableness" of the belief regarding the smuggled character of the gold would have to be judged by the adjudicating officer with reference to the information which the seizing officer had at the moment of seizure, and that information must necessarily have been obtained behind the back of the person from whom the gold had been seized and before the officer commenced any enquiry to ascertain the truth or otherwise of the information conveyed to him, (3) There is no reasonable or rational connection between the fact to be proved, viz. ' that the gold was smuggled and the fact from which such an inference is permitted to be drawn by the impugned provision, viz., the reasonable belief of the officer effecting the seizure that the gold was smuggled. There is therefore no adequate basis on which the provision could be sustained as a rule of evidence, (4) The operation of section 178A is not restricted in point of time or to persons actually suspected to be connected with the import but extends also to persons who are able to establish bona fide acquisition of gold but who are unable to prove how the person from whom they acquired, obtained the gold they sold, (1) 813 (5) A presumption of this sort might be reasonable in respect of goods which are dangerous or noxious per se, like firearms or poison, since ordinarily people might be expected to be. on their guard before obtaining such goods to ensure that their acquisition was lawful and in accordance with I the formalities, if any prescribed by the relevant statute or rule. Gold, however, is not such a type of commodity. It is, an inncouous article of commerce and is under the law a subject of unrestricted trade within the country. The burden of proof of the sort imposed by a. 178A, in respect of such a commodity, is therefore unreason able, (6) The burden of proof cast by section 178A is, in most cases, impossible of being discharged be cause: (a) it extends to facts which would not be in the possession of a bona fide purchaser and would comprise matters which he never knew, or could never know, (b) large quantities of gold have been imported into India before restrictions were imposed in 1939. The net imports upto 1939 are estimated at over 353 crores of rupees which at the present price of gold would be over 2,000 crores of rupees. As gold which is sold in the market is not identifiable, it would be impossible for any purchaser to say whether the gold that he was 'buying was that which had been imported lawfully before 1939 or had come into the country, after. 1939 after payment of duty or had been. smuggled into the country in violation of the Foreign Exchange Control Regulations. The section, therefore, practically prohibits, all holding of gold, or trade in gold and subjects the holding of and the trade in gold to the penalty of confiscation, indigenous gold has been produced in mines in India both before and after 1939 and there is nothing to differentiate this from imported gold, (d) it is a commodity which frequently changes hands because of regular trade and widespread 814 use as ornaments etc., and finally (e) the indentification of gold is impossible because of frequent meltings and fusion of separate pieces and the absence of any system of compulsory marking. We shall deal with each of these points and examine them in the light of the submissions made by the learned Solicitor General in answer. Grounds 1 and 3 which we have set out earlier may be taken up together since they are merely different modes of expressing the same contention. The point raised is that there is no rational connection between the fact from which the statute raises the presumption and the fact which has to be proved in order that the goods might be the subject of confiscation. The argument is that the fact from which the presumption is drawn is the reasonable belief of the officer effecting the seizure that the article seized is smuggled; while the fact which by the terms of the statute it is held to prove is that the gold seized is smuggled; with the result that the practical effect of the provision is that there is a statutory direction to the adjudicating officer to treat the gold as smuggled so as to entitle him to confiscate the same. It is only if learned Counsel for the respondent is right that the effect of the section is as above that the several decisions of the American Courts to which he invited our attention, could have any application. Learned Counsel relied particularly on the decisions in Bailey vs State of Alabama (1), and Manley vs State of Georgia (2). The first of these was concerned with the validity of a law of the State of Alabama by which refusal without just cause, to perform the labour agreed to be performed in a written contract of employment under which the employee had obtained money which he did not refund was made prima facie evidence of an intent to commit a fraud. The Supreme Court held the law invalid. Two grounds were urged in support of the argument that the legislation was unconstitutional. The first was that (1) ; : ; (2) L. Ed; 5 5. 815 it was in violation of the 13th amendment against "involuntary servitude except as punishment for crime", the other that the law was in violation of due 'Process ' clause contained in the 14th amendment The Supreme Court upheld both these contentions, but what is relevant to the present context and on which learned Counsel relied was the reason assigned for holding that the rule of evidence enacted by the impugned statute violated the requirement of due 'process '. Reliance was placed for the State before the Supreme Court on the fact that the presumption raised was not conclusive but was open to rebuttal by the accused, but this was held not to be of avail, because according to the rule of evidence enforced by the Courts of Alabama, the accused, for the purpose of rebutting the statutory presumption, was not allowed to testify as to his uncommunicated motives, purposes or intentions, so that virtually it amounted to a conclusive presumption against the accused. The statute whose validity was attacked in the second American decision referred to was one declaring that every insolvency of a bank shall be deemed fraudulent and subjected the directors to imprisonment unless they repelled the presumption of fraud by showing that the affairs of the bank had been fairly and legally administered. Head Note 1 to this case sums up the American law on the subject of the constitutional validity with reference to the due 'process ' clause, of laws of evidence creating presumptions. It runs: "1. State legislation that proof of one fact, or group of facts, shall constitute prima facie evidence of the main or ultimate fact in issue, does not constitute a denial of due process of law if there is a rational connection between what is proof and what is to be inferred, and the presumption is not un reasonable, and is not made conclusive of the rights of the person against whom it is raised. " 116 In regard to the American decisions of which only a few were cited, including those just now get out, the principle underlying them is to be found summarized in Rottschaefer 's Constitutional Law at p. 835, where the learned author says: "The power of a legislature to prescribe the rules of evidence is universally recognised, but it is equally well established that due process limits it in this matter. It may establish rebuttable presumptions only if there is a rational connection between what is proved and what is permitted to be inferred therefrom. " It would be seen that the decisions proceed on the application of the 'due process" clause of the American Constitution. Though the tests of ,reasonableness ' laid down by cls. (2) to (6) of article 19 might in great part coincide with that for judging of 'due process ', it must not be assumed that these are identical, for it has to be borne in mind that the Constitution framers deliberately avoided in this context the use of the expression due process ' with its comprehensiveness, flexibility and attendant vagueness, in favour of a somewhat more definite word " 'reasonable", and caution has, therefore to be exercised before the literal application of American decisions. In making these observations we are. merely repeating a warning found in the judgment of this Court in A. section Krishna vs The State of Madras (1), where Venkatarama Ayyar, J., speaking with reference to the point now under discussion after quoting the passage already extracted from Rottschaefer 's treatise stated: "The law would thus appear to be based on the due process clause, and it is extremely doubtful whether it can have application under our Constitution. " With this caution we shall proceed to examine the submission of learned Counsel regarding the (1) ; , 412. 817 absence of any rational connection between the fact to be proved and the fact on which the presumption is raised. An analysis of the arguments of the learned Counsel shows that the real legal objection to the provision lay in the sixth point urged by him, viz., the impossibility of discharging the burden of proof cast by section 178A, which thus virtually results in a confiscation of property without a judicial adjudication or condemnation. Pausing here we might mention that two matters might be urged as flowing from or as the necessary result of the impugned provision: (1) that even a bona fide possessor of the goods might be deprived of his property notwithstanding that there was no basis even for a suspicion that he was a party to the smuggling or had any knowledge that the goods in his possession were smuggled goods; and (2) that the burden cast on the possessor to prove the negative, namely, that the gold was not smuggled cast an impossible burden upon the person from whom the goods are seized as it virtually amounts to a confiscation by the law without any reasonable proof before a quasi judicial authority that the gold was smuggled. To this last, the sixth point, we shall advert in its proper place, but what we are concerned to point out at this stage is that apart from the point about the impossibility of discharging the onus of proof cast by the section, there is little basis for the argument that there is lack of any rational connection between the facts giving rise to the presumption and the fact presumed, and to this we shall now proceed. This question about the lack of rational connection may be considered from two points of view. First Mr. Palkivala does not impugn the constitutional validity of section 106 of the Indian Evidence Act or the legislative application of the principle underlying it to any concrete case. It need hardly be pointed out that in every case without exception, the possessor of the gold would be the person beat acquainted with the manner of 818 his acquisition and the circumstances attendant on or connected with that acquisition. It was part of the learned Counsel 's submission that he could not successfully impugn the validity of a provision on the terms of section 259 of the U. K. Customs Consolidation Act. Recalling the decision in R. vs Fitzpatrick (1), already referred to, we might mention that the prosecution there was for a violation of section 186 of the U. K. Customs Consolidation Act, 1876, which, so far as material, was in substantially the same terms as the relevant portion of section 167(8) of the , the essential ingredient of the offence being indicated by the words "person concerned in dealing with goods the import of which is prohibited or which are liable to duty with intent to defraud His Majesty", and it was a violation of this section that Fitzpatrick was found guilty of by the application of the rule as to onus of proof prescribed by section 259 extracted earlier. If in a prosecution for dealing in smuggled goods the onus could with constitutional propriety be cast upon the accused to prove that the goods were not smuggled, it is difficult to see any reasonable basis for the contention that where the offence charged against a person is not dealing in but possession of ,smuggled goods, there is a constitutional bar on the burden being so laid. Secondly, is learned Counsel correct in his ,submission that under a. 178A the onus is cast upon the possessor of the goods seized by reason only of the reasonable belief of the seizing officer that the goods seized by him are smuggled ? It is to be noted that the seizure by the officer in the belief that the goods are smuggled does not by itself operate to effect the confiscation or deprive the owner of his property in the goods. This result, however, follows only on an order of an adjudicating officer who investigates into the complaint regarding the defendant 's possession of the smuggled goods. As; we shall have occasion to point out (1) , 772. 819 later the entire evidence in the, possession of the seizing officer would be and has to be before the officer adjudicating the confiscation under section 182 of the . No doubt, on the language of section 178A the presumption of the goods being smuggled arises only when the seizure is made by an officer entertaining a reasonable belief that the goods are smuggled, and in that sense the reasonable belief of the seizing officer is a pre requisite for the statutory onus to arise. It is also true that at the stage of the adjudication the reasonableness of the belief of the officer effecting the seizure that the goods are smuggled would be the subject matter of investigation by the adjudicating officer. Nevertheless it is manifest that at the stage of the adjudication (when only the rule of evidence laid down by the section comes into operation) the very facts which led the seizing officer to effect the seizure ' as distinguished from their significance as affording a reasonable belief for the seizing officer to hold that the goods are smuggled are before the adjudicating officer. These facts which justified the seizing officer to reasonably believe that the goods were smuggled would certainly impart a rational connection between the facts on which the presumption is raised and the fact to be proved, so that whatever other constitutional infirmity might attach to the impugned provision, the lack of rational connection is not one of them. It appears to us therefore that the argument regarding the lack of rational connection has no substance. It is derived wholly on a literal reading of section 178 A and would not be available if the provisions were read in the manner we have just now indicated. The second of the grounds urged by learned Counsel was that the requirement of section 17 8 A that the belief of the officer seizing the goods should rest of reasonable grounds provided no safeguard to the citizen, as the seizing officer who acts administratively entertains the belief on unproved information gathered from sources which most often are not and 820 in practice will not be possible to be disclosed to the party affected. In connection with this point two alternative submissions were made : (1) that the reasonable belief of the officer effecting the seizure was one entirely for his subjective satisfaction and that this rendered the protection wholly illusory and therefore patently unreasonable. This was advanced on the basis of the passage in the judgment of this Court in Babulal Amthalal Mehta vs The Collector of Customs, Calcutta (1), already extracted reading : "the only pre requisite for the application of the section is the subjectivity of the Customs Officer in having a reasonable belief that the goods are smuggled. " The learned Solicitor General, on the other hand pointed out that this was not really part of the decision, but was just an observation and that he would not support it. The learned Solicitor General submitted that a seizure to which section 178 A was applicable was merely a preliminary to proceedings before a quasi judicial authority under section 182. When the matter comes before the latter authority, and anterior to that authority invoking the presumption raised by section 178 A, it would, on the terms of the section, have to be satisfied that the seizure was made "in the reasonable belief that the goods seized were goods that had been smuggled". At that stage the enquiry is not and cannot be confined as to whether the seizing officer bona fide entertained the belief, but must necessarily extend to an examination of the grounds upon which that belief was entertained with a view to ascertain whether the belief was reasonable. It might be that the entirety of the evidence which conceivably in several cases consist of information communicated by informers might not be made available, to the person affected, but still the adjudicating officer would have to satisfy himself that the requirements (1) 821 of section 178 A had been complied with before invoking the presumption laid down by that section. Mr. Palkivala 's alternative submission was that even if test of 'reasonable belief ' was not subjective but was objective, in that the point as to whether the belief was reasonable was open to examination by the adjudicating officer under section 182, still, this provided no sufficient safeguard, because, if ",information not tested by cross examination" could from the basis of "reasonable belief", by applying the same tests, the adjudicating officer would and must in most cases reach the same conclusion. It is, no doubt, true that in some cases there might be pieces of information on the basis of which the seizure was effected which might not be capable of being disclosed to the affected party because it might consist of information supplied by customs informers, but if that information would have to stand the test of scrutiny as to credibility by an independent officer dealing with it in a quasi judicial capacity, it cannot be said that the protection is illusory. It has also to be added that at the stage of appeal or revision from the orders of the officer adjudging confiscation under section 182 of the Act each successive appellate or Revisional authority has also to address itself to this requirement. We shall now pass on to the fourth of the points urged by learned Counsel for the petitioner that the onus of proof is unreasonable, in that it was not restricted in point of time or to persons connected with the import. The point suggested may be expanded in these terms : What the party affected has to prove is not that his acquisition has been bona fide, which of course be might be in a position to prove and might properly be required to prove, but that somebody else over whom he has no control and of whose actions he would, in most cases, be completely ignorant has similarly bona fide 822 acquired the gold without violating the law and so on until one reached the stage of the origin of the gold which is the subject of seizure and of adjudication before the Customs authority. It would be seen that this is really the argument upon which the sixth of the points urged by learned Counsel rests and therefore it will be convenient to examine the soundness of the contention and the answers which have been made on the other side after dealing with point No. 5. The fifth point relates to the fact that the presumption raised by the section is about the possession of an innocuous article of property which under the law is the subject of unrestricted trade in the open market as distinguished from articles which are inherently dangerous such as firearms or Poisonous drugs, in regard to which possession and dealing are legitimately subject to severe restrictions. Learned Counsel is, no doubt, right in his submission that gold as a commodity is an innocuous article of commerce, that articles made of gold have been used as part of jewellery by the middle and upper classes from the beginning of time, that it, has served as a store of value from ancient times and that the very large number of people in this country are in possession of gold for the purposes just now mentioned. But that however is not any conclusive consideration in support of the invalidity of a law which seeks to throw the burden of establishing possession as legal under the law, upon the possessor. It cannot be seriously disputed that in most of the cases the possessor of the gold would certainly be in a position to establish the mode of his acquisition (subject to the last of the points about the burden of proof being impossible to discharge), which would more often than not take it out of the category of smuggled gold. It is only in those cases where reasonable suspicion exists that the gold in the possession of a person has come into the country by illicit means, that there is power in an officer to affect the seizure and in most 823 of the cases the innocent possessor would be in a position to discharge the onus. It is therefore in cases where a person is unable to prove how he got into possession of the gold found with him or where his explanations are found to be false or unacceptable that in the large majority of cases the section would normally be invoked. Besides these, it would be applied also in cases where a person is able to prove that his acquisition was bona fide but that the persons from whom he acquired or one higher up in the series of prior owners is unable to explain satisfactorily his possession, and it is only in these marginal or extreme cases that the onus created by the section might be contended to be harsh and unreasonable. Learned Counsel is, therefore, not right in suggesting that section 178A operated, as it were, by itself to confiscate the gold and gold ornaments in the possession of the entire population of the country, each individual being compelled before the restoration of the gold to him to strictly prove either that the gold was of indigenous origin or had been imported prior to 1939, or if imported subsequently bad either been permitted to be imported or had paid duty, if such duty was leviable. We consider that this is not the effect of the section and that it does not, on any reasonable construction, justify this picture of its operation. We shall now proceed to consider the last of the points raised by learned Council in conjunction with point No. 4 which we had reserved for being examined along with it. This point learned Counsel expanded in the following terms. The burden of proof cast by the section is or is almost impossible of discharge, because (1) it extends to facts which would not be in the possession of bona fide purchaser at all, facts which he never knew and which be could never reasonably ascertain ; (2) large quantities of gold have been imported into this country before the introduction of restrictions on their importation by virtue of the legislation 824 brought into force from 1939. In this context, learned Counsel relied on the several matters set out in the passage from the judgment of K. T. Desai, J., extracted earlier and laid particular emphasis on the fact : (a) that gold was held in myriad forms and for diverse purposes by a sizeable portion of the population of the country, (b) that gold in its several forms was incapable of being identified as indigenous or imported, or if imported had paid duty or not. In view of these circumstances he urged that to call upon any person to prove any thing more, than that his acquisition of the gold was bona fide and without violation of the law would be to cast an impossible burden upon the possessor. Learned Counsel further urged that the precise reason for which the burden had been thrown upon the possessor was because of the inability of the State to establish before the quasi judicial authorities acting under section 182 reasonable proof that the gold seized was smuggled. He therefore submitted that if Government with all its administrative machinery operating in several fields was unable to lead evidence which could satisfy the, Collector of Customs that the gold seized had an illicit origin, how could it be reasonable to expect the individual possessor, who knew nothing beyond how he himself came by the gold, to establish the negative, viz., that the gold in his possession had not been smuggled but was lawfully within the country. Before considering these submissions it is necessary to mention one point suggested in answer by the learned Solicitor General which has apparently found favour with the learned Judges of the Division Bench of the Bombay High Court in Pukhraj Champalal Jain vs D. R. Kohli(1). The point was this: The Central Board of Revenue lad issued certain administrative instructions as regards the manner in which the Customs Officers should regulate their procedure before the goods are adjudged to be confiscated under the provisions of the . These are sell , out at p. 1240 (1) 825 of the Report in 61 Bombay Law Reporter and need not be repeated here. The learned Solicitor General 's argument was that as the section was being administered subject to these safeguards, the provision must be held to be a reasonable restriction within (6) of article 19 of the Constitution. We are clearly of the opinion that the argument about the relevance of this matter is incorrect and must be rejected. This Court has held in numerous rulings, to which it is un necessary to refer, that the possibility of the abuse of the powers under the provisions contained in any statute is no ground for declaring the provision to be unreasonable or void. Commenting on a passage in the judgement of the Court of Appeal of Northern Ireland which stated: "If such powers are capable of being exercised reasonably it is impossible to say that they may not also be exercised unreasonably" and treating this as a ground for holding the statute invalid Viscount Simonds observed in Belfast Corporation vs O. D. Commission(1): "It appears to me that the short answer to this contention (and I hope its shortness will not be regarded as disrespect) is that the validity of a measure is not to be determined by its application to particular cases. . If it is not so exercised (i.e., if the powers are abused) it is open to challenge and there is no need for express provision for its challenge in the statute". The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity. The converse must also follow that a statute which is otherwise, invalid as being unreasonable cannot be saved by its being administered in a reasonable manner. The constitutional validity of the statute would have to be determined on the basis of its (1) , 520 521 826 provisions and on the ambit of its operation as reasonably construed. If so judged it passes the test of reasonableness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Constitution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements. In saying this we are not to be understood as laying down that a law which might operate harshly but still be constitutionally valid should be operated always with harshness or that reasonableness and justness ought not to guide the actual administration of such laws. We shall now proceed to examine what in effect is the central point in the argument of the learned Counsel for the respondent which might be split up into two heads: (1) Under section 178 A the burden of proof is cast upon a person from whom the goods have been seized which is impossible for him to discharge, with the consequence that though in form the impugned section purports to be a rule of evidence, it is virtually a law which per se effects confiscation in (,very ease to which it is applicable. (2) Is such a law a reasonable restriction on the right to hold property or on the right to carry on business within cls. (5) & (6) of article 19, but they may be considered together. Section 178 A operates to cast the burden of proof on the person from whose possession goods specified in its sub section (2) are seized to establish that the goods are not smuggled. It must be apparent that this will include, in several cases, persons who are concerned in and are charged with being concerned in the act of illicit importation. In their case, as we have already pointed out, learned Counsel admits that the onus is properly shifted and that such a provision would be reasonable and so constitutionally valid, though undoubtedly it might be possible for the State to prove 827 its case even without the aid of the presumption raised by section 178A. Again there might be some cases where goods are seized from a person who is unable to account satisfactorily for his ownership or possession. In such cases also we did not understand learned counsel for the petitioner to suggest that the shifting of the burden of proof would be unconstitutional, for surely the principle underlying section 106 of the Evidence Act;which, it is conceded, enunciates a just and reasonable principle would serve to sustain the validity of the impugned provision. The two classes of cases which we have just set out would in themselves constitute most of the cases in which suspicion or information of the type which leads to seizure and the ensuing proceedings would occur. Section 178A however does not exhaust those classes. and that is the ground of complaint by the learned Counsel, and it is precisely on this basis or for this reason that learned Counsel contends that the entire provision is constitutionally invalid. This analysis would show that the provisions of the section are constitutionally valid in the sense of being reasonable restrictions on the right to hold property or to carry on trade or business in the large percentage of cases to which the section would apply, and. it is only in the marginal cases already described that, it can, with any justification, be contended that the restriction is unreasonable. From this position, the question that arises is whether because of the inclusion of this type of case the impugned provision should be held to be constitutionally invalid. This has to be taken in conjunction with what is obviously correct, that any severance of the marginal cases and their exclusion from the operation of the provision would greatly reduce its effectiveness and provide innumerable loop holes for easy evasion. It is in this context that the test for ascertaining the "reasonableness" postulated of the restrictions in cls. (2) to (6) of article 19 assumes great. relevance and crucial importance. There are several decisions of this Court in which the relevant 828 criteria have been laid down but we consider it sufficient to refer to a passage in the judgment of Patanjali Sastri, C. J., in State of Madras vs V. G. Row(,). The learned Chief Justice said at p. 607 of the Report: "It is important in this context, to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed. , the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at ', he time, should all enter into the judicial verdict. " It would be apparent that this is in line with the great principle underlying the structure of the rights guaranteed by article 19, viz., a balancing of the need for individual liberty in the matter inter alia of the right to hold property or of the right to trade, with the need for social control in order that the freedoms guaranteed to the individual subserve the larger needs moral, social, economic and political of the community and thus ensure orderly prog ress towards the goal indicated by the preamble. It would follow that the reasonableness of the restraint would have to be judged by the magnitude of the evil which it is the purpose of the restraint to curb or eliminate. The submission of the learned Solicitor General was that the reasonableness of the impugned provision had to be judged in the light of the widespread smuggling in commodities like gold which if not checked was calculated to destroy national economy and hamper economic stability and progress, and that no (1) ; , 607. 829 reasonable alternative to the provision would achieve the desired end. In this connection he drew our attention to the Report of the Taxation Enquiry Commission, 1953 54, which pointed out the factual position regarding the existence of widespread smuggling in certain commodities including inter alia gold. They stated at p. 320 of the Report: "11. Smuggling now constitutes not only a loophole for escaping duties but also a threat to the effective fulfilment of the objectives of foreign trade control. The existence of foreign pockets in the country accentuates the danger. The extent of the leakage of revenue that takes place through this process cannot be estimated even roughly, but, we understand, it is not unlikely that it is substantial. Apart from its deleterious effect on legitimate trade, it also entails the outlay of an appreciable amount of public funds on patrol vessels along the sea coasts and permanent works along the land border, and watch and ward staff on a generous scale. It is, there. fore, necessary, in our opinion, that stringent measures, both legal and administrative should be adopted with a view to minimising the scope of this evil. " The deleterious effects of smuggling, as pointed out in the extract from the Report, are real and it is not in dispute that the prevention and eradication of Smuggling is a proper and legally attainable,objective and that this is sought to be achieved by the relevant law. If therefore for the purpose of achieving the desired objective and to ensure that the intentions of Parliament shall not be defeated a law is enacted which operates somewhat harshly on a small section of the public, taken in conjunction with the position that without a law in that form and with that amplitude smuggling might not be possible of being effectively checked, the question arises whether the law could be held to be violative of the 830 freedom guaranteed by article 19(1)(f) & (g) as imposing an unreasonable restrain. That the restrictions are in the "interest of the general public" is beyond controversy. But is the social good to be achieved by the legislation so disproportionately small that on balance it could be said that it has proceeded beyond the limits of reasonableness? We would answer this in the negative. We would only add that there is authority for the position that "acts innocent in themselves may be prohibited and the restrictions in that regard would be reasonable, if the same were necessary to secure the efficient enforcement of valid provisions. The inclusion of a reasonable margin to ensure effective enforcement will not stamp a law otherwise valid as within legislative competence with the character of uncon stitutionality as being unreasonable" [vide Manohar Lal vs State of Punjab (1) and Ram Dhan Dass vs State of Punjab (2) Having given the matter our best attention we have arrived at the conclusion that the impugned legislation has not overstepped the limits set by the Constitution and in saying this we have adopted the test laid down in State of Madras vs V. G. ROW (3) whose terms we have quoted at the start of this discussion. Proceeding therefore on the basis that the impugned provision was constitutionally valid we have still to consider two further points on the basis of which learned Judges of the High Court upheld the case of the respondent even on the assumption that section 178A was constitutionally valid. The first of these grounds was that the impugned section 178A which had been introduced by the Act of 1955 (Act 21 of 1955) is not attracted to the prohibitions enacted by section 23A of the Foreign Exchange Regulation Act. The reasoning on 'which this conclusion was reached was that section 23A, whose terms we have set out, when enacted in 1952 in effect incorporated into the provisions of the Foreign Exchange Regulation Act all the relevant provisions of the , as that (1) ; (2) ; (3) ; , 607. 831 enactment stood in 1952, with the result that any subsequent amendments to the did not and could not affect, modify or enlarge the scope of the incorporated which had become part of the Foreign Exchange Regulation Act. In support of this conclusion the learned Judges of the High Court have relied largely on the decision of the Privy Council in The Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd. (1). We consider that the legislation regarding which the Privy Council rendered the decision bears no resemblance, whatever to the matter now on hand and that the ruling in The Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd. (1), cannot therefore furnish any guidances or authority applicable to the interpretation of section 23A of the Foreign Exchange Regulation Act. To consider that the decision of the Privy Council; has any relevance to the construction of the legal effect of the terms of section 23A of the Foreign Exchange Regulation Act is to ignore the distinction between a mere reference to or a citation of one statute in another and an incorporation which in effect means the bodily lifting of the provisions of one enactment and making it part of another so much so that the repeal of the former leaves the latter wholly un touched. In the case, however, of a reference or a citation of one enactment by another without incorporation, the effect of a repeal of the one "referred to" is that set out in section 8(1) of the General Clauses Act: "8. (1) Where this Act, or any Central Act or Regulation made: after the commencement of this Act, repeals and re enacts., with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different (1) [1931] L.R. 58 I.A. 259. 832 intention appears : be construed as references to the provision so re enacted. " On the other hand, the effect of incorporation is as stated by Brett, L. J., in Clarke vs Bradlaugh(1): "Where a statute is incorporated, by reference, into a second statute the repeal of the first statute by a third does not affect the second". This is analogous to, though not identical with the principle embodied in section 6A of the General Clauses Act enacted to define the effect of repeals effected by repealing and amending Acts which runs in these terms : "6A. Where any Central Act or Regulation made after the commencement of this Act repeals any enactment by which the text of any Central Act or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal. " We say not identical ' because in the class of cases contemplated by section 6A of the General Clauses Act, the function of the incorporating legislation is almost wholly to effect the incorporation and when that is accomplished, they die as it were a natural death which is formally effected by their repeal. In cases, however, dealt with by Brett, L. J., the legislation from which provision, . are absorbed continue to retain their efficacy and usefulness and their independent operation even after the incorporation is effected. We consider that on the language of the provisions in the two Acts section 19 of the and section 23A of the Foreign Exchange Regulation Act there is no scope for any argument that there (1) 833 has been any incorporation of the provisions of the earlier statute in the later. We shall repeat the terms of section 19 of the which runs : "19. The Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any customs frontier as defined by the Central Government." Section 8(1) of the Foreign Exchange Regulation Act enables similar notifications by the Central Government in these terms: "8. (1) The Central Government may, by notification in the Official Gazette, order that subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign. Explanation. The bringing or sending into any port or place in India of any such article as aforesaid intended to be taken out of India without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be, sending, into India of that article for the purposes of this section. " In this situation section 23A of the Foreign Exchange Regulation Act enacts: ". . the restrictions imposed by sub section (1) of section 8 shall be deemed to have been imposed under section 19 834 of the , 'and all the provisions of that Act shall have effect accordingly. . . The effect, therefore, of section 23A is to treat the text of the notification by the Central Government under section 8(1) as if it had been issued under s ' 19 of the with the title and the recital of the source of power appropriate to it by the creation of a legal fiction. It would be obvious that in the context and on the language here employed, if section 19 of the were repealed there would no longer be any legal foundation for invoking the penal provisions of the to a contravention of a notification under section 8(1) of the Foreign Exchange Regulation Act. This conclusion is reinforced by a comparison of the usual and normal or recognized formulae generally employed to effect incorporation, such that changes in or even repeal of the incorporated statute is not intended per se to affect the operation of the incorporating legislation. It is sufficient to pick out a few of the well known formulae employed which would indicate that normally the draftsman does not leave his intentions in doubt. For instance, in section 20 of 53 and 54 Vict. 70 Housing of the Working Classes Act, 1890, the words used were, "shall,, for that purpose, be deemed to form. part of this Act in the same manner as if they were enacted in the body thereof,". In 54 and 55 Vict. 19, section 1(3), the language employed was "The provisions of section 134 of the said Act (set out in the schedule) shall apply as if they were herein reenacted. " To take more modern instancess 10 and 11 George VI Ch. 51, (the Town and Country Planning Act, 1947), section 44(1) enacts : 835 "Sections 19 to 30 of the Act of 1944 which provide for the disposal,and appropriation by local Planning Authorities of land acquired or appropriated under Part I of that Act, 'for the carrying out by such authorities of development of such land, and for other matters arising in relation to the acquisition of land in that part shall, except so far as repealed by this Act, be incorporated with this part of this Act, subject to the amendments specified in the second column of the following Schedule of this Act and of the following provision of this section". 6 & 7 Eliz. 2 Ch. 63 (the Park Lane Improvement Act, 1958), section 5 reads: "The Land Clauses Act (other than the excepted provision); so far as they are applicable for the purposes of this Act and are Dot inconsistent with the provisions thereof, are hereby incorporated with this Act. " A comparison of the formulae with the text of section 23A shows that the reference in it to section 19 of the is merely for rendering notifications under the named provisions of the Foreign Exchange Regulations Act to operate as notifications under the , and that it cannot have the effect of incorporating the relevant provisions of the earlier Act into the Act of 1947, so as to attract the rule formulated by Brett, L. J., in Clarke vs Bradlaugh already quoted. A close examination of the decision of the Privy Council in The Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd. (1) would show that the incorporation effected in the statute there under consideration the Calcutta Improvement Trust Act, 1911 referred to by their Lordship as the "Local Act" was in express terms and in the form illustrated by 54 & 55 Vict., Ch. 19, just now referred to. The "Local Act" in (1) (1931) L.R. 58 I.A. 259. 836 dealing with the acquisition of Land for the purposes designated by it, made provision for the acquisition under the Land Acquisition Act, and the provisions of the Land Act Acquisition were subjected to numerous modifications which were set out in the Schedule, so that in effect the " 'Local Act" was held to be the enactment of a Special Law for the acquisition ;of land for the special purpose. It was in the context of these and several other provisions which pointed to the absorption of certain of the provisions of the Land Acquisition Act into the "Local Act" with vital modifications that their Lordships stated: "But their Lordships think that there are other and perhaps more cogent objections to this contention of the Secretary of State, and their Lordships are not prepared to hold that the sub section in question, which was not enacted till 1921, can be regarded as incorpo rated in the Local Act of 1911. It was not part of the Land Acquisition Act "hen the local Act was passed, nor in adopting the provisions of the Land Acquisition Act is there anything to suggest that the Bengal Legislature, intended to bind themselves to any future additions which might be made to that Act. It is at least conceivable that new provisions might have been added to the Land Acquisition Act which would be wholly unsuitable to the local code. Nor again, does Act XIX of 1921 contain any provision that the amendments enacted by it are to be treated as in any, way retrospective, or are to be regarded as affecting any other enactment than the Land Acquisition Act itself. Their Lordships regard the local Act as doing nothing more than incorporating certain provisions from and existing Act, and for convenience of drafting doing so by reference to that Act, instead of setting out for itself at length the provisions which it was desired to adopt. " 837 It was for this, among other reasons, that the Judicial Committee held that rights of appeal created by amendments effected to the Land Acquisition Act subsequent to the enactment of the Local Act were not attracted to the incorporated provisions in the "Local Act". We consider that there is no analogy between the provisions held to be incorporated in the Calcutta Improvement Trust Act 1911 dealt with by the Privy Council and section 23A of the Foreign Exchange Regulation Act now under discussion. We bold therefore that when a notification issued under section 8(1) of the Foreign Exchange Regulation Act is deemed for all purposes to be a notification issued under section 19 of the , the contravention of the notification attracts to it each and every Provision of the which is in force at the date of the notification. The other ground upon which the learned Judges upheld the respondent 's contention that the rule as to the burden of proof enunciated in s.178 A was not attracted to the present case was based on the finding that the Customs Officer who effected the seizure did not, at the moment of seizure, entertain a reasonable belief that the goods seized were smuggled. The learned Solicitor General who contested the correctness of this finding did not urge that the words. in section 178A "in the reasonable belief that they are smuggled goods" did not prescribe a condition precedent to the applicability of that provision which had to be satisfied before the provision could be invoked against the affected party. As we have already pointed out, his further submission was that such a reasonable belief must not only be entertained by the seizing officer and besides that the question whether the officer had done so or not, was a matter which could objectively be determined by the adjudicating authority acting under section 182. And these submissions he made, as aids to his main contention that the burden of proof 838 imposed was reasonable. We are pointing this out because before the learned Judges of the High Court the argument apparently advanced was that the test was the subjective belief of the seizing officer which could only be disproved by the establishment of circumstances in which no such belief ,could ever honestly or reasonably be entertained based on the reference to ',the subjectivity of the officer" in the judgment of this Court in Babulal Amthalal Metha vs The Collector of Customs, Calcutta (1). It was by approaching the problem even from this very narrow stand point that the learned Judges reached a conclusion on this part of the case favourable to the respondent. For the decision of this point it is necessary to canvass the facts which occurred at the moment of seizure in some detail. As narrated at the commencement of this Judgment, Nandgopal, the second respondent the employee of the first respondent was intercepted first by the Head Constable of the Madras State Prohibition Intelligence Department and his clothing was searched and the four gold blocks weighing about a thousand tolas were seized by the Head Constable. The Prohibition Crime branch has a Criminal Investigation Department and the seized gold was handed over by the Head Constable to the Inspector of Police Criminal Investigation Department on the same day. It was this Inspector (C. Rajamanickam) that forwarded the gold to the Inspector of Customs (Special Division) with a letter in these terms "I send herewith 1,000 (One thousand) tolas of gold in 4 (four) blocks seized from G.Nandgopal,Clerk, M/s. Nathella Sampathu Chetty, Madras, No. 177, N. section C. Bose Road. The passenger came from Bombay to Madras in N. Y. Bombay Mail on 26th June 1956, at 6 A. M. He has no records (1) 839 of any kind for the purchase of gold. Hence the gold was seized and he was arrested under a mahazar. The passenger and gold are forwarded for further action under Customs Act. " It would be seen that up to this point there had been no seizure by an officer acting under the within section 178A of the Act. It has also to be noticed that Nandgopal had in his possession admittedly no receipt of any kind for the purchase of the gold ; further he had on him the letter addressed by the first respondent to Mathura das Gopalakrishnayya & Co., Bullion merchants, Bombay intimating that cash to the extent of rupees one lakh was being sent through the representative, which obviously could not possibly remain in the possession of Nandgopal if has story about his taking cash to that addressee and the purchase of the gold from him were true. It was in these circumstances that the Inspector (Special Division) Customs House recorded : "Detained four blocks of gold said to weigh about 1,000 tolas from Shri Nandgopal, representative of Nathella Sampathu Chetty & Sons for further investigation". There are two views possible of the exact import of this note by the Customs Inspector : (1) that it was a ,,,detention" preliminary to a seizure which would be effected after the further investigation, and (2) that which found favour with the learned Judge; of the High Court that it was itself the seizure. In support of the first of the above constructions attention may be drawn to the fact that the events narrated earlier took place before 8 O 'clock in the morning and that immediately thereafter Nandgopal was taken to the Customs House and was examined there at about 8.30 and in the course of his examination he made several statements which were obviously incorrect and whose error was capable of being detected then and there. 840 (1) He stated that the gold had been bought from M/s. Mathuradas Gopalakrishnayya & Co. having paid them the sum of rupees one lakh which was referred to in the letter seized from him, but obviously if the gold had been purchased from that firm the letter could not remain with Nandgopal and this discrepancy he was unable to explain at that stage. , for he said " I cannot account for the presence of this letter on me which should have been given to the firm in Bombay". (2) Nandgopal who spoke to having received gold and then secreted it in the inner side pockets of his waist coat and stitched it stated, that the gold was moosa gold and it was found that the gold seized from him was not that variety. It is really after this statement was recorded at the Customs House that the "investigation" began. It is therefore possible to take the view that the detention resulted in a seizure after the statement was recorded. There was ample material at that stage on the basis of which it could be said that a reasonable belief could be entertained that the gold seized was smuggled. Even taking the record of the detention in the mahazar prepared at the Central station as "the seizure" we do not agree with the learned Judges of the High Court that the seizing officer could not entertain a reasonable belief that the gold seized was smuggled. The reasonableness of the belief has to be judged by all the circumstances appearing at that moment. In the present case, the quantity of gold in the possession of Nandgopal of the value of over one lakh of rupees was certainly a very relevant factor to be taken into account and which could be considered in judging the matter. No doubt, such a quantity could be the subject of bona fide purchase in the course of normal trade, particularly when the person in possession was the representative of a ' well known firm of bullion dealers. Put one 841 would also normally expect that the representative would have secured a bill or voucher to evidence the purchase. In other words: (1) it was not a case of a few trinkets of gold or small quantity purchased for domestic or personal use but a considerable amount for purposes of business, (2) the undelivered letter addressed to M/s. Mathuradas Gopalakrishnayya and Co., which admittedly had a bearing upon the purchase of gold in the possession of Nandgopal necessarily drew an amount of suspicion on the theory of a bona fide purchase. These circumstances, in our opinion, which were admittedly present at the moment when the gold was taken by the Customs Officer at the Central Station did tend to raise a reasonable suspicion that the gold seized had been obtained illicitly and this was sufficient to constitute, in the words of the statute, 1% reasonable belief that the goods (gold) were smuggled". We are therefore of opinion (1) that s.178A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchange Regulation Act, 1947, by virtue of its being deemed to be a contravention of a notification under section 19 of the , (3) that the preliminary requirement of section 178A that the officer seizing should entertain "a reasonable belief that the goods seized were smuggled" was satisfied in the present case. The result therefore is that the petitions under article 226 of the Constitution filed by the respondent before the High Court should have been dismissed. We accordingly allow appeals 408 and 409 with costs throughout (one set of hearing fees), the writ petitions filed by the respondent being directed to be dismissed. In view of our decision in appeals 408 and 409, the points raised by the respondent in appeal 410 of 1960 do not require to be decided. That appeal fails and is dismissed. There will however, be no order as to costs. 842 Criminal Appeals No. 38 of 1959, No. 126 of 1959, No. 1.23 of 1959, Civil Appeal No. 511 of 1960 and Writ Petition No. 118 of 1958 were not heard on the merits and we have not examined the facts of any of those cases. Those appeals and petitions should, therefore, be posted for hearing in the usual course. Appeals nos. 408 and 409 allowed. Appeal No. 410 dismissed.

Under the powers conferred by section 8(1) of the Foreign Exchange Regulation Act, 1947, the Central Government issued a notification on August 25, 1948, placing a ban on the importation of gold except with the permission of the Reserve Bank. Section 23A of the Act, which was introduced by an amendment in 1952, provided that". the restrictions imposed by section 8(1). shall be deemed to have been imposed under section 19 of the , and all the provisions of the Act shall have effect accordingly. " Section 19 of the , enabled the Central Government, by notification, to prohibit or restrict the bringing goods of any specified description into 787 India and, by reason of other :provisions of that Act, goods imported in contravention of the notification issued under section 19 were liable to confiscation. In 1955, the , was amended by the introduction of section 178A in that Act, which provided, inter alia that "where goods were seized, under that Act in the reasonable belief that they were smuggled goods, the burden of proving that they were not smuggled goods shall be on the person from whose possession the goods were seized. " On June 26, 1956, N, an employee of the respondent, on alighting at the Central Station in Madras From Bombay was intercepted by a Police Head Constable and, on a search of his clothing, four blocks of gold weighing about a thousand tolas were found in his possession. The officers of the customs department interrogated him and, finding that lie was unable to produce any record for the purchase of the gold, seized from him the blocks of gold. N admitted that he brought the gold for the respondent and enquiries were made to verify the story narrated by him as to the source from which he obtained the gold. Thereafter the Collector of Customs being prima facie of the view that the gold seized had been smuggled, issued notice to the respondent to show cause why the said gold should not be confiscated. The respondent offered his explanation bat the Collector held that the respondent bad not discharged the onus of proving that the gold was not smuggled, an onus which had been cast on him by section 178A of the , and directed the confiscation of the gold under section 167(8) of that Act. The respondent challenged the legality of the action taken by the Collector of Customs on the grounds, inter alia, (1) that section 178A of the Sea Customs Act, 1873, was consti tutionally invalid as it was an unreasonable restraint on the citizen 's rights to hold property or to do business guaranteed by article 19(1)(f) and (g) of the Constitution of India and was not saved by cls. (5) and (6) respectively of article 19; (2) that section 178A of the Sea Customs Act which was enacted in 1955 could not be invoked in adjudicating a contravention of a notification under the Foreign Exchange Regulation Act inasmuch as section 23A of the latter Act when enacted in 1952 in effect incorporated into that Act all the relevant provisions of the Sea Customs Act as they stood in ' 1952 with the result that any subsequent amendments to the Sea Customs Act could not affect section 23A; and (3) that the rule as to the burden of proof under section 178A was not attracted to the present case because the Customs Officer who effected the seizure did not, at the moment of seizure, entertain a reasonable belief that the goods seized were smuggled. The Collector of Customs besides maintaining the legality of the order of confiscation, contended that the question raised in the case as to the constitutional 788 validity of section 178A of the Sea Customs Act was concluded by the decision in Babulal Amthalal Mehta vs The Collector of Customs, Calcutta Held: (1) that Babulal Amthalal Mehta vs The Collector of Customs, Calcutta, [1957] section C. R. II 10, was a decision as to the validity of section 178A of the Customs Act, 1878, with reference to article 14 of the Constitution of India only and that the question whether the said section was obnoxious to the rights guaranteed by article 19(1)(f) and (g) was not considered by that judgment. (2) that the object of section 178A was the prevention and eradication of smuggling, inter alia of gold which was widely prevalent, and in view of the fact that without a Law in that form and with that amplitude smuggling might not be possible of being effectively checked, the restrictions imposed by that section being in the interests of the general public could not be held to be violative of the rights guaranteed by article 19 (1) (f) and (g), though it might operate somewhat harshly on a small section of the public. Accordingly, section 178A does not contravene article 19(1)(f) and (g). State of Madras vs V. G. Row, ; , Manohar Lal vs State of Punjab, ; and Ram Dhan Dass vs State of Punjab; , , relied on. Pukhraj Champalal Jain vs D. R. Kohli, (1959) 61 Bom. T. R. 1230, approved. M.G. Abrol vs Amichand, (1 960) , disapproved. Nathella Sampathu Chetty vs Collector of Customs, Madras, A. 1. R. , reversed. (3) that a seizure to which section 178A was applicable was merely a preliminary to the proceedings before a quasi judicial authority under section 182 and that it was only when the latter authority was, satisfied that the seizure was made "in the reasonable belief that the goods seized were goods that had been smuggled" that the rule of evidence laid down by section 178A came into operation. (4) that the wording of section 23A of the Foreign Exchange Regulation Act, 1947, showed that the reference in it to section 19 of the , was merely for rendering notifications under the named provisions of the Foreign Exchange Regulation Act to operate as notifications under the and that it could not have the effect of incorporating the relevant provisions of the latter Act in the Act of 1947, and that, consequently, when a notification issued under section 8(1) of the Foreign Exchange Regulation Act was deemed for ail purposes to be a notification issued under section 19 of the 789 , the contravention of the notification attracted to it each and every provision of the which was in force at the date of the notification. The, Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd., (1931) L. R,. A. 259, held inapplicable. (5) that, in the instant case, the circumstances present at the moment when the gold was taken by the Customs Officer at the Central Station did tend to raise a reasonable suspicion that the gold seized had been obtained illicitly and that this was sufficient to constitute in the words of the statute "a reasonable belief that the goods (gold) were smuggled."

The respondent field a suit against the appellant for recovery of possession of a building on the ground of wilful deflault in payment of rent which was Rs. 900 per ;month. The appellant denied the relationship of landlord and tenant, claiming himself as one of the "associates" or "co sharers" or "co owners" of the building. The Munsif decreed the suit; and the decree was affirmed in appeal by the first appellate court as also by the High Court. Hence the present appeal. During the pendency of the present appeal, cl. (ii) of section 30 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, which exempted from application of the Act premises the monthly rent in respect of which exceeded Rs. 400, and on the basis of which the suit giving rise to the present appeal emanated, was struck down in a judgment by this Court. ** The appellant contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, of the Act, 311 which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400, the decree of the civil court became null and void and of no effect. On behalf of the respondent it was submitted that the decree passed by the civil court was not a nullity for the Act did ;not bar the jurisdiction of the civil court but only prohibited execution of a decree of eviction otherwise than in accordance with the relevant statutory provision; and that such a decree was not void, but was merely under an eclipse, and would become executable as and when the bar is removed. Allowing the appeal, this Court, HELD; 1.1 Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prohibits jurisdiction of the civil court in respect of eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section and sections 14 to 16. The sole circumstance and the condition precedent to the exercise of jurisdiction by a civil court as stated in second proviso to section 10(1) is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller, on such denial or claim by the tenant, reaches a decision and duly records a finding that such denial or claim was bona fide and only when these conditions are satisfied jurisdiction of the civil court can be invoked to pass a decree for eviciton on any of the grounds mentioned in section 10 or sections 14 to 16. Except to this limited extend the jurisdiction of the civil court is completely barred and the same is vested in the tribunals set up under the Act. Any suit instituted by a landlord for eviction of a tenant from a building falling within the ambit of the Act,otherwise than as stipulated by the section is, therefor, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect. [317D E, G H; 318 D,G H] Sushil Kumar Mehta vs Gobind Ram Bohra, [1990] 1 SCC page 193, referred to. 1.2 The decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters. [318D E] Magiti Sasamal vs Pandab Bissoi,[1962] 3 SCR 673, referred to. 1.3 If the decision of the Controller is that tenant 's denial or 312 claim is not bona fide, the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide denied landlord 's title or claimed right of permanent tenancy.[318E F] 1.4 Although the Act contains no express bar of jurisdiction of the civil court, its provisions explicitly show that, subject to the extraordinary powers of the High Court, and this Court, such jurisdiction is statute for eviction of tenants "in execution or otherwise". The provision of the Act are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it, and their competence to administer the same remedy as the civil courts render in civil suits. Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it. [317A C] Dhulabhai &Ors. vs The State of Madhya Pradesh & Anr. , ; ; Secretary of State vs Mask & Co., [1939 40] IA 222 (PC, Raleigh Investment Co. Ltd. vs Governor General in Council, [1946] 47 IA 50 (PC and Barraclough vs Brown & Ors., , referred to. In the instant case, the procedure stipulated in the second proviso to section 10 had not been complied with. At the time of institution of the suite, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in cl. (ii) of section 30, but after leave to appeal was granted, the applicability of the Act was extended to the building by reason of the decision of this Court, declaring the invalidity of cl. (ii) of section 30 on account of its inconsistency with Article 14 of the Constitution. Whatever be the consequences of that declaration whether it has rendered the statutory provision null and void and of no effect, or, merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban in either event, the civil court acting without the aid of the exclusionary provision in cl. (ii) of section 30, during the period of invalidity,had become coram non judice and its proceedings resulting in the decree a nullity. [319A D] 313 Ratan Arya & Ors. vs State of Tamil Nadu & Anr. , ; , referred to. Kiran Singh & Ors. vs Chaman Paswan & Ors., ; relied on. V.B. Patankar & Ors.v. C.G. Sastry, ; , held inapplicable. Behram Khurshed Pesikaka vs State of Bombay, ; Saghir Ahmad vs State of U.P. and Ors. ; ; Bhikaji Narain Dhakras & Ors. vs The State of M.P. The State of A.P. & Anr., ; , referred to.

In connection with an investigation in January 1958 relating to another case, the appellant, who was employed as a railway guard on the Eastern Railway, was found in possession of pecuniary resources disproportionate to his known sources of income. As it was thought that he ' had come in possession of these pecuniary resources by committing acts of misconduct defined in clauses (a) ,to (d) of section 5(1) of the Prevention of Corruption Act 2 of 1947, on the recommendation of the Deputy Superintendent of Police for the area, an Inspector of Police was appointed by an Order dated 27th February 1959 of the Magistrate, Ist Class, Sahibganj, to investigate the case against the appellant. The Investigating Officer, upon completion of the investigation and after obtaining sanction of the appropriate authority for prosecution of the appellant, submitted a charge sheet on March 31, 1960. The Trial Court convicted the appellant under section 5(2) of the Act and s.411 I.P.C. In appeal, by a judgment dated September 14, 1965,. the High Court set aside the conviction and sentence of the appellant under section 411 I.P.C. but confirmed his conviction under section 5(2) of the Act and reduced the sentence awarded by the Trial Court. On December 18, 1964 Parliament enacted the Anti Corruption Laws (Amendment) Act 40 of 1964 which repealed sub section (3) of section 5 of the. Act and enlarged the scope of criminal misconduct in section 5 by inserting a new clause (e) in section 5(1) of the Act. In appeal to this Court it was contended on behalf of the appellant (i) that section 5(3) of the Act having been repealed while the appeal was pending in the. High Court, the presumption enacted in section 5(3) was not available to prosecuting authorities after the repeal 'and it was not open to the High Court to invoke the presumption in considering the case against the appellant; the presumption contained in section 5(3) was a rule of procedural law and as alterations in the form of procedure are always retrospective in character, unless it was provided otherwise, it was not open to the High Court to apply the presumption in the present case; (ii) that the statutory safeguards under section 5A of the Act had not been complied with as the Magistrate had not given reasons for entrusting the investigation to a Police Officer below the rank of Deputy Superintendent Police; and (iii) that the charge against the appellant under section 5(2) the Act was defective as there were no specific particulars of misconduct as envisaged under clauses (a) to (d) of section 5(1) of the Act, nothing was stated about the amounts the appellant took as bribes and the 412 persons from whom he had taken such bribes so that the, appellant had no opportunity to rebut the presumption raised under section 5(3) of the Act and to prove his innocence. HELD: Dismissing the appeal v: (i) The High Court was right invoking the presumption under section 5(3) of the Act .even though it was repealed on December 18, 1964 by the Amending Act. Although as a general rule the amended law relating to procedure operates retrospectively, there is another equally important principle, which is also embodied in section 6 of the General Clauses Act, that a statute should not be so construed 'as to create new disabilities or obligations or impose new duties ties in respect of transactions which were complete at the time the amending Act came into force. The effect of the application of this principle is that pending cases although instituted under the old Act but still pending are governed by the new procedure ' under the amended law, but whatever procedure was correctly adopted and concluded under the old law cannot be opened again for the purpose of applying the new procedure. In the present case, the trial of the appellant was taken up when section 5(3) of the Act was still operative. The conviction of the appellant was pronounced on March 31, 1962 long before the amending Act was promulgated. It Was not therefore possible to accept the contention that the conviction pronounced by the trial Court had become illegal or in any way defective in law because of the amendment to procedural law made on December 18, 1964. [417 G; 418 D] James Gardner v, Edward A. Lucas, at p. 603; King V, Chandra Dharrna, ; In re a Debtor [1936] .1 Ch.237 and In re Vernazza; ; referred to. (ii) Although the Magistrate 's order on the, petition filed by the DepUty Superintendent of Police suggesting that the Inspector of Police be empowered to investigate the case does not state any reasons for his granting the permission sought, the High Court had rightly concluded 'that as the Magistrate was working in the area for a period of two years prior to the passing of the order in question he must have known that the Deputy Superintendent of Police could not devote his whole. time to the investigation of the case and therefore the inspector of Police .should be entrusted to do the investigation. [419 F] (iii) The charge, as framed, dearly stated that the appellant accepted gratification other than legal remuneration and obtained pecuniary advantage .by corrupt ,and illegal means. The absence of sufficient particulars could not invalidate the charge though it may be a ground for asking for. better particulars. The appellant never complained in the trial court or the High Court that the charge did not contain the necessary particulars, he , was. misled on that account in his defence. In view this and the provisions of section 225 Cr. P.C. it could not be said that charge was defective. [421 F]

Section 56 of the Bombay Police Act, 1951, is not unconstitutional and does not contravene the provisions of article 19 of the Constitution. Gurbachan Singh vs State of Bombay ( ; , followed. In order to attract the operation of the section the Officer concerned should be satisfied that the witnesses are not willing to come forward to give evidence in public, but it is not necessary to show that all the witnesses are unwilling to give evidence. The terms of the section do not justify any restricted meaning being given to the word "witnesses" and it is applicable to members of the police force and employees and officers of the Customs Department also. Gurbachan Singh vs State of Bombay ( ; , explained. Under the provisions of section 56 of the Bombay Police Act, 1951, an order of externment was passed against the petitioner by which he was directed to remove himself outside the limits of Greater Bombay and not to enter the said area for a period of two years without the prescribed permission; and subsequently he entered Greater Bombay in order to attend Court in a case pending against him in which a warrant of arrest had been issued. He was convicted for committing the breach of the externment order and he contended that his conviction was in itself an indication of the unreasonableness of the restriction. Held, that the restrictions cannot be said to be unreasonable, as the petitioner could have avoided the prosecution. and the conviction by obtaining the previous permission of the prescribed authority. Per JAGANNADHADAS J. If the matter were res integra should have felt difficulty in upholding the validity of section 56(b) of 534 the Bombay Police Act, 1951, in so far as it did not demarcate the application thereof to the more serious classes of offences falling within the specified Chapters. I.should also have felt difficulty in holding a provision to be reasonable which clothes the executive officers with an authority to extern a person for so long a period as two years.

Double Jeopardy Applicability of rule Law finally and authoritatively decided by Supreme Court as to interpretation of the constitution If a substantial question of law Constitution of India, Arta. 20 (2), 145 (3). After the discovery of the conspiracy, ten conspirators including the appellants were put to trial before the Sessions judge under section 120 B of the Indian Penal Code and also each one of them separately under section 409 read with section 109 of the said Code. The charge was that they, alongwith one Shankar Lal and Doshi, both of them deceased entered into a criminal conspiracy at Bombay and elsewhere between or about the period from September 20, 1950 to December 31, 1950, to commit or cause to be committed criminal breach of trust in respect of Government securities or proceeds thereof or the funds of the Empire of India Life Assurance Co. Ltd., Bombay, acquiring its management and control and dominion over the said property in the way of business as Directors, Agents or attorneys of the said company. The learned Sessions Judge convicted six accused persons under section 120 B, read with section 409 of the Indian Penal Code and sentenced them to various terms of imprisonment. The rest four accused persons were acquitted. Against the acquittal State preferred an appeal to the High Court and the convicted accused persons also filed appeals against their convictions. Government appeal was allowed and the appeals of the convicted accused persons were dismissed by the High Court. These appeals by special leave have been preferred only by five accused persons against their conviction and sentences. In these appeals, the Court pro ceeded on the basis as it was manifest and indeed not disputed 379 that there was a conspiracy and the only question for con sideration was whether all or some of the appellants were parties to it. Held, that the essence of conspiracy is that there should be an agreement between persons to do one or other of the acts described in the section. The said agreement may be proved by direct evidence or may be inferred from acts and conduct of the parties. But section 10 of the Evidence Act intro. duces the doctrine of agency and if the conditions laid down therein are satisfied, the acts done by one are admissible against the co conspirators. The section can be analysed as follows : (1) There shall be a prima facie evidence affording a reasonable ground for a court to believe that two or more persons are members of a conspiracy; (2) if the said condition is fulfilled, anything said, done or written by any one of them in reference to their common intention will be evidence against the other; (3) anything said, done or written by him after the intention was formed by any one of them; (4) if it would also be relevant for the said purpose against another who entered the conspiracy whether it was said, done or written before he entered the conspiracy or after he left it; and (5) it can only be used against a co conspirator and not in his favour. Held, that so far as the appellant in criminal appeal No. 82/62 is concerned, applying the test laid down by this Court, the two conspiracies are not the same offence. The ingredients of both the offences are totally different and they do not form the same offence within the meaning of article 20 (2) of the Constitution and, therefore, that Article has no relevance to the present case. Further, there are no permissible grounds for upsetting the concurrent findings of both the courts below that the appellant was a member of the conspiracy. Leo Boy Prey vs The Superintendent, District Jail, Amritsar, ; and The State of Bombay vs section L. Apte, ; , relied on. Sardul Singh Caveeshar vs State of Bombay, [1958] S.C.R. 161, referred to. As the question raised regarding interpretation of article 20 (2) of the constitution has already been decided by this Court, it cannot be held that the question raised involves a substantial question of law as to the interpretation of the Constitution within the meaning of article 145 (3) of the Constitution. State of Jammu & Kashmir vs Thakur Ganga Singh, [1960] 2 section C. R. 346 relied on. 380 Held, that from the relevant provisions of section 53 and the Explanation to section 55 of the Evidence Act. , it is clear that the evidence of general reputation and general disposition is relevant in a criminal proceeding. Under the Indian Evidence Act, unlike in England, evidence can be given both of general character and general disposition. Disposition means the inherent qualities of a person; reputation means the general credit of the person amongst the public. There is a real distinction between reputation and disposition. A man may be reputed to be a good man, but in reality be may have a bad disposition. The value of evidence as regards disposition of a person depends not only upon the witness 's perspicacity but also on his opportunities to observe the person as well as the said person 's cleverness to hide his real traits. But a disposition of a man may be made up of many traits, some good and some bad, and only evidence in regard to a particular trait with which the witness is familiar would be of some use. But, in any case, the character evidence is a very week evidence; it cannot out weight the positive evidence in regard to the guilt of a person. It may be useful in doubtful cases to tilt the balance in favour of the accused or it may also afford a background for appreciating his reactions in a given situation. It must give place to acceptable positive evidence. The opinion expressed by the witnesses does credit to the accused, but, in the face of the positive evidence it cannot turn the scale in his favour.

The appellants were detained under r. 30(l) of the Defence of India Rules made by the Central Government under section 3 of the Defence of India Ordinance, 1962. They applied to the Punjab and Bombay High Courts under section 491(1)(b) of the Code of Criminal Procedure and their case was that sections 3(2)(15)(i) and 40 of the Defence of India Act, 1962, and r. 30(1)(b) of the Defence of India Rules, which were continued under the Act, were unconstitutional and invalid inasmuch as they contravened their fundamental rights under articles 14, 21, 22(4), (5) and (7) of the Constitution and that, therefore, they should be set at liberty. The High Courts held that the Presidential Order which had been issued on November 3, 1962, under article 359(1) of the Constitution, after a declaration of emergency under article 352, consequent on the Chinese invasion of India, barred their right to move the said petitions and dismissed them. These appeals raised two common questions in this Court, (1) what was the true scope and effect of the Presidential Order issued under article 359(1), and (2) did the bar created by the Order operate in respect of the applications under section 491(1)(b) of the Code. The Presidential Order was as follows: "G.S.R. 1464 In exercise of the powers conferred by cl. (1) of article 359 of the Constitution, the President hereby declares that the right of any person to move any court for the enforcement of the right conferred by article 21 and article 22 of the Constitution shall remain suspended for the period during which the Proclamation of Emergency issued under clause (1) of article 352 thereof on the 26th October 1962 is in force, if such person has been deprived of any such rights under the Defence of India Ordinance, 1962 (4 of 1962) or any rule or order made thereunder. " By a later amendment of the Order article 14 was incorporated into it. 798 Held:(per Gajendragadkar, Sarkar, Wanchoo, Hidayatullah, Das Gupta and Shah, JJ.) that the proceedings taken by the appellants in the High Courts under section 491(1)(b) of the Code were hit by the Presidential Order and must be held to be incompetent. Article 359 of the Constitution was not capable of two interpretations and it was, therefore not necessary to decide the controversy raised by the parties as to whether that Article should be interpreted in favour of the President 's power granted by it or the fundamental rights of the citizens. The King (At the Prosecution of Arthur Zadig) vs Halliday, ; , Liversidge vs Sir John Anderson, ; , Keshav Talpade vs The King Emperor, [1943] F.C.R. 49, Nakkuda Ali vs M. F. De section Jayaratne, and King Emperor vs Vimalabal Deshpande, L.R. 73 1. A. 144, considered. The words 'any court ' in article 359(1), construed in their plain grammatical meaning, must mean any court of competent jurisdiction including ' the Supreme Court and the High Courts before which the rights specified in the Presidential Order can be enforced. It was not correct to say that the use of the words was necessary so as to include such other courts as might be empowered in terms of article 32(3). Nor was it correct to say that the words could not include a High Court as its power to issue a writ under article 226(1) was discretionary. In judging whether a particular proceeding fell within the purview of the Presidential Order the determining factor was not its form nor the words in which the relief was couched but the substance of it. If in granting the relief the court had to consider whether any of the fundamental rights mentioned in the Presidential Order, had been contravened, the proceeding was within the Order, whether it was under article 32(l) or 226(1) of the Constitution. The right to move the court for writ of habeas corpus under section 491(1)(b) of the Code of Criminal Procedure was now a statutory right and could no longer be claimed under the common law. Girindra Nath Banerjee vs Birendra Nath Pal I.L.R. 54 Cal. 727, District Magistrate, Trivandrum vs K. C. Mammen Map pillai, I.L.R. , Matthen vs District Magistrate, Trivandrum L.R. 66 I.A. 222 and King Emperor vs Sibnath Banerji, L.R. 72 I.A. 241, referred to. Since the promulgation of the Constitution the two methods by which a citizen could enforce his right of personal freedom were (i) by a writ under article 226(1) or article 32(l), or (ii) under section 491(1)(b) of the Code of Criminal Procedure. Whichever method he adopted if the right he sought to enforce was a fundamental right guaranteed by the Constitution the matter must, come within article 359(1) of the Constitution. That the court could exercise its power under section 491(1)(b) suo motu could make no 799 difference and articles 372, 225 or 375 could provide no valid ground of attack. The suspension of the right to move any court, as under the Presidential Order, must necessarily suspend the Court 's jurisdiction accordingly. The right to challenge a detention order under section 491(1)(b) of the Code had been enlarged by the fundamental rights guaranteed by the Constitution and when a detenu relied upon such rights in his petition under that section he was in substance seeking to enforce his fundamental rights. The prohibition contained in article 359(1) and the Presidential Order must, therefore, apply. The expression "right to move any court" in article 359(1) and the Presidential Order takes in all legal actions, filed or to be filed, in which the specified rights are sought to be enforced and covers all relevant categories of jurisdictions of competent courts under which the said actions would other wise have been normally entertained and tried. Sree Mohan Chowdhury vs Chief Commissioner Union Territory of Tripura, ; , referred to. Even though the impugned Act may be invalid by reason of contravention of articles 14, 21 and 22, as contended by the appellants, that invalidity could not be challenged during the period prescribed by the Presidential Order and it could not be said that the President could not because of such invalidity issue the order. Where, however, the challenge to the validity of the detention order was based on any right other than those mentioned in the Presidential Order, the detenu 's right to move any court could not be suspended by the Presidential Order because the right was outside article 359(1). Where again the detention was challenged on the ground that it contravened the mandatory provisions of the relevant act or that it was malafide and was proved to be so and in all cases falling under the other categories of section 491(1) of the Code excepting those under section 491(1)(b), the bar of the Presidential Order could have no application. So also the plea that the operative provision of the law under which the order of detention was made suffered from the vice of excessive delegation, was an independent plea not relatable to the fundamental rights mentioned in the Presidential Order and its validity had to be examined. The plea that section 3(2)(15)(i) and section 40 of the impugned Act suffered from excessive delegation must fail. The legislative policy was broad stated in the preamble and the relevant provisions of sections 3(1) and 3(2) gave detailed and specific guidance to the rule making authority and it was not correct to say that the Act had by the impugned sections delegated essentially legislative function to that authority. Rule 30(1)(b) which was consistent with the operative provisions of the Act could not also be challenged on that ground. 800 In " The etc. ; , Harishankar Bagla vs The State of Madhya Pradesh, , Bhatanagars and Co. Ltd., vs The Union of India, ; , relied on. The impugned Act could not also he struck down as a piece of colourable legislation because the , was already on the Statute book. The Parliament had power under Entry 9, List I of the Seventh Schedule to the Constitution and if in view of the grave threat to the security of India it passed the Act, it could not be said to have acted malafide. If the Parliament thought that the executive would not be able to detain citizens reasonably suspected of prejudicial activities by a recourse to the , which provided for the required constitutional safeguards and the impugned Act which it enacted did not, it could not be suggested that it was acting malafide. Even if the impugned Act contravened articles 14 and 22 and the detentions thereunder were invalid, article 359(1) and the Presidential Order, which were precisely meant to meet such a situation, barred investigation on the merits during the period prescribed by the Order. The proceeding under section 491(1)(b) of the Code is one pro ceeding and the sole relief that can be claimed under it is release from the detention. If that could not be claimed because of the Presidential Order it was unreasonable to say that a mere declaration that the impugned Act and the detention thereunder were invalid could be made. Such a declaration is clearly outside the purview of section 491(1)(b) of the Code as also of articles 226(1) and 32(l) of the Constitution. The period for which the emergency should continue and the restrictions that should be imposed during its continuance are matters that must inevitably be left to the executive. In a democratic state the effective safeguard against any abuse of power in peace as also in emergency is the existence of enlightened, vigilant and vocal public opinion. Liversidge vs Sir John Anderson, [19421 A.C. 206, referred to. The inviolability of individual freedom and the majesty of law that sustains it are equally governed by the Constitution which has made this Court the custodian of the fundamental rights on the one hand and, on the other, provided for the declaration of the emergency. Consequently, in dealing with the right of a citizen to challenge the validity of his detention, effect must be given to article 359(1) and the Presidential Order issued under it. The right specified in that Article must be held to include such right whether constitutional or constitutionally guaranteed and the words "any court" must include the Supreme Court and the High Court. The Punjab and the Bombay High Courts were, therefore right in their decision that the applications under section 491(1)(b) of 801 the Code were incompetent in so far as they sought to challenge the validity of the detentions on the ground that the Act and the Rules under which the orders were made contravened articles 14, 21 and 22(4)(5) and (7) of the Constitution. Per Subba Rao, J. It was clear that section 3(2)(15)(i) of the Defence of India Act, 1962, and r. 30(1)(b) made under the Act contravened the relevant provisions of article 22 of the Constitution and were, therefore, void. Deep Chand vs The State of Uttar Pradesh, [1959] Supp. 2 S.C.R. 840, Mahendra Lal vs State of U.P., A.I.R. 1963 S.C. 1019, A. K. Gopalan vs State of Madras, ; , referred to. Under the Constitution, every person has a right to move the Supreme Court, the High Courts or any other court or courts constituted by the Parliament under article 32(3) for the enforcement of fundamental rights in the manner prescribed. But while the right to move the Supreme Court is a guaranteed right, the right to move the others is not so. Article 359, properly construed, meant that the bar imposed by the Presidential Order applied not only to the guaranteed right to move the Supreme Court but also the rights to move the other courts under article 32 and article 226 of the Constitution. There is no new rule of construction peculiar to war measures. It is always the same, whether in peace or in war. The fundamental rule is that the courts have to find out the expressed intention of the Legislature from the words of the enactment itself. Words must be given their natural and ordinary meaning unless there is ambiguity in the language in which case the court has to adopt that meaning which furthers the intention of the Legislature. A constitutional provision such as article 359, however, cannot be given a strained construction to meet a passing phase such as the present emergency. Rex vs Halliday, L.R. [19171 A.C. 260, Liversidge vs Sir John Anderson; , , Nakkuda A1i vs jayaratna, , Gibbon vs Ogden, (1824) 6 L. Ed. 23, discussed. Section 491 of the Code of Criminal Procedure is wide in its terms and gives a discretionary power to the High Courts. Unlike articles 32 and 226, the exercise of the power is not channelled through procedural writs or orders and their technicalities cannot circumscribe the court 's discretion. Girindra Nath Banerjee vs Birendra Nath Pal, (1927) I.L.R. , District Magistrate, Trivandrum vs Mammen Mappillai, I.L.R. , Matten vs District Magistrate, Trivandrum, L.R. (1939) 66 I.A. 222, referred to. Section 491 is continued by article 372 and article 225 preserves 802 the jurisdiction of the High Court. The power it confers on the High Court is not inconsistent either with article 32 or article 226 or any other Article of the Constitution and the section cannot, therefore, be said to have been impliedly superseded even to the extent article 226 empowers the High Court to give relief in cases of illegal detention. Though remedial in form the section postulates the existence of the substantive right that no person can be deprived of his liberty except in the manner prescribed by law. It assumes the existence of the rule of law and empowers High Court to act suo motu. The rights, substantive and procedural conferred by it arc different from those under articles 32 or 226 of the Constitution. It places the onus on the custodian to prove that the detention is legal and although in scrutinising the legality of the detention the court may have to consider whether the law offends any fundamental rights, that cannot make the proceeding one for the enforcement of fundamental rights or the decision anything but one on the unconstitutionality of a law because of infringement of fundamental rights generally. The mode of approach to the High Court under section 491 of the Code or the nature of the relief given thereunder cannot be equated with those under the Constitution. The absolute discretionary jurisdiction under it cannot be put on a par with the jurisdiction under article 226 which is hedged in by constitutional limitations. Alam Khan vs The Crown, Lahore 274, Ramji Lal vs The Crown, I.L.R. (1949) 11 E.P. 28, King Emperor vs Vimlabai Deshpande, (1946) L.R. 73 I.A. 144, referred to. While section 491 gives no right to enforce fundamental rights, operating as it does as a check on arbitrary action, article 359 is concerned not with statutory powers but deals with the constitutional right and the constitutional enforcement of it. It was not, therefore, correct to say that article 359 would be frustrated if section 491 was allowed to stand for Parliament might amend that section any time it liked. The expression "right to move any court for enforcement of such of the rights conferred by Part 111" in article 359 must refer only to the right to move under article 32 or article 226 for the said specific relief and could not be applied to the exercise of the statutory power of the High Courts under section 491 of the Code and, consequently, the expression "all proceedings pending in any court for the enforcement of the rights" must refer to the proceedings initiated in exercise of that right. The detenus could not, therefore, enforce their fundamental rights under articles 21, 32 and 14 while the Presidential Order lasted, but that did not affect the High Court 's power under section 491 of the Code. The President 's Order cannot bar the detenus from proving even under articles 32(l) and 226 that the detentions were not made 803 under the Defence of India Ordinance or the Act as they were outside the Ordinance or the Act or in excess of the power conferred by them or that the detentions were made malafide or in fraudulent exercise of power.

The respondents addressed two letters to the Chief Justice of the Calcutta High Court regarding mysterious death of two young boys living in Barrackpore area near Calcutta alleging, inter alia, that the local police was not conducting the investigation into the unnatural death of the two boys fairly and properly and was trying to make it a case of suicide and requested the High Court to order a thorough investigation into the incident by an independent machinery which would command confidence and be acceptable to the local police. A single Judge of the High Court, before whom the letters were placed, treated the two letters as a formal petition and, without giving notice directed issue of a rule to the State of West Bengal and other authorities to show cause why a writ in the nature of mandamus may not be issued directing investigation in accordance with law to be conducted over the unnatural death of the two boys. In the meanwhile the Judge also appointed Deputy Inspector General, Central Bureau of Investigation to make as inquiry and report to the High Court as to how 257 the two boys met their death. The appellants preferred an appeal against the said order before the Division Bench which also confirmed the order of the Single Judge with the modification that the DIG, CBI will act as a special officer. Hence this appeal. The appellants contended (i) that the order of the Single Judge was vitiated having been made in violation of rules of natural justice; (ii) that the order was also bad as the learned Single Judge had not cared to inform himself as to the stage of investigation and if there was any lacuna therein and he proceeded to act on certain assumptions for which there was no basis or foundation, (iii) that since there had been no breach of duty, the court had no jurisdiction to interfere with the investigation which, under the law, was vested in the police authorities and therefore the directions given by the Single Judge and upheld with certain modifications by the Division Bench were not proper. Allowing the appeal, ^ HELD: 1. It is clear from the order passed by the Learned Single Judge that no bearing was afforded to the State Government or its officers when direction to appoint the special officer in whom power of inquiry was to be vested was made. There was no basis at that stage to assume that the contents of the letters as also the facts stated in the columns of the newspaper had not been contradicted. It was the State Government or its officers who alone could have authoritatively indicated the facts showing whether the allegations contained in the letters or the newspaper report were true and if so to what extent or how the investigation was being carried on and what stage it had reached so as to enable the court to come to a prima facie authorities were not discharging properly their statutory obligation to carry out an investigation But when no notice was given to the State Government and no opportunity was offered to them, it is difficult to see how an ex parte order could be made on such an assumption. If the facts stated in the letter or the writ petition are credible and there is such urgency that the ends of justice might be defeated by not making an ex parte order or giving of notice without ex parte order might lead to aggrevation of oppression or exploitation or removal or elimination of evidence, the court would certainly be justified in making an ex parte order. But in the instant case, there were no such circumstances at all and the court could have very well issued notice to the respondents and tried to find out whether there wag any necessity directing the appointment of DIG, CBI to act as a Special officer and requiring the police authorities of the State to extend all possible help as may be required by him. [270C H: 271A] (2) The appointment of a Special officer with a direction to enquire into the commission of an offence can only be on the basis that there has not been a proper investigation. There is a well defined hierarchical administrative set up of the police in the State of West Benga1 as in all other States and lo have created 3 new channel of inquiry or investigation is likely to create an impression that everything is not well with the statutory agency 258 and it is likely to cast a stigma on the regular police hierarchy. In the facts and circumstances of the instant case and the nature of the order made in view, the direction to appoint a Special officer with powers to inquire should not have been made until the appellants has been given a hearing and the court had the papers of investigation laid before it for being prima facie satisfied that the investigation had either not been proper or adequate. [271C E] (3) Under the Code of Criminal Procedure which lays down the procedure to be followed when report of an offence is lodged with the police, the power to investigate is vested in the police. The procedure laid down in the Code is clear and definite. Investigation is a matter for the police under the scheme of the Code. Judicial opinion seems to be settled and there are several authorities of the Supreme Court where interference by the Court into police investigation has not been approved. There is however. residuary jurisdiction left in the court to give directions to the investigating agency when it is satisfied that the requirements of the law are not being complied with and investigation is not being conducted properly or with due haste and promptitude. The court has to be alive to the fact that the scheme of the law is that the investigation has been entrusted to the police and it is ordinarily not subject to the normal supervisory power of the court. But in the instant case, the material placed before the court did not justify an exception to be made to the rule indicated by the Supreme Court and the appointment of a Special officer was not called for at this state. [262D; 270B; 278H; 279A C] State of West Bengal vs S.N. Basak S.N. Sharma vs Bipin Kumar Tiwari & Ors.[1970] 3 S.C.R 946. State of Bihar v J. A. C. Saldanha & Ors. [1980] 2 S.C R. 16 followed. kings Emperor vs Khwaja Nazir Ahmed [1944] L.R. 71 referred to. Bhagwant Singh vs Commissioner of Police, Delhi ; held not applicable. (4) 'Inquiry ' and 'investigation ' are statutory terms defined in the Code. In the instant case whatever name the work entrusted to the Special officer be called, there can be no dispute that he was required to ascertain facts from the witnesses and documents, if any, in regard to the death of the two boys. This process necessarily involved a fact finding inquiry by ordinarily tapping the same sources as the investigating agency was expected to contact. This, therefore, necessarily involved a duplicate investigation. In view of the fact that there were two separate channels Placed in active charge of investigation to be conducted contemporaneously, confusion was bound to occur and working of the two channels at a time was likely to prejudice the proper investigation making the exposing of the truth buried under mystery more difficult. Carrying this duplicate process was not likely to serve the cause of justice nor help in achieving the object for which it had been set up. The Special officer was not to exercise the power under s.5 of the , and if be wanted any real 259 assistance in the matter of investigation, it had to be carried through the police officers of the State Administration. This was likely to bring in futher confusion in as much as the witnesses were likely to be contacted by the same police office on more than one occasion once in the course of investigation conducted by the police and again to meet the requirements of the Special officer. We are sure that the High Court never intended the cause of justice to be prejudiced and the serious attempt to find out the truth to be aborted. [273D F; H; 274A C] (5) While section 6 of the would require the consent of the Slate Government before jurisdiction under s.5 of that Act is exercised by officer of that establishment, when a direction is given by the court in an appropriate case, consent envisaged under s.6 of the Act would not be a condition precedent to compliance with the court 's direction Section 6 of the Act does not apply when the court C gives a direction to the C.B.I. to conduct an investigation. In this view, the impugned order of the learned single judge and the appellate decision of the Division Bench appointing DIG, CBI to inquire into the matter would not be open to attack for want of sanction under s.6 of the Act. [269B D] (6) ln the instant case, the Court allowed the appeal and set aside the order of appointment of the Special officer and observed that the investigation carried out has not been quite satisfactory. However, in the facts and circumstances of the case, there is no necessity to take away the investigation from the hands of the State Police machinery which is the statutory agency. The court pointed out that though there are occasions when death remains a mystery in spite of the best of efforts, it hopes that with an honest attempt and since efforts made, the truth would be found out and the police authorities of the State would be in a position to give a creditable account of themselves. The court also suggested that the Director General of Police, West Bengal, will appoint a competent supervisory officer from the higher ranks of the State police with expertise in investigation to supervise the investigation in the present case. [279D; 282E H]

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. 424 of 1958. Appeal from the judgment and decree dated April 25, 1950, of the Madras High Court in A. section No. 67 of 1947. K. Bhimasankaram and. K.R. Chaudhuri. for the appellants. T. V. R. Tatachari, for respondents Nos. 1 to 3. P. Ram Reddy, for respondent No. 9. M. R. Krishna Pillai for respondent No. 24. September 18. The Judgment of the Court was delivered by SHAH J. One Thammiah had two sons Gangaraju and Ramayya and four daughters Ammanna, Sesbamma, Gangamma and Bbavamma, of these, the two sons and the daughter Ammanna .died during Thammiab 's life time. Gangaraju left him surviving his widow Cbetamma and Ramayya his widow Venkamma. Ammanna was survived by her son Rudrayya, who was brought up by Thammiah. Thammiah died in 1885, Seshamma in 1904, Gangamma in 1930 and Bhavamma in 1935. After the death of Bhavamma, Paddaraju (herein after called the plaintiff), son ' of Gangamma filed Suit No. 53 of 1944 in the court of the Subordinate 655 Judge at Rajamundhry against the descendants of Seshamma and Ammanna for a decree for partition and separate possession of a third share in 17 lands, described in Schedule B to the plaint as "agricultural land and measuring in the aggregate 51 acres 72 cents in Patta No. 12 in village Pandalpaka in Pitbapur Zamindari" and in Schedule IC ' described as three houses with sites thereof in village Pandalpaka,. To this suit Jaggarayudu and Paddaraju, sons of Venkataraju brother of the plaintiff were impleaded as defendants 31 and 32. The plaintiff claimed that Thammiah owned occupancy rights in the ryoti lands in the Pithapuram Zamindari and that after Thammiab 's death the lands were managed with the permission of the plaintiff and his brother Venkataraju, in the first instance, by the two daughters in law of Thammiah Chetamma and Rammanna, son of Seshamma and their "possession and management was on behalf of heirs and persons entitled to maintenance out of the estate" and that the right to sue for ' partition accrued on the death of Bhavamma on March 18, 1935. The suit was resisted by the descendants of Seshamma and Annamma principally on the plea that in the lands described in Schedule "B 'Thammiah had not proprietary right and that occupancy right therein accrued to Rudrayya and Veeriah (husband of Seshamma) by virtue of the Madras Estates Lands Act, 1908. It was also pleaded that Thammiah had made an oral will devising his estate in favour of Veeriah who was his illatom son in law and Rudrayya in equal shares. This plea about the oral will was negatived by the Court of First Instance and, the High Court and need no longer be consi dered, because it is not canvassed be fore us in this appeal. The trial Court held that Thammiah had no proprietary interest in the lands in Schedule 'B ' and on that view decreed the plaintiff 's claim for partition of the houses and sites described in Schedule IC ' only and awarded a third share to him, 656 another third share to Ramanna and the remaining third share collectively to defendants 31 and 32sons of Venkataraju. in appeal, the High Court of Madras modified the decree of the trial court holding that in the agricultural lands Thammiah had occupancy rights which on his death devolved on his surviving daughters, and directed that those lands be also partitioned, and that a third share be awarded to the plaintiff and a third share to defendants 31 and 32 together with mesne profits from March 18,1935. the date of Bhavammas death. With certificate under article 133, this appeal is preferred by the descendants of Seshamma and Ammanna. The principal question which falls to be determined in this appeal is whether Thammiah had, as claimed by the plaintiff, occupancy rights in the lands described in Schedule 'B ', or as the contesting defendants contend, Thammiah was an annual tenant of the zamindar and that after his death the lands were held on similar tenure by different members of the family of Thammiah and that the occupancy right was acquired by Rudrayya and Veeriah by virtue of the Madras Estates Lands Act, 1908. The lands are within a permanently settled zamindari under Madras Regulation XXV of 1802, and it is common ground that Thammiah was cultivating the entire area of the lands during his life time. There is no evidence indicating that his possession was ever disturbed during his life time. There is again no evidence about the commencement of the occupation of Thammiah or his pre decessors : commencement of their occupation is therefore lost in antiquity. The lands are described in the various documents, to which we will presently refer, as "jeeroyati landie ' Thammiah as "jeeroyati ryot", and after his death his daughters in law and grandson Ramanna were similarly described. Three documents Exts. D 1, D 2 and D 3which establish that Thammiah was cultivating the lands throw important light on the problem under 657 discussion. Exhibit D 1 is a muchilika dated July St 1, 1883, executed by Thammiah in favour of the zamindar. Exhibits D 2 and D 3 are similar muchilikas dated respectively August 10, 1884, and July 15 1885. Each of these muchilikas is in respect of the seventeen pieces of lands described in Schedule "B ' and the 'cist ' settled is Rs. 419/8/ . The terms of the three muchilikas are identical. Thammiah is described in the muchilikas as "jeeroyati ryot" and the lands are described as "jeeroyati pampus". It is recited in the muchilikas "I have executed and delivered this muchilika agreeing that I should pay the said cist amount of Rs. 419/8/every fasli according to the instalments mentioned hereunder to the Officials on your behalf and to obtain receipts;. . . that during the last year of the term, I should not raise gingelly or chiruyeru crop on these pampus but that I should leave sufficient land for purposes of garden cultivation and seed beds; that I should not cut down any, kind of trees without your permission; that I should not raise permanent gardens or construct houses on these lands without your permission; that I should not cause damage to these lands so as to make them unfit for cultivation purposes; that if at the of the term you should lease out these pampus to anyone, whom you like, for a cist amount advantageous to you, I should not raise objection thereto; that if you had leased out these lands to other ryots for the ensuing year after the expiry of the term, and if 'the said ryots should carry on necessary works for purposes of cultivation during the ensuing year by way of ploughing seed beds, sowing seeds and planting tender sugarcane even before the expiry of this term, I should leave sufficient land to them without raising any objection whatsoever. " By the covenants of the muchilikas Thammiah had undoubtedly undertaken not to raise certain crops, nor to cut trees, nor to put up permanent constructions and had also undertaken to give certain facilities to other tenants 658 inducted in the lands by the zamindar. The evidence does not justify the inference that Thammiah was inducted on the land by Ext. There is even no evidence that the land was acquired from the, zaminder by the members of Thammiab 's family or that the ancestors of Thammiah were not on the land before the zamindari rights accrued to the zamindar. It is also not didputed that land 1, in zamindaries in the Madras Presidency were even held in occupancy right by many ryots before the Madras EstateB Lands Act, 1908, was enacted. As observed in Venkata Narasimha Naidu vs Dandamudi Kotayyo(1) at 301 that "there is absolutely no ground for laying down that the rights of ryots in zamindaries invariably or even generally had their origin in express or implied grants made by the zamindar. The view that in the large majority of instances, it originated otherwise is the one most in accord with the history of agricultural land holding in this country. For, in the first place, sovereigns, ancient or modern, did not here set up more than a right to a share of the produce raised by raiyats in lands cultivated by them, however much that share varied at different. times. And, in the language of the Board of Revenue which long after the Permanent Settlement Regulations were passed, investigated and reported upon the nature of the rights of ryots in the various parts of the Presidency, "whether rendered in service, in money or in kind and whether paid to rajas, jagirdars, zamindars, poligars, mutadars, shrotiemdars, inamdars or to Government officers, such as tehaildars, amildars, amins or thannadars, the payments which have always been made are universally deemed the due of Government. . Therefore to treat such a payment by cultivators to zamindars as 'rent ' in the strict sense of the term and to imply therefrom the relation of landlord and tenant so as to let in the presumption of law that a tenancy in general is one from year to year, would be to introduce (1) Mad.a 299. 659 a mischievous fiction destructive of the rights of great numbers of the cultivating classes in this province who have held possession of their lands for generations and generations. " It was also observed in that case (at p. 303), ",It thus seem unquestionable that prima facie a zamindar and a raiyat are holders of the melvaram and kudivaram rights, respectively. When, therefore, the former sues to eject the latter, it is difficult to see why the defendant in such a case should be treated otherwise than defendants in possession are generally treated, by being called upon, in the first instance, to prove that they have a right to continue in possessions The right to occupy land under the revenue system prevailing in Madras may arise by reason of the customs in the district in which they are situate. In any event, there is no presumption that the holder of the land under a Zamindar is a tenant at will. In each case the rights of the ryot have to be ascertained in the light of the facts proved. In Appa Rau vs Subbanna (1), Muttusami Ayyar and Wilkinson, JJ., were called upon to consider whether a zamindari ryot could mortgage his interest in his holding. It was observed in that case that " 'According to the course of decisions, therefore, in this presidency the landlord may determine the tenancy if there is a contract, express or implied, by exercising his will in accordance with his obligations; that there is no presumption in favour of a tenancy at will; that an occupancy right may exist by customs; that a pattadar or raiyat in a mitta is entitled to continue in possession so long as he regularly pays rent 'and has a saleable interest, and that by reason of special circumstances in evidence the onus of proof may be shifted, even in regard to a permanent occupancy right, from the tenant to the landlord. " The court also observed that it would be ,,monstrous to hold that every tenant in a zamindari is presumably a tenant at will". (1) (1889) 1. L. R. 660 In Vencata Mahalakshmamma vs Ramajogi (1), a zamindar served a notice upon the defendant, who was a cultivating ryot in the zamindari calling upon him to deliver possession of his holding, and on default of compliance sued to evict him from his holding. The defendant pleaded that he and his ancestors had been "jiroyati ryots" of the holding from times immemorial. According to the High Court, the zamindar having failed to prove that the ryot 's tenancy had commenced under the zamindar or his ancestors, the suit should be dismissed. The court observed that "in cases. in which the raiyats ' holding is not shown to have commenced subsequent to the permanent settlement, and when upon the evidence, it is possibly as ancient as the zamindari itself, the principle laid down with reference to tenancies which admittedly commenced under the zamindar" had no application, and that "in such cases it is not unreasonable to hold that the onus of showing that the tenancy commenced under the plaintiff or his ancestors rests on the zamindar, and that until he shows it, the zamindar may be fairly presumed to have been the assignee of Government revenue, and the tenant liable to pay a fair rent and entitled to continue in possession as long as be regularly pays rent. In Yenkata Narasimha Naidu vs Dandamudi Kotayya(2), which we have already referred, it was held that a ryot in a permanently settled estate is prima facie not a mere tenant from year to year but the owner 1 of the kudivaram right in the land he cultivates, and in a suit in ejectment, the zamindar "is to prove that the kudivaram right in the disputed land subsequently passed to the defendant or some person through whom he claims under circumstances which give the plaintiff the right to eject. " The Court observed that there is no substantial analogy between an, English tenant and an Indian ryot for the right of ryots came into existence ' (2) Mad. 661 mostly, not under any letting by the Government of the day or its assignees, the zamindars, but independently of them, according to the Indian: traditions such right were generally acquired by, cultivators entering upon land, improving it and. making it productive. After referring to the judgment of Turner, C. J., and Muttusami Ayyar, J., in Siva Subramanya vs The Secretary of State for India(1), that the Hindu jurisprudence rested private property, on occupation as owner, and to Secretary of State vs Vira Rayan(2) that the right to the possession of lands acquired by the first person who makes a beneficial use of the soil, it was observed that the well known division in the, Madras Presidency of the great interests in land under two main beads of the melvaram interest and the kudivaram interest made the holder of the kudivaram right, far from being a tenant of the holder of the melvaram right, a co owner with him. In Cheekati Zamindar vs Banasooru Dhora and others(3), Shephard, J., observed at p. 322, "Many of the occupants of zamindari lands are not tenants in the proper sense of the word, and the fair presumption is that, when new occupants are admitted to the enjoyment of waste or abandoned lands, the intention is that they should enjoy on the same terms as those under which the prior occupants of zamindari lands held. It is open to the zamindar to rebut the presumption. He may show as was shown in Achayya vs Hanumantrayudu (4) that the usual condition of things does not prevail in his estate or he may adduce evidence as to the particular contract made between him and his tenant. In other words, he may show that the terms of the contract were different from those which ordinarily prevail between a zamindar and the occupant of zamindari lands. " Subrahmania Ayyar, J. observed, "Practically the whole of the agricultural land there (1) mad. (2) Mad. (3) (1899) 1. L. R. (4) (1891) 1. L. R. 662 is not cultivated by persons who merely hire it for a limited time. The raiyats most generally hold by no derivative tenure. And even where the right to cultivate passes to them from zamindars the payment made by them, in the absence of a contract, is regulated by custom in the last resort, as provided in section 11 of the Rent Recovery Act. The raiyats are generally entitled to hold the lands for a unlimited time, that if; as long as they wish to retain it subject to the performance of the obligations incident to the tenure. Nor can it be said that this is true only in regard to so much of the land in the hands of the raiyats as cannot be shown to have been obtained by them from zamindars. For in the case of lands which have been relinquished by the former occupants or which have been lying waste from time immemorial, they too, when taken up by a raiyat, are treated exactly on the same footing as land into the possession of which it is not shown that the raiyat was let in by a zamindar, and the raiyat holds possession of them for an indefinite period". In Kumbham Lakshmanna and others. vs Tanjirala Venkateswarlu and Others (1), the Judicial Committee of the Privy Council held that in a suit to eject the tenant of an inamdar from his holding the burden is on the plaintiff to make out a right to evict by proving that the grant included both the melvaram and the kudivaram interests, or that the tenants or their predecessors were let into possession by the inamdar under a terminable lease. The dispute in that case was between inamdars and a tenant and had to be decided by the Civil Court, for having regard to the definition in a. 3(2) (d) of the Madras; Estates Land Act, 1908, the Act did not apply to inamdars. By section 6 of the Act it having been provided that ",every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such landholder shall have a permanent right of occupancy in his holding," (1) (1949) L. It. 76 T. A. '202. 663 all tenants in possession of land at the date on which the Act came into operation, were declared to be holders of permanent occupancy rights, but the Act did not justify the inference that the holders prior to that date did not and could not hold occupancy rights. The Privy Council was of the view that in any action by an inamdar to evict his tenants and by a zamindar prior to 1908 to evict his raiyats from their holdings, the burden was on the plaintiff to make out the right to evict by proving that the grant included both the melvaram and the kudivaram interests or that the holders of land or their predecessors were let into possession by the inamdar or the zamindar under a terminable lease. The Privy Council judgment, therefore, recorded its approval to the view expressed in the earlier cases to which we have referred. But counsel for the respondents contended that this was not a suit between a zamindar and a ryot and the rule as to the onus of proof in a suit as between a zamindar and a ryot did not apply where the suit was filed by a person like the plaintiff claiming a share in the occupancy right in land in possession of the defendants, and unless the plaintiff establishes affirmatively that the common ancestor was before 1908 in possession as an occupancy tenant, his suit must fail. We do not think that this is a permissible approach. The presumption which arises in a suit by a zamindar against a ryot for possession of the letter 's holding, rests not on the narrow ground of burden that whoever alleges title and claims relief on that footing must establish it ; the presumption has its roots in the system of land tenure and in custom of the area in which the lands are situate, and applies in a suit between persons claiming under the ryot, as well as in a suit against the ryot by the zamindar. Counsel for the respondent relied upon certain circumstances which appeared from the evidence 664 as lending support to the plea of the contesting defendants that the lands were not held by Thammiah in occupancy right. Reliance was placed upon the covenant in Exts. D 1, D 2 and D 3 that the zamindar may on the expiry of the year of the muchilika, let out the lands to any tenant at "cist" advantageous to the, zamindar. It is true that in Exts. D 1, D 2 and D 3 it is recited that if at the end of the terms of the muchilika the zamindar should lease out the land to any one for a "cist" advantageous to hina, Thammiah would not object thereto, and he further agreed that he would leave sufficient land, without raising any objection, for the ryot to carry out the necessary work for cultivation during the ensuring year. But such a covenant is by itself not sufficient to justify the inference that the ryot 's tenure was precarious. It appears that since the decision of the Madras High Court in Chockaling Pilli vs Vythealinga Pundara Sunnady (1) that neither the rent Recovery Act, nor the regulations operated to extend a tenancy beyond the period secured by the express or implied terms of the contract creating it, the zamindars were accustomed to take muchilika or other writings from their ryots admitting notwithstanding the true nature of their rights, that their tenure was restricted or precarious. In Vencata Mahalakshmamma vs Ramajogi (2), in dealing with a muchilika executed by a ryot for a period of one year only, Muttusami Ayyar J., observed, "Neither a patta nor a muchalka granted or executed under Act VIII of 1865 during the continuance of the holding is conclusive evidence that the holding is a tenancy from year to year. A patta or muchalka is ordinarily nothing more than a record of what the tenant has to pay for a particular year with reference to the pre existing relation of landlord and tenant. The fact cannot also be lost sight of that the zamindar is always a man of education, status and influence and often exercises (1) (2) (1892) 1. L. R. 665 revenue power and control over the village records. On the other hand, the raiyats are illiterate persons and it would be easy enough to get them sign anything as long as there is no attempt to interfere with their actual occupation and enjoyment of the land.". It would be unreasonable, therefore, to attach any undue important to the recitals of the, nature contained in Exts. D 1, D 2 and D 3. The Privy Council in Kumbham Lakshmamma 's case referred to the practice among zamindars of taking muchilikas from ryots negativing the existence of the occupancy rights as being prevalent and to the judicial recognition of such a practice in Peravali Kotayya V. Pnnopalli Ramakrishnayya (2) and Zamindar of Chella palli vs Rajalapati Somayya (3). The Judicial Committee referred with approval to the observations of Wallis, C.J., in the latter case to the effect : "In this connection it is to be borne in mind that numerous instances have come before the courts in which subsequent to the decision of in inserting in pattas and muchilikas terms negativing the existence of occupancy right". and pointed out that they could not neglect the consideration that a ryot so long as he is not evicted, might be prepared to sign anything and that the evidential value of such a contract should be judged accordingly. It is true that if there were some reliable or substantial evidence to show that the tenancy had commenced after the zamindari rights accrued or that 'otherwise the tenant 's right was restricted, the value to be attached to the reci tals of 'the nature set out may be greater ; but there are no circumstances in this case lending strength to the recitals contained in Exts. D 1, D 2 and D.3. After the death of Thammiah, muchilikas were obtained 'and pattas granted by the zamindar not in favour of the daughters ' of Thammiab, who were under the Hindu Law his heirs, but in favour (1) (1949) L. R. 76 I. A. 202. (2) (4) 666 of his daughters in law, in the first instance, and thereafter, in favour of one of the daughters in law and Ramanna, grandson of Thammiah. These documents are Exts. D 4, D 5, D 5 (a), D 6 and D 8. Ext 1 @ 4 is a muchilika executed on August 15, 1891 by Venkamma and Chetamma, daughters inlaw of Thammiah. D 5 is another ' muchilika executed on August,, 15, 1893 by Venkamma and Chetamma. Each of these muchilikas is for period of one year. D 5 (a) is a patta executed on October 10, 1893 by the zamindar corresponding to muchilika Ext. exhibit D 6 is a patta executed on May 21, 1904, by the zamindar in favour of Chetemma and Ramanna minor by his guardian Veeriah and there% is Ext. D 8 which is a patta dated January 16, 1906 also in favour of Chetamma and Ramanna. All these muchilikas and pattas related to the same seventeen pieces of land which were originally in the possession of Thammiah, and the covenants thereof are identical. It is true that in respect of the first two inuchilikas the ryots were Chetamma. and Venkamma, and in Exta. D 6 and D 8; the ryots were Chetamma and Ramanna. Counsel for the defendants asks us to infer from Exts. D 4 to D 8 that the zamindar had at the end of the year for which the muchilikas or pattas were executed exercised his right of eviction and had taken possession of the lands and had given them to other persons of his own choice. But it is difficult to draw that inference in the absence of any reliable evidence that the zamindar had evicted ryots who had executed the muchilikas and had then inducted fresh ryots on the land. The reason why Venkamma was omitted after 1893 from the muchilikas and pattas of the land and in her place Ramanna was substituted will be presently mentioned. After the death of Thammiah, his rights in the land would undoubtedly devolve by the law of inheritance upon his surviving daughters with limited interest. But the fact that muchilikas were taken from persons who were strictly not heirs according to Hindu law, but were still 667 representatives of the family, will not justify an inference that the right of the original ryots were extinguished and fresh rights in favour of persons who executed muchilikas were created. The two daughters in law Chetamma and Venkamma after the death of Thammiah, continued to live in the. family house together with Sesharama. Veerayya and Rudriah, and it is not unlikely that the zamindar regarded the two daughters in Law as representatives of the family and took muchilikas from them. there is no warrant for the inference that they were inducted on the land in independent right by the zamindar arid not as representatives of the descendants of Thammiah. The learned Judges of the High Court observed that "in 1895 (when Ext. D 4 was executed) in country parts like Pandalpaka, it is too much to assume such a second knowledge of Hindu law. Besides, Venkamma and Chetamma were, admittedly, living a,long with Veerliah and Rudrayya and Ramanna and Bhavamma during Thammiah 's life time, and continued to live in that some 'house after his death . So, we have no doubt that the Maharaja of Pittapur, the zamindar, never intended.in the least to take away the B Schedule lands from Tammayya 's heirs and given them to Venkamma and Chittemma who were not heirs and we hold that he renewed the patta in favour of these two windows, as they were considered by him to be representing Tammayya 's estate, being his widowed daughters in law. our view, this in the circumstances of the case, is a correct inference. It appears that after 1895 there arose disputes between Veeriah and Venkamma and it was arranged to provide maintenance to Venkamma out of the estate of Thammiab. , Ext. P 1 dated May 16, 1.899 records the terms on which maintenance was granted. This document has a very importal Lt bearing on the question which falls to be decided in this appeal. 1 b is received i@.a E2:t. P 1 that all the properties of Thammiah had, devolved,, after 668 his death, upon his "dowbitras" (daughter 's sons), Rudriah and Ramanna and that the two "dowhitras" were bound to maintain the widowed daughters in law Chetamma and Venkamma and that accordingly they. were being ' maintained, but a Venkamma was unwilling to live in the family house, it. Was decided to give her for maintenance expenses Rs.25 and 240 kunchams of white paddy per year besides a house, for residence. This deed recites that out of the estate of Thammiah the two widows Chetamma and Venkamma were in fact being maintained that the estate was inherite I by Rudriah and Ramanna, and recognises the right of the widows to receive maintenance out of the estate. There is no evidence on the record that besides the lands mentioned in Schedule 'B ' there was any other agricultural land of which Thammiah was possessed and which had devolved upon Rudriah and Ramanna. It is admittedly out of the property of Thammiah which had devolved upon Rudriah and Ramanna that maintenance was agreed to be given, and if Thammiah was not possessed of any property other than the lands in Schedule "B ', Ext. P 1 must lend strong support to the inference that the lands in Schedule 'B ' were regarded at the date of the maintenance deed as belonging to the estate of Thammiah out of which Venkamma was entitled to maintenance. The assumption that the property had, devolved upon Rudriah and Ramanna is evidently not true. long as the daughters or any of them were alive, they were, according to the Hindu law applicable to the Madras Presidency, owners, though for their lifetime only, of the estate left,. by Thammiah. P 1 does therefore land support to the case of the plaintiff that the property was regarded as belonging to the family in which all persons who were living in the house of Thammiah, including the two daughters in law., had;, interest. After. maintenance was provided to Venkamma by Ext. P 1 her name was omitted from the muchilikas and the pattas subsequently Pattas D 6 and 669 D 8 are as we 'have already stated, 'in favour of Chetamma and Ramanna. It is true that rent was enhanced by the zamindar from time to. time under the muchilikas. During the life time of Thammiah the annual rent was Rs. 419 8 0 and it .remained unchanged, but after his death the rent, even though the area 0f the land continued to be ' the same, was enhanced to Rs. 481 8 0 under Ext. There is some error in totaling tip the amount of rent,, but the enhancement of rent by Rs. 52 is substantially the result of alteration of rent of Sr. No. 315. Originally the rent of Sr. No. 315 was Rs. 29 3 9: it was enhanced to Rs. 81 3 9. under Ext. D 5 the rent is Rs 537 (it should have, been Rs. 473), but that again, is the result of some error in totaling, the only enhancement being in respect of No. 358 which was increased from Rs. 5 to Rs. 6 8 0. 'In Ext, D 6 of the year 1904 the rent of this land was enhanced to Rs. 60 8 0 and rent in respect of, Sr. No. '315 was enhanced to Rs. 91 3 9. The High Court has held that this enhancement of rent of the two lands Nos. 315 and 358 was presumably because the lands were irrigated, and, having regard to the circum stances, we think the inference of the High Court is correct. Enhancement of rent of the lands from time to time does not lend support to the inference that fresh pattas and muchilikas were not in recognition of the previous rights. It is, pertinent to note that in the records of the zamindar all the muchilikas in respect of the lands bore No. 12, during the life time of Thammiah and after his death they bore No. 23. The circumstance that the same area of land remained in the occupation continuously of the family of Thammiah under Exts. D 1 to D 8 for a period exceeding 25 years also lends support to the plea of the plaintiff. It is true that by his notice Ext. D 7 the zamindar called upon Ramanna and Chetamma to vacate. the kumatam (which term is translated by the learned counsel for the respondent as home farm) lands of the extent of 51 acres 72 cents. But by the year 670 1905 it was well known that legislation of the nature,which was ultimately enacted as the Madras Estate Land Act, 1908, was on the legislative anvil and no reliance can be placed upon the statements made in the notice which does 'not appear to have been followed by proceedings, for enforcement of the claim to possession. It is common wound that on January 16, 1906, the zamindar issued in favour of Chetamma and Ramanna a patta in respect of the same lands.for an annual rental of Rs. 578 4 0, rent having been enhanced in respect of Sr. No. 46 and 358 only. The High Court placed strong reliance upon the circumstances that in all the muchilikas and pattas the lands were described as "jeroyati lands" and the tenants were described as "joroyati ryots". The High Court observed that "jeroyati ryot" was a well known term indicating prima: facie posses sion of occupancy rights. However, the state of the authorities in the Madras High Court to which cur attention his been invited does not justify as in expressing any definite opinion on that plea. In Zamindars of Bodokimidy vs Badankayala Bhimayya(1), Curgenven, J. held that the phrase "on jirayati tenure ' is only used where occupancy rights exist. But beyond the bare statement in the judgment that "the phrases" on jirayati tenure being so far as my experience goes, only used where occupancy rights exist", there is no further elaboration in the judgment. In (Ivaturi) Lingayya Ayyavaru vs Kandula Guningiah (2), Wallace, J., without referring to the earlier judgment of Curgenven, J., observed that the term "jeroyatidar" did not imply that; the executant was an occupancy ryot. Here also no reasons appear to have been given in support of the view. In Dadamudy Tatayya vs Kelachina Venkatasubbarayya Sastri (3), Devadoss, J., in the course of hearing in appeal called for a finding from the (1) A.I.R 927 Mad. (2) A.I.R. 1928 Mad. 58. (3) A.I.R. 1928 Mad. 671 trial Court as to the meaning of the word jeroyati" as used in the Vuyyur Zamindari and as to the meaning of the expression "savaram jeroyiti" used in documents in that estate. The Subordinate Judge recorded evidence on the question referred to him, and observed after referring to Brown 's Dictionary and Wilson 's Glossary, that the word " 'jeroyiti land" may mean "cultivable or arable land", but it was only the context that must decide which meaning was to be given to the word. He also observed that the word " 'jeroyiti" especially when prefixed to the word " 'right" or hakku had come to mean "rights of occupancy". This report of the Subordinate Judge, it appears, was accepted by the High Court. These are the only decisions of the Madras High Court to which our attention was invited. The task of this Court, in ascertaining the special meaning which an expression used in the revenue administration and by the residents of a certain area has acquired, is indeed difficult. If the expression "jeerayot" is a local variation of "Zeerait" used in the revenue administration, especially in Northern India, it may mean " assessed" land, or "agricultural" land. On the material.% placed, we are unable to express any definite opinion on this part of the ease of the plaintiff. To summarise, there is no evidence to show that occupation of the lands by Thammiah commenced under the zamindar ; and there is no evidence as to the terms on which Thammiah or his predecessors were inducted on the lands: the commence ment of the tenancy and the terms there of are lost in antiquity, but Thammiah and his descendants are proved to have continued in possession of land uninterruptedly till the enactment of the Madras Estates Land Act, 1908. In the light of the presumption that the zamindar is, unless the contrary is proved, the owner of the melvaram and the ryot the owner of the kudivaram the inference is irresistible that Thammiah was the holder of the 672 occupany rights in the lands and that these rights devolved 'upon,. his successors and that the, occupancy rights in the lands were not acquired by virtue of the provisions of Madras Act 1 of 1908. Before parting with the case a minor question relating to mesne profits awarded to the plaintiff ,and defendants 31 and 32 must be mentioned. By his plaint the plaintiff claimed mesne profits in respect of his share for three years prior to the date of the suit. He valued the claim for mesne profits at Rs. 3,800 past profits on plaintiffs 1/3rd share for two years 1940 and 1941 at Rs. 2,280 and past mesne profits on plaintiff 's 1/3rd shares for the year 1942 at Rs.1,520. The trial court dismissed the plaintiff 's suit as to his share in property described in Schedule 'B '. The High Court in awarding a third share to the plaintiff and another third share to defendants 31 and 32 collectively also awarded past mesne profits from the 18th of March, 1935, i.e., the date of the death of Bhavamma, alone with future mesne profits regarding the shares in the B and the C Schedules properties. But the High Court could not award mesne profits prior to August, 1940 which had never been claimed by the plaintiff in the suit. We therefore modify the decree of the High Court and direct that mesne profits 1940. Subject to that modification the decree passed by the High Court is affirmed and the Appeal is dismissed with costs payable by the contesting defendants to the plaintiff. Appeal dismissed subject to modification.

The lands in question which were within the permanently settled Zamindari in the then presidency of Madras, belonged to T who, during his lifetime, was cultivating the lands. He died in 1885 leaving behind, inter alia, three daughters. After the death of the three daughters, the last having died in 1935, the sons of one of them instituted a suit against the descendants of the other two for partition and separate possession of a third share, inter alia in the lands in question on the footing that T owned occupancy rights in the lands. The suit was resisted on the plea that T had, no proprietary right in the lands, that he was only an annual tenant of the Zamindar, that after his death the lands were held on similar tenure by different members by his family and that occupancy rights were acquired by those members of his family who were in possession of the lands when the Madras Estates Land Act, 1908, came into force in 1908. There was no evidence to show that the occupation of the lands by T commenced under the Zamindar, nor was there any evidence as to the terms on which he or his predecessors were inducted on the lands, the commencement of the tenancy and the terms thereof being lost in antiquity, but he and his descendants were proved to have continued in possession of the lands uninterruptedly till the enactment of the Madras Estates Land Act, 1908. Held, that in cases in which a ryot 's holding is not shown to have commenced subsequent to the permanent settlement, the presumption is that Zamindar was only the holder 654 of the melvaram being the assignee of the Government revenue, and that the kudivaram in the land belonged to the ryot who Was entitled to continue in possession as long as he paid the rent regularly; and that this principle was applicable equally in a Suit between persons claiming under the ryot as in a suit against the ryot by the Zamindar. Case law relating to the rights of ryots in Zamindaries in the Madras Presidency reviewed. Held, further, that T was the holder of the occupancy rights in the lands, , that these rights devolved upon his successors and that the said occupancy rights were not acquired by virtue of the provisions of the Madras Estates Land Act, 1908.

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.

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.

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 appellants filed suits for the recovery of certain properties from the possession of the respondents. The plaintiffs were the trustees of the temples and the defendants were the archakas and the alienees of the suit properties. These suits were based on title and the relief asked for was the eviction of the archakas from the suit property as they, according to the plaintiffs, (appellants) had no title to remain in possession The plaintiff claimed that the suit properties were the properties of the deity and that the defendants had no right therein. The archakas raised the plea that the title of the deity was confined only to melvaram in the plaint schedule lands and that they had title to the Kudivarani. Both the Trial Court and the High Court confirmed the title of the deity to both the interests (Varams) and negatived the title of the defendant Archakas. The High Court also held that the archakas were entitled to have a portion of the said properties allotted to them towards their remuneration for the services to the temples and gave a decree directing the division of the said properties into two halves and putting the archakas in possession of one half. Against this decree of the High Court both the archakas and the trustees (appellants) preferred cross appeals to this Court. 348 The main point for consideration was whether the High Court, having held that the title to the suit property vested in the deity, had jurisdiction to compel the trustees of the temple to put the archakas in possession of specified extent of property towards their remuneration. Held:(i) The principle of a Lost Grant can only be invoked where there is no acceptable evidence of the terms of the grant. In the present case there is no scope for invoking the doctrine of Lost Grant as the terms of the grant are clear from the recitals in the lnam register and the inam statement, which conclusively establish that both the Varams were granted to the deity. Sankaranarayana Pillayan vs H.R.E. Board, Madras I.L.R. , Buddu Satyanarayana vs Konduru Venkatapayya: ; , Maginiram Sitaram vs Kasturbai Manibhai, (1921) L.R. 49 I.A. 54 and Mohamed Muzafar Ali Musavi V. Jabeda Khatun, (1930) L.R. 57 A. 125, relied on. (ii)The High Court erred in making an allocation of the lands between the trustees and the archakas in a suit for ejectment because there was absolutely no material either in the pleadings or in the evidence to make any such apportionment. 'Me High Court had De option but to deliver possession to the plaintiffs who had established their title to the suit properties. In a suit for framing a scheme for temple a court may in an appropriate case put the archaka in possession of a portion of the temple lands towards his remuneration for services of the temple; but such considerations are out of place in a suit for ejectment. Brahmayya vs Rajaswaraswami Temple, A.I.R. 1953 ',fad. 580 as Venkatadri V. Seshacharlu, I.L.R. referred to. (iii)On the facts of this case it was held that the conduct of the archakas, was consistent with the recitals in the inam register, namely, that what was granted to the deity was the land i.e. both the Varams and that they had been put in enjoyment the said land in their capacity as archakas and de facto trustees. They could not by mortgaging or otherwise alienating the property claim any right in derogation of the title of the deity. They also cannot claim any right because their names are mentioned in addition to deity in the Inam register. Their names in addition to the deity are mentioned as they were in possession of the land in their capacity as de facto trustees. Arunachalam Chetti vs Venkata Chalapathi Guruswamligal, Mad. 253 and Secretary of State for India vs Vidhya Thirta Swamiga, I.L.R. , referred to. Narayanamurthi V. Achaya Sastrulu, A.I.R. 1925 Mad. 411 relied on.

The respondent was the owner of the suit properties leased to the appellants by lease deeds executed in 1945 and 1946 and sued the appellant for their possession on various grounds. The appellant claimed an 'occupancy right ' in the properties and pleaded that he could not be evicted in view of the protection afforded to him by section 6 of the Madras Estates Land Act 1 of 1908. The Trial Court upheld his contention and dismissed the suit but the High Court allowed an appeal holding that as the case fell within the scope of section 8(5) of the Act, the appellant was not entitled to the benefit of section 6; it therefore remanded the case for trial on other issues. During the pendency of the appeal in the High Court, the Madras Cultivating Tenants Protection Act came into force and therefore the appellant claimed before the Trial Court after remand that he was a 'cultivating tenant ' within the meaning of the Act and could not, for this additional reason, be evicted. Both the Trial Court as well as the High Court rejected the appellant 's contentions. In the appeal to this Court it was contended on behalf of the appellant that although section 8(5) of Madras Act 1 of 1908 may govern the present case, but when section 8(5) says that the land holder shall 'have the right notwithstanding anything contained in the Act for a period of twelve years from the commencement of the Madras Estate Land (Third Amendment) Act, 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them", it merely means that for the period of twelve years, the tenants on the land cannot claim the benefit of section 6(1) of the Act but they get those rights immediately after the twelve years period is over; furthermore, that section 6(1) is the main provision; it has general application and contains the policy and purpose of the law; section 8(5) is an exception; therefore section 6(1) should be construed liberally while section 8(5) should be strictly construed with a view to advance the purpose of the law. It was also contended that the Trial Court as well as the High Court were in error in holding that the decision of the High Court prior to the remand was binding on both courts and could not be reagitated before them. HELD: Dismissing the appeal. (i) While section 6(1) is subject to the provisions of the Act, section 8(5) is not controlled by any other provision of the Act. Therefore if the case falls both within section 6(1) as well as section 8(5), then the governing, provision will be section 8(5) and not section 6(1). As the present case fell within section 8(5) it necessarily followed that it was taken out of the scope of section 6(1). [513 C D] From the language of 'section 8(5), it is not possible to. hold that the contract itself is exhausted or stands superseded at the end of the twelve year period mentioned therein. [514 C D] 509 Executive Officer vs L.K. Ganapathi Thevar, ; and Sri Navaneethaswaraswami Devasthanam Sikki, represented by its Executive Officer vs P. Swaminatha Pillai, I.L.R. ; referred to. Muminia Damudu and Ors. vs Datla Papayyaraju Garu by Muktyar Putravu Ramalingaswami and Ors. , A.I.R. 1944 Mad. 136; Korda Atchanna vs Jayanti Seetharamaswami, A.I.R. 1950 Mad. 357; Thota Seshayya and six Ors. vs Madabushi Vedanta Narasimhacharyulu, I.L.R. and Vadranam Ramchandrayya and Anr. vs Madabhushi Ranganavakamma, (1957) 2 Andhra Weekly Reports, p. 114 distinguished. (ii) On the facts found in the present case, the appellant could not be considered a 'cultivating tenant ' after the amendment of the definition of a cultivating tenant ' in the Madras Cultivating Tenants Act, 1955, became of the addition of the explanation; in order to fall within the definition of 'cultivating tenant ' a person should carry on personal cultivation which again requires that he should contribute physical labour. The use of physical labour includes physical strain, the use of muscles and sinews. Mere supervision of work, or, maintaining of accounts or distributing the wares will not be such contribution of physical labour as to. attract the definition. [516 G] Mohamed Abubucker Lebbai & Anr. vs The Zamindar of Ettayapuram Estate, Koilapatti, (1961) (1) M.L.J., p. 256 and S.N. Sundalaimuthi Chettiar vs palaniyandayan; , ; referred to. (iii) The trial court could not go into the question of the claim to an occupancy tenant 's right after the judgment of the High Court at the time of the remand. That decision was also binding on the bench which heard the appeal. However, the appellant was entitled to reagitate the issue in the present appeal. Satyadhyan Ghosal and Ors. vs Sm. Deorajin Debi and Anr. , ; , referred to,.

The appellant was convicted under section 302 of the Indian Penal Code and sentenced to imprisonment for life by the High Court for the offence of the murder of his wife. He was granted special leave to appeal by this Court. During the pendency of the hearing of this appeal the appellant died. After his death his sons and daughter applied to this Court for permission to continue to prosecute the appeal. It was pleaded by the legal representatives of the appellant that though that sentence of imprisonment could no longer be executed, it still affected the property of the deceased and the legal representatives were, therefore, interested in the appeal and should be permitted to continue it. The appellant, who held a high office in the Government of Andhra Pradesh had been suspended during the investigation of the charge against him and he was dismissed from service under certain service rules on his conviction. During this time the appellant had only been given a small allowance. On these facts it was pleaded that if the conviction was set aside, the estate of the deceased would be entitled to receive the full salary from the Government. Held (Per Sarkar, J.): (i) Neither section 431 nor the cases men tioned can be said to apply to the present case proprio vigore, for the present is not an appeal under the code of criminal procedure which is dealt with by section 431 nor is it a revisional application like the one which came up for consideration in Pranab Kumar Mitra 's case, while as for the English case, it is only of persuasive value. Pranab Kumar Mitra vs The State of West Bengal, [1959] Supp. 1 S.C.R. 63 and Hodgson vs Lakeman, , distinguished. (ii).The principle on which the hearing of a proceeding may be continued after the death of an accused would appear to be the effect of the sentence on his property in the hands of his legal representatives. If the sentence affects that property, the legal representatives can be said to be interested in the proceeding and allowed to continue it. This principle applies in appeals, revisions, and in petitions under article 136 of the Constitution. A sentence of fine no doubt affects the property. In the present case, however, the sentence was not of fine but of imprisonment which on the death of the accused has become infructuous. In the present case the effect of the sentence imposed in this case being set aside would not directly entitle the legal representatives to the salary. They will have to obtain necessary orders from the Government for the purpose. 252 Held (Per Hidayatullah, J.): (i) This was an appeal against a sentence of imprisonment and an appeal of this character would normally abate on the death of the appellant because a criminal prosecution is concerned primarily with the punish ment of an offender and not with the trial of an abstract issue about the truth or falsity of a prosecution case. The same principle must apply to appeals after conviction, except in so far as a judgment already rendered touches assets which would come to the legal representative. In so far as personal punishment (other than a fine) is concerned that stands dissolved by the death of the offender and an appeal to get that punishment set aside becomes infructuous and abates. Pranab Kumar Mitra vs The State of West Bengal, [1959] Supp. 1 S.C.R. 63, Pritam Singh vs State, ; , distinguished. Hodgson vs Lakeman, [1943] L.R.K.B. 15, Baghis vs Rowes , referred to. (ii).The principle laid down in Pranab Kumar Mitra vs The State of. West Bengal and Another and in Pritam Singh vs The State has.no application to the present matter because there is no analogy between an appeal by special leave and a revision under the code. The present case is not a case where the legal representatives after the death of the offender have to meet the liability of a fine or are required to protect the assets which they claim should reach them. In the present case no claim of the petitioners is jeopardized directly, by the judgment. Their claim is dependent upon the administrative action of Government which may not proceed upon the result of criminal prosecution. This appeal was only concerned with the correctness or otherwise of the conviction and not with any monetary claims depending upon the result of the appeal. In such a situation the ordinary rule that a criminal proceeding against a person comes to an end on his demise must apply also to special appeals in this court, such as this, even though the provisions of the Criminal Procedure Code may not be directly applicable. Held (Per Mudholkar, J.): (i) The decision of this court in Pranab Kumar Mitra vs The State of West Bengal has no, bear ing upon an appeal brought to this court by special leave. It is no doubt true that the power confer red by section 435 of the Code on the High Court and certain other courts and by Article 136 of the Constitution on this Court is discretionary. Under section 439 of the Code the High Court can exercise any of the powers conferred on a court of appeal by sections 423, 426, 427 and 428 or on a court by section 338 and has also the power to enhance the sentence. Under Section 435 of the Code, the High Court can suo motu call for the record of any inferior court but this power cannot be exercised by this court under article 136 of the Constitution. Therefore there is a fundamental difference between the power of the High Court in revision and the power of this Court in article 136 of the Constitution. Pranab Kumar Mitra vs The State of West Bengal, [1959] Supp. 1 S.C.R. 63, distinguished. (ii).In a criminal matter the issue is personal between the accused person and the State and the right of appeal is also personal to the appellant. There is admittedly no express provision permitting the substitution of legal representatives of a decreased appellant in a criminal appeal brought to this Court by 253 special leave. The policy of the law discernible from section 431 of the Code has to be borne in mind. The policy under section 431 of the Code is that every criminal appeal under chapter XXXI will abate except an appeal from a sentence of fine. There is no provision which prescribes the continuation of the appeal on the death of the appellant in cases where the sentence is of imprisonment. The interest of the legal representatives in the present case is not a direct interest in the sense that it cannot arise out of the decision of this court even if it is in favour of the appellant. The only interest which the applicants have is a contingent one and is not one which could flow directly out of the ultimate decision of this Court. Hodgson vs Lakeman, (1943) L.R.K.B. 15, Regina vs Rowe, , Hesketh vs Atherton, Leach vs Wanstead School Board, Siberry vs Connolly, Constantine vs Illingworth, Jones vs Gallowfield, Rivers vs Glasse, (all cited in Short and Mellor, Practice on the Crown Side of the King 's Bench Division 2nd Ed. at p. 425), United States vs Mook, , The State of Kerala vs Narayani Amma Kamala Devi, [1962] Supp. 3 S.C.R. 943 and Imperatrix vs Dongali Andaji, , referred to and discussed. (iii). .The Legislature has by limiting in section 431 of the Code the survival of appeals to appeals against sentences of fine has chosen to recognise only one kind of interest and no other. This Court in exercise of its inherent powers or discretionary powers would not be acting according to correct legal principles in recognising a kind of interest which the legislature has not chosen to recognise. In the circumstances the applicants ought not to be granted special leave to prosecute the appeal.

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]

Appeal No. 324 of 61. Appeal by special leave from the judgment and decree dated December 23, 1960, of the Mysore High Court in Second Appeal No. 61 of 1954. C. K. Daphtary, Solicitor General of India, J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for the appellants. R. Ganapathy Iyer and G. Gopalakrishnan, for the Respondent No. 1. 878 1961. September 27. The Judgment of the Court was delivered by SINHA, C. J. This appeal by special leave granted by this Court on April 20, 1961, is directed against the concurrent decisions of the courts below decreeing the plaintiff 's suit for ejectment on the ground that the defendant is a tenant at will and negativing the appellants ' claim to a permanent tenancy. The controversy between the parties depends upon the true construction of the lease dated October 26, 1914, executed between the predecessors in interest of the parties to the present litigation. The facts leading up to this appeal are as follows: One N. J. Gamodia of Bombay took on lease a piece of agricultural land measuring about 4 1/2 acres belonging to one Gurupadappa of Devangere City for the purpose of erecting a Ginning and Pressing Cotton Factory. The terms of the registered lease deed dated October 26, 1914, in so far as they are material for the determination of this appeal are better stated in the relevant portions of the deed itself: "1. For the 1st period of 20 (twenty) years commencing from the 1st October, 1914, and ending on the 30th day of September, 1934, you shall pay to me Rs. 350/ (three hundred and fifty) rupees being the annual rent reserved every year in advance and obtain proper receipts of the payment from me. If before the expiration of the said period of 20 (twenty) years you will remove your factory from the said land hereby leased you are bound to pay me annually the rent of Rs. 350/ (three hundred and fifty rupees) for the (torn) 20 (twenty) years but you are entitled to retain in possession of and, the road till the 30th September, 1934. 876 2. After the expiration of the said period of 20 (twenty) years mentioned in the 1st clause hereby you shall be at liberty to con tinue the lease of the said land and the said road and keep the said land and the said road in your possession as long as you may desire to do. In case of your thus continuing the lease of the said land and the said road you shall pay to me annually the sum of Rs. 400/ (four hundred rupees) as rent of the said land and the said road for 1st ten years beginning from the 1st October ', 1934, and ending on the 30th September, 1944, and after the expiration of the period of ten years the annual rent payable by you for the said land and the said road will be Rs.500/ (five hundred rupees) per annum but you shall always be at full liberty to give up the said land the said road and terminate this lease at any time you may desire so to do after the 1st October, 1934, and the rent payable in respect of the said land and the said road shall cease to be paid by you from the time you may give up the said land and the said road after the 1st October, 1934. But I agree and bind myself not to call upon you at any time to give up the possession of the said land and the said road as long as you may desire to keep the same for your purposes observing the terms of this agreement. 3. . . . . . . . 4. . . . . . . . 5. You are at full liberty to erect, as many buildings, godowns, factories, bungalows and other structures etc. as you may desire on the land hereby leased and to pull down, re erect and make any alterations in the same as you may desire. I shall not raise any objection to your erecting any such structures on the, land or to your use, and enjoyment of 880 the land in any way or for any purpose as you may desire. . . . . . . . 7. I hold myself liable, to pay always the annual assessment of the land hereby leased to Government you shall not be liable for such land assessment. But you shall be liable 'to pay all fines and other taxes which the Government will hereafter impose for having converted the parable 'or cultivable land into land for factories and building purposes. . . . . . . . . 9. . . . . . . 10. You shall be always entitled and have full liberty to sublet or re let the said land together with the said road for any purpose to any other person or persons on any conditions you like but without effecting in the least any of the conditions or terms of this lease. . . . . . . . 12. . . . . . . 13. . . . . . . . 14. This lease is binding on me, my heirs, executors, administrators, successors and assigns as well as on your heirs, executors, administrators, successors and assigns. I have hereby by this writing granted you this lease by ;my own free will and in my full senses and I bind myself to abide by its terms and conditions mentioned above". The said lessee, N. J. Gamodia died in 1916 leaving a will appointing executors to look after his affairs. The executors assigned the lease to the second defendant, Gamodia Factories Limited by a deed dated November27, 1933. The assignee like the original tenant continued to pay the stipulated rent 'to the lessor Guru padappa till his death which 881 occurred in May, 1939. 'The second defendant in its turn assigned its leasehold interest to the first defendant by a deed dated May 30, 1944. It is common ground that the leasehold property contains factory, buildings and residential quarters. After the lessor 's death his two widows continued to receive rent from the lessees as usual. The plaintiff is the adopted son of the original lessor and was a minor till some time in 1949. The plaintiff sought to terminate the tenancy by issuing notices to the defendants on, the ground (1) that the lease bad created a tenancy at will in the events. that had happened; and (2) that the original lessee had in contravention of the terms of the lease, assigned the benefits under the lease in favour of the defendants. As the defendants did not vacate the premises and deliver possession of them to the plaintiff, in terms of the notice aforesaid, he instituted the suit giving rise to the present appeal for a declaration that the defendants were tenants at will and that their possession after service of notice was wrongful, The suit was. resisted by the first defendant principally on the ground that the lease created not a tenancy at will as claimed by the plaintiff but a permanent tenancy, hence there is no question of the defendant being ejected on the grounds alleged in the plaint. The courts below have decreed the suit and ordered the defendant appellant to give up porsession. In the trial court, a number of issues were struck between the parties. The most important issue upon which the result of the litigation largely defended was the one relating to the nature of the lease created by the lease deed aforesaid. The trial 'court held that it was a lease for 20 years certain, ,and on the efflux of that period on October 26,_ 1934, the second defendant became a tenant at will and as such the tenancy could be terminated at the will of either party, the second defendant and the first defendant were liable to be ejected on service of the 882 necessary notice, which is found to have been properly served. In the result, the plaintiff 's suit was decreed with costs and the defendants were directed to quit the land and the road annexed to the land. and to restore possession of the premises to the. plaintiff after removing the iron and steel machinery and other appurtenances of the factory, but leaving intact the residential quarters and the appurtenances of those quarters. On appeal by the defendants, the lower appellate court affirmed the finding of the trial court and dismissed the appeal with this modification that the defendants were given six, months ' time to restore possession to the plaintiff after removing their machinery etc. The lower appellate court made some other modifications also which are not material to this appeal. On second appeal by the first defendant, the High Court dismissed the appeal with costs, but modified. the findings of the two courts below in so far as it held that after the lapse of the first 20 years of the lease, the tenancy was not a tenancy at will, but a tenancy for an indefinite period which would be valid for the lifetime of the lessee himself as also of the transferees of the lessee namely the second defendant, which is the 'company inasmuch as the original lessor in his lifetime had accepted the assignment of the lease in favour of the second. defendant. The High Court also held that as the second defendant was admittedly no longer in possession of the leasehold and as there has been an assignment to the first defendant, the transfer was not binding on the plaintiff and therefore the first defendant did not become the plaintiff 's tenant. In that view of the matter, the judgment and decree of the courts below were confirmed with the modification that the appellants were given four month 's time to vacate and deliver possession of the premises to the plaintiff The first defendant made an application to ' the High Court for the necessary certificate of fitness for coming up in appeal to this court. but the High Court by its order dated March 29, 1961, 883 refused to grant the certificate. As time was running against the first defendant, he hurried up to this court by a petition for special leave to appeal dated April 10, 1961. On April 20, 1961, this court granted special leave to appeal. That is how the matter comes before us. The controversy between the parties must be determined on a reference to the terms of the lease deed on a proper construction of which the rights and obligations of the parties must be determined. If it is held that after the lapse of the first 20 years of the lease, the defendants became tenants at will, there is no answer to the claim for Possession of the premises. If it is held, as it had been held by the High Court, that the second defendants interest as an assignee of the original lessee created a lease for an indefinite period in favour of the assignee which would enure for the life of the assignee namely the company, then the further question will arise whether or not the first defendant appellant before us had acquired the same interest by virtue of the transfer in his favour. That is one of the alternative arguments raised on behalf of the appellant by his learned counsel. The learned counsel for the appellant also mentioned the ground founded on the provisions of the Mysore Rent Act ; but as that defence has not been raised in the pleadings of the defendant and as that point has not been canvassed in the High Court, we ruled that we shall not permit that contention to be raised here. But the substantial ground on which this appeal has been pressed upon us is that by virtue of the lease deed. of the year 1914, on a proper construction of that grant, a permanent tenancy was created. If that is so, it is common ground that the suit must fail. Naturally therefore, the main argument at the bar on both sides has been devoted to the question, whether or not the lease deed evidences a perpetual grant to the lessee on the terms and conditions contained in the lease deed. 884 Addressing ourselves to that Question, it is clear on a construction of the document Ex I that it was a lease of the demised premises for a term of 20 years certain, on payment of Rs. 350/ annua rent in advance, even though the lessee may not continue to occupy the demised land; that the lessee had been granted a right to continue the lease of the demised premises as long as the lessee desired to do so ; that on his choosing to continue to enjoy the leasehold, the lessee was obliged to pay annually the enhanced rent of Rs. 400/ for the next ten years after October 1, 1934, and after the expiration of the ten years aforesaid, the rent was further enhanced to the sum of Rs. 500/ per annum ; that the lessee was given the option to give up the lease at any time after October 1, 1934, without any further liability for payment of the stipulated rent ; that (and this is a very important stipulation) the lessor bound himself not to call upon the lessee at any time to give up possession of the ease hold as long as the lessee was prepared to observe the terms of the lease, that the lessee was fully authorised "to erect, as many buildings, godowns, factories, bungalows and other structures etc. " as also to pull down and re erect structures or to make any altera tions, as desired by him ; that the lessor undertook not to raise any objection to the lessee making those structures or his using or enjoying the land in any way or for any purposes according to his desire; that the lessor undertook to pay the annual assessment to Government in respect of the demised premises but the lessee was obliged to pay all fines and other taxes which Government might impose for granting permission to convert the culturable land into land meant for building factories and other structures as contemplated between the parties, that if the lessee chose to give up possession of the demised premises, he shall be entitled ' to take away all machinery, iron and steel, wood works etc. of the factories, buildings and other structures that may be standing, that in the event of a default in the payment of the annual rent fixed as aforesaid 885 upon notice of demand served upon the lessee, the reserved the right to re take possession of the demised land. The lessee was also declared by para. 10 quoted above to be always entitled to sub let or re let the demised land to any person and on any terms. As the lease was apparently for the purpose of converting agricultural land into factory premises necessary for running the factory, it was specifically provided that if the Government refused Co give the necessary permission for setting up the factory,, the lease shall be deemed to be ,cancelled. 13 also contains a stipulation that the heirs and assigns of the lessor shall have. no right to disturb the lessee in peaceful possession of the demised premises, and that in the event of any such interference, the lessee shall be entitled to claim damages for the loss suffered by any action on the part of the lessor or his heirs or successors. 14 is also a very important clause in the lease deed, which though coming as the last clause, must 'govern all the stipulations between the parties. Thus the terms and conditions of the lease which created the rights and obligations between the lessor and the lessee were specifically declared to be binding on the heirs and successors in interest of the lessor and the lessee. It is manifest, therefore, on a plain construction of the terms aforesaid of the lease deed that the purpose of the transaction was a building lease that though there was liberty reserved for the lessee or his successor to give up the lease hold at any time after October 1, 1934, no corresponding right was reserved to the lessor. Thus there is no room for the controversy which has occupied a large portion of the judgments of the courts below, that reservation of the right to the lessee to surrender possession at any time, imported a corresponding right to the lessor to call upon the lessee to give up possession. It was an advantage specifically reserved to the lessee without any corers ponding benefit to the lessor. It is equally clear 886 that the lease was heritable and assignable. Thus there is no difficulty in holding that there if; no room for the contention, on the terms of the lease, that the parties intended that after the lapse of the first 20 years of the lease, the tenancy will be merely a tenancy at will. It was clearly a tenancy for an indefinite period, at the least. The contention on behalf of the appellant is that on a proper construction of the lease deed, read as a whole, the inference is clear that the parties intended it to be, a permanent lease. The first argument in support of the conclusion we are asked to arrive at is that it is clearly a lease for building purposes ; and it is rightly pointed out that where the land is let out for building purposes without a fixed period, the presumption is that it was intended to create a permanent tenancy. Reliance, was placed upon the leading case in Navalram vs Javerilal (1) where Sir Lawrence Jenkins, C. J., laid it down that a presumption in favour of a permanent tenancy arises on a transaction like the one we have before us. The terms of the grant in that case are set out in 11 at p. 402 and it is clear on a reference to those terms that the deed was not as strong as we have in the in stant case. Only two things were explicit in the terms of that document, namely, (1) that it was a lease for building purposes and (2) that as long as the lessee continued to pay the stipulated rent, the lessor would not be entitled to call upon the lessee to quit. Reliance was also placed upon the decision of the Calcutta High Court in Promada Nath Roy vs Srigobind Chowdhry (2). In that case the Kabuliat did not specify any period during which the lease was to subsist. It had been stipulated that the land was to beheld from year to year at an annual rent and that in the event of a masonry building being erected on the land, rent was to be assessed at the prevailing rate. Eventually, the tenant (1) (1905) 7 Bom. L. 401. (2) Cal, 648 887 built the structure on the land. It was held by, the Calcutta High Court that ' the parties contemplated the lease to be for building purposes 'and that therefore the court could presume that the lease was intended to be permanent. The terms of the lease in that case also were not as telling an in the case 'before us. Similar was the case of Forbes vs Hanuman ,Bhagat (1) decide by a Divison Bench of the Patna High Court which applied the decision of the Calcutta High Court in Promada Nath Roy vs Srigobind Chowdhry (1) to the case before it. That case was followed by a subsequent Division Bench in the case of Commissioner of Income tax vs Maharajadhiraj Kumar Visheshwar ' singh(3). Fazl Ali, J. , who delivered the leading judgment of the court relied upon the decision of their Lordships of the Judicial Committee of the Pi ivy Council in the case of Janaki Nath Roy vs Dina Nath Kundu (4). Mr. Justice Fazl Ali particularly relied upon two circumstances which in his view supported the inference of the tenancy being permanent, namely., (1) that no term had been fixed in the lease and (2) that the lease deed contained provisions for the exercise of certain rights by the heirs of the lessor and the lessee, apart from the circumstance that the building was for enabling the lessee to build a gola (ware house) and a platform for a rice mill. In all these cases decided by the Bombay, Calcutta and Patna High Courts as also by the Judicial Committee, there was no fixed period as the term of the lease. But it was contended on behalf of the plaintiff respondent that the term expressly granting the lessee the right to give up possession at will was wholly inconsistent with the permanency of the tenancy. In our opinion the presumption raised by the fact that the lease was for building purposes and therefore intended to be permanent is not weakened by the fact that the lessee had stipulated (1) Pat. (2) Cal. (3) Pat. (4)(1931)35 C.W.N.982. 888 with the lessor to be entitled to give up, possession if and when he decided to do so. It is a, right reserved in favour of the lessee and did not confer, as already pointed out, any corresponding right, on the lessor. Such a right in favour of the lessee cannot be converted into a disability or an obligation which should detract from the grant of a permanent tenancy. Such a stipulation which gives a right to the tenant to surrender the lease hold at any time be decided to do,so, if it is coupled with a corresponding right in the landlord to serve notice of ejectment at any time he chose to do so may have the effect of making the tenancy, a tenancy at will, but such a conclusion has been negatived by the High Court and rightly enough. In this connection the following 'Observations of the Privy Council in the case of Baboo Lekhraj Roy vs Kunhya Singh (1) may be quoted: "If a grant be made to a man for an indefinite period, it enures, generally speaking for his lifetime, and passes no interest to his heirs unless there are some words shewing an intention to grant an hereditary interest. That rule of construction does not apply if the term for which the grant is made is fixed or can be definitely ascertained". In that case, a lease had been granted to the respondents ' ancestor to continue during the term of the mokurruri of the grantor. The grantor 's term could be terminated by the owner (in this case the Government) at the end of a year, a power which had never been exercised. In a suit for ejectment by the successor in title of the original lessee, it was held by the Privy Council that the general rule that a lease of an indefinite nature enures for the life of the grantee did not apply to the case, because the interest of the lessor itself had paused from generation to generation. In this case, it has been found by the High Court that. after the lapse of the first 20 years of the (1) (1877) L. R. 4 I.A. 223,252. 889 lease, the lease became one for an indefinite term Which meant on the authority of the decision of the Bombay High Court in Babasaheb vs West Patent Co., Ltd.(,) to which one of us sitting in the Bombay High Court (Gajendragadkar, J.) was a party, a lease for the lifetime of the lessee. The facts of that case were similar to those of the present except in so far as there do not appear in the lease any such terms as are contained in cl. 14 of the lease deed in the instant case. The Bombay High Court therefore had not to consider the terms of a lease which could be said to be in pari materia with those of the present. In that case, the court had to choose between two rival contentions, namely, (1) that the lease created a tenancy at will and (2) that the lease was a lease good enough for the lifetime of the grantee, if it was not indeed a permanent tenancy. We are in complete agreement with the following observations of the court made in that case, which in our opinion apply to the facts and circumstances of the case in hand "The forms in which tenancy rights are created in India are not uniform and they do not conform to precedents known to conveyancing ; sometimes the words used are not precise and it is not easy to understand from the said words the intention of the parties in executing the documents. Leases are often executed without legal assistance; and the aid that the parties obtain from professional scribes does not always contribute to make the terms clear or precise. The nature of the tenancy created by any document must never theless be determined by construing the docu ment as a whole. If the tenancy is for a building purpose, prima facie it may be arguable that it is intended for the life time of the lessee or may in certain cases be even a permanent lease. Prima facie such a lease is not intended to be tenancy at will. But whether it is a tenancy for life or a permanent (1) I. L. R. , 4 50. 890 tenancy must ultimately depend upon the terms of the contract itself. And in construing the terms of 'such contracts the courts must look at the substance of the Matter And decide what the parties really intended to do. " Our task therefore in the present case is to determine what the parties really intended to do. In this connection, it is pertinent to ' re emphasise the following facts : the lessee with a view to raises a substantial structure by way of factory premises, residential quarters and other appurtenant buildings, took a lease of extensive land, about 4 1/2 acres in area ; those lands, at the time of the transaction in question, were being used for agricultural purposes with the permission of the Government who were the ultimate owners. Its character could be changed with the permission of the Government on payment of certain prescribed fees and charges. The parties could not he certain of obtaining the necessary Government sanction to the conversion of the tenancy from agricultural to building purposes. Therefore the stipulation was clearly made that in the event of the Government refusing to sanction the con version, the lease will be deemed to have come to an end. If the permission were forthcoming, and if the lessee put up substantial structures, it would be in his interest to continue in possession of the premises demised by the lease as long as he found it worth his while, but the lessee may have apprehended that circumstances might supervene neces sitating his walking out of the venture. He therefore had to make provision in the lease entitling him to surrender the lease so as to avoid the liability for payment of future rents. But the lessor on his part would be equally anxious to conserve his rights and therefore 'he 'insisted upon the payment of rent for at least 20 years irrespective of the consideration whether or not 'the tenant continued 891 to occupy the premises. Thereafter, the lessor stipulated for enhanced rent of Rs.;. 400/ per annum for the first ton years after the initial period of twenty years aforesaid, and Rs. 500/ thereafter for all times that the lessee continued to occupy the premises. It could not therefore have been in the contemplation of the parties that the lease should be only for the life of the grantee or for an indefinite period which could be terminated at the will of the lessor. In order to ensure that the lessor, should not eject the lessee, at his sweet will, the term was specifically included in the lease that it will not be open to the lessor to do so. It must, therefore, be held that a stipulation entitling the lessee to surrender possession of the premises at his will is not wholly inconsistent with the tenancy being permanent. In this connection, the following observations of the Judicial Committee of the Privy Council in the case of Janaki Nath Roy vs Dina Nath Kundu (1) may be quoted : "On the other. hand, restrictions upon the power of the tenant to dig tanks and build masonry structures (el. 8) and other provisions in the document were relied upon by the Appellants as indicating a tenancy not of a permanent nature. That some provisions are to be found which point in that direction cannot be denied though some of them may be explained by the existence of the special powers to resume Khas possession referred to above. But the question after all, is one of construction of a document, viz., what is the correct view to take of the rights of the parties after considering all the clauses of the kabuliyat and giving due weight to the several indications which point in the different directions ?" It is noteworthy that the lease was intended by, the parties to be heritable and assignable. It (1) (1931) 35 C.W.N. 982, 986. 892 was a lease for twenty years certain, and then in terms which are not wholly unequivocal in respect of the period after the lapse of the initial twenty years. That the lease was not intended to be for the life only of the grantee is clear not only from the facts already noticed, namely, that it was meant for building purposes, was heritable and assignable and had not reserved any right to the lessor to terminate the tenancy, but also from the consideration that the lessor would not gamble upon the life of his lessee when he was making sure of the term of at least twenty years. He must have. known that the factory worked for twenty years, it would go on for ever, according to human calculations. The fact that the lessee stipulated in express terms that he shall always be at full liberty to give up the lease after October 1, 1934, it was argued, was a clear indication of the lease not being a permanent one ; in other words, the contention is that the presumption arising from the fact that the lease was for a building purpose, heritable and assignable is rebutted by the fact that the tenant had insisted upon the stipulation aforesaid. In oar opinion, there is no substance in this contention. It is always open to a lessee of whatever description to surrender his leasehold interest to the lessor, by mutual consent. It is not necessary in law that the mutual consent should be at the time ' the surrender is being made. It is open to the parties to stipulate terms in anticipation of such a surrender. In the instant case, the surrender was to be in express terms agreed to by the parties, at any time after the lapse of the initial period of twenty years. Such a stipulation for the benefit of the lessee cannot be construed as in derogation of the permanency of the tenure, if the parties otherwise agreed to create such a tenure. For the reasons aforesaid, it must be held that the High Court was in error in holding that the present case is governed by the decision of the 893 Bombay High Court in I.L.R. That decision was, with all respect, entirely correct on the terms of the document then before the court. That being so, in our opinion, on a true and proper construction of the lease deed, the presumption in favour of the transaction creating a permanent lease cannot be held to have been rebutted by a stipulation in favour of the tenant having the right to surrender the lease at his choice. That being so, it must be held that the lease deed evidences an intention to create a permanent lease. In view of this finding, it is not necessary to advert to the other contentions raised on behalf of the appellants. For the reasons given above, the appeal must be allowed; the judgement and decree of the courts below are set aside and the suit giving rise to the appeal dismissed with costs throughout. Appeal allowed.

The material terms of the lease in. controversy provided that for the first 20 years the lessee was to pay a fixed rent of Rs. 350/ every year in advance and if if removed his factory within that period be would still have to pay the 'said rent for the twenty years retaining his right to possession; that thereafter he would be free to continue the lease, as long as he liked subject to the payment of the annual rent of Rs. 400/for the first 10 years and thereafter of Rs. 500/ per year, with the right ' to terminate the, lease at any time and the lessor would not have the right to call upon him to give up possession at any time as long as if wanted to, keep the land for his purposes observing the terms of the agreement; that the lessee would be entitled to raise buildings godowns, factories, bunglows or any other structures as he desired; that the lessor would pay the annual land assessment to the Government and the lessee would pay any fines and taxes imposed by the Government for using. agricultural land for building purposes; that the lessee would be free to sublet or relet without affecting the terms and conditions of the lease and that the heirs, executors, administrators, successors and assigns of the lessee as much as those of the lessee would remain bound by the lease. After more than twenty years had elapsed since the lease, which was a registered one, had been executed between the predecessors in interest of the parties, the respondent who succeeded to the original lessor 's title, brought the suit, out of which the present appeal arose, for ejectment of the assignee of the lessee 's interest on the ground that the lease created a tenancy at will and stood determined on service of notice to quit. The trial court and the court of first appeal found in favour of the respondent and decreed the suit. The High Court in second appeal confirmed the decree but relying on a decision of the Bombay High Court in Bavasaheb vs West Patent Co, Ltd. I.L.R. , held that after the lapse of the twenty years the lease was one for an indefinite period and could enure only during the lifetime of the lessee and such 877 assignees as bad been accepted by the original lessor and since the present assignee was not one of them he acquired no right under the lease. Held, that the lease, read as whole and properly construed, created a permanent tenancy and not a tenancy at will or one for an indefinite period valid only during the life of the lessee. It was not correct to say that the stipulation, granting the lessee the right to surrender the lease at any time after the first twenty years gave to the lessor in the absence of such a provision in the lease itself, the, right to call upon the lessee to at quit any time or that the stipulation was inconsistent with a permanent tenancy. The presumption attaching to a lease for building purposes for no fixed period, therefore, was not weakened in the instant case. Janaki Nath Boy vs Dina Nath Kundu, (1931) 35 C.W.N. 982 and Baboo Lekhraj Boy vs Kunhya Singh, (1877) L.R. 4 I.A. 233, referred to. Babasaheb vs West Patent Co., Ltd., I.L.R. , distinguished, Navalram vs Javerilal, , Promada Nath Roy vs Srigobind Choudhry Cal. 648, Forbes vs Hanuman Bhagat, Pat. 452 and Commissioner of Income tax vs Maharajadhiraj Kumar Visheshwar Singh, Pat. 805, discussed. Held, further, that it is always open to a lessee of any description to surrender his lease hold interest to the lessor by mutual consent. It is not necessary in law that there should be such consent at the time when the surrender is made. Since in the instant case, the surrender after the lapse of twenty ) cars had in terms been agreed to by the parties and that stipulation was for the benefit of the lessee, it could not be construed as in derogation of his right to a permanent tenancy.

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.

The appellants were the transferees of lease hold rights granted by the proprietor of an impartible estate in respect of lands in the estate. The estate was notified and abolished in 1948 under the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948. The Manager who was appointed collected the rent as reduced under the Madras Estates Land (Reduction of Rent) Act. direct from the tenants in possession of the lease hold lands from the fasli year 1357, but did not pay it over to the appellants. Ryotwari settlement was introduced in the lands in 1959 (fasli 1369), and in 1960 (fasli 1370), the lease, which was covered by section 20 of the Abolition Act, was terminated, the unexpired portion of the lease period being 26 years. The appellants were paid in 1961: (1) certain sums towards the amount collected as rent till the termination of the lease, and (2) compensation. No interest was paid on the rent collected by the Manager. On the question regarding the correctness of the basis of the calculations made by the respondent, HELD: (1) The respondent was right in holding that the appellants were entitled only to the rents collected, under section 3(4) of the Rent Reduction Act, and not to the assessment made by way of ryotwari settlement under section 22 of the Abolition Act. That assessment was a matter between the Government and the tenant and if, by virtue of it, the Government was entitled to more amount as land revenue than the rent payable under the Rent Reduction Act, the appellants had no right to such excess amount. [542 F H] (2) (a) Under section 20(2) of the Abolition Act rules for determining compensation had to be framed having regard to the value of the right and the unexpired portion of the period for which the right was created. Rule 1 (ii) framed under the section, provides that in the case of a right which was created for a specified number of years, the compensation shall be limited either to twenty times. the net annual income or the net annual income multiplied by the unexpired portion of the period of such right, whichever is less; and, under r. 2, net annual income is the average net income during 3 lash years preceding the lash year in which the right was terminated. Since the rule is framed having regard to the unexpired period, there is no repugnancy between the section and the rule. [543 B G; 544 E H; 545 A] 539 (b) The settlement rates under the ryotwari settlement represent what is payable to the Government as revenue and do not represent what is due as rent to the appellants from their tenants. Therefore, the respondent was right in determining the net annual income under r. 1 (ii) by taking into account only the rent as fixed under the Rent Reduction Act in the three preceding fasli years 1367 1369 and not the settlement rate for the fasli year 1369. [544 D E] (c) The definition of rent in the Madras Estates Land Act, 1908, incorporated into the Abolition Act, and the sections of the Abolition Act show that 'rent ' includes any local tax, eess etc. The original patta granted by the proprietor of the impartible estate provided that the lessees should pay the cesses. Hence, the net income could only be arrived at by taking into account the eesses payable by the lessee. Therefore, the respondent was justified in deducting from the annual gross income the cesses, for arriving at the net annual income which is the basis of compensation. [54 5 E G] (3) On general principles of equity as well as under the Interest Act, 1839, the appellants were entitled to interest on the amount of rents collected by the Manager on behalf of the Government and not paid to the appellants, even though, under the statute, there is no provision for payment of interest. [546 E G] National Insurance Co. Ltd. Calcutta vs L. I. C. India, [1963] Supp. 2 S.C.R. 971, 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. 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]

On July 29, 1945 the predecessor in interest of the appellant mortgaged his house in Ratlam to K for a sum of Rs. 3,100 with possession. According to the deed of mortgage interest would run on the said sum at Rs. 0 10 0 per cent per annum till realisation. The period of redemption was two years. Simultaneously with the mortgage a rent note was executed by and between the parties under which the mortgagor was to continue to Occupy the premises, at a rental of Rs. 20/ per month. The rent note provided inter alia that if the executant (i.e. mortgagor) made default in payment of two months ' rent the mortgagee would be entitled to get him evicted. The mortgagee was also entitled to increase or decrease the rent and the executant was to vacate the. house whenever asked to do so. K filed a suit on his mortgage in 1954 and a preliminary decree was passed in his favour. On his death his legal representatives were substituted in his place on record. For some reason no application for a final decree for sale of the property was made within the period fixed under the Limitation Act. The application for this purpose made by the executors to the estate of K was dismissed on July 29, 1960 as barred by limitation. On December 27, 1960 the said executors filed a suit for ejectment of the appellant alleging that the 'rent for the premises had remained unpaid from September 19, 1957 till November 28, 1960. The trial judge dismissed the suit. In first appeal the plaintiffs claim was allowed in full. The High Court in second appeal maintained the decree of the appellate court. Appeal by special leave was filed in this Court against the High Court 's judgment. It was contended by the appellants that : (i) The rent note executed simultaneously with the mortgage was a mere device to secure payment of interest and did not represent an independent transaction. Further it did not create any relationship of landlord and tenant; (ii) The plaintiffs ' right as mortgagee merged in the decree and execution thereof being barred by the laws of limitation the plaintiffs had lost all their rights; (iii) The mortgage being extinguished the mortgagor could not bring a suit for redemption on account of section 28 of the Limitation Act, 1908. HELD : The appeal must be dismissed. (1) The contents of the documents executed by the parties showed that the relationship between the parties was not simply that of a mortgagee and mortgagor the creditor also had the rights of a landlord qua his tenant besides other rights conferred on him which were greater than those possessed by an ordinary landlord. [728 F] In all such cases the leasing back of the property arises because of the mortgage with possession. It cannot however be held that the mortgagee 724 does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid. If the security is good and considered to be sufficient by the mortgagee there is no reason why be should be driven to file a suit an his mortgage when be can file a suit for realisation of the moneys due under the rent note. The position of the creditor is strengthened where as in the present case, the interest on the amount of the mortgagee is not the same as the rent fixed. If during the continuance of, the security the mortgagee wanted to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there could be no legal objection to it. Under the provisions of 0.34 r. 4 of the Code of Civil Procedure he could deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage. It may be (without a final opinion being expressed on the point) that a mortgagee who secured decree for payment of rent cannot put the property to sale for realisation of the amount decreed, but there cas be no objection to his suing for possession if the rent note entitles him to do so. So long as the mortgagor has a right to redeem the mortgage fie can always pay off the mortgagee and get back possession. This position would continue so long as the property is not sold under a final decree for sale under the provisions of 0. 34 C.P.C. [732 D G] Lalchand vs Nenuram, I.L.R. , approved. Harilal Bhagwanji vs Hemshanker, A.I.R. 1958 Bombay 8, Ramnarain vs Sukhi, A.I.R. 1957 Patna 24, Umeshwar Prasad vs Dwarika Prasad, A.I.R. 1944 Patna 5, Ganpat Ruri vs Mad. Asraf Ali, A.I.R. 1961 Patna 133 and Jankidas vs Laxminarain, I.L.R. , 'referred to. (ii) Since the mortgagee had only lost his 'right to recover the money by sale of the mortgaged property, his security otherwise remaining intact, and the mortgagor also continued to have his right to redeem the property, the contention on behalf of the appellant that the rights of the mortgagee merged in the preliminary decree could not be accepted. [732 H] (iii) If the mortgagee had an independent right on the strength of the rent note which continued to be in force notwithstanding that the period for a final decree for sale had expired, there could be no extinction of his right to sue for possession because of section 28 of the Limitation Act. [733 C]

Plot No. 4635A (old number 5199) admeasuring bigha and 2 biswas and located in the Meerut municipal area was leased by the Lala Nanak Chand Trust to the predecessor in interest of the present respondents. According to the lease deed dated June 23, 1926 the lease was granted "for the purpose of planting a grove, erecting buildings and digging wells etc.". The period of the lease was 30 years but the lessor agreed that on the expiration of that period he would at the request of the lessee renew the lease for another 30 years. On the expiry of the initial period of 30 years on July 1, 1956 the lessor Trust instituted a suit for recovery of possession of the aforesaid land. The suit was dismissed by the trial court but decreed by the first appellate court. The respondents thereafter, on permission granted by the said first appellate court instituted a suit for the specific performance of the agreement to re let the land for another term of 30 years. The suit was dismissed on the ground of limitation by the trial court, as well as the first appellate court. In both the suits the present respondents filed second appeals in the High Court. While these appeals were pending the U.P. Urban Areas Zamindari Abolition and Land Reforms Act, 1956 was enforced in the city of Meerut. The land in dispute was declared an agricultural area ' under the Act and a notification under section 8 of the Act vesting the land in the State was issued on July 16, 1964. Rule 39 of the Uttar Pradesh Urban Areas Zamindari Abolition and Land Reforms Rules, 1957 provided for abatement of certain suits and appeals. Applying the rule the High Court abated the two aforesaid appeals filed by the respondents before it. The Trustees appealed to this Court by special leave. They also filed a writ petition under article 32 of the Constitution praying that the notifica tion under section, 8 of the Act dated July 16, 1964 be quashed as violative of Articles 14, 19(1)(f) and 31 of the Constitution. It was further contended that section 2(1)(d) of the Act whereby land held on lease duly executed before the first day of July 1955 for the purposes of erecting buildings thereon was included in the term 'agricultural area ' was protected by article 31 A of the Constitution. HELD : (i) The lease was not exclusively a building lease. Admittedly no building had been constructed. The respondents claimed to have planted a grove. If so, the land would be covered by section 2(1)(c)(viii) The lease could not therefore be held to fall exclusively under section 2(1)(d). [790B] 784 (ii) In Durga Prasad 's case the Allahabad High Court has pointed out the history of cl. The High Court has taken the view that section 2(1)(d) is limited to lands which are being used for agricultural purposes. The conclusion must be held to be correct though for different reasons, On this construction of section 2(1)(d) it cannot be said that this provision is not connected with agricultural reforms. It could accordingly receive the protection of article 31A and would be immune from attack on the ground of violation of Articles 14, 19 and 31. [792C] Durga Prasad vs Board of Revenue U.P. Allahabad and others, A.I.R. 1970 All. 159, referred to. (iii) The report of the Commission would not show that the land in dispute was a grove within the meaning of section 2(6) of the U.P. Tenancy Act, 1939. As the appellants had given the old number of the plot in their petition the Government did not reply to the allegation in the petition. Accordingly it was not possible to express any concluded opinion on the question whether the land in dispute was an 'agricultural area ' on the date specified under section 2(1) and was being used for horticulture. , The issue must be decided afresh by the appropriate authority under the Act. If it is held by him that the land in dispute is an 'agricultural area ' and the State Government issues a notification under section 8 of the Act with respect to the land, the appeals will be, disposed of by the High Court in accordance with the provisions of the Act. [793C] [Notification dated June 16, 1964 quashed, and orders of the High Court abating the appeals and suits set aside.]

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.

il Appeals Nos. 751 of 1957 and 10 of 1958. Appeal from the judgment and order dated December 7, 1956, of the Calcutta High Court in Matters Nos. 29 and 58 of 1956. M. C. Setalvad, Attorney General of India, C. K. Daphtary, Solicitor General of India, Sukumar Mitra, Sankar Ghosh and B. N. Ghosh, for the appellants in C. A. No 751 of 57. M. C. Setalvad, Attorney General of India, Sankar Ghosh and D. N. Mukherjee, for the appellants in C. A. No. 10 of 1958. section M. Bose, Advocate Generalfor the State of West 905 Bengal, B. Sen and P. K. Bose, for the respondents (in both the appeals). 1960. September 27. The Judgment of the Court was delivered by HIDAYATULLAH J. These two appeals on a certificate under article 132(1) of the Constitution have been filed respectively by the Burmah Shell Oil Storage land Distributing Co., of India, Ltd., and the Standard Vacuum Oil Company (in this judgment referred to as the appellant Companies) against a common judgment of the High Court of Calcutta dated December 7, 1956. The High Court was moved for writs of mandamus, prohibition and certiorari under article 226, but the petition was dismissed by D. N. Sinha, J. The matter arises out of assessment to sales tax on sale of motor spirit for aviation purposes (shortly, aviation spirit) supplied by the appellant Companies to aircraft bound for countries abroad, under the Bengal Motor Spirit Sales Taxation Act, 1941, as amended by section 2(a)(i) of the Bengal Motor Spirit Sales Taxation (Second Amendment) Act, 1954. The Commercial Tax Officer, the Commissioner of Commercial Taxes and the State of West Bengal have been joined as respondents in this Court, as they had previously been joined in the High Court. The appellant Companies deal in Petroleum and Petroleum products, and carry on business at Calcutta. They maintain supply depots at Dum Dum Airport from which aviation spirit is sold and delivered to aircraft proceeding abroad and belonging to several Companies. It appears that such sales were treated by the sales tax authorities in the State of Bombay as not falling within the taxing Acts in force in the Bombay State by reason of the provisions of article 286 of the Constitution. The sales tax authorities in West Bengal, however, took a different view of the matter, and after sundry procedure resulting in assessment of tax, presented a demand notice for the tax assessed which was paid under protest by the appellant Companies. The appellant Companies filed petitions under article 226 of the Constitution in the High 906 Court of Calcutta questioning the legality of the imposition but without success. They have now filed these appeals after obtaining a certificate, as already stated. The contentions in this Court, as they were also before the High Court, 'are that such sales are made in the course of export of such aviation spirit out of the territory of India, that they take place outside the State of West Bengal, that inasmuch as aviation spirit is delivered for consumption outside West Bengal, the sales cannot fall within the Explanation to sub cl. (a) of the first clause of article 286, and that unless they can be said to become "Explanation Sales", the power to tax does not exist. It is argued in support of the last contention that there is not even an averment in the reply of the respondents before the High Court that aviation spirit is delivered for consumption within West Bengal. The case in the High Court was restricted to consideration of supplies to aircraft which either proceed to foreign countries directly from Dum Dum Airport, or do so ultimately, though landing en route at some place or places in the Indian territory. The case has been similarly confined in this Court also, and we are not required to express any opinion about sales of aviation spirit to aircraft flying from one place in West Bengal to another place also within that State, or even to some place in another State in the territory of India. The facts are fortunately not ' in dispute. Both parties admitted the procedure for the supply of aviation spirit to aircraft. Briefly described, it is as follows: Before the arrival of such an aircraft, a representative of the appellant Companies applies to the Airport Customs Officer to depute an Officer to supervise the refuelling of the aircraft. After the aircraft lands, the captain or the Ground Engineer gives instruction about the quantity of aviation spirit required, and on permission being given by the Customs authorities, the stated quantity is delivered in the presence of the Customs Officer deputed. Details of the delivery are entered in a delivery receipt, which 907 is signed by the representative of the appellant Companies and the Customs Officer deputed. Duty drawback shipping bills are also drawn up to show the ' quantity of aviation spirit and are countersigned by them and also by a representative of the aircraft. Later, claims for refund of customs duty are made, and refund is granted. In the petition filed in the High Court, it was averred that such aviation spirit is required for consumption during flight and/or outside the territory of India, and is thus delivered for purposes of consumption outside West Bengal and in some cases outside the territorial limits of India as well. It was also stated that it was sold in the course of export outside the territory of India, and drawback of customs duty was obtained. In the reply of the respondents, it was stated that the refund of customs duty was an irrele vant fact for the purpose of assessment. It was further stated in the affidavit of the Commercial Tax Officer as follows : " I further state that a foreign bound aircraft on leaving Dum Dum Airport consumes a portion of the aviation spirit taken in by it at the Airport within the territory of West Bengal before it moves out of the said territory or the territory of India. I do not admit that the entire quantity is used outside the territorial limits of India as alleged. I deny that the sale of such aviation spirit takes place outside the State of West Bengal and state that the sale takes place within the State of West Bengal and the purchaser pays its price within the State of West Bengal. The sale of such aviation spirit is completed by delivery at the Dum Dum Airport in West Bengal. " We have mentioned this fact, because it was argued that the respondents had not averred clearly that aviation spirit was sold for consumption within West Bengal even though the appellant Companies had denied it. The respondents pointed out that at least some of the aviation spirit must be consumed in the State, and that this was so stated in the affidavit filed in reply to the petition and quoted by us. This is 908 hardly a case for a fight on pleadings, especially as the entire procedure of the supply of aviation spirit and the use to which it is put are beyond controversy. The question that we have to consider is one of principle, and the answer depends upon broad facts and not on technicalities. Either the whole of the sale is within the taxing power of the State or it is not, and the fact that aviation spirit is consumed in taking off or in flying over the territory of West Bengal before it leaves that territory would make no difference either way to the principles applicable. Though parties entered into a debate on this part of the case, we do not propose to consider it, because, in our opinion, the question must be considered in substance and not in abstractions. The liability to sales tax, if any, is attracted when aviation spirit is sold, and immunity can only be claimed, if, as stated in article 286(1)(a) and the Explanation, the sale can be said to take place outside the State or can be regarded under article 286(1)(b) as having taken place " in the course of. export of the goods out of, the territory of India". Before we take up these two questions, we desire to refer to some provisions of certain Acts, which bear upon the matter. The Indian , is an Act for the control of the manufacture, possession, use, operation, sale, import and export of aircraft. Section 16 of this Act provides that the Central Government may, by notification in the Official Gazette, declare that any or all of the provisions of the Sea Customs Act shall, with such modifications and adaptations as may be specified in the notification, apply to the import and export of goods by air Sections 2(3) and (4) define " import" and " export ' respectively as " bringing into India " and " taking out of India ". A notification issued under the Indian , the rules framed thereunder and the Indian Aircraft Rules, 1920, appointed the Civil Aerodrome, Dum Dum, a Customs Aerodrome, and to that Customs Aerodrome, the provisions of the Sea Customs Act mutatis mutandis were made applicable by r. 63 (Part IX) of the Indian Aircraft Rules, 1920. As 909 a result, Dum Dum Airport became a Customs Aerodrome, and any aircraft coming into India from foreign countries or leaving for any such country has to comply with ordinary Customs formalities. Section 42 of the Sea Customs Act, which allows drawback on re export and is applicable mutatis mutandis, provides: " When any goods, capable of being easily identified, which have been imported by sea into any customs port from any foreign port, and upon which duties of customs have been paid on importation, are re exported by sea from such customs port to any foreign port, or as provisions or stores for use on board a ship proceeding to a foreign port seven eighths. of such duties shall, except as otherwise hereinafter provided, be repaid as drawback: ". (Provisos omitted). Under section 51, no drawback is allowed unless the claim to receive such drawback is made and established at the time of re export, and under section 52, the person claiming drawback has to make and subscribe to a declaration. The procedure which is described in an earlier portion of this judgment bears upon these matters. Coming now to the taxing Acts with which we are concerned, it may be pointed out that the Bengal Motor Spirit Sales Taxation Act, 1941, originally did not contemplate levy of a tax on the sale of aviation spirit. Motor spirit was defined to mean, " any liquid or admixture of liquids which is ordinarily used directly or indirectly as fuel for any form of motor vehicle or stationary internal combustion engine, and which has a flashing point below 76 degrees Fahrenheit ". Sub section (4) of section 3, which is the charging section, provided that no tax shall be levied on the sale of any motor spirit for the purpose of aviation. The Act was amended by the Second Amendment Act, 1954, and sub section (4) of section 3 was omitted, and the proviso to the first sub section was re enacted, adding one more clause to the following effect 910 the tax on all retail sales of motor spirit for the purpose of aviation, which are effected on or after the date of the commencement of the Bengal Motor Spirit Sales Taxation (Second Amendment) Act, 1954, shall be charged at the rate of three annas per gallon ". By the Bengal Motor Spirit Sales Taxation (Amendment) Act, 1955, the original Act was further amended. To the definition of" motor spirit ' quoted by us earlier, an Explanation was retrospectively added, which reads as follows: " Explanation For the avoidance of doubt, it is hereby declared that in this Act, the expression ' vehicle ' means any means of carriage, conveyance or transport, by land, air or water ". The original Act was again amended by the Bengal Motor Spirit Sales Taxation (Amendment) Act, 1957. This time, among other amendments involving rates of tax, the words " and which has a flashing point below 76 degrees Fahrenheit " were omitted from the definition of 'motor spirit '. The result of all these amendments was to make retail sales of aviation spirit liable to sales tax, and 'retail sale ' was defined, at all material times, as a sale " by a retail dealer for the purpose of consumption by the purchaser ". After the coming into force of the Constitution, section 22, in terms of article 286, was added to the original Act by paragraph 3 of, and the Eleventh Schedule to, the Adaptation of Laws Order, 1950. It read: " 22(1). Nothing in this Act shall be construed to impose or authorise the imposition of a tax on the sale or purchase of motor spirit: (a) where the sale or purchase takes place outside the State of West Bengal; (b) where the sale or purchase takes place in the course of the import of such motor spirit into, or export of such motor spirit out of the territory of India; or (c) (omitted). (2) The Explanation to clause (1) of article 286 of the Constitution shall apply for the interpretation of clause (a) of sub section (1) 911 Clauses (a) and (b) of the first sub section do no more than re enact the prohibition contained in article 286 of the Constitution with modifications to Suit motor spirit, and the Explanation to sub cl. (a) of cl. (1) of the said Article in the Constitution has been applied without an attempt to modify or adopt it. The Explanation to sub cl. (a) of the first clause of article 286, the meaning of which was much in dispute in this case, may conveniently be quoted here. It reads: " Explanation For the purposes of sub clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general laws relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State ". The High Court of Calcutta in its judgment dealt with the points urged, and rejected them. The reasons of the High Court briefly were as follows: The learned Judge declined to draw any inference from the fact that customs duties were refunded as drawbacks on aviation spirit delivered to the aircraft. He held that he was not required to decide whether the appellant Companies were entitled to claim and receive drawbacks of customs duty. He then gave a finding that the sale was physically within the State, because both the buyer and the purchaser were, at the time of sale, within the State of West Bengal even though delivery of aviation spirit was beyond the customs barrier. He then considered the legal position in the light of article 286 from three points of view. He first held that it was not an inter State transaction, because both the parties were in the State of West Bengal, and aviation spirit was not delivered outside the State. Thus, he held that el. (2) of article 286 did not apply. In this connection, he relied upon the decision of this Court in the Bengal Immunity Co., Ltd. vs State of Bihar and others (1). He next considered (1) 912 the matter under the first sub clause, and held that unless the fiction created by the Explanation applied, the sale must be treated as within the State under the law relating to sale of goods. In his opinion, the sale being completed within the State of West Bengal both as regards contract and delivery, the fiction could not be held applicable, because no " outside " State was involved, even though the aircraft might have to consume some aviation spirit while flying over the " outside " State. He, therefore, held that the Explanation and article 286(1)(a) which it seeks to explain, were both not applicable. He then considered the matter from the point of view of article 286(1)(b). He explained on the authority of the decision of this Court in State Of Travancore Cochin and others vs Shanmugha Vilas Cashewnut Factory and others (2) that the expression " in the course of export out of the territory of India" referred to sales which, by themselves, occasioned the export of goods out of the territory of India and not to sales for the purpose of export, even though the goods ultimately passed the customs barrier. He pointed out that there was no foreign purchaser to whom the aviation spirit could be said to have been exported, and that aviation spirit, in fact, was consumed en route and never taken to any foreign territory. He also pointed out that no bills of lading or shipping documents were drawn up, and therefore there was neither an export nor a sale in the course of export out of the territory of India. The appellant Companies claim that these sales come within the exemption granted the sub cls. (a) and (b) of the first clause of article 286. To claim the exemption granted by the first sub clause, they rely upon certain decisions of this Court, and contend that unless the sale can be said to fall within the Explanation, it must be treated as a sale outside the State of West Bengal, and is thus exempt. With regard to the second sub clause, they contend that there was an export out of the territory of India inasmuch as aviation spirit was taken abroad and any sale by which it is taken abroad is also exempt These (2) ; 913 arguments, as has been shown above, were urged before the High Court, but were not accepted. These two arguments need to be considered separately, as they have little in common. Article 286 places restrictions upon the power of the States to tax sales and purchase of goods, and cuts down the amplitude of Entry No. 54 in the Second List of the Seventh Schedule. Other restrictions are also to be found in Part XIII of the Constitution. With those we are not concerned in these appeals. We are also not concerned with the subsequent amendment of article 286, nor with the ban imposed by the second clause of the Article on taxes on sales in the course of inter State trade and commerce. We are concerned with the first clause only, as it stood before the amendment. That clause is divided into two sub clauses. The first sub clause prohibits the imposition of tax on the sale or purchase of goods where the sale or purchase takes place outside the State. AD Explanation is added to this sub clause, which has been quoted by us earlier. This Explanation has led to a long controversy in this Court during which somewhat conflicting views have been expressed about its meaning. This conflict has further been accentuated when the interplay between the two clauses has been considered. The view now accepted is that the bans imposed by the two clauses are independent and separate and each must separately be got over. In view of this, we are not required to travel beyond the first clause in this case. We have heard widely divergent arguments in these appeals. The learned Attorney General who appeared on behalf of the appellant Companies read to us copious extracts from the earlier decisions of this Court, and contended that unless the sales could be said to fall within the Explanation so as to become 'Explanation sales ', they must be regarded as having taken place outside the State of West Bengal and for that reason, not taxable. According to him, they could only become 'Explanation sales ' if aviation spirit was delivered for the purpose of consumption within the State of West Bengal. The learned Advocate General of West Bengal, on the other band, 914 contended that the Explanation did not apply to the facts here, and that the observations in the rulings were not relevant. The first sub clause in its opening portion says that no law of a State shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place outside the State. It is thus plainly meant that a State is not to tax sales which take place outside that State. But, where does a sale take place ? Numerous elements go to make a sale, and they may take place in more than one State. Under the law relating to the sale of goods, property passes on the happening of certain events. When they happen, the sale is complete. Now, a contract for the sale of goods may be entirely within one State when all parties are within the State, the offer and acceptance also take place there, and the goods are also within that State, and there, the property in the goods passes and delivery also takes place. But it may also happen that the constituent elements may be spread over two or more States, some of the elements described above falling within one State and some others falling within one or more other States. Prior to the Constitution, multiple taxation of a single transaction of sale was possible, and Provincial legislation then existing clearly demonstrates that States having Some connection with the sale because one or more elements took place within those States, treated this as sufficient nexus between the taxing power and the States, authorising them to tax sales even where property passed in another State. The Constituent Assembly desired to achieve certain objects in the matter of taxation, particularly in relation to sales tax. Article 286 achieves, among other objects, the avoidance of this multiple taxation. The first sub clause of the Article is clear in its terms, when it says that a State cannot tax sales which take place outside the State. The converse is also true, that is to say, that a State can tax a sale of goods which takes place within the State. By sale here is meant a completed transaction by which property in the goods passes. Before the property in the 915 goods passes, the contract of sale is only executory, and the buyer has only a chose in action. " Property in the goods passes either by the fulfilment of the conditions of the contract, if any, or by the operation of the law relating to the sale of goods. Starting from the basic fact that what is to be taxed under the Constitution is a sale completed by the transference of property in the goods, we have to see at what stage and where this happens. The taxable event thus cannot be found at any earlier stage when the sale is not completed by the passing of property. The critical taxable event is the passing of property in the goods as a result of a contract for their sale. The parties to the contract can agree when that event is to take place, but where it happens may be a matter of some doubt and even of difficulty. Where the parties have not agreed as to the time of the passing of property, the law relating to the sale of goods furnishes the answer. There too, there may be the same difficulty as to the place of the passing of property. The place of physical delivery of the goods does not help to solve this difficulty, because delivery may, precede or follow the passing of property in the goods. Delivery of goods is, thus, not always an element which determines the completion of a sale, because the sale may be completed both before and after delivery. The Constitution, however, thinks in. ' terms of a completed sale by the passing of property and not in terms of an executory contract for the sale of goods. The essence of the matter being thus the passing of property in goods,, there was always a likelihood of more than one State claiming the right to tax the same transaction. One State might claim that goods in which property passed were in that State, and hence property in the goods passed there. Another State might claim that the conditions precedent to the passing of property were fulfilled in that State and hence the sale was completed by the passing of property there. Yet another State might claim that property passed in that State according as one or more events connected with the passing of property took place within that State. 916 It was to avoid this welter of confusion as far as possible that the Explanation was added, and it also avoided multiple taxation. The Explanation serves two purposes. It indicates the State where the tax can be levied, and also indicates the State or States where it cannot. It achieves these two purposes excluding all considerations as to where property the goods can be said to have passed under the law relating to the sale of goods. The purpose is achieved by the Explanation and particularly by the non obstante clause in the Explanation. Any State claiming to tax a sale of goods on the ground that it was completed by the passing of property in the goods in that State could not do so, if the goods as a direct result of the sale were delivered for the purpose of consumption in another State. The Explanation creates a fiction that the sale must be deemed to have taken place in the latter State and not in the State where the sale was completed by reason of passing of property. It thus discards the test of passing of property and adopts the test of delivery 'as a direct result of such sale for the purpose of consumption in that State '. Where more than one State is involved, any State claiming to tax the sale by reason of something anterior to the passing of property would not be able to claim that the sale took place there unless it was also the State of delivery, because the sale is complete only on the passing Of property, and till the sale is complete, liability to tax does not arise. Once the sale is complete, the delivery State gets the right to tax the sale by the fiction introduced. Now, the Explanation must be ' interpreted according to its own tenor, and it is meant to explain el. (1)(a) of the Article and not vice versa. It is an error to explain the Explanation with the aid of the Article, because this reverses their roles. The Explanation discards the test of passing of property, and adopts the test of delivery as a direct result of the sale for purposes of consumption. This delivery may be in the State where the passing of property also took place, but then, there is no difficulty. The sale is then entirely within the State. The sale is outside 917 the State only when the passing of property takes place in the State, but that is not the State where the goods have been actually delivered as a direct result of the sale for purposes of consumption in that State. The Constitution has, thus, for certain cases shifted and confined the situs of the taxable event to the State of the delivery of goods; but it must be remembered that this delivery,may precede as well as follow the passing of property. It is, therefore, plain that no single element of the contract of sale is by itself a decisive factor in determining which State is to tax the sale where there are more States than one involved, except the test of actual delivery of the goods in a State as a direct result of the sale for purposes of consumption in that State, and it is that State and that State only which has the right to tax the sale and none other. The Explanation is not applicable, unless there are more States than one involved. It is only a key to find out which of the States is competent to tax and which are not, and is by no means a definition of an 'outside sale '. It is an Explanation, which determines which State out of those connected with the transaction of sale can tax it. The interpretation which we have placed upon the first sub clause of article 286(1) is substantially the same, as was placed in the earlier rulings of this Court. In The State of Bombay and another vs The United Motors (India) Ltd. and others (1), it was pointed out that the Explanation formulated an easily applicable test to find out an 'outside sale ' and this, it was said, was done " by defining an inside sale ". It was observed further: " Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States ". Certain reasons were given why this test was adopted, and it is these reasons and their effect on the second clause, which led to a re examination of the subclause in The Bengal Immunity Company Limited vs (1) ; 117 918 The State of Bihar and others (1). The majority in that case touched upon the various grounds which were advanced before this Court, but declined to express "any final opinion upon the matter ". The case went on to decide that the bans imposed by the two clauses of article 286 were independent, and needed to be separately enforced. But, on the meaning of the Explanation, no different view was expressed. Again, in M/8. Ramnarain Sons Ltd. vs Asst. Commissioner of Sales Tax and others(2), it was observed as follows: "So far as article 286(1)(a) is concerned, the Explanation determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category and when a transaction is thus determined to be inside a particular State it necessarily becomes a transaction outside all other States. The only relevant enquiry for the purposes of article 286(1)(a), therefore, is whether a transaction is outside the State and once it is determined by the application of the Explanation that it is outside the State it follows as a matter of course that the State with reference to which the transaction can thus be predicated to be outside it can never tax the transaction (Italics supplied). Now, in so far as this case is concerned, the words the Explanation determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category " in the extract last quoted, become important. The first question to consider is whether these cases can be governed by the Explanation at all. The learned Attorney General contends that the power to tax these transactions can only be found if the sales were 'Explanation sales ', in the sense that the goods were delivered as a direct result of the sale for consumption in West Bengal. In our opinion, the explanation can apply only if more than one State is involved in the same transaction. When there is no other State in which the goods can be said to be delivered for consumption, apart from the State where the property in the goods passed, the Explanation is not needed as a key. The (1) (2) ; 492. 919 power to tax in those circumstances which is exercisable by virtue of transfer of title to the property, can only be taken away if there be some other State in ' which the goods as a direct result of the sale were delivered for consumption. But if there is no such other State, the question does not arise. In the present cases, there is no such rival State. Where the purchaser buys goods in West Bengal for his own consumption, the test of an 'inside sale ' is satisfied when the property in the goods passes in the same State and all the elements of the contract of sale also take place inside it. Where the property in the goods passes to a buyer who is also the 'ultimate ,consumer, the terms of the Explanation are themselves satisfied. To exclude, thus, the powers of taxation of the State of West Bengal, the appellant Companies must be able to point out some other State where the goods can be said to have been delivered as a direct result of the sale for the purpose of consumption in that other State. Unless they can do so and they have not so done before us they cannot invoke the Explanation, and the cases, to borrow the language of the last quotation, cannot be said to be "within that category ". In our opinion, the learned Advocate General of West Bengal was right in his argument (which was accepted by the High Court) that the ban contained in article 286(1)(a) and the Explanation does not apply. The appellant Companies next rely upon article 286 (1)(b), which provides that: " No law of a State shall impose or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place in the course of the. . export of goods out of, the territory of India ". The contention is that the sales in question must be regarded as having taken place in circumstances which exempt sales under the sub clause. This the appellant Companies argue from the following facts that aviation spirit is delivered outside the customs barrier, that aviation spirit is taken out of the territories of India, and that the sales occasion this 920 export. They rely upon the definition of 'export ' in other Acts to show that the word means no more than 'taking out of the country '. This clause of the Article has been construed on previous occasions by this Court, and what is meant by the expression " in the course of " has been well. established. Indeed, in State of Mysore vs Mysore Spinning and Manufacturing Co. Ltd. (1), this Court observed that the point could no longer be said to be at large. Fortunately, there is less disagreement on this point than on the interpretation of the Explanation, and it is sufficient to refer to the leading decisions of this Court. The earliest case on the subject is State of Travancore Cochin and others vs The Bombay Co. Ltd. (2), where four possible meanings of the expression " in the course of " were considered. It is not necessary to refer to all of them here, and it is sufficient to point out that of the view that the clause is not restricted to the point of time at which goods are exported from India and that the series of transactions which necesssarily precede export of goods also come within the purview of the clause, it was said that it was too wide. It was observed by this Court that: "A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea. Such a sale cannot be dissociated from the export without which ' it cannot be effectuated, and the sale and resultant export form parts of a single transaction. Of these two integrated activities, which together constitute an export sale, whichever first occurs can well be regarded as taking place in the course of the other. " The meaning of these observations was further explained in State of Travancore Cochin and others vs Shanmugha Vilas Cashew Nut Factory and Others (3). It was observed (p. 62) that the words "export out of " in this context did not refer to the article or commodity exported, and that the reference to "the (1) A.I.R. 1958 section C. 1002. (2) ; (3) ; 921 goods " and to the "territory of India " made it clear that the words " export out of " meant the exportation out of the country. It was then added that, "The word 'course ' etymologically denotes movement from one point to another, and the expression 'in the course of ' not only implies a period of time during which the movement is in progress but postulates also a connected relation. " This inter connection of the sale sought to be taxed with the course of export was emphasised again in clear terms thus : " The phrase 'integrated activities ' was used in the previous decision to denote that 'such sale ' (i.e., a sale which occasions the export) I cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction '. It is in that sense that the two activities the sale and export were said to be integrated. A purchase for the purpose of export like production or manufacture for export, is only an act preparatory to export and cannot, in our opinion, be regarded as an act done I in the course of the export of the goods out of the territory of India ' any more than the other two activities can be so regarded. " From the views here expressed, it follows that every sale or purchase preceding the export is not necessarily to be regarded as within the course of export. It must be inextricably bound up with the export, and a sale or purchase unconnected with the ultimate export as an integral part thereof is not within the exemption. It may thus be taken as settled that sales or purchases for the purpose of export are not protected, unless the sales or purchases themselves occasion the export and are an integral part of it. The views expressed in these two cases were accepted and applied in State of Madras vs Gurviah Naidu and Co. Ltd. (1), Kailash Nath vs State of U.P. (2), State of Mysore vs Mysore Spinning and Manufacturing Co. Ltd. (3) and Gordhandas Lalji vs B. Banerjee (1) A.I.R. 1956 S.C. 158. (2) A.I.R. 1057 S.C. 790. (3) A.I.R. 1958 S.C. 1002. 922 and others (1). These cases do not advance the matter further, and it is, therefore, not necessary to refer to them in detail. In the earlier cases, it was not necessary to explain the meaning of the word 'export ', because there was always a foreign buyer to whom the goods were ultimately sent. In none of the cases the facts found here were present. Here, the buyer does not export the goods to a foreign country, but purchases them for his own use on the journey of the aircraft to foreign countries. This difference is vital, and makes the position of the appellant Companies, if anything, weaker. It is for this reason that the appellant Companies depend on a wide meaning of the word 'export ', which they illustrate from other Acts where the word is tantamount to "taking out of the country '. We are of opinion that this meaning cannot be given to the word 'export ' in the clause. The word 'export ' may conceivably be used in more senses than one. In one sense, 'export ' may mean sending or taking out of the country, but in another sense, it may mean sending goods from one country to another. Often,, the latter involves a commercial transaction but not necessarily. The country to which the goods are thus sent is said to import them, and the words 'export ' and import ' in this sense are complementary. An illustration will express this difference vividly. Goods cannot be said to be exported if they are ordered by the health authorities to be destroyed by dumping them in the sea, and for that purpose are taken out of the territories of India and beyond the territorial waters and dumped in the open sea. Conversely, goods put on board a steamer bound for a foreign country but jettisoned can still be said to have been exported ', even though they do not reach their destination. In the one case, there is no export, and in the other, there is, though in either case the goods go to the bottom of the sea. The first would not be within the exemption even if a sale was involved, while any sale in the course of the second taking out would be. In both, the goods were taken out of the country. The difference lies in (1) A.I.R. 1958 S.C. 1006. 923 the fact that whereas the goods, in the first example, had no foreign destination, the goods, in the second example, had. It means, therefore, that while all exports involve a taking out of the country, all goods taken out of the country cannot be said to be exported. The test is that the goods must have a foreign destination where they can be said to be imported. It matters not that there is no valuable consideration from the receiver at the destination end. If the goods are ex. ported and there is sale or purchase in the course of that export and the sale or purchase occasions the export to a foreign destination, the exemption is earn. Purchases made by philanthropists of goods in the course of export to foreign countries to alleviate distress there, may still be exempted, even though the sending of the goods was a not a commercial venture but a charitable one. The crucial fact is the sending of the goods to a foreign destination where they would be received as imports. The two notions of export and import, thus, go in pairs. Applying these several tests to the cases on hand, it is quite plain that aviation spirit loaded on board an aircraft for consumption, though taken out of the country, is not exported since it has no destination where it can be said to be imported, and so long as it does not satisfy this test, it cannot be said that the sale was in the course of export. Further, as has already been pointed out, the sales can hardly be said to 'occasion ' the export. The seller sells aviation spirit for the use of the aircraft, and the sale is not integrally connected with the taking out of aviation spirit. The sale is not even for the purpose of export, as explained above. It does not come within the course of export, which requires an even deeper relation. The sales, thus, do not come within article 286 (1)(b). These sales must, therefore, be treated as made within the State of West Bengal. The customs barrier is a barrier for customs purposes, and duty drawback may be admissible if the goods once imported are taken out of the country. The customs duty drawbacks have nothing to do with the sale of aviation 924 spirit, which takes place in West Bengal. The cus toms barrier does not set a terminal limit to the territory of West Bengal for sales tax purposes. The sale beyond the customs barrier is still a sale, in fact, in the State of West Bengal. Both the buyer and the seller are in that State. The goods are also there. All the elements of sale including delivery, payment of price, take place within the State. The sale is thus completely within the territory of the taxing State. No outside State is involved where the goods can be said to have been delivered for consumption as a direct result of the sale that takes place. Article 286(1)(a) and the Explanation are wholly inapplicable, and the sale cannot, even by a fiction, be said to be outside the State of West Bengal. No doubt, aviation spirit is taken out of the State and also the territory of India, but it cannot be said to have been exported or delivered for consumption in some other State. The so called export is not occasioned by the sale, and the sale, on the authorities cited, is not in the course of export ', so as to attract article 286(1)(b). The decision of the High Court was correct. The appeals fail, and are dismissed with costs. One hearing fee. Appeal dismissed.

The appellant companies which were carrying on business in Calcutta in petroleum and petroleum products maintained supply depots at Dum Dum Airport from which motor spirit for B the purposes of aviation was sold and delivered to aircraft which either proceeded to foreign countries directly from that Airport or did so ultimately, though landing en route at some place or places in the Indian territory. Dum Dum Airport was a customs aerodrome and all aircraft coming into it or leaving it had to comply with ordinary customs formalities. The sales tax authorities of West Bengal sought to levy tax on the sales of motor spirit as aforesaid under the provisions of the Bengal Motor Spirit Sales Taxation Act, 1941, as amended. The appellant companies claimed that the sales were exempted from taxation under both the clauses (a) and (b) of article 286(i) of the Constitution of India on the grounds (i) that the sales in question had taken place outside the State of West Bengal, as they did not .come within the Explanation to article 286(1)(a), (2) that aviation spirit was delivered outside the customs barrier and therefore the sales were outside the State, and (3) that the sales had taken place in the course of export, as aviation spirit was taken out of the territory of India. Held: (i) that by sale in article 286(i)(a) is meant a completed transaction by which property in the goods passes. Before property in the goods passes the contract of sale is only executory and the buyer has only a chose in action. The taxable event is not to be found at an earlier stage because the critical taxable event is the passing of property. The Explanation to cl. (1) of article 286 was added to avoid, among other things, multiple taxation of the same transaction. It indicates the State where the tax can be levied and also the State where it cannot. It achieves it by excluding from consideration the place where the property in the goods passed according to the law relating to sale of goods. The non obstante clause establishes this. By the fiction created by the Explanation a sale is deemed to have taken place in the State where the goods are delivered as a direct result of the sale for purposes of consumption in that State. Where there are more States than one involved, any State claiming to tax a sale by reason of something anterior to the passing of property would not be able to claim that the sale took place there unless it was also the State of delivery. The Explanation is meant to explain the Article and must be interpreted according to its tenor and the Explanation is not to be explained with the aid of the Article because that would reverse their roles. The Explanation is not applicable unless there are more States than one involved. The State of Bombay vs The United Motors (India) Ltd., , State of Travancore Cochin vs Shanmugha Vilas Cashewnut Factory, ; , Ramnayain Sons Ltd. vs Asst. 904 Commissioner of Sales Tax; , and The Bengal Immunity Company Ltd. vs The State of Bihar, [1955] 2 S.C.P. 603, considered. (2) that to exclude the power of taxation of the State of West Bengal under article 286(i)(a), read with the Explanation, the appellant companies must be able to point out some other State where the goods could be said to have been delivered as a result of the sale for the purpose of consumption in that other State, and that where, as in the present case, aviation spirit was delivered to the aircraft, there was no such rival State, and therefore, the ban contained in article 286(i)(a) and the Explanation, did not apply. (3) that in the phrase " in the course of export out of the territory of India " in article 286(i)(b) the word " export " does not merely mean 'taking out of the country '. Export here means that the goods are being sent to a foreign destination at which the goods can be said to be imported. In the Article the notions of import and export go in pairs. State of Travancore Cockin vs The Bombay Co. Ltd., ; and State of Travancore Cochin vs Shanmugha Vilas Cashew Nut Factory, ; , relied on. (4) that aviation spirit loaded on board the aircraft for consumption, though taken out of the country, was not exported since it had no destination where it could be said to be imported. The sales in question could not, therefore, be said to have occasioned the export, nor were they in the course of export. Accordingly, article 286(i)(b) was not applicable. (5) that the sales must be treated as made within the State of West Bengal. The customs barrier did not set a terminal limit to the territory of West Bengal for the purposes of sales tax, and the sales, though beyond the customs barrier, were still within the territory of the taxing State.

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.

A single Judge of the Calcutta High Court, on an oral application made in his chamber on behalf of a person professing to be respondent No. 1, and on giving an oral undertaking to make a written application within 4 days, issued an interim order directing maintenance of status quo in regard to an auction of a liquor shop held in favour of the appellant. The said order did not make any attempt to indicate even briefly the facts, the question of law, if any, raised before the Judge and the reasons which prompted him to make such an interim order. On receiving the information about the said order, the appellant contacted the High Court and got the information that the subsequent writ petition filed by respondent No. I under Article 226 would be taken up for orders at 2. 30 p.m. On 3. 4. 1984. While the representatives of the appellant and their advocate were wailing in the court, they came to know that the matter had been mentioned in the chamber of the learned Judge who had earlier granted stay and that the order of statues quo had been extended until further orders. The appellant told the learned Single Judge that they were waiting in the Court and . were not informed that the matter was going to be mentioned in his chamber and in view of this they requested the learned Judge to reconsider his order. But, the Judge declined to do so. There upon the appellant filed a Writ Appeal. The Writ Petition filed by respondent No. I along with the Writ Appeal of the appellant were heard together by a Division Bench which set aside the auction and directed that a fresh auction be held on 19th April 1984. Aggrieved by the said order, the appellant has filed the present appeal. Disposing of the appeal, ^ HELD: There is hardly any justification for the entertainment of an oral application and the issuance of an interim order with no record whatever of what was submitted to the court of the reasons for the order made by the court. To permit a procedure by which oral applications may be made and internal orders obtained without any petition in writing, without any affidavit having been sworn to as prima facie proof of allegations and without any record before kept before the court may lead to very serious abuse of the process of the court. Therefore, this Court expresses its disapprobation and forbids the 25 practice of entertaining oral applications by any court in matters of consequence A without any record before it. [29E G] (2) This Court does not mean to suggest that oral application may never be made. Often during the course of the hearing of a case it becomes necessary to make applications of a formal nature and such application are permitted by the Presiding Judge. But in all such cases the court is already seized of the principal matter or dispute and there is a record pertaining to it before the 13 court. Again, this Court does not mean to suggest that other urgent oral applications may never be made. If urgent interim orders are imperative, at least skeletal applications setting out the bare facts and the questions invoked should be insisted upon. A detailed application could be permitted to be filed later. If the matter is so urgent as not even to brook any insistence upon a written application, the judge should at least take The trouble and the care to record in his order the facts mentioned to him and the submissions made to him. It is essential that there be a contemporaneous record. Otherwise the court ceases to be a court of record. [29G H; 30A B] (3) A sitting in chambers could be held when both sides are represented and the sittings are held openly so that members of the public, if they desire to attend, may have access even in the chamber. To grant interim orders on oral applications in chambers when the judge is otherwise sitting in open court for other matters would seriously reflect on the fairness of the procedure adopted by the courts and may have the unpleasant effect of undermining public confidence in courts. A public hearing is one of the great attributes of a court, and courts of this country are therefore required to administer justice in public. Otherwise, there is a risk that justice may even be undone. It is not 'as a matter of policy but as a matter of law ' that The hearing of a cause be public except in the limited class of cases. That rule was violated by the learned Single Judge in this case. [3lE;H; 32A.B] Naresh Shridhar Mirajkar & ors. vs State of Maharashtra PC 246 referred to.

% The respondent, an unregistered firm of coal merchants with its place of business in Bihar and an office in U.P., was assessed to sales tax by the first appellant in respect of the turnover of coal supplied by the respondent assessee for the assessment years 1967 68 and 1968 69. The assessee filed writ petitions alleging that the assessment orders were without jurisdiction on several grounds. The High Court allowed the writ petitions holding that section 9 of the as it stood at the relevant time cast a liability to tax only on a 'registered dealer ' and not an 'unregistered dealer '. In the appeals it was contended on behalf of the Department that by virtue of section 9 of the Central Sales Tax (Amendment) Act, 1976, cl. (b) of the proviso to section 9(1) of the was deemed to have been in force since 5.1.57 and, therefore, the position was as if the Act had always imposed a liability to pay tax even on unregistered dealers just as it had originally done on registered dealers, and that the amendment only affected the venue of taxation, and being procedural in nature, it was required to be construed retrospectively, Dismissing the appeals, ^ HELD: 1. Clause (b) of section 9(1) of the is operative only from 7.9.76. [573] The instant case is, therefore, governed by the earlier provision, and the respondent assessee being an unregistered dealer is not liable to pay tax. [573D] State vs Kasturi Lal Har Lal, [1987] 67 STC 154 SC, relied on. 563 2.1 Where the statute, Central Sales Tax (Amendment) Act, 1976, on its face, clearly indicates retrospective effect where intended, there can be no justification to read retrospectivity into the amendment made by cl. (c) of section /6 of the Amending Act, which does not contain any words to that effect. [571D] 2.2 The language of the validation section clearly concerns only penalties which are dealt with under section 9(2). The amending Act refers to section 9 in general and not to section 9(2) only because section 9(1) also contains a reference to sub section (2). From this circumstance alone it cannot be inferred that retrospectivity to the amendment of section 9(1) also is intended. [572C D] 2.3 The employment of word "also" cannot be treated as an indication of intention by the Legislature that the amendment of section 9(1) by section 6 of the Amending Act was to be effective from 5.1.57. If the Legislature had intended it, the intention could and would have been expressed clearly in cl. (a) of section 6 itself as it had been in the other clauses and in the other sections. If section 9(1) of the Amendment Act had been inserted as cl. (d) in section 6 thereof, it could not have changed the prospective effect of cl. The position is not different merely because this provision is contained in section 9 and not section 6 of the Amendment Act. Section 9(1) of the Amendment Act talks only of reading these extra words into section 9(1) of the Principal Act between 5.1.57 and 7.9.76. It does not contain any operative words that require section 9(1) of the Principal Act being read in the form in which it has been amended by section 6 during that earlier period. [572E G] All that the provision requires is that for the period 5.1.57 to 7.9.76, the section is to be read as if it also included the additional substantive provisions referred to therein. It was earlier not clear whether all these provisions could be read into the section before 7.9.76, the date when the amendment Act came into force. So, the validation section declares that the section should be read, even earlier, as if it comprehended also these substantive provisions. It is in this context that the word "also" is used. [572D E] 2.4 The question whether a charge to tax can be imposed in one State or another is not a mere question of venue. It may have an impact on the rate of tax in certain cases and it also regulates the rights inter se of States to levy taxes on such inter state sales. [573B C] The amendment changes the position that an unregistered dealer 564 is not taxable under the proviso and imposes a substantive liability on such a dealer. It is also one which confers jurisdiction on an officer in a particular State to levy a tax which he otherwise cannot. It is thus a substantive provision. [573B] The amendment cannot, therefore, be treated as purely procedural and hence necessarily retrospective. [573C] S.T.O. vs Coal & Coke Supplies Corporation JT, [19871 4 S.C. 472; Khemka vs State, ; and Shiv Dutt Rai vs Union, 119831 3 S.C.C. 529 referred to.

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 Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 amended sub section (1) of section 3 of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 purporting to levy purchase tax on industrial alcohol, which was chal lenged in a writ application before the High Court by the respondents. The respondents contended before the High Court that the State Legislature was incompetent to levy tax with reference to Entry 54 of List II in respect of industrial alcohol in so far as that article was the subject of regulation by the Central Government in exercise of its power under section 18G of the Industries (Development and Regulation) Act, 1951; that the price of that article was regulated by the relevant Price Control Orders made by the Central Government under the IDR Act and any levy of sales tax or purchase tax by the State by recourse to Entry 54 of List II would come into direct conflict with the law made by Parliament and the control exercised by the Central Government under that law in regard to an industry falling under Entry 52 of List I read with Entry 33 of List III. 65 Relying upon the decision of a Constitution Bench of this Court in Synthetics and Chemicals Ltd. & Others vs State of U.P. & Others, ; the respondents further contended that, in so far as industrial alcohol was concerned, the State was incompetent to levy sales tax, by reason of the operation of the Ethyl Alcohol (Price Control) Orders made by the Central Government under section 18G of the IDR Act. The appellants Opposite parties contended that the decision of this Court in ; did not deal with the question of levy of tax failing under Entry 54 of List 1I and that the power of the State to levy taxes on the sale or purchase of goods was not the subject of consideration in that decision. The High Court allowing the writ petition and declaring the U.P. Act 8 of 1976 to be null and void held that the levy of purchase tax on industrial alcohol was, during the operation of the PriCe Control Orders of the Central Govern ment beyond the legislative competence of the State, against which the State filed the present Appeal. The appellant submitted that the reference to sales tax in the judgment of this Court in ; , which the High Court in the present case thought was binding upon it, was accidental and per incurium and did not arise from the judgment; that the levy of sales tax was not in question at any stage of the arguments, nor was the question considered as it was not in issue; that the Court gave no reason what ever for abruptly stating that sales tax was not leviable by the State by reason of the Ethyl Alcohol (Price Control) Orders. The respondents contended that the prices strictly controlled by the Central Government in exercise of its power under the IDR Act; that the State Law cannot be al lowed to disturb such prices; that any attempt to raise the prices, despite the strict control exercised by the Central Government by means of statutory orders, was an invalid exercise of power. On the question, whether or not the power of the State to levy tax on the sale or purchase of goods falling under Entry 54 of List 1I will comprehend industrial alcohol, allowing the appeal of the State, this Court, HELD: Per T. Kochu Thommen & R.M. Sahai, JJ. 66 1.01. The High Court was clearly in error in striking down the impugned provision in sub section (1) of section 3 of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 as amended by the U.P. Act 8 of 1976, undoubtedly fails within the legislative competence of the State being referrable to Entry 54 of List 11. [91A] 1.02. The decision of this Court in Synthetics ; is not an authority for the proposition canvassed by the assessee. This Court has not, and could not have, in tended to say that the Price Control Orders made by the Central Government under the IDR Act imposed a fetter on the legislative power of the State under Entry 54 of List II to levy taxes on the sale or purchase of goods. The reference to sales tax in paragraph 86 of that judgment was merely accidental or per incuriam and has therefore, no effect on the impugned levy. So far ds industrial alcohol was con cerned, the State was incompetent to levy sales tax by reason of the operation of the Ethyl Alcohol (Price Control) Orders made by the Central Government in exercise of its power under section 18G of the IDR Act. [91A C, 73E F] Per T. Kochu Thommen, J. 2.01. This Court in Synthetics & Chemicals Ltd. & Others vs State of U.P. & Others, ; was concerned with only one question, and that was whether the States could levy excise duty or vend fee or transport fee and the like by recourse to Entries 51 or 8 in List 11 in respect of industrial alcohol and it did not deal with the taxing power of the State under 54 of List II, although there is a refer ence to sales tax. "The State may charge excise duty on potable alcohol and sales tax under Entry 52 of List II". Entry 52 of List II is mentioned in connection with Excise duty and sales tax, but neither of them fails under Entry 52. Reference to Entry 51 of List 11 ought to have been made, if it was excise duty that the Court had in mind. Entry 54 of List 11 would have been referred to, and not Entry 52, if the Court had in mind sales tax. On the other hand, Entry 52 had any application to the fees or charges in question. [80B F] The abrupt observation of this Court in ; was without a preceding discussion, and inconsistent with the reasoning adopted by this Court in earlier decisions from which no dissent was expressed on the point. [80G H] 2.02. The question in the instant case is whether or not the 67 impugned legislation fails in pith and substance within Entry 54 of List 11, and not whether the industry (Producing goods the sale of which is leviable to tax under the im pugned legislation) is controlled within the ambit of Entry 52 of List I was not considered in ; [87H 88B] Synthetics and Chemicals Ltd. & Others vs State of U.P. State of Uttar Pradesh & Others vs M/s. Synthetics & Chemcials Ltd. & Others, ; , overruled in ; , Referred to. Per R.M. Sahai, J. (Concurring) 2.03. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decedendi. [93B C] 2.04. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law. [93D E] 2.05. Law declared is not that can be culled out but that which is stated as law to be accepted and applied. A conclusion without reference to relevant provision of law is weaker than even casual observation. [93E F] 2.06. In absence of any discussion or any argument the order was founded on a mistake of fact, and, therefore, it could not be held to be law declared. [94B C] 2.07. The conclusion of law by the Constitution Bench in ; that no sales or purchase tax could be levied on industrial alcohol with utmost respect fell in both the exceptions, namely, rule of sub silention and being in per incurium to the binding authority of the precedents. [94C D] 68 Young vs Bistol Aeroplane Ltd., [1944] I KB 718; Jaisri Sahu vs Rajdewan Dubey, ; Lancaster Motor Company (London) Ltd. vs Bremith Ltd., [1941] IKB 675; Municipal Corporation of Delhi vs Gurnam Kaur, ; and Shama Rao vs State of Pondicherry, AIR 1967 SC 1680, Referred to. Per T. Kochu Thommen. The power of regulation and 'control is separate and distinct from the power of taxation. Legislative exer cise of regulation or control referrable to Entry 52 of List I or Entry 8 of List 11 is distinct and different from a taxing power attributable to Entry 54 of List I or Entry 92A or 92B of List I. The power to levy taxes on sale or pur chase or consignment is referrable to these Entries, and subject to the other provisions of the Constitution, the taxing power of the State is not cut down by the general legislative control vested in Parliament and referrable to the general topics of legislation. [86G 87H] 3.02. Any exercise of power by the State which trans gresses upon the power of Parliament or of the Central Government, as its delegate, is to the extent of such trans gression null and void. [85C] 3.03. None of the entries in the Concurrent List deals with tax but general subjects of legislation. No conflict can, therefore, arise between the taxing powers of the Union and the States. Parliament has the power to legislate in respect of a 'controlled ' industry failing under Entry 52 of List I, and both Parliament and the States have the power to legislate in respect of the trade and commerce in, and the production, supply and distribution of, the products of a 'controlled ' industry (Entry 33 of List Ill). These are not taxing entries and do not, therefore, relate to taxes, but powers of regulation and control. The power to control industry being thus vested in Parliament (Entry 52 of List I) and the legislative power in respect of trade and com merce in such industry being concurrently vested in the Union and the States (Entry 33 of List III) any exercise of control by the State must be subject to the legislative power of Parliament. [84H 85C] 3.04. The taxing power of the State on a matter falling within its competence under Entry 54 of List II, namely, sale or purchase of goods (other than newspapers) is, sub ject to the taxing power of Parliament under Entry 92A of List I and other provisions of the Constitution, plenary and unlimited, and untrammelled by the supervisory or regulatory power of Parliament under Entry 52 of List I read with its 69 concurrent power under Entry 33 of List III. This is the crucial: distinction between the wide taxing power of the State under Entry 54 of List II and its conditional or restricted taxing power, for example, over mineral rights mentioned in Entry 50 of that List. [82E G] 3.05. Similarly, the power of the State in respect of potable alcohol (as distinguished from industrial alcohol) falling under Entry 8 of List II is significantly unfet tered, unlike, for example, mines and mineral development over which the regulatory power of the State is specifically stated to be subject to the regulatory power of Parliament (see Entry 23 of List II read with Entry 54 of List I). The legislative competence of the State in respect of mines and minerals was held to be denuded to the extent that the field was covered by section 9 of the Central Act, namely, Mines and Minerals (Regulations and Development Act), 1957. [82G 83A] 3.06. Unlike mines and minerals, alcohol stands on a different footing, and is dealt with differently, dependent on whether it is potable or not. What is significant is that legislation failing in pith and substance under Entry 8 or Entry 51 of List 1I in relation to alcoholic liquor for human consumption (as distinguished from industrial alcohol) whether for the purpose of levying vend fee or transport fee or excise duty, strictly confined to such articles, is not subject to challenge on the ground of legislative incompe tence or repugnancy by reason of the power vested in Parlia ment under Entry 52 or Entry 84 of List I or Entry 33 of List III. Incompetence or repugnancy arises only when the impact of the legislation falls, not incidentally, but substantially on industrial alcohol so as to transgress on a field occupied by Parliament. [83A C] 3.07. The matters concerning intoxicating liquors are included within the legislative competence of the States. In respect of any such matter, the States are competent to levy fees (Entry 66 of List II). Entry 51 of List II relating to excise duty on alcoholic liquors for human consumption clearly refers to liquor for human consumption, the same meaning has been judicially ascribed in ; to 'intoxicating liquors ' in Entry 8 of the same List, the legislative competence of the State in respect of 'intoxi cating liquors ' referred to in Entries 8 and 66 of List II as a subject of legislation and fee respectively and the power of the State to levy excise duty on "alcoholic liquors for human consumption" falling under Entry 51 of the same List must necessarily be confined to potable alcohol, and cannot include industrial alcohol or medicinal and toilet preparations containing alcohol (see Entry 84 of List I). 70 Any transgression by the State on industrial alcohol will be invalid for want ' of power by reason of the limitation of Entries 8 and 51 of List II (being confined to potable alcohol) and consequent transgression on areas covered by Entries 52 and 84 of List I respectively relating to de clared industry and excise duty on industrial alcohol and medicinal and toilet preparations containing alcohol, and also for repugnancy arising from a clash with the centrally occupied field failing under Entry 33 of List III. [85E, 85H 86D] 3.08. The power to tax under Entry 54 of List II being a specific power, it cannot be cut down or in any manner lettered by the general power of control exercised by Par liament, by legislation on a matter failing under Entry 52 of List I relating to an industry, the control of which by the Union is declared by Parliament by law to be expedient in the public interest, read with Entry 33 of List III dealing with trade anti commerce in, and the production, supply and distribution of the products of any such con trolled industry, and imported goods of the same kind as such products, and other articles mentioned in Entry 33. [89F H] 3.09. The impugned provision of the Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 levying tax at the point of first purchase of alcohol in the State is undoubtedly an impost failing in pith and substance under Entry 54 of List II. In the absence of any fetter on the legislative power and in the absence of any valid challenge against the provision as a colourable piece of legislation, the impugned legislative enactment ' remains unimpeachable. [89H 90B] 3.10. The control exercised by the Central Government by virtue of section 18G of the IDR Act is in a field far/removed from the taxing power of the State under Entry 54 of List II. So long as the impugned legislation fails in pith and substance within the taxing field of the State, the control of the Central Government in exercise of its power under the IDR Act in respect of a controlled industry fail ing under Entry 52 of List cannot in any manner prevent the State from imposing taxes on the sale or purchase of goods which are the products of such industry and which are referrable to Entry 33 of List III. The taxing power of the State under Entry 54 of List II cannot be cut down by the general legislative power of control of the Centre. [90B D] 3.11. The levy of fee, whether called vend fee or trans port fee or duty or charge, whether levied by Rules purport edly made under the Excise Act or the Prohibition Act or any other statute, otherwise than as 71 a proper levy falling in pith and substance under a taxing Entry, was not valid, to the extent that it lacked quid pro quo and applied to industrial alcohol. Any such fee or charge can he justified as a mode of control falling in pith and substance under Entry 8 read with Entry 66 of List II only to the extent that it remains within the bounds of the concerned subject matter, namely, `intoxicating liquors ', which must necessarily exclude industrial alcohol. [90D F] 3.12. Taxes on sale or purchase are not governed by the Price Control Orders, made under the IDR Act, the purpose of which is to prevent the seller from pricing his goods beyond the limit prescribed by the Orders. That is a fetter on the free play of demand and supply. When supply is scarce, the prices are bound to rise and it is that vice which is con trolled by fixing the maximum price. But that does not in any manner curtail the power of the State to levy taxes on the sale or purchase of goods. It is no doubt true that the consumer of the article must, in addition to the price, pay purchase tax due in respect of them. But that is by reason of a valid levy which is within the constitutional power of every State, and is dehors the price, though often referra ble to it. [90F H] State of Bombay & Anr. vs F.N. Balsara, ; ; India Cement Ltd. & Ors. vs State of Tamil Nadu & Ors. , ;I M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr., ; at 1479; M/s. R.M.D.C. (Mysore) Private Limited vs The State of Mysore, ; Ganga Sugar Corporation Ltd. vs State of Uttar Pradesh & Others, ; ; Ch. Tika Ramji & Others etc. vs The State of Uttar Pradesh & Ors., ; ; Kannan Devan Hills Produce Company. Ltd. vs The State of Kerala & Another, ; and Hoechst Pharmaceuticals Ltd. & Anr. vs The State of Bihar & Others. , ; , referred to. " Per. R.M. Sahai, J. (Concurring) 3.13. Power to tax is a sovereign power. In federal system of governance it is exercised by distribution of power between the Union and the State Both are supreme in their sphere. That is brought out Clearly by Article 246(1) and Article 246(3) of the Constitution. The legislative field for levying tax by Union is set out in Entries 82 to 92 in List I and State in Entries 45to 63 in List II of the VIlth Schedule. There is no overlapping. Fields are clearly demarcated. Limitations and restrictions are also mentioned.

The appellant Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949. The assessments were challenged in the High Court but the petitions were dismissed. While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents. The respondents challenged the attachment proceedings but their petitions were again dismissed. In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded. This Court thereafter allowed the appeals by the respondents. Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court. However, when. the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again. Those petitions were allowed and the appellant appealed to this Court. While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section (3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law. But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968. Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected. [293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court. It markes a direct inroad into the judicial powers of the State. The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively. By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective. But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts. Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution. 1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr. No. 75/69 dt. 289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed. The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution. State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.

The 'any felts ' manufactured by the appellant assessee were held by the assessing authorities to be not 'textiles ' within the meaning of Item 30 of Schedule 'B ' the Punjab General Sales Tax Act, 1318 and thereafter, on appeal the Tribunal and on reference the High Court also confirmed this view. Allowing the appeal by special leave, the Court ^ HELD: 1. 'Dryer felts ' are 'textiles ' within the meaning of that expression in Item 30 of Schedule 'B ' to the Punjab General Sales Tax Act, 1948. [551 E] 2. In a taxing statute words of every day use must be construed not in their scientific or technical sense but as understood in common parlance, meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it." [548 A, F] Ramavatar Budhaiprasad vs Assistant Sales Tax officer, Akola, A.l.R. , M/s. Motipur Jamindary Co. Ltd. vs State of Bihar, A.l. R. , State of West Bengal vs Washi Ahmed. ; and Madhya Pradesh Pan Merchant 's Association, Santara Market, Nagpur vs State of Madhya Pradesh, 7 S.T.C. 99 at 102 referred(1 to E Gretfell vs IR.C. [1876)] I exhibit D. 242 at 248, Planters Nut and Choco Co. Ltd. vs The King, [1951] 1 DLH 385 and 200 Chests of 'Tea, (1824) 9 Wheaton (U.S.) 430 at 438; quoted with approval. Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention us clearly expressed by the Legislature. The reason is that the Legislature does not suppose our merchants to be 'naturalists, or geologists, or botanists". In the instant case the word 'textiles ' is not sought by the assessee to be given a scientific in preference to its popular meaning. It has only one meaning namenamely a woven fabric and that is the meaning or technical meaning which it bears in ordinary parlance. [550 E G]. The concept of 'textiles ' is not a static concept. It has, having regard to newly developing materials, methods techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language be regarded as textiles [550 H] The word 'textiles ' is derived from Latin 'texere ' which means 'to weave ' and it means woven fabric. When yarn, whether cotton, silk. woollen rayon, nylon or of any other description or made out of any other material is woven into a fabric, what comes into being is a 'textile ' and is known as such. Whatever be 546 the mode of weaving employed, woven fabric would be 'textile '. What is necessary is no more than meaning of yarn and weaving would mean binding or putting together by some process so as to form a fabric. A textile need not be of any particular size or strength or weight. the use to which it may be put is also immaterial and does not bear on its character as a textile. The fact that the 'dryer felts ' are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit, cannot militate against 'dryer felts ' falling within category of textiles, if otherwise they satisfy the description of textiles. The refers to textile fabrics in this sense. [549 C D, E F., G H] Ramavatar Budhaiprasad vs Assistant Sales lax officer Akola; , and M/s. Motipur Jamindary Co. Ltd. vs Stale of Bihar, ; , distinguished.

l Appeal No. 135 of 1958. Appeal from the judgment and order dated 114 394 September 4, 1956, of the Punjab High Court in Civil Writ Case No. 325 of 1965. N. A. Palkhivala and J. B. Dadachanji, for the appellant. C. K. Daphtary, Solicitor General of India, K. N. Rajagopal Sastri and D. Gupta, for the respondents. September 27. The Judgment of the Court was delivered by HIDAYATULLAH J. The appellant firm, L. Hazarimal Kuthiala of Kapurthala, moved the High Court of Punjab under article 226 of the Constitution for writs of prohibition, certiorari, quo warranto etc., against the Income tax Officer, Special Circle, Ambala and the Commissioner of Income tax, Punjab (1), Himachal Pradesh, Bilaspur and Simla in respect of reassessment of the income of the firm for the account year, 1945 1946. The High Court dismissed the petition, but granted a certificate under articles 132 and 133 of the Constitution, and this appeal has been filed on that certificate. The firm carried on business as forest lessees and timber merchants at Dhilwan in the former Kapurthala State. In that State, an Income tax law was in force, and prior to the integration of the State, on April 10, 1947, the income of the firm for the account year 1945 1946 (Samvat. 2002) was duly assessed, and the tax was also paid. Subsequently, political changes took place, Kapurthala integrated into what was known as Pepsu, and the Rajpramukh issued two Ordinances in Samvat. 2005, by which all laws in force in Kapurthala including the Income tax law ceased to be operative from August 20, 1948. The two Ordinances instead applied laws in force in the Patiala State to the area of the new State which included Kapurthala, and the Patiala Income tax Act, 2001, came into force. Later still, the Indian Finance Act, 1950 (26 of 1950), applied the Indian Income tax Act to the Part B States, which had emerged as a result of political changes. Section 13 of the Indian Finance Act, 1950, repealed the Income tax laws obtaining in the area of the Part B States except for the purposes 895 of levy, assessment and collection of income tax and super tax in respect of the period defined therein. On March 12, 1955, the Income tax Officer, Special Circle, Ambala, issued a notice purporting to be under section 34 of the Patiala Income tax Act of Samvat. 2001 to the appellant firm calling upon it to file a return of its income and total world income, because he had reason to believe that the income had been underassessed. Previous to this, on November 4, 1953, the Commissioner of Income tax, Punjab (1), Himachal Pradesh, Bilaspur and Simla, purporting to act under section 5, sub sections (5) and (7A) of the Indian Income tax Act, ordered that the assessment of the appellant firm would be done by the Income tax Officer, Special Circle, Ambala and not by the Income tax Officer, B Ward, Patiala, who ordinarily would be the competent authority under section 64 of the Indian Income tax Act to assess the appellant firm. The appellant firm raised objections, but failed, and then filed the petition under article 226 of the Constitution, out of which the present appeal arises. Numerous objections were taken in respect of the competency of the proceedings before the taxing authorities, but some of them are no longer pressed. An argument under article 14 of the Constitution has now been abandoned, though it figured at earlier stages of the present case. A second point that the reassessment cannot be made under the Patiala In. come tax Act is not in dispute, because the respondents before us stated that the reassessment, if any, would have to be done in accordance with the Kapurthala law, as it existed in the assessment year (Samvat. 2002). A third argument, namely, that the words of section 13 of the Indian Finance Act, 1950, did not include reassessment, has also been abandoned, in view of the decisions of this Court in Lakshmana Shenoy vs The Income, tax Officer, Ernakulam (1) and The Income tax officer, Bangalore vs K. N. Guruswamy (2). Only one point has been pressed before us, and it is that the Income Tax Officer, Special Circle, Ambala, had no jurisdiction to issue a notice under section 34, and (1) [1959] S.C.R. 751. (2) ; 896 that only the Income tax Officer, B Ward, Patiala, was the competent authority. Reliance is placed in this connection upon the provisions of section 64(1) of the Indian Income tax Act, under which the locally situated Income tax Officer would have had jurisdiction in this case. The transfer of the case by the Commissioner of Income tax by his order dated November 4, 1953, is characterised as ultra vires and incompetent, and it is this argument alone to which we need address ourselves in this appeal. The Patiala Income tax Act contained provisions almost similar to sections 5(5) and 5(7A) of the Indian Income tax Act. Sub section (5) differed in this that the Commissioner of Income tax was required to consult the Minister in charge before taking action under that sub section. The only substantial difference in the latter sub section was that the Explanation which was added to section 5(7A) of the Indian Income tax Act as a result of the decision of this Court in Bidi Supply Co. vs Union of India (1) did not find place in the Patiala Act. The Commissioner, when he transferred this case, referred not to the Patiala Income tax Act, but to the Indian Income tax Act, and it is contended that if the Patiala Income tax Act was in force for purposes of reassessment, action should have been taken under that Act and not the Indian Income tax Act. This argument, however, loses point, because the exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory. This principle is wellsettled. See Pitamber Vajirshet vs Dhandu Navlapa(2). The difficulty, however, does not end there. The Commissioner, in acting under section 5(5) of the Patiala Income tax Act, was required to consult the Minister in charge. It is contended that the Central Board of Revenue which, under the Indian Finance Act, 1950, takes the place of the Minister in charge was not consulted, and proof against the presumption of regularity of official acts is said to be furnished by the fact that under the Indian law no such consultation was necessary, and the Commissioner, having purported (1) [1056] S.C.R. BOM. 486, 489. 897 to act under the Indian law, could not have felt the need of consultation with any higher authority. This, perhaps, is correct. If the Commissioner did not act under the Patiala law at all, which enjoined consultation with the Minister in charge and purported to act only under the Indian law, his mind would not be drawn to the need for 'Consultation with the Central Board of Revenue. Even so, we do not think that the failure to consult the Central Board of Revenue renders the order of the Commissioner ineffective. The provision about consultation must be treated as directory, on the principles accepted by this Court in State of U. P. vs Manbodhan Lal Srivastava (1) and K. section Srinivasan vs Union of India (2). In the former case, this Court dealt with the provisions of article 320 3)(c) of the Constitution, under which consultation with the Union Public Service Commission was necessary. This Court relied upon the decision of the Privy Council in Montreal Street Railway Company vs Normandin (3), where it was observed as follows: ". . The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at. The cases on the subject will be found collected in Maxwell on Statutes, 5th Ed., p. 596 and the following pages. When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have 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. " The principle of the Privy Council case was also applied by the Federal Court in Biswanath Khemka vs The King Emperor (4), and there, as pointed out by this (1) [1058] S.C. R. 533. (3) ; (2) ; , 1321. (4) 898 Court, the words of the provision were even more emphatic and of a prohibitory character. The essence of the rule is that where consultation has to be made during the performance of a public duty and an omission to do so occurs, the action cannot be regarded as altogether void, and the direction for consultation may be treated as directory and its neglect, as of no consequence to the result. In view of what has been said in these cases, the. failure to consult the Central Board of Revenue does not destroy the effectiveness of the order passed by the Commissioner, however wrong it might be from the administrative point of view. The power which, the Commissioner had, was entrusted to him, and there was only a duty to consult the Central Board of Revenue. The failure to conform to the duty did not rob the Commissioner of the power which he exercised, and the exercise of the power cannot, therefore, be questioned by the assessee OD the ground of failure to consult the Central Board of Revenue, provision regarding which must be regarded as laying down administrative control and as being directory. Learned counsel, however, contends that even if all this be decided against him, he is still entitled to show that the transfer of the case can only take place under sub section (7A) of section 5 and not under sub section According to him, the former subjection deals with the transfer of individual cases, and that inasmuch as there was no pending case at the time, then, as was ruled by this Court in the Bidi Supply case (1), the transfer could not be valid. In the absence of an Explanation similar to the one added to the Indian Income tax Act, he contends that a case which was not pending, could not be transferred under sub section He contends also that sub section (5) deals not with the transfer of individual cases but with the distribution of work. The two sub sections of section 5 of the Patiala Income tax Act read as follows: " (5) Income tax officers shall perform their functions in respect of such persons or classes of persons or of such incomes or classes of income or in respect of (1) ; 899 such areas as the Commissioner of Income tax may in consultation with the Minister Incharge direct, and, where such directions have assigned to two or more Income tax Officers, the same persons or classes of persons or the same incomes or classes of income or the same area, in accordance with any orders which the Commissioner of Income tax may in consultation with the Minister Incharge make for the distribution and allocation of work to be performed. The Minister Incharge may, with the previous approval of the ljlasi Khas, by general or special order in writing, direct that the powers conferred on the Income tax Officer by or under this Act shall, in respect of any specified case or class of cases, be exercised by the Commissioner, and, for the purposes of any case in respect of which such order applies, references in this Act or in any rules made hereunder to the Income tax Officer shall be deemed to be references to the Commissioner. (7A) The Commissioner of Income tax may transfer any case from one Income tax Officer subordinate to him to another, and the Minister Incharge may transfer any case from any one Income tax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the re issue of any notice already issued by the Income tax Officer from whom the case is transferred. " There can be no doubt that sub section (7A) authorises ,the Commissioner to transfer individual cases. The words " any case from one Income tax Officer subordinate to him to another ", " such transfer may be made at any stage of the proceedings " etc., clearly indicate this. Sub section (7A) is, however, not applicable here, because in respect of the cognate sub section of the Indian Income tax Act it was ruled by this Court that it could apply to a pending case only. It was to overcome this lacuna that the Explanation was added by the Indian Parliament. This amendment came in 1956, and the Patiala Act did not include a similar Explanation, because prior to 1956 the question had not arisen. There is one other difference between the Patiala Act and the Indian Act. Whereas sub section (7A) was introduced in the Indian Act by an 900 amendment, the corresponding sub section was enacted at the same time as the rest of the Patiala Act. Now, it is quite clear that 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. The same reasoning must be applied to that subsection, as it was applied to the Indian Act. Learned counsel referred us to an affidavit by the Under Secretary, Central Board of Revenue, reproduced in Pannalal Binjraj vs Union of India (1), which stated the reason for the introduction of sub section It is a little difficult to accept the affidavit as an aid to find out the intention why a particular law or amendment was enacted, more so where the affidavit concerns quite another Act of a different legislature. It is, however, pertinent to remember that sub section (7A) expressly gave the power to transfer pending cases, but said nothing about cases which were riot pending. The power to transfer such cases before they came into being must, therefore, be found in some other enactment. The Department contends that it would fall within sub section (5) of section 5, and points out that this Court was not required to consider that sub section, because the transfer of the cases dealt with in the Bidi Supply case (2) was by an authority not named in sub section (5) and therefore the transfer in those instances could not be held to be under that sub section. The Department contends that the Commissioner of Income tax is mentioned both in sub section (5) and sub section (7A) and could derive his power from one or the other or both. The short question thus is whether an individual case which was not a pending case 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 reassessments relating to previous assessment years. Mr. Palkhivala argues that the words of the sub section " such persons or classes of persons or of such incomes or classes of income or in respect of such areas " denote, by the plural employed, a dealing with a group rather than (1) ; 246. (2) ; 901 an individual case. He further contends that if individual cases were held to be included in sub section (5), then sub section (7A) would be unnecessary and otiose. He argues that harmonious construction thus requires that the two sub sections must be taken to cover different situations. The last argument is hardly open after the decision of this Court adverted to already. If pending cases alone were within sub section (7A), those cases which were not pending could not be said to have been provided for, there. There is thus no overlapping at least in so far as cases not pending were concerned. An arrangement for their disposal would be a subject of distribution of work and nothing much turns upon the employment of the plural number, because the plural includes the singular. Indeed, a single case might well be in a class separate from others. Duplication of powers is sometimes noticeable in statutes, and does not destroy the effectiveness of the powers conferred. Section 24 of the Civil Procedure Code dealing with transfers of cases and the provisions of the Letters Patent of the High Court are instances in point. If a particular action is valid under one section, it cannot be rendered invalid because the identical action can also be taken under another section, and it makes no difference if the two empowering provisions are in the same statute. In any event, sub section (7A) would cut down sub section (5) only to the extent the former provides, and it has been held that it was confined to pending cases only. Sub section (5) was thus available for cases which were not pending, and the case which was 'the subject matter of the Commissioner 's order was not a pending case. Mr. Palkhivala contends that sub section (5) merely enables distribution of work, and does not deal with transfers. But where a case is not pending, an order relating to it may take the form of transfer or an arrangement for its disposal. There is nothing to prevent the Commissioner, acting under sub section (5), to arrange that the case of an assessee shall be disposed of by a particular Income tax Officer. The words of 115 902 sub section (5) that " Income tax Officers shall perform their functions in respect of such persons as the Commissioner may direct " only show that the Commissioner may direct that one Income tax Officer shall not and another Income tax Officer shall, perform the functions in respect of such and such person or persons. The plural including the singular, the order of the Commissioner was valid, because he arranged and distributed work, and did not seek to transfer any case. It is, however, contended that this renders sub section (7A) otiose. In our opinion, it does not. Special provision for transfer of pending cases is all that is provided there, and if such a transfer takes place, the provisions of sub section (7A) will be invoked. Those provisions are to be read as not pre judicing the general powers granted by sub section (5) and vice versa. For these reasons, the appeal fails, and will be dismissed with costs. Appeal dismissed.

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.

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.

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.

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.

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]

In respect of its business as a middleman relating mainly to sales of coal and coke in the course of inter State trade, the appellant firm was assessed to Central sales tax under section 8(2) of the , by the Commercial Tax officer. The appellant without availing itself of the remedies under the Act, applied for and obtained special leave to appeal under article 136 of the Constitution of India directly against the order of assessment When the appeal was taken up for hearing, the question was raised as to whether it should be entertained, when even the facts had not been finally determined by the final fact finding authority under the Act, nor had the jurisdiction of the High Court been invoked to exercise its powers under the Act. Held, that an assessee is not entitled ordinarily to come up to the Supreme Court directly against the judgment of the Assessing Authority and invoke the Court 's jurisdiction under article 136 of the Constitution without first exhausting the remedies provided by the taxing statutes. Mahadayal Premchandras vs Commercial Tax Officer Calcutta, and The State of Bombay vs M/s. Ratilal Vedilal, [1961] 2 section C. R. 367, explained. Chandi Prasad Chokhani vs The State of Bihar, [1962] 2 section G. R. 276 and Kanhaiyalal Lohia v, Commissioner of Income Tax Bengal, [1962] 2 section C. R. 839, followed. ^ Held, further, that in the present case, in which there, were no special circumstances and in which the facts had not yet been finally determined, the appeal must be considered to be incompetent.

Section 2 of the Part States (Laws) Act, 1950, empowered the Central Government to extend by notification in the official gazette, to any Part C State, or to any part of it, with such restrictions and modifications as it thinks fit, any enactment in force in a Part A State. In 1951, the Central Government, in exercise of this power, extended by a Notification the Bengal Finance (Sales Tax) Act, 1941, to the then Part State of Delhi with certain modifications in section 6. The section, after such extension with modifications, provided: 6(1) No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule subject to the conditions etc: and (2) The State Government [Amended as Central Government in 1956] after giving by notification in the official gazette not less than 3 months notice of its intention to do so, may by like notification add to or omit from or otherwise amend the Schedule and thereupon the Schedule shall he amended accordingly A modified Schedule of goods exempted from tax under section 6 was also substituted for the original Schedule in the Bengal Act, by the Notification. After the passing of the , the Part States (Laws) Act became . with necessary adaptations. In 1957, the Central Government issued a Notification in purported exercise of the powers under section 2 of the 1950 Act, amending the 1951 Notification. By the 1957 Notification an additional modification of section 6 of the Bengal Act was introduced in the 1951 Notification, namely the words "such previous notice as it considers reasonable" were substituted for the words "not less than 3 months ' notice" in section 6(2). In 1959, Parliament passed the Bengal (Sales Tax) (Delhi Amendment) Act, 1959, making some amendments in various sections of the Bengal Act but left section 6 untouched. By various notifications, exemption from sales tax was granted to several commodities. but subsequently, the exemption was withdrawn by other notifications after giving notice of less than 3 months. Dealers in those commodities, who were aggrieved by the withdrawal of the exemption, challenged the validity of ' the withdrawal. The High Court dismissed their petitions. On the main ground that Parliament, while enacting the Amending Act of 1959, had put its seal of approval to the curtailed period of notice in section 6(2) and as such, it should be taken to have keen provided by Parliament itself in the Bengal Act. 786 Allowing the appeals to this Court, ^ HELD: The 1957 Notification purporting to substitute the words "such previous notice as it considers reasonable" for the words 'not less than 3 months ' notice" in section 6(2) of the Bengal Act, is beyond the powers of the Central Government, conferred on it, by section 2 of the ; and in consequence, the various notifications, in so far as they with drew exemptions from tax with respect to the several commodities, are invalid and ineffective, as the exemption was withdrawn without complying with the mandatory requirement of not less than 3 months ' notice enjoined by the section. [808 D E] (1) (a) The primary power bestowed by section 2 of the , on the Central Government is one of extension, that is, bringing into operation and effect, in a Union Territory, an enactment already in force in a State. The discretion conferred by the section to make "restrictions and modifications" in the enactment sought to be extended, is not a separate and independent power, which can be exercised apart from the power of extension, but is an integral constituent of the power of extension. This is made clear by the use of the preposition "with" one meaning of which (which accords with the context) is "part of the same whole". [801 E F] (b) There are 3 limits on the power given by section 2. (i) The power exhausts itself on extension of the enactment. It can be exercised only once, simultaneously with the extension of the enactment, but cannot be exercised repeatedly or subsequently to such extension. (ii) The power cannot be used for a purpose other than that of extension. In the exercise of the power, only such restrictions and modifications can be validly engrafted in the enactment sought to be extended, which are necessary to bring it into operation and effect in the Union Territory. Modifications which are not necessary for, or ancillary and subservient to the purpose of extension, are not permissible. Only such modifications can be legitimately necessary for such purpose, as are required to adjust, adapt, and make the enactment suitable to the peculiar local conditions of the Union Territory for carrying it into operation and effect. (iii) The words "restrictions and modifications" do not cover such alterations as involve a change in any essential feature of the enactment or the legislative policy built into it. [801G H, 802A] (c) If the words "such restrictions and modifications as it thinks fit" are given the wide construction of giving an unfettered power of amending and modifying the enactment sought to be extended, as contended by the respondent, the validity of the section itself becomes vulnerable on account of the vice of excessive delegation. Moreover. such a construction would be repugnant to the context and content of the section, read as a whole. [802 B C] Rajnarain Singh vs The Chairman Patna Administration Committee Patna and Re: Delhi Laws Act; , , referred to. (2) The 1957 Notification transgresses these limits in two respects : (a) The power has not been exercised contemporaneously with the extension or for the purposes of the extension of the Bengal Act to Delhi but 6.6 years thereafter. The power of extension with restrictions and modifications had exhausted itself when the Bengal Act was extended to Delhi with some alterations by the 1951 Notification. [802D E] The power given under section 2 of the 1950 Act, cannot be equated to the "Henry VIII clause" of the Acts of the British Parliament because while the power under section 2 can be exercised only once when the Act is extended, the power under a "Henry VIII clause" can be invoked, if there is nothing contrary in the clause, more than once on the arising of a difficulty when the Act is operative [802F H] Observations of Fazal Ali, J. at p. 850 in Re: Delhi Laws Act case explained. 787 (b) The alteration sought to be introduced in section 6(2) by the 1957 Notification goes beyond the scope of the "restrictions and modifications" permissible under section 2 of the 1950 Act, because, it purports to change the essential features of section 6(2) and the legislative policy inherent therein. [803F] Section 6(2) before the issue of the 1957 Notification, requiring the Government to give "not less than 3 months ' notice" of its intention to add to or omit from or otherwise amend the Schedule to the 1950 Act, embodies a determination of legislative policy and its formulation as an absolute rule of ' conduct could be diluted, changed or amended only by the legislature, in the exercise of its essential legislative function, which could not be delegated to the Government. [803G 804E, F, G] (i) The language of the sub section as it stood is emphatically prohibitive and it commands the Government in unambiguous negative terms that the period of the requisite notice must not be less than 3 months, showing that the provision was mandatory and not directory. [804 A B] (ii) The scheme of the Bengal Act is that the tax is to be quantified and assessed on the quarterly turnover. and the period of not less than 3 months, notice conforms to the scheme and ensures that the imposition of a new tax of exemption does not cause dislocation or inconvenience either to the dealer or the Revenue. [804B] (iii) By fixing the period at not less than 3 months, purchasers on whom the incidence of tax really falls have adequate notice of taxable items. [804 C] (iv) Dealers and others likely to be affected by an amendment of the Schedule get sufficient time to make representations and adjust their affairs. [804 D] The span of notice was thus the essence of the legislative mandate. The necessity of notice and the span of notice both are integral to the scheme of the provision and it cannot be split up into essential and non essential components, the whole of it being mandatory. [804 E F] Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur, ; , distinguished. (3)(a) Pt. Benarsi Das Bhanot vs State of Madhya Pradesh does not assist the respondent. That was a case where the contention that 5. 6(2) of the C.P. & Bihar Sales Tax Act, 1947, was invalid on the ground of excessive delegation, was rejected, by the Court. In the present case, it is the validity of a Notification purported to be issued under section 2 of the 1950 Act that is impeached as beyond the powers of modification conferred by the section. [804H, 805A] (b) In the present case, the Central Government did not directly amend section 6(2). More than 6 years after the extension of the Act by the 1951 Notification, it amended the sub section indirectly by amending the 1951 Notification. But on the extension of the Act to Delhi, the 1951 Notification had exhausted its purpose, and the purported amendment, through the medium of such a "dead" Notification is an exercise in utility. Further, an amendment which was not directly permissible could not be done indirectly. [805 B, C] (4) The High Court was in error in holding that Parliament had validated or re enacted referentially, with retroactive effect, what was sought to be done by the 1957 Notification when it passed the Amending Act, 1959. [807C] The Amending Act leaves section 6(2) untouched. It does not even indirectly refer to the 1957 Notification or the amendment purportedly made by it in section 6(2). Nor does it re enact or validate what was sought to be achieved by that notification. No indication of referential incorporation or validation of the 1957 Notification or the amendment sought to be made by it, is available either in the Preamble or in any other provision of the Amending Act. Parliament despite its presumed awareness of the 1957 Notification, has said nothing in the Amending Act indicating that it has in any manner incorporated, re enacted or 788 validated the 1957 Notification or the amendment sought to be made thereby, while passing the Amending Act, 1959. [805 E F, 807 B C] Krishna Chandra vs Union of India, A.I.R. 1975 S.C. 1389, referred to, (5) A mere amendment of an Act by a competent legislature does not amount to re enactment of the parent Act. [807D] Venkatarao Esajirao Limberkar 's case [1970] 1 S.C.R. 317, explained. (6) The respondent cannot contend that if the withdrawal of exemption without giving 3 months" notice was illegal, then the grant of exemption without giving 3 months ' notice was also void. [808 A] (a) Some of the goods were granted exemption by the 1951 Notification itself and, hence, there is no question of giving notice for giving those exemptions. [807 G] (b) The validity of the notifications granting exemptions after the extension of the Act to Delhi is not in issue in the writ petitions. and whether or not the requisite notice was given before granting exemption is a question of fact depending on evidence. [807G] (c) To allow the respondent to take such a plea would be violative of the fundamental principle of natural justice, according to which a party cannot be allowed to take advantage of his own lapse or wrong. [807 H] (7) The respondent cannot also rely on section 21 of the General Clauses Act, because, the source of the power to amend the Schedule to the 1950 Act. is section 6(2) of the Bengal Act and not section 21 of the General Clauses Act, and the power has to be exercised within the limits of section 6(2) and for the purpose for which it we conferred. [808 B] Gopichand vs Delhi Administration, [1959] Suppl. 2 S.C.R. 87, referred to.

The appellant held office as the last Governor General of India. He has been drawing Rs. 15,000/ per annum as pension while residing in the city of Madras. The Corporation of Madras demanded profession tax from him under section 111(i)(b) of the City Municipal Act, 1919 for the year 1958 59 on the ground of his residence being within Madras city and his drawing the pension to which he was entitled. The appellant addressed a communication to the Corporation asserting that this demand was illegal as the Corporation was empowered by the relevant constitutional provisions merely to levy a tax "on a profession, trade calling or employment" and that as he as a pensioner did not fall under any of these classes, the said demand was illegal. The Corporation did not accept the contention of the appellant and therefore, the appellant filed a writ petition under article 226 of the Constitution before the High Court. The High Court dismissed the writ petition of the appellant. The High Court granted a certificate under Art.133(1)(c ) of the Constitution to the appellant to file on appeal to the Supreme Court. Hence the appeal. The question before the Supreme Court was whetherthe Corporation was entitled to levy a tax on pensioners in respect of thepensions received by them in Madras City. Held:(1) that the power of the Corporation to levy the tax is dependent on the subject of the tax being within the State Legislative power under the Constitution. The present levy comes within the purview of item 60 in the State list in Schedule VIII of the Constitution, which reads as follows: "Taxes on profession, trades, callings and employments. " Being a "pensioner" cannot be a "profession, trade, business or calling", nor could a tax on a person because he is in receipt of a pension be said to be a tax on 'employments". The tax, therefore, under the last portion of sec. 111(1)(b) reading profession tax on persons "in receipt of any pension or income from investments" is nothing but a tax on income falling within Entry 82 of the Union List. 963 The taxes specified in item 60 are taxes on the carrying on of a profession, trade etc., and would, therefore, apply only to a case of present C. ' employment. The mere fact that a person has previously been in a profession or carried on trade etc. cannot justify a tax under this entry. The tax on the receipt of pension or on the income from investments which is referred to in the last part of sec. 111(1) is in truth and substance a taxon income. At the time the tax is levied the appellant pen sioner is inno employment but is only in receipt of income. (ii) The present levy of tax cannot be saved by article 277 of the Constitution because the tax was a new levy and not a continuance of a tax which had been levied just prior to April 1, 1937. On the facts of this case it was held that if the statutory charge to profession tax imposed on pensioners by the Act of 1919, was lifted by the Act of 1936, and the tax again came into operation only on April 1, 1937, it would follow that there was no "levy of the tax ' immediately before the commencement of Part III of the Government of India Act. so as to bring it within the saving in section 143(2) of that Act. Besides, the two circumstances, viz., that residence within the city for a specified period was made a condition of the liability to the tax, as well as the increase in the rates would both serve to emphasise that the levy was a new one, with a different texture and not a continuation of the tax which was leved just prior to April 1, 1937. (iii)The mere fact that prior to 1st April, 1937 the Corporation had under Act of 1936 the power to bring the tax into force by a resolution does not on a proper construction of section 143(2) bring it within the range of those taxes or duties which "were being lawfully levied" prior to the commencement of Part III of the Government of India Act 1935, which alone are permitted to be continued to be levied notwithstanding that these duties were in the Federal Legislative List. The mere existence of a power to bring a tax into operation, cannot be equated with "a tax which was being lawfully levied" before Part III of the Government of India Act, 1935. The High Court erred in holding that section 292 of the Government of India Act applies to this case. The Town Municipal Committee, Amravati vs Ramchandra Vasudeo Chimote, ; , South India Corporation (P) Ltd. V. The Secretary, Board of Revenue, Trivandrum, A.I.R. , relied on. (iv)Under section 111(1) as amended, the tax could be levied only in accordance with the rules in Schedule IV and as those rules did not make a provision for the levy of a tax on pensioners, it would follow that the tax "was not being lawfully levied" on them. The High Court erred in holding that such defect would be removed by section 18 of the Madras General Clauses Act. (v)S. 142 A(1) of the Government of India Act, 1935 would assist the respondent 's case only if tax imposed were on a profession, trade, calling or employment. In the present case, the tax is being imposed 664 on an income of a pensioner and so this provision has no application. It is not the intention of Parliament that State might levy a tax on income and call it "profession" tax.

ION: Criminal Appeal No. 31 of 1961. Appeal by special leave from the judgment and order dated October 7, 1958 of the Andhra Pradesh High Court in Criminal Appeal No. 456 of 1957. Ram Reddy for the appellants. Ratna Rao and K R. Choudhri, for respondent No 1. A. Ganganatham Chetty and T.M. Sen. for respondent No.2. October 5. The Judgment of the Court was delivered by HIDAYATULLAH, J. The two appellants who were granted special leave by this Court, appeal against the judgment of the High Court of Andhra Pradesh convicting them, on appeal against acquittal, of an offence under. 380 of the Indian Penal Code and sentencing them to six months ' rigorous imprisonment and a fine Rs. 500/ each, with further rigorous imprisonment for one month in default of payment of fine. The prosecution case which had a chequered career in the High Court and the two Courts below, is as follows: In Dusi, which is a part of Bhaskararaopuram, there was a Press known as Srinivasa Printing Press at Srinivasa Ashram. This Press existed for over 17 years. Pappala Chinna Ramadasu (P.W.4) was admittedly a printer and for some years, the declared keeper of that Press under section 4 of the Press and Registration of Books Act, 1867. The declarations were made in 1944 (Ex.P.4) and 1947 (Ex. On November 21, 1955, 10 Pappala Chinna Ramadasu sold this press by a registered document (Ex.P. 1 ) to one Boddepalli Lakshminarayana for Rs 4,000/ , of which Rs.3,500/ were shown to have been paid in advance and the balance was received by Pappala Chinna Ramadasu on January 10, 1956, (Ex.P.2). Two applications were then made on December 1, 1955, respectively by Chinna Ramadasu and Boddepalli Lakshminarayana before the Collector and District Magistrate for substituting the name of Boddepalli Lakshminarayana in place of that of Pappala Chinna Ramadasu in the declaration. On December 6, 1955, by exhibit P.11 they were informed that they should apply under the Press and Registration of Books Act (25 of 1867). Subsequently, on January 11, 1956, a declaration under section 4 of that Act was made by Boddepalli Lakshminarayana and was accepted (Ex.P.3). The case of the prosecution further is that Boddepalli Lakshminarayana went to Kurnool on March 20, 1956, and in his absence, the two appellants with two others (who were prosecuted but acquitted) removed the Printing Press on the night of March 25, 1956 to Korlakota where the first appellant, Apparao, resides. A report of the offence (Ex. P 13), purporting to be written on March 27, 1956, was handed in at the police station house on the following day at 8 P.m. The police took no action, and a complaint was, therefore, filed on April 4, 1956, by Boddepalli Laksminarayana. The Judicial Second class Magistrate, Srikakulam, convicted the two appellants of an offence under 8. 380 of the Indian Penal Code, and acquitted the two others, with whom we are not concerned, and sentenced each of the appellants to imprisonment till the rising of the Court and a fine of Rs. 250/ , with simple imprisonment for one month in default. On appeal, the Additional District and Sessions Judge, Srikakulam, set aside the conviction and acquitted them. The complainant then obtained special leave of the High Court to file 11 appeal against this acquittal, and the High Court reversed the acquittal, as already indicated above. In support of the prosecution case, the complainant examined four witnesses, including himself. Pappala Chinna Ramadasu was examined as P.W.4 to prove that he had sold the Press to Boddepalli Lakshminarayana, and two other witnesses were examined to prove the removal of the Printing Press by the appellants. The defence of the appellants was as follows: According to them, the Press originally belonged to one Govindachari, and on October 25, 1947 he transferred it to Kuna Appala Naidu by exhibit D 2. In the registered sale deed then executed, Govindachari was joined formally by Pappala Chinna Ramadasu. The sale was for Rs. 6,400/ and on the same day, a promissory note was executed by Kuna Appala Naidu in favour of Govindachari, which was attested by Pappala Chinna Ramadasu. Subsequently, Appala Naidu made payments of certain amounts, and endorsements on tho promissory note showing these payments were signed by Pappala Chinna Ramadasu as a witness. Kuna Appala Naidu was examined as D.W.1, and he stated that, the name of Pappala Chinna Ramadasu was formally included in the transfer deed, since the declaration stood in his name. He also stated that the deed, exhibit D.2, was signed as witness by one Akkala Naidu, who died years before the present controversy started. Kuna Appala Naidu later sold the Press to the second appellant and one Sri K. Sriramda, and the second appellant continued in possession as owner. Pappala Chinna Ramadas continued as the printer, and his declaration as the keeper of the Press also continued. In 1953, Pappala Chinna Ramadasu left the Press for good. The Press was leased out by the second appellant to one Appanna, and this leave continued till 1956. On March 19, 1956, an agreement for leave was executed in favour of the first appellant, and on March 26, 1956, a registered deed was duly 12 executed. According to the appellants, the Press WAS removed during the day on March 27 and the lease amount was paid on the 28th. According to them, the second appellant was the owner, in law and in fact, of the Press and the first appellant was the lessee and had removed the Press in the bona fide exercise of his right as lessee. The appellants examined eight witnesses in support of their case. The case of the prosecution hinged upon the evidence of Pappala Chinna Ramadasu, when confronted with exhibit D 2, he denied his signature, and stated evasively that he could not identify the signatures of Govindachari and Appala Naidu. He admitted, however, that Appanna used to look after the Press after 1953, though he said that he used to visit the Press once in two or three months before he sold it to P.W.1, and that the correspondence used to be made in his name. He also stated that he had purchased the Press from the Madras Type Foundry Co., for RH. 9,107/ but that the bills were lost, and he added that they were taken away along with the Press, when it was removed. The case of the appellants rested upon the proof of the signature of Pappala Chinna Ramadasu on Es. D 2 and additionally the proof of the signature of Akkala Naidu, beoause if Akkala Naidu signed the document in 1947 and died some four years before the present controversy started, there would be good reason to think that a document of this character could not be a fabricated one. The appellants examined a handwriting expert, Sri B. R. Singh (D.W.8). He stated categorically that Ex. D 2 bore tho signature of Pappala Chimla Ramadasu. The signature of Akkala Naidu was proved by his son, Sri Rangam. He identified the signature of his father not only on that document but also on exhibit D 3, the promissory Dote. He also stated that h father had died in 1951. From this material, the Additional District and Sessions Judge, Srikakulam, found that Ex D 2 13 was not a forged document, as was suggested, but was amply proved as genuine by Pappala Chandrudu (D.W 4) and the combined evidence of Sri Rangam (D. W. 3) and Sri B. R. Singh (D. W. 8). He therefore, held that Pappala Chinna Ramadasu had no right to sell the Pres in 1955 to Boddepalli Lakshminarayana and that his connection with the Press had effectively ceased from. 1953 even as a mere printer. It is unnecessary to examine whether this finding or the finding given by the Judicial Second Class Magistrate, Srikakulam, who held otherwise, was the correct inference from the. facts. The learned Judge of the High Court, who heard the appeal against the acquittal, said nothing about exhibit D 2. According to him, the removal of the Press amounted to theft, even though the appellants removed it under a bona fide claim of right. In this statement of the law, the learned Judge was, with respect, clearly in error. This is what the learned Judge observed: "Further, to a charge of theft, the plea that the property was removed under a bona fide claim of right would not avail. For example a person who bona fide believes that the fountain pen on his neighbour 's desk is his has no right in law to trespass into the neighbour 's house and snatch away the pen without the latter 's content. " The first of the statements is certainly not the law. It is settled law that where a bona fide claim of right exists, it can be a good defence to a prosecution for theft. An act does not amount to theft, unless there be not only no legal right but no appearance or colour of a legal right. in 2 East . 659, the law was stated a long time ago thus: "If there be in the prisoner any fair pretence of property of right, or if it be brought into doubt at all, the court will direct an acquittal." 14 And according to I Hale P.C. 509, the best evidence is that the goods were taken quite openly. The law thus stated by East and Hale has not been altered in modern times. There are numerous cases in which Courts in India have recognised a bone fide claim of right as a defence to the charge of theft. See Ratanlal law of Crimes 19th Ed. p. 933. We are not concerned in this case with the declaration under the Press and Registration of Books Act. A declared keeper of the Press is not necessarily the owner thereof so as to be able to confer title to the Press upon another. The ownership of the Press is a matter of the general law and must follow that law. Whether Pappala Chinna Ramadasu was not only the declared keeper of the Press but also its owner can only be effectively decided by the Civil Court. For purposes of Criminal law, the evidence prima facie pointed to a transfer of the Press by Pappala Chinna Ramadasu and Govindachari to Kuna Appala Naidu. The evidence prima facie also established that the appellants had taken possession of the Press under a bona fide claim of right, and that, in our opinion. was sufficient to dispose of the present case. The Additional District and Sessions Judge, Srikakulam, had rightly held that the matter was for the decision of the Civil Court, and that this was not a case of theft under the Indian Penal Code, and had rightly directed the acquittal of the appellants. The learned Judge of the High Court considered the declaration by Pappala Chinna Ramadasu, which continued Unchanged, as sufficient to prove an offence of theft. In our opinion, in tho circumstances and in the light of the finding given by the District and Sessions Judge with regard to exhibit D 2, it was necessary to go further to see what right Pappala Chinna Ramadasu had to the Press at all. If this had been considered, the learned Judge would have seen that there was some doubt the right of Pappala Chinna Ramadasu 15 to transfer the Press in 1955 to Boddepalli Lakshminarayana, and further that the defence that the appellants took possession of the Press under a bona. fide claim of right was a good defence entitling them to an acquittal. In the result, this appeal must succeed. The convictions of the appellants and the sentences passed on them are set aside, they are acquitted and their bail bonds shall stand discharged. The fines, if realised, are ordered to be remitted. Appeal allowed.

On a complaint by one L, the Magistrate convicted the two appellants of an offence under section 380 of the Indian Penal Code for having removed a printing press alleged to have belonged to L to whom it was sold in 1955 by one R once a declared keeper of the said press under section 4 of the Press Act, 1867. The defence was that the Press originally belonged to one G. In 1947 transferred it to N by exhibit D 2 wherein R joined formally, as declaration of keeper stood in his name. N sold the Press to the second appellant and another, but R 's name continued as a printer and keeper of the press In 1956 the second appellant leased out the press to the first appellant. According to the appellants, the second appellant was the owner in law and fact of the press and the first appellant was the lessee and had removed the press in the bonafide exercise of his right as lessee. The case of the prosecution hinged upon the evidence of R and that of the appellants rested upon the proof of the signature of R on exhibit D 2 which R denied. The handwriting expert stated categorically that exhibit D 2 bore the signature of R. The Judge of the High Court who heard the appeal against the acquittal order, passed by the Additional District and Sessions Judge, said nothing about exhibit D 2 and considered the declaration of R under section Of the Press Act which continued unchanged, as sufficient to prove an offence of theft. According to him, the removal of the Press amounted to theft even though the appellants removed it under a bonafide claim of right. ^ Held, that where a bonafide claim of right exists, it can be a Good defence to a prosecution for theft. An act does not amount to theft, unless there be not only no legal right but no appearance or colour of a legal right. For the purpose of criminal law on the present case the evidence prima facia pointed to a transfer of the press by R and to N. The evidence prima facie also established that the appellants had taken possession of the press under a 9 bonafide claim of right and there was some doubt about the right of R to transfer the press to L and further the defence that the appellants took possession of the press under bonafide claim of right was a good defence entitling them to an acquittal.

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 respondent cooperative society purchased a Press. from another cooperative society on 21st March 1961. The establishment had been set up by the vendor originally in 1946 and at the time of purchase by the respondent only 9 workmen were employed therein. As the number of workers employed by the respondent went beyond 20 the Employees ' Provident Fund Act, 1952 and the Employees ' Provident Fund Scheme 1952 became applicable to the: respondent 's establishment with effect from April 1961. For not complying with the provisions of the aforesaid Act and Scheme the Provident Fund Inspector, Trivandrum (appellant herein) launched prosecutions against the respondent. The specific charges related to the failure, of the respondent (i) to pay to the Employees ' Provident ' Fund the employees ' and the employer 's share of contributions together with administrative charges 'for the twelve quarters comprised between May 1961 and February 1964; (ii) to submit the returns in Forms 5 and 10 for the same twelve quarters; (iii) to send statements of recoveries of contributions in Form 12 for the same quarters; and (iv) to send the; initial return in Form 9 showing the particulars as on 30 4. 1961 along with Form 2 in the manner specified in the SCheme. On trial the Magistrate recorded the finding that the establishment as run by the respondent after 1961 could not be held to be an old establishment set up in the 1946, it had emerged as a new establishment in 1961, and consequently for a period of three years from April 1961, the provisions of the Act would not apply to. this establishment because of the provisions. contained in section 16(1)(b) of the Act. On this view the respondent was acquitted. The High Court in appeal did no,t agree with the Magistrate that a new establishment came into being in 1961, but nevertheless upheld the acquittal on the ground that under section 16(1)(b) of the Act an establishment is given exemption for a period of 3 years from the date on which it came within the: purview of the Act. On appeal to this Court by special leave, HELD. : (i) In view of the decision of this Court in R. Ramakrishna Rao 's case the finding of the High Court that the exemption under section 16(1)(b) of the Act was available for the first three years from the date when the Act became applicable to an establishment, was wrong [486 A C] R. Ramakrishna Rao vs State of Kerala, ; , applied. (ii) However the acquittal of the respondent must be upheld. The burden of proving that the old establishment had continued was on the appellant. The evidence showed: that, at the time of the purchase a new owner came in place of the previous owner; the work of the Press was stopped on sale and was restarted after a break of about three 482 months; the machinery in the Press was also altered; the persons employed previously were not continued in service, while= a fresh recruitment of employees took place amongst whom only six happened to be previous employees; and compensation was paid to the workmen at the time of the sale. by the previous owner. On these facts, no other conclusion could be drawn except that the old establishment was completely closed when the transfer of ownership took place and an entirely new establishment was set up three months ' later, so that in this case the benefit of the Act under section 16(1)(b) of the Act for a period of three years was available to the respondent from June or July 1961 when the new establishment was set up,. [488 E G] Lakshmi Rattan Engineering Works vs Regional Provident Fund Commissioner, Punjab & Ors. Jamanadas Agarwalla & Anr. vs The Regional Provident Fund Commissioner, West Bengal & Ors. , M/s. Bharat Board Mills Ltd. vs The Regional Provident Fund Commissioner & Ors., and Devi Press vs Regional Provident Fund Commissioner, Madras & Anr. A.I.R. , distinguished. Vittaldas Jagannathadas & Anr. vs Regional Provident Fund Conmissioner & Anr. , applied.

Where at the hearing of an appeal filed by special leave from a decision of the High Court in a Writ Petition filed there under article 226 of the Constitution of India against an order of the Payment of Wages Authority, the Court considered that there was some force in the contention relating to the jurisdiction of the Authority concerned but did not decide that question on the view that as there had been no failure of justice the Court would not interfere under its powers under article 136, and the appellant applied for a review of the judgment 15 114 Held, that wide as are the powers of the Supreme Court under article 136 of the Constitution, its powers are discretionary and though special leave had been granted the Court was not bound to decide the question of jurisdiction of the inferior tribunal or court where the decision of the inferior tribunal or court had been taken to a higher tribunal which undoubtedly had jurisdiction and from the decision of which the special leave was granted if on the facts and circumstances of the case it came to the conclusion in dealing with the appeal under that Article that there was no failure of justice. A. M. Allison vs B. L. Sen, ; , relied on.

The appellant is a Municipal Councillor of the Cuddapah Municipal Council. He was elected to the Council as an independent candidate. According to him, he enjoys populari ty in his area and had previously held important positions in the District. He states that the local leadership of the ruling Telugu Desam Party having failed to woo him into their fold, he was pressurised through the Excise and Police authorities foisting false cases upon him. Scenting a move to detain him under the provisions of the Andhra Pradesh Prevention of Dangerous Activities of Bootleggers, Dacoits, Drug Offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986, the appellant filed a writ petition on 6.6.1988 in the High Court, averring inter alia that the successive actions initiated against him were a part of political vendetta. A learned Single Judge on 8.8.1988 was pleased to direct interim the respondents not to take the appellant into preventive custody for a period of 15 days on the basis of the cases already registered. However, on 10.6.1988 the appellant was served the detention order dated 3.6.1988 as well as the grounds of detention, and he was taken into custody, but was released after four days. The appellant filed on 25.6.1988 in his pending writ petition a miscellaneous petition, as an additional affida vit. He assailed therein the order of detention on various grounds. A Division Bench of the High Court, on reference by the learned Single Judge, held that the prayer in the writ petition had become infructuous, and that there were no extraordinary or special reasons to depart from the normal rule, namely, that in such a case the appellant should first surrender and move for a writ of habeas corpus. The Division Bench accordingly, dismissed the writ petition. Before this Court it was inter alia contended on behalf of the 106 appellant that the High Court erred in holding that there were no extraordinary circumstances or special reasons to depart from the normal rule, thereby refusing to grant relief to the appellant against infringement of his funda mental right to liberty; that the detention order having not been approved by the State Government as required under Section 3(3) of the Prevention of Dangerous Activities Act and the appellant 's case having not been placed before the Advisory Board as required under section 10 thereof, the detention order ceased to be in force and hence was liable to be quashed. On behalf of the respondent, it was contended that the detention order having been passed before the writ petition was filed, the High Court was right in dismissing the writ petition following the court 's practice and procedure, and that there were no extraordinary or special reasons to depart from the normal rule inasmuch as granting relief at such a stage would defeat the very purpose of the Act. Counsel, however, could not deny that the detention order was not approved by the State Government and that the appel lant 's case was not placed before the Advisory Board. Allowing the appeal and quashing the order of detention, this Court, HELD: (1) The position of a person who is actually under illegal detention and of a person who is in imminent jeop ardy of illegal detention are not far dissimilar. Refusal to interfere in such a case may amount to denial of the funda mental right itself. [114A]. Jayantiial Bhagwandas Shah vs The State of Maharash tra, , referred to. (2) There could be no reason why in an exceptional and rare case, detention order already made, and either served or yet to be served, and the person is still free, could not be legally brought under challenge. [114F] Vedprakash Devkinandan Chiripal vs State of Gujarat, AIR 1987 Gujarat 253. A.K. Gopalan vs State of Madras, ; ; Addl. District Magistrate, Jabalpur vs Shivakant Shukla, ; , referred to. 107 (3) For enforcement of one 's right to life and personal liberty resort to Article 226(1) has been provided for. The word 'enforcement ' has also been used in Article 32 of the Constitution which provides the remedy for enforcement of rights conferred by Part III of the Constitution. The word 'enforcement ' has not been defined by the Constitution. [115B] (4) 'Enforce ' means to compel obedience to laws; to compel performance, obedience by physical or moral force. [115C] (5) Conferring the right to life and liberty imposes a corresponding duty on the rest of the society, including the State, to observe that right, that is to say, not to act or to do anything which would amount to infringement of that right, except in accordance with the procedure prescribed by law. [115F] (6) Resort to Article 226 after the right to personal liberty is already violated is different from the pre viola tion protection. Post violation resort to Article 226 is for remedy against violation and for restoration of the right, while pre violation protection is by compelling observance of the obligation or compulsion under law not to infringe the right by all those who are so obligated or compelled. To surrender and apply for a writ of habeas corpus is a post violation remedy for restoration of the right which is not the same as restraining potential violators in case of threatened violation of the right. [116B C] (7) Law surely cannot take action for internal thoughts but can act only after overt acts. If overt acts towards violation have already been done and the same has come to the knowledge of the person threatened with the violation and he approaches the court under article 226 giving sufficient particulars of proximate actions as would imminently lead to violation of right, should not the court call upon those alleged to have taken these steps to appear and show cause why they should not be restrained from violating that right? [116 C D] (8) The difference of the two situations have different legal significance. If a threatened invasion of a right is removed by restraining the potential violator from taking any steps towards violation, the rights remain protected and the compulsion against its violation is enforced. If the right has already been violated, what is left is the remedy against such violation and for restoration of the right. [116F G] (9) In the instant case, the appellant 's fundamental right to 108 liberty is the reflex of a legal obligation of the rest of the society, including the State, and it is the appellant 's legal power bestowed upon him to bring about by a legal action the enforcement of the fulfilment of that obligation existing towards him. Denial of legal action would, there fore, amount to denial of his right of enforcement of his right to liberty. A petition for a writ of habeas corpus would not be a substitute for this enforcement. [120D E] K.K. Kochunni vs The State of Madras and Ors., [1959] Supp. 2 SCR 316; Special Reference No. 1 of 1964; , ; M.C. Mehta vs Union of India, [1987] 1 SCC 395 referred to. (10) As the detention order was already passed and served and the detenu was already taken into custody during the pendency of the writ petition, these subsequent events having being brought to the notice of the court by a Misc. application in the form of additional affidavit, the same ought to have been dealt with by the High Court. [113A B] (11) The detention order had not been approved by the State Government within 12 days of its being made, as en joined under subsection (3) of section 3 of the Act. The result is that the order could not remain in force more than 12 days after making thereof and as such must be treated as to have ceased to be in force and non existent thereafter. [122A] (12) Even though the detenu was released, if the deten tion order was in force, his case was required to be placed before the Advisory Board. This being a mandatory provision and having not been complied with, the detention order even if otherwise in force, cannot be said to have been in force after three weeks. [122H; 123A]

The appellant firm was assessed to sales tax under the pro visions of the Bihar Sales Tax, 1944, for three periods commencing from October 1, 1947, and ending on March 31, 1050. Its claim for certain deductions was disallowed, and its applications in revision under section 24 Of the Act to the Board of Revenue, Bihar, were dismissed by three orders dated August 20, 1953, September 3, 1953 and April 30, 1954. Under section 25(1) of the Act the appellant applied to the Board to state a case to the High Court of Patna on certain questions of law, but the applications were dismissed by order dated August 30, 1954, on the ground that no questions of law arose. The appellant then moved the High Court for requiring the Board to state a case on the said questions of law. The High Court dismissed the applications in respect of the first two periods of assessment, but by order dated November 17, 1934, directed the Board to state a 277 case in regard to the third period on one of the questions of law which only, in its opinion, arose. By its judgment dated January 21, 1957, the High Court answered the question against the appellant. On February 17, 1955, the appellant made applications to the Supreme Court for special leave to appeal against the orders of the Board of Revenue dated August 20, 953, and September 3, 1953, in respect of the first two periods; and on April 12, 1955, it similarly applied for special leave in respect of the third period. Leave was granted in respect of all the three applications by order dated December 23, 1955, the leave granted in regard to the third period being confined to the order of the Board dated August 30, 1954. When the appeals came up for hearing the question was raised as to whether the appeals were maintainable in view of the fact that no applications for leave to appeal were filed against the orders of the Board of Revenue and the High Court subsequent to the orders of the Board in respect of which only special leave had been granted. Held, that though the words of article 136 of the Constitution of India are wide, the Supreme Court has uniformly held as a rule of practice that there must be exceptional and special circumstances to justify the exercise of the discretion under that Article. Pritam Singh vs The State, ; , V. Govinda rajulu Mudaliar vs The Commissioner of Income tax, Hyderabad, A.I.R. 1959 S.C. 248 and Messrs Chimmonlall Rameshwarlal vs Commissioner of Income tax (Centyal), Calcutta, , relied on. Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax, West Bengal, ; and Baldev Singh vs Commis sioner of Income tax, Delhi and Ajmer, , explained. Held, further, that in the circumstances of the present case the appellant was not entitled to a grant of special leave against the orders of the Board of Revenue where the result would be to by pass the High Court by ignoring its orders. Held, also, that though special leave might have been granted on an application made under article 136, the Court is not precluded from coming to a conclusion at the time of the hearing of the appeal that such leave ought not to have been granted. Baldota Brothers vs Libra Mining Works, A.I.R. 1961 S.C.C. 100, followed.

The plaintiff, Ramanathan Chettiar, obtained a decree in O. section No. 45 of 1943 for the recovery of an amount due on promissory note against one Venkatachalam Chettiar and assigned the decree in favour of the appellant in C. A. 105 of 1961. The execution application filed by him proved infructuous because the first defendant was adjudicated an insolvent on February 27, 1945. On September 9, 1946 a composition of the debts due from the insolvent and his son, the second defendant, was arrived at. To the deed of composition the second defendant was also a party though he was not adjudicated an insolvent. Under that deed the creditors, including the four appellants in this case, agreed to take 40% of the dues. Under the composition arrangement, the entire property of the defendants, both in India and in Burma was to vest in four trustees, one of whom was the insolvent that is, the first defendant to the suit. Two of the trustees were the present appellant in C A. No. 104 of 1961 and the fourth trustee was an outsider. The deed provided for the payment of the reduced amount by the trustees to different creditors from the income of the properties or by sale or mortgage of those properties within tour years from April 14, 1947. Tile deed further provided for the extension of this time limit "according to exigencies and necessity it the discretion of the first two trustees" i. e., the first defendant and the appellant Chidambaram Chettiar. The composition contemplated the realisation of the dues of the creditors front the income or sale or mortgage of the Barma property, in the first instance. The composition scheme was accepted by the insolvency court and the adjudication of the first defendant as insolvent was annulled by the court on December 19, 1946. Out of the Burma assets very little was realised within the period of four years prescribed in the composition deed and the trustees did not extend the time. 242 The appellants, therefore, sought execution of their decrees against the Indian assets. The last execution application in O. section No. 46 of 1943 was dismissed on September 19, 1946, and no petition was filed thereafter till 'June 13, 1952. Similarly in the other three appeals execution applications were filed more than three years after the dismissal of the previous applications. In each of the execution applications, relief was claimed only against the second defendant. The Subordinate Judge, before whom the execution applications were filed, held that the adjustment precluded each of the appellants from executing his decree for a period of four years from April 14, 1947 and, therefore, the execution applications were within time. The High Court disagreed with the Subordinate Judge and holding that the execution petitions were barred by time allowed the appeals. The main contention of the appellants in this Court was that the principle underlying section 15 (1) of the Limitation Act applied to the present case and at any rate the letter written by the second defendant to the trustees operated as an acknowledgment of liability under section 19 of the Limitation Act. Held, that section 15 (1) of the Limitation Act is restricted in its application to a case where the execution of a decree has been stayed by an injunction or an order. The Limitation Act is a piece of adjective or procedural law and not of substantive law. Rules of Procedure cannot be extended by analogy or reference to proceedings to which they do not expressly apply or could be said to apply by necessary implication. Suspension of Limitation in circumstances of the kind obtaining in these appeals is neither explicit nor implicit in section 15 upon which reliance is placed by the appellants. Govind Naik Gurunathnaik vs Basawannawa Parutappa, 1. L.R. , Pulin Chandra Sen vs Amin Mia Muzaffar Ahmad, A. I.R.1933 Cal. 508, Lakhan Chunder Sen vs Madhusudan Sen, (1907) 1. L. R. , Nrityamoni Dassi vs Lakhan Chandra Sen, ( 1916) 1. L. R. , Badruddin Khan vs Mahyar Khan, I. L. R. 1939 All. 103 and Managing Committee Sunder Singh Malha Singh Rajput High School, Indore vs Sunder Sigh Malha Singh Sanatan Dharma Rajput High School Trust, I. L. R. , distinguished. Held, further, that in the present appeals two different sets of persons, the defendants and the Trustees were liable and their respective liablities were distinct. To refer to a liablility resting on some one else was not to acknowledge one 's own liability within the meaning of the word in section 19. The defendant No. 2 had not even indirectly referred to the 243 decree much less to the liability arising under any of them. In the circumstances it must be held that the letter dated April 19, 1949, did not extend the period of limitation. Khan Bahadur Shapoor Freedom Mazda vs Durga Prosad Ckamaria , held inapplicable

The appellant, Gopinath Ghosh along with Bharat Ghosh @ Sadhu, and Jagannath Ghosh, was convicted and sentenced to life imprisonment under Section 302 read with Section 34 I.P.C. for having committed the murder of Rabi Ghosh, son of Kartik Ghosh on August 19, 1974. The High Court in appeal, accepted the plea of the two other accused only and acquitted them, while confirming the conviction and sentence of the appellant. The appellant for the first time in the Supreme Court raised the New Plea that as he was a "child" within the meaning of the expression in West Bengal Children Act, 1959, the entire trial was vitiated. The court, by its order dated March 11,1983 directed the Session Judge Nadiar to give a finding on the age of the appellant on the date of the occurrence. The Sessions Judge, in his report, after detailed examination of the evidence of Chief Medical officer of Health, Nadia, (PWI), Radiologist (PW2) orthopaedic Surgeon (PW3), another doctor Mr. R.B. ROY (PW4), the mother of the appellant (PW5) and the Headmaster of the School who brought records of the School, gave a finding that the appellant was aged between 16 and 17 years on the date of occurrence i.e. on August 19, 1974, which finding is not challenged by the State. Allowing the appeal by Special leave, the Court, ^ HELD: 1.1 A combined reading of Sections 2(d), 2(h), 4 to 6, 22, 23, 24 (2) and 26 of the West Bengal Children Act, 1959 makes it clear that where a juvenile delinquent is arrested, he/she has to be produced before a juvenile court, and if no juvenile court is established for the area amongst others, the court of Session will have powers of a juvenile court; (b) such a juvenile delinquent ordinarily has to be released on bail irrespective of the nature of the offence alleged to have been committed unless it is shown that there appears reasonable grounds for believing that the release is likely to bring him under the influence of any criminal or expose him to moral danger or defeat the ends of justice; (c) Section 25 forbids any criminal or a juvenile delinquent and only an inquiry can be held in accordance with the provisions of the code of Criminal 804 Procedure for the trial of a summons case; and (d) the bar of Section 24 which had been given an over riding effect as it opens with the non obstante clause takes away the power of the court to impose a sentence of imprisonment unless the case falls under the proviso. [808 A C 1.2 In the instant case, the entire trial of the appellant is without jurisdiction and is vitiated. The report of the Sessions Judge unquestionably established by unassailable evidence that the appellant having been 16 to 17 years of age on the date of occurrence was a juvenile delinquent and therefore the Magistrate could not have committed his case to the court of Session. Only an inquiry could have been held against him as provided in Section 25 of the Act unless the case of the appellant falls within the proviso to Section 24 (2). [808 H, 809 A B] 1.3 ordinarily, the Supreme Court would be reluctant to entertain a based on factual averments for the first time before it. However, the court is equally reluctant to ignore, overlook or nullify the beneficial provisions of a very socially progressive statute by taking shield behind the technicality of the contention being raised for the first time in court. In view of the underlying intendment and beneficial provisions of the Act read with clause (f) of Article 39 of the Constitution which provides that the State shall direct its policy towards securing that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that child hood and youth are protected against exploitation and against moral and material abandonment, it would not be proper to allow a technical contention that the plea is being raised for the first time in the court and thereby thwart the benefit of the provisions being extended to the appellant, if he was otherwise entitled to it. F H] Practice Directions: Whenever a case is brought before the Magistrate and the accused appears to be aged 21 years or below, before proceeding with the trial or under taking an inquiry, an inquiry must be made about the age of the accused on the date of occurrence. This sought to be made so where special Acts dealing with juvenile delinquents are in force. If necessary, the Magistrate may refer the accused to the medical Board or the Civil Surgeon, as the case may be, for obtaining credit worthy evidence about age. The magistrate may as well call upon accused also to lead evidence about his age. Thereafter, the learned Magistrate may proceed in accordance with law. This procedure, if properly followed, would avoid, a journey upto the apex court, and the return journey to the gross root court. [809 H; 810 A B] (The court suggested, that if necessary an found expedient, the High Court, on the administrative side may issue necessary instructions to cope with such situation). [810 B]

Appeal No. 459 of 1958. Appeal by special leave from the judgment and decree dated June 29,1955, of the former Andhra High Court in Second Appeal No. 730 of 1949. A.V. Viswanatha Sastri and 'P. V., R. Tatachari, for the appellants. K. Bhimasankaram and G. Gopalakrishanan, for the respondents. September 29. The judgment of Wanchoo, Das Gupta and Shah, JJ., was delivered Wanchoo, J., Dayal J. delivered a separate 912 WANCHOO, J. This is an appeal by special leave from the judgment and decree of the Madras High Court. The appellants were defendants in a suit brought by the respondents for possession of certain properties which originally belonged to one Subbarayudu. The case of the respondents was that Subbarayudu executed a will dated September 15, 1885. Under that will the property passed on hit; death to his wife with life interest and after her death absolutely to his daughter Krishnavenamma who was in enjoyment thereof till her death in 1933. The daughter executed a will on March 24, 1933, in favaur of her step son Nagaraju who came into possession of the property on her death soon after. Nagaraju in his turn executed a will on August 16, 1933, by which he gave life interest to his wife who was the first plaintiff (now the first respondent before us) and thereafter the property was bequeathed absolutely to his daughters. The second respondent is the tenant of the first respondent. Nagaraju died soon after executing the will and the case of the first respondent was that she came into possession of the property on his death and was in enjoyment thereof till she was forcibly ejected in 1943 by the appellants who claimed to be the purchasers of the property from Seetaramayya and Ramakotayya who in their turn claimed to be the reversioners of Subbarayudu. Consequently, the suit out of which the present appeal has arisen was filed in June, 1944, for possession and mesne profits. The suit was resisted by the appellants, and their case was that they had purchased the property from the reversioners of Subbarayudu in 1942. It was further contended on their behalf that on the death of Krishnavenamma the reversioners came into possession of the property through the tenants who had been in possession from before under a lease granted to them by Krishnavenamma. These tenants remained in possession till the sale deed in favour of the appellants and attorned to the 913 appellants thereafter. Later the two tenants surrendered possession to the appellants who thus came into actual possession of the property in suit. The appellants also contended that the so called will executed by Subbarayudu was a forgery and the first respondent had no title to the property. On these pleadings, the main point that arose for decision was whether the first respondent had title to the property and was in possession of it till she was dispossessed in 1943. Further the title set up by the appellants was also gone into and their claim as to possession came up for consideration. The trial court found that the will said to have been executed by Subbarmyudu was not proved. In consequence of this finding, it came to the conclusion that the title of the first respondent which depended upon the proof of this will was not a legal title. Further it found that it was not established that Seetaramayya and Ramakotayya were the next reversioners to the estate of Subbarayudu. The result of these findings was that no title was found in either party. These findings have been upheld by the Subordinate Judge and also by the High Court in second appeal and therefore it must now be accepted that both the parties have no title to the property in suit. The main contest therefore centred round possessory title which was also asserted by both the parties in the trial court. On this question the trial court found that after the death of Krishnavenamma, the name of the first respondent was entered in the revenue papers in her place but the property was actually in possession of the two tenants by virtue of the lease executed in their favour by Krishnavenamma in 1929 for six years. Therefore, there was a kind of race between respondent No. I and Seetaramayya and Ramakotayya who set themselves up as reversioners to obtain the favour of these two tenants, and the so. called reversioners managed to obtain in June, 1933, a kadapa from the two tenants for five years 914 ending with May, 1938. They also executed a cowle in favour of the tenant,% and both these documents were registered in July, 1933. But the finding of the trial court was that there was no payment of rents in the years 1933 'and 1934 and that the real fight for the land started towards the end of 1935 or the beginning of 1936 and although documents were taken from the tenants by the so called reversioners no actual payment of rent was made to them. It also held that in this game of winning the favour of the tenants the real gainers were the tenants who paid no rent to either the first respondent or the so called reversioners. The trial court further held that it was in 1936 that the first respondent managed to dispossess the tenants forcibly through her tenant Moka Subbarao who seems to have been a person of some influence in the village. Thereafter the first respondent remained in possession through her tenant till she was dispossessed in November, 1943, forcibly by the present appellants after they had purchased the lands from the go called reversioners. In effect, therefore. the finding of the trial court was that neither party was in Possession. of the property up to 1936 and it was only in 1936 that the first respondent came into possession through Moka Subbarao by dispossessing the tenants who were holding the land from the time of Krishnavenamma and had paid no rent to anybody after her death In consequence the trial court hold that as the possession of the first respondent was earlier she was entitled to succeed at least on the ground of possessory title. Incidentally it also held that although the title of the first respondent was defective for the reason that Krishnavenamma did not have absolute right in the property it was not :void but was only voidable at the instance of the nearest reversioner or some one else having better title, which the appellants or their predecessors in interest did not have. In the result the suit was decreed with mesne profits. 915 This was followed by an appeal to the Subordinate Judge by the present appellants. We have already said that the Subordinate Judge upheld the findings of the trial court on the title of the parties and came to the conclusion that the title of neither party was proved. He also rejected the view of the trial court that the first respondent at any rate had some title though defective it might be. He then addressed himself to the question of possessory title and considered whether the finding of the trial court that the first respondent was in possession ' earlier than the appellants and was therefore entitled to recover possession on the basis of her. possessory title, was correct. He. came to the conclusion that the so called reversioners had got possession of the property peacefully immediately after the reversion opened. in 1933 and therefore the appellants were entitled to maintain their possession as they derived their title from the so called reversioners who had earlier possession than the first respondent. In coming to this conclusion the Subordinate Judge relied on the Kadapa executed by the tenants in favour of the so called reversioners in June, 1933, and the cowle executed by the so called reversioners in favour of the tenants. But the Subordinate Judge did not consider the further question which was considered by the trial court,. namely, whether after the execution of the Kadapa and the cowle the so called reversioners. ever collected rents from the tenants who were there from the time of Krishnavenamma between 1933 and 1936. This question had been specifically considered by the trial court and it had come to the conclusion that though the kadapa and the cowle had been executed they were mere paper transactions and the so called reversioners had never collected rents during this period and the tenants had never paid the rent to anybody during this period. The Subordinate Judge, however, allowed the appeal and dismissed the 916 suit on the view taken by him that the so called reversioners had come into possession of the property after the death of Krishnavenamma end were forcibly ejected in 1936 by Moka Subbarao as the tenant of the first respondent. This was followed by a second appeal by the respondents. The High Court took the view that the finding of the Subordinate Judge that the so called reversioners were in possession from 1933 to 1936, could not be accepted. According to the High Court, the main question was whether the tenants who were there from before really attorned to the reversioners. The High Court then went into some of the evidence and held that various matters which should have received the attention of the Subordinate Judge in coming to a conclusion on this important point of fact were not considered by him; therefore it was not prepared to accept the finding of the Subordinate Judge in second appeal and required the Subordinate Judge to submit a fresh finding on this question. When the ' matter went back to the Subordinate Judge he examined the entire evidence and came to the conclusion that the so called reversioners in order to create evidence of possession had taken the kadapa from the tenants after winning them over to their side, perhaps by a promise not to collect rent from them. He also came to the conclusion that the so called reversioners were not in possession of the property after the death of Krishnavenamma from 1933 to 1936 and that it appeared that during that period neither party was in possession and only 'the tenants who were there from the time of Krishnavenamma continued to being possession but without paying rent to anybody. He further held that in the circumstances the possession of the tenants could only 'be treated as that of the rightful owner which neither party was in this case. Finally he came to the conclusion that it was for the first time in 1936 that Moka Subbarao took possession of the 917 land as the tenant of the first respondent and the appellants got possession for the first time in 1943. Therefore he held that as the first respondent 's possession was earlier it must be restored. This finding was accepted by the High Court with the result that the second appeal was allowed and the order of the trial court restored. The appellants have come to this Court by special leave. The main contention urged before us on behalf of the appellants is that the High Court had no jurisdiction in second appeal to reverse the finding of fact arrived at by the first appeal court as to possession, and inasmuch as the High Court indirectly reversed that finding by calling for a further finding on the question of possession, the judgment of the High Court should be set aside as without jurisdiction. On the other hand it has been urged on behalf of the respondents that though the first order of the High Court calling for a finding looks as if it was interfering with a finding of fact as to possession, a close examination of the circumstances and the findings of the trial court and the first appellate court will show that in fact there was no finding by the first appellate court on the crucial question which arose in the suit resting on possessory title and therefore the High Court was justified in calling for a finding in the matter. It is urged that where the case is based on possessory title only, a party must establish effective possession before it can succeed on its possessory title. On the question of effective possession the trial court had found that though there was a kadapa by which, it may be said, the tenants who were there from before had attorned to the so called reversioners, that was a mere paper transaction and the tenants never paid rents to the so called reversioners; as such,the reversioners never had effective possession between 1933 and 1936. According to the respondents, this finding of the trial court should have been specifically considered by the Subordinate 918 Judge; but all that 'the Subordinate Judge did 'was" to rely on the kadapa and hold on the basis of that document that the so called reversioners had come into possession peacefully. It is said that whatever may be said about the value of attornment: made in favour of the true owner the position. is different where attornment is in favour of a person who is not the true owner. In such case before the person in whose favour an attornment has been made, can establish that , his possession was effective it must also be shown that he was paid rent by the tenants who attorned to him. Therefore, it is urged that, as there was no finding by the Suboridnate Judge on this crucial question the, High Court was justified in sending the case back to the Subordinate Judge for a finding in this regard. As such, it is urged that this is not a case where the High Court had reversed, a finding of fact by the first appellate court which it is admitted it has no jurisdiction to 'do; but it is a case where there was no finding on the crucial question of fact by the Subordinate Judge and the High Court therefore hid jurisdiction to call for a finding in this regard. We are of opinion that though on a first reading of the High Court judgment calling for,a finding it does look as if the High Court was reversing the finding of fact as to possession ' when it called for a further finding on the question, a closer examination of its Judgment calling for a finding along with the findings by the Munsif and the Subordinate Judge on the crucial question involved in this case shows that it held that there was no 'finding by the Subordinate Judge on that crucial question,, though the trial court had given a finding in favour of the first respondent in that respecter, As both parties were relying on possessory title, it was necessary that they should prove effective possession over the, property in order to succeed on the basis of possessory title. By effective possession we mean either ' actual possession or 919 possession through a tenant who must have paid rent voluntarily or under a decree to the person claiming possessory title. The kadaps by the previously existing tenants in favour of the so called reversioners all along been treated as an attornment by all the three courts and we therefore accept it as such. If the so called reversioners Third title in the sense that they were the next reversioners, then attornment by the kadapa would have been sufficient to establish their possession over the property; but where the person in whose favour the attornment bad been made has no title,, a mere paper attornment would not be enough to establish as against third parties the possession of the person in whose favour attornment has been made and it will still have to be shown that the possession. was effective in, the sense that the person who attorned also paid rent voluntarily or under a , decree to the person in whose favour he made the attornment. The fact that, the tenants who had executed the kadapa may be estopped from challenging the title of the so cAlled reversioners, if a suit was brought Against them makes no difference to the position stated above. The finding of the Munsif was that no rent had been paid to anyone by the tenants; further no suit had, been brought by the so called reversioners, to recover the rent before the first respondent got into possession. The kadaps therefore remained a mere paper transaction and attornment through it would not be sufficient to put the so called reversioners in effective possession and confer possessory title on them which could be taken advantage of by the appellants to show earlier possessory title as against the undoubted Possessory title of the first respondent from 1936. It seems to us that, that is what the High Court meant when it said that the crucial question in this case was "whether the tenants really attorned to the reversioners". We emphasise the word "really" Which shows that the High Court was not satisfied With mere paper attornment which was all 920 that was found by the Subordinate Judge and rightly required in a case based on possessory title only that the attornment should be a real attornment, i. e., one in which the person attorning should also have paid rent either voluntarily or under a decree to the person in whose favour the attornment was made. The Subordinate Judge, however, had merely considered the paper attornment and had not considered the evidence as to payment of rent, which was, there and which had been considered by the trial court. The trial court had come to the conclusion after considering the evidence relating to payment of rent that in fact there was no payment though the attornment was made through the kadapa. The trial court therefore held that from 1933 to 1936, only the tenants were in possession but they never paid rent to anybody and thus neither party was in possession through them. This aspect of the finding of the trial court was completely overlooked by the Subordinate Judge who decided the question of possession merely on the paper attornment (namely, the kadapa). What the High Court seems to have meant when it said that the real question was not properly considered by the Subordinate Judge therefore was that he was merely satisfied with paper attornment in a case based on possessory title which was not enough in law and had not given any finding as, to whether the attornment was a reality in the sense that the rent was paid and would thus result in effective possession of the so called reversioners through the tenants. It seems to us therefore that though the form in which the High Court expressed itself when it called for a finding was not happy, what the High Court really did was to hold that there was no finding by the Subordinate Judge on the question of effective possession of the so called reversioners after a consideration of the evidence relating to payment of rent etc.; it therefore called for a finding on the question of effective, possession after 921 consideration of the entire evidence. This in our opinion the High Court was justified in doing because the trial court had considered the entire ,evidence and had come to the conclusion that the so called reversioners had no effective possession and the attornment through the kadaps was a mere paper transaction. In these circumstances it cannot be said that the High Court had no jurisdiction to call for a finding. It is not disputed that if the High Court had jurisdiction to call for a finding the final order of the. High Court allowing the appeal based on the finding which was submitted was not open to question. We therefore dismiss the appeal but in the circumstances pass no order as to costs of this Court. RAGHUBAR DAYAL, J. I agree that the appeal be dismissed, but for different reasons. If Narasimhulu and Ramudu alias Mark, who were in possession of the land in suit under the lease, exhibit P 6, dated May 6, 1929, for six years from Josyula Krishnavenamma, had attorned to Ramakotiah and Seetharamiah by executing the Kadapa (Kabuliat) exhibit D 4, on March 16, 1933, I do not think that any further payment of rent was necessary to make the attornment effective and am of opinion that in that case the view of the learned Subordinate Judge to the effect that the predecessors in interest of the defendants appellants were in possession through their tenants over the land in suit, Was correct. The High Court did not decide by its first order remitting the point No. 2, viz., ,whether the plaintiffs got into possession of the suit properties earlier than the defendants and their predecessor in title and whether they are entitled to recover possession of the suit properties on the strength of their Possessory title ' for a fresh finding that the attornment by the execution of the deed of Kadapa was not good attornment without the executants paying rent to Ramakotiah and Seetharamiah. The learned Judge simply said: 922 "Apart from 'the question whether the principle of law adopted by the learned. Judge is welf founded or not, on which I express no opinion at present it seems to me that the finding of the learned Judge that,, the first defendant bad prior, possession from 193 to 1936 cannot be accepted in second appeal" The finding about the prior possession, of the learned Subordinate Judge was not accepted by the High Court because it considered that the Subordinate Judge bad not closely scrutinized the evidence in the case on the very crucial question in issue between the parties. This crucial question was formulated as 'whether the tenants really attorned to the reversgioners and the reversioners recognized the possession of the tenants as theirs. ' What was want by the High Court from this question, is not clear to me. If the execution of the deed, exhibit D 4, amounted to the attornment by the tenants in favour of Seetharamiah and Ramakotiah, who claimed to be the heirs of Krishnavenamma, and the execution of the cowle, exhibit D 5, by those two persons in favour of the tenants, to the recognition of the tenants as their tenants, no further question of scrutiny of any other evidence on record could have arisen. The other evidence on record about which the High Court expressed its opinion, and that too not in a final form, as a fresh finding was being called on the basis of that evidence, mainly consisted of the evidence in favour of the defendant,%. Non consideration of that evidence could have been a grievance to the defendants, but not to the plaintiffs appellants before the High Court. Expression of opinion in that form on such evidence wag detrimental to the interest of the defendant in a fresh 'consideration of that evidence by the Subordinate Judge, who,, naturally, in his fresh finding, followed a practically similar line of criticism against "that evidence. The mere fact that certain evidence had not been closely scrutinized or, in other orders, not scrutinized, in & manner, in which the second 923 appellate Court desires, it to be scrutinized, cannot be round for interference with the finding of fact in the second appeal. If the High Court considered, is being now urged for the respondent, that without proof of the tenants actually paying rent to,, Seetharamiah and Ramakotiah, who laid claim as heirs but have been proved to be not heirs of Rat Krishnavenamma, there was no valid attornment, the order for a fresh finding about attornment could be justified on the ground that the Subordinate Judge had not referred to the evidence having a hearing on the question of the payment of rent by the tenants and its receipt by the new landlords Seetharamiah and Ramakotiah. I however find it difficult to put such a construction on the High Court 's order when it did not decide upon the principle of law adopted by the first appellate Court. "Attornment, in its strict sense, is an agreement of the tenant to a grant of the reversion made by the landlord to another, or, as it has been defined ', 'the act of the tenants putting one person in the place of another as his landlord" see paragraph 732, Foa 's General Law of Landlord and Tenant. This means that in the first instance attornment is made in favour of the person who has derived his title or supposed ' title from the Original landlord. It implies a continuity of the tenancy created by the original landlord in favour of the tenant. It is in these circumstances that the existing tenant, for the rest of the period of his Tenancy, agrees to acknowledge the new landlord as his landlord. Such an agreement of the tenant amounts to attornment and by such an attornment the tenant by his act substitutes the new landlord in place of the previous one. Such attornment is complete the moment the tenant agrees to acknowledge the new landlord to be his landlord. Any future payment or non payment of rent does not affect the relationship created by the attornment. The new landlord will have his remedies with respect to the rents falling in arrears. 924 Again, it is stated in paragraph 745 at page 475 : "With regard to the title of person from whom the possession was not obtained, but who has been recognised as landlord by the tenant, such recognition may be by express agreement, by attornment, or other formal acknowledgment (as by paying a nominal sum of money), by payment of rent, or of a. nominal sum as rent, or by submission to a distress. " The attornment is here described as one mode of recognising a person as one 's landlord, just as payment of rent is another mode for the purpose. Expression to similar effect is to be found in paragraphs 746, and also 747 where it is further noted : "But the tenant is not allowed to impeach the title of a person to whom he has paid rent, or whose title he has otherwise recognised, without showing a better title in some other person. Thus he cannot, after attorning to a person who derives his title under a will, contend merely that upon a true construction o f the will he had no title; nor can he, after paving him rent, dispute his title merely on the ground that the devise to him was void, owing to the incapacity of the testator. " In krisna Proshad Lal Singha Deo vs Baraboni Coal Concern (1) the Privy Council said at page 318, when considering the scope of section 116 of the Indian Evidence Act: "Whether during the currency of a term the tenant by attornment to A who claims to have the reversion, or the landlord by acceptance of rent from B who claims to be entitled to the term, is estopped from disputing the ' claim which he has once admitted,, we important questions, but they are instances of cases which are outside section 116 altogether. " (1) (1937) L. R. 64 I. A. 311. 925 And again, at page 319 "In the ordinary case of a lease intended as a present demise which is the case before the Board on this appeal the section applies against the lessee, any assignee of the term and any sub lessee or licencee. What all such persons are precluded from denying is that the lessor had a title at the date of the lease, and there is no exception even for the case where the lease itself discloses the defect of title. The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversion, though in such cases there may be other grounds of estoppel, e.g., by attornment, acceptance of rent etc. In this sense it is true enough that the principle only applies to the title of the landlord who let the tenant in ' as distinct from any other person claiming to be reversioner." These observations make it clear that simply by attornment the tenant is estopped from questioning the derivative title of the claimant 's successor just as the acceptance of rent will create an estoppel against the landlord from denying the person, who paid the rent, to be his tenant. These observations do not indicate that any actual payment of rent by the tenant who has attorned is necessary to make the attornment effective. If it was otherwise, the new landlord in whose favour the tenant has attorned, will not be able to take successfully any action against that person till that person had made the first payment of rent. I am therefore of opinion that on co the tenant has agreed to accept the person claiming title from the previous landlord, that amounts to effective attornment in favour of the landlord and is no more dependent on the future conduct of the tenant by way of payment of rent or otherwise. 926 A person can establish his possessory title by establishing that he had been in actual possession of the land in suit or had been in possession through tenants. So long as the persons in actual possession are deemed to be his tenants on account of their conduct in recognising that person as their landlord and are estopped to question his title, I see no good reason why their possession be not taken to be, the possession on behalf of that person, irrespective of the fact whether that person bad legal title or not. If he had legal title, no question of relying on possessory title would ever arise. It is only in the case of his failure to establish his legal title that he has to fall back upon possessory title. I see no good reason why the possession of tenants who had attorned to a person having no title be not considered to be his possession in determining whether he had preferential possessory title to that of another, who too has no title and secured possession of the land subsequent to the attornment. In this view of the matter, I am of opinion that the High Court was wrong in asking for a fresh finding on the question of possession when it bad not decided that the tenants had not, in law, attorned to Seetharamiah and Ramakotiah, on the basis of the two documents Kadapa exhibit D 4 and Cowle exhibit D 5, and when according to the first appellate court, the effect of those documents was that the tenants had attorned to them. I am, however, of opinion, though the point was not raised, that the Kadapa exhibit D 4 is not an agreement by tenants simply accepting the claimants to be the new landlords as, by this document, they do not just substitute the new landlords in the place of the old. They really took a new lease from those two persons. The terms of the new lease were different from those of the lease of Krishnavena The unexpired period of the tenancy was two years. Under the Kadapa, the new tenancy was to continue for five years from June, 1933. The lease does not cover just the land which they held under 927 their previous tenancy, but included some other land as well. The amount of rent they were to pay also differed. It was much reduced. Such a document is not a deed of attornment but is a document accepting fresh tenancy. Seetharamiah and Ramakotiah could not in law lease the land in suit to those tenants as they had no tit ,in themselves, they being not heirs of Krishnavenamma. Any lease executed by them created no right. These lessors were not in actual possession of the land at any time. They could not have, therefore, conveyed possession to their tenants. As the new lesseess got no title under the lease, their continued possession over the land in suit could not be possession under the lease on behalf of the new lessors, especially when their possession can be traced to the valid tenancy under the deed, exhibit P 6, in favour of Krishnavenamma and will be deemed to be on behalf of legal heir. Seetharamiah and Ramakotiah, therefore, cannot be held to be in possession of the land in suit through their tenants between June, 1933, and some time in 1936, when those tenants were dispossessed by Moka Subba Rao on behalf of plaintiff No. 1. It follows that the predecessors in interest of the defendants have been rightly held to be not in possession of the land in suit prior to plaintiff No. 1, 'who too. , had no title, getting possession of the land in suit and that the order under appeal is correct. Appeal dismissed.

In the present suit for possession the courts found that none of the parties had a legal title to the property in the dispute and in determining which of the parties had possessory title to the said property the trial court found that on the death of the daughter of the original owner the so called reversioners got a Kodaha (Kabuliyat) executed in their favour by two tenants of the last possessory of the property and themselves executed a cowle in their favour but the said tenants did not pay any rent to the so called reversioners. The trial court held that,though there was a kadapa by which it might be said that the tenants who were there from before had attorned to the so called,reversioners it was a mere paper transaction as no rent was paid. On appeal the first appellate court relying, on the Kadapa and, cowle, found that the so called reversioners got peaceful possession of the property but did not enter into the question whether any rent was paid to them by the tenants. On, second appeal the High Court held that the real question was whether the tenants really attorned to the reversioners and as the, first appellate court did not consider whether there: was.real attornment by, payment, Of rent sent back the case to the said court for a fresh finding,on that question whereupon that court returned a finding in favour of the respondent on the question of possession. The contention of the appellant on appeal by special leave was that the High Court had no jurisdiction in second appeal to reverse a finding of fact arrived at by the first appellate Court and as the high Court indirectly reversed that finding of fact by calling for a further finding on the question of possession the judgment, of the High Court should be set aside. Held (per K. N. Wanchoo, K.C Das Gupta and K.J.C. Shah, JJ.) that if the so called reversioners had title in the sense that they were the next reversioners, then attornment by the Kadapa would have been sufficient but where a person in whose favour attornment had been made had no title, a mere paper attornment would not be sufficient unless there was a real attornment in the sense that the person who attorned also paid rent voluntarily or under a decree to the 911 person in whose favour the attornment was, made. The first appellate court had merely considered the paper attornment and had not considered the evidence as to the payment of 'rent which was there and had been considered by the trial court. The High Court was therefore, justified in calling for. a finding on a question which was not considered by the lower appellate court. Per Raghubar Dayal, J. Once a tenant agreed, to accept the person claiming title from the previous landlord, that amounted to attornment in favour of the new landlord and was no more dependent on the future conduct of the tenant by way of payment of rent or otherwise., Krishna Prasad Lal Singha Deo vs Baraboni Coal Concern, (1937) L. R. 64 I. A. 31 I , referred to. There was no good reason why the possession of tenants who had attorned to a person having no, title be not considered to be, his possession in determining whether he had preferential possessory title to that of another who too had no title. The mere, fact that certain evidence had not been closely scrutinised in other words, not scrutinised in a manner in which the second appellate court desired it to be scrutinised, could not be a ground for interference with a finding of fact in second appeal. In the present case the Kadapal the terms of which were different from those of the old one was not a deed of attornment merely substituting the new landlord in place of the old but was a document accepting fresh. tenancy but as the new lessors had no title to the property the ' lease executed by the created no right.

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]

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 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.

% 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.

Order XXI Rule 64 of the C.P.C. lays down that "any court executing a decree may order that any property attached by it and liable to sale or such portion thereof as may seem necessary to satisfy the decree, shall be sold and that the proceeds of such sale, or a sufficient portion thereof shall be paid to the party entitled under the decree to receive the same. " The 5th respondent/decree holder, S.P.R. Reddy obtained two decrees against the Judgment debtor Pujari Subbarayudu in two suits viz.; U.S. 15 of 1949 and O.S. 19 of 1953. He filed execution proceedings No. 24 of 1953 in the trial Court for selling the properties belonging to the judgment debtor in Devanoor and Gudipadu villages in order to satis fy the decree in U.S. 15 of 1949. He also applied for permission to bid at the auction sale. In the auction sale held on March 2, 1955, the 5th respondent purchased the lands situated in village Devanoor for a sum of Rs. 16,880/ . Despite the fact that the sale proceeds of the lands in village Devanoor alone was sufficient to satisfy the decretal amount mentioned in the warrant of sale and the proclamation of sale viz.; Rs. 16,715.50, The Court proceed ed to sell the properties of the judgment debtor in village Gudipadu which fetched Rs. 12,500/ and which were purchased by the appellant auction purchaser. The judg ment debtor filed an application on March 31, 1955 to set aside the sale contending, inter alia, that once the sale of the properties in village Devanoor was sufficient to satis fy the amount mentioned in the sale proclamation, the Court should have stopped the sale as required by the mandatory provisions of Order XXI Rule 64 of the C.P.C. The Trial Court rejected the said application; whereupon the decree holder on April 20, 1955 obtained an order from the court for rateable distribution of the sale proceeds. In appeal the High Court accepted the plea of the judgment debtor regarding non compliance with the provisions of O.XXI Rule 64 C.P.C. and set aside the sale with respect to the proper ties situated in village Gudipadu. Dismissing the appeal by certificate the Court, HELD: (1) The High Court rightly held that as the sale of the properties in village Devanoor fetched an amount mentioned in the sale warrant. the Executing Court was not justified in proceeding with the sale of the properties in village Gudipadu and should have stopped the sale. [694 F] (2) The logical corollary which flows from O.XXI Rule 64 of the Code is that where the amount specified in the proc lamation of sale for the recovery of which the sale was ordered is realised by sale of certain items, the sale of further items should be stopped. [695 C D] (3) Under Order XXI Rule 64, the Executing Court derives jurisdiction to sell properties attached only to the point at which the decree is fully satisfied. The words "necessary to satisfy the decree" clearly indicate that no s,de can be mentioned in the sale proclamation and is sufficient to satisfy the decree, no allowed beyond the decretal amount mentioned in the sale proclamation. In other words. where the sale fetches a price equal to or higher than the amount further sale should be held and the court should stop at that stage. [695 E F] (4) In the facts and circumstances of the present case, there being nothing to show that the decree holder had approached the court for including the second decretal amount obtained in O.S. 19 of 1953 in the proclamation of sale, the 693 Executing Court was not justified in selling the properties situated in village Gudipadu. The fact that the Judgment debtor did not raise an objection on this ground before the Executing Court rs not sufficient to put him out of court because this was a matter which went to the very root of the jurisdiction of the Executing Court to sell the properties and the non compliance with the provisions of O.XXI, Rule 64 of the Code was sufficient to vitiate the same so far as properties situated in village Gudapadu were concerned. [695 G H, 696 A] (5) The Court remitted the matter to the Executing Court for an inquiry with the following directions: (i) The appellant will have to return the properties in village Gudipadu to the judgment debtor and he will be entitled to receive the value of improvements made by him during the time he was in possession of these properties, as determined by the Executing Court in addition to Rs. 12,500/ . (ii) He will not he entitled to any interest on the value of the improvements, if he is found to be in posses sion of the property. (iii) If the Executing Court finds that the auction purchaser was not in possession of the properties, the judgment debtor will have to refund the amount of Rs. 12,500/ to the appellant with interest at the rate of 12 per cent per annum from the date of sale upto the date of refund. [696 B E]

This petition for special leave to appeal was filed against the judgment and order of the High Court, whereby the High Court had held that the petitioner was not a sub tenant and as such he was bound by the decree passed against the tenant for eviction. The petitioner challenged before this Court the finding of the High Court and contended that he was a sub tenant with the knowledge and consent of the landlord and as such the decree of eviction passed against the tenant did not bind him because in the suit he had not been a party. He should have been made a party to the suit. Dismissing the petition, the Court, HELD: The High Court was right. The attention of the Court was drawn to an agreement of 1st September, 1966, with the contention that that was an arrangement of sub letting and in that document one of the attesting witnesses was the landlord himself, and, therefore, the subletting was done with the knowledge and consent of the landlord and, as such, was valid. [1088G] One of the attesting witnesses to the said agreement was Md. Ali, the respondent herein, who was at the relevant time the landlord, now represented by his legal representatives in this petition. On a construction of the different clauses of the aforesaid document, the Court was of the opinion that this was an agreement of the business of the tenant. It was not and could not be construed as an agreement of subtenan cy. There was no parting of possession of the premises. There was only a right to "manage" the business, looking after the existing business with fixed monthly payments and this could not be construed as an agreement of sub tenancy. Therefore, though the landlord had knowledge of the docu ment, it could not be said to be consent to an agreement 1088 of sub tenancy. The attention of the Court was drawn to section 2(4) on the expression 'tenant ' in the West Bengal premises Tenancy Act, 1956. That definition did not affect the position of the petitioner in this case as there was no sub tenancy in the case. [1090C E, G] The High Court was right in the view it took. [1088F] M/s. Girdhar Lal & Sons vs Balbir Nath Mathur and oth ers, , referred to.

Sub section (1) of section SO of the Karnataka Rent Control Act, 1961 confers revisional jurisdiction on the High Court in respect of orders passed or proceedings taken by the Court of Small Causes or the Court of Civil Judge under the Act while sub section (2) empowers the District Judge to revise the orders passed or proceedings taken by the Court of Munsif and makes his order final. A Full Bench of the Karnataka High Court in Krishnaji Venkatesh Shriodkar vs Gurupad Shivaram Kavalekar & ORS. , (ILR , following the decisions of this Court in Chhagan Lal vs The Municipal Corporation. Indore, ; and Krishnadas Bhatija vs A.S. Venkatachala Shetty, (SLP No. 913 of 1978 decided on 13th Feb., 1978) held that the fact that the order of the District Judge under section SO(2) of the Karnataka Rent Control Act, 1961 is made final, does not affect the jurisdiction of the High Court under section 115 of the Code of Civil Procedure to revise such orders of the District Judge, in the absence of any express words in the statute taking away such jurisdiction. Later this Court, in Vishesh Kumar vs Shanti Prasad, ; while interpreting section 25 of the Provincial Small Causes Courts Act, as amended by the U.P. Amendment Act, 1978, under which the revisional jurisdiction was shared between the District Court and the High Court, took the view that the High Court was not vested with revisional jurisdiction under section 115 CPC in respect of a revisional order made by the District Court under that section. A similar view was also 341 taken in Aundal Ammal vs Sadasivan Pillai, ; while construing section 20 of the Kerala Buildings (Lease and Rent Control) Act, 1965 . Relying on the aforesaid two decision a Full Bench of the High Court of Karnataka in M.M. Yaragatti vs Vasant, (ILR took a contrary view to Krishnaji 's case. The appellant 's revision petition having been dismissed by a Single Judge of the High Court following the Full Bench decision in Yaragatti 's case, he preferred an appeal to this Court by special leave. Allowing the appeal, ^ HELD: 1. A revision application is maintainable under section 115 of the Code of Civil Procedure read with section 50(1) of the Karnataka Rent Control Act, 1961 when a District Judge has made an order in his revisional jurisdiction under section 50(2) of the Act. Chhagan Lal vs The Municipal Corporation, Indore, ; and Krishnadas Bhatija vs A.S. Venkatachala Shetty, (S.L.P. No. 913 of 1978 decided on 13th of February, 1978, referred to. Vishesh Kumar vs Shanti Prasad, ; ; Aundal Ammal vs Sadasivan Pillai, ; ; South Asia Industries Private Ltd. vs S.B. Sarup Singh & ors. J and National Sewing Thread Co. Ltd. vs James Chadwick & Bros. Ltd., ; distinguished. Krishnaji Venkatesh Shirodkar vs Gurupad Shivaram Kavalekar & ors. ILR approved. M.M. Yaragatti vs Vasant, ILR overruled. The decision of a Full Bench of the High Court consisting of three Judges rendered in Krishnaji 's Case was binding on a bench of equal strength unless that decision had directly been overruled by this Court or by necessary implication became unsustainable. There is no such overruling of Krishnaji 's decision by this Court. It cannot also be said that by necessary implication the ratio therein supported by the direct authority of this Court stood superseded. [349B C] 3. Judicial propriety warrants that decisions of the Supreme 342 Court must be taken wholly binding on the High Courts. That is the necessary outcome of the tier system. Article 141 of the Costitution unequivocally states that the law declared by this Court shall be binding on all courts within the territory of India. A coordinate Bench of the High Court, therefore, should not have chosen to overrule an earlier judgment of that Court based upon a decision of this Court.[349C F] Broom vs Cassell & Co., [19721 1 AER 801, referred to. It is one of the essential requirements of the administration of justice that judgments rendered by superior courts and particularly with the approval of the apex court should not be frequently changed so as to unsettle settled positions. The fact that the State Legislature has not thought it necessary to amend the law and set at naught the decisions in Krishnaji 's case or Bhatija 's case is indicative or the position that this Court had not taken a wrong view of the legislative intention [349H: 350A]

l Appeal No. 96 of 1952. Appeal from the Judgment and Order dated the 9th April, 1951, of the High Court of Judicature at Calcutta (Sen and Chunder JJ.) in Civil Rule No. 1038 of 1950 arising out of the Order dated the 4th July, 1960, of the Court of the 6th Judge, Presidency Small Causes Court, Calcutta, in Ejectment Suit No. 6571 of 1949. Arun Kumar Dutta and, Shivdas Ghosh for the appellant. Panchanan Ghose (section P. Ghose, with him) for the respondent. January 29. The Judgment of the Court was delivered by DAS J. This appeal is directed against the judgment and order of a Bench of the Calcutta High Court passed on the 9th April, 1961, in Civil Rule No. 1038 of 1950. The facts leading up to this appeal may be shortly stated as follows : The respondents were, according to the appellant, monthly tenants under the appellant in respect of three rooms, one kitchen, one privy and a bathroom on the ground floor of premises No. 6, Roy Began 535 Street, Calcutta, at a monthly rent of Rs. 25 payable according to the Bengali calendar month. On the 29th Baisakh 1356 B. section the appellant gave notice to the respondents to quit the premises on or before the 7th Jaistha 1356 B.S. The respondents having failed to comply with the notice the appellant on the 1st June, 1949, instituted proceedings under Chapter VII of the , for the eviction of the respondents from the demised premises on the allegation that the tenancy had determined ipso fact,) for nonpayment of rent for three consecutive months in terms of section 12 (3) of the West Bengal Premises Rent Control Act, 1948. The respondents on the 6th July, 1949, deposited into Court Rs. 233 7 0 and on the 8th July, 1949, entered appearance and filed a written statement denying that they were in arrears with their rent or that their tenancy , had been ipso facto determined. The said proceedings came up for hearing on the 27th February, 1950, and the respondents not having appeared it was heard ex parte and an order was made directing the delivery of possession of the premises to the appellant on the 3rd May, 1950. In the meantime on the 31st March, 1960, the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 (Act XVII of 1950) came into force. On the 29th May, 1950, the respondents filed an application in the trial Court under section 18 of the said Act for vacating the order for possession. On the 5th June, 1950, the trial Court made an order upon terms which, as set out in the respondents ' case, are as follows : "5 6 50. On consent all arrears of rent up to Jaistha 1357 B.S. with interest at 9% p.a. along with the costs of the suit including half Pleader 's fee amounting to Rs. 399 3 0 on consent in total to be paid by the defendants to the plaintiff by 4 7 50. The date fixed for payment and final orders. All proceedings and execution stayed until further orders. " The agreed amount having been paid the order for possession was vacated on the 4th July, 1950. The 536 order as recorded in the order sheet reads as follows: "4 7 50. Parties present as before. Defendant carries out the order of the learned Court, dated 5th June, 1950. Money deposited in Court as ordered. Accordingly order of decree for possession is vacated. Money in Court is allowed to be withdrawn by the plaintiff 's pleader under power. " The appellant on the 1st August, 1950, moved the High Court under section 115 of the Code of Civil Procedure for setting aside the order of the trial Court passed on the 4th July, 1950. While the application was pending before the High Court the West 'Bengal Premises Rent Control (Temporary Provisions) (Amendment) Act, 1950 (Act LXII of 1950) came into force on the 30th November, 1950. On the 9th April, 1951, the High Court following an earlier decision of another Bench of that Court in Rai Bahadur Atulya Dhan Banerjee vs Sudhangsu Bhusan Dutta(1) dismissed the application. On the 30th November, 1951, the High Court granted leave to the appellant to appeal to this Court and issued a certificate under the provisions of article 133 (1) (c) of the Constitution of India. As already stated, the proceedings out of which the present appeal arises were instituted under Chapter VII of the . Chapter VII of that Act which is intituled "Recovery of Possession of Immovable Property" allows the landlord, in certain circumstances, to "apply to the Small Cause Court for a summons against the occupant calling upon him to show cause on a day therein appointed why he should not be compelled to deliver up the property. " Section 43 provides that if the occupant does not appear at the time appointed or show cause to the contrary, the applicant landlord shall, if the Court is satisfied that he is entitled to apply under section 41, be entitled to an order addressed to a Bailiff of the Court directing (1) 537 him to give possession of the property to the applicant on such date as the Court thinks fib to name in such order. Although under the rules framed under the Act this application under section. 41 is initiated by a plaint there is no dispute that the proceeding is not a suit and the order for delivery of possession does not strictly speaking amount to a decree for recovery of possession [See Rai Meherbai Sorabji Master vs Pherozshaw Sorabji Gazdar(1)]. Indeed, section 1.9 of the Act peremptorily provides, inter alia, that the Small Causes Court shall have no jurisdiction in suits for recovery of immovable property. The only question for consideration, therefore, is whether section 18(1) of Act XVII of 1950 applies to an order for possession made under section 43 of the . Section 18(1) and the marginal note to that section run as follows: "18. Where any decree for recovery of posses Power of court to sion of any premises has been made |rescind or vary on the ground of default in decrees and orders payment of arrears of rent under or to give relief in the provisions of the West Bengal pending suits in Premises Rent Control (Temporary, certain cases Provisions) Act, 1948,but the possession of such premises has not been recovered from the tenant, the tenant may apply to the trial Court within sixty days of the coming into force of this Act for vacating the decree for ejectment against him and within such period no order for delivery of possession shall be made by any Court, nor if an application is made by the tenant under this sub section till the application has been dismissed under sub section (4). " In Rai Bahadur Atulya Dhan Banerjee vs Sudhangsu Bhusan Dutta it was held that the expression "decree for recovery of possession" in subsection (1) of section 18 includes an order for recovery of possession made under Chapter VII of the . This case (1) BOM. (2) 538 was followed, without further discussion, by different Benches of the same High Court in Dhanesh Prakash Pal vs Lalit Mohan Ghose (1), Mohon Lal Khettry v: Chuni Lal Khettry(2), Jethmull Sethia vs Aloke Ganguly (3) and also in the present case. Finally, the question was again considered by a larger Bench of the Calcutta High Court in Iswari Prosad Goenka vs N. B. Sen(4). The learned Judges agreed with the earlier decision in Rai Bahadur Atulya Dhan Banerjee vs Sudhangsu Bhusan Dutta (5). After hearing the able arguments I advanced before us and giving the most anxious consideration to the decisions in the cases mentioned above we are unable to accept the conclusion arrived at by them in those, cases as correct. Apart from the question whether the marginal note can at all be referred to in construing the provisions of a section of an Act, it is quite clear, on the authorities, that the marginal note cannot control the meaning of the body of the section if the language employed therein is clear and unambiguous. If the language of the section is clear then it may be that there is an accidental slip in the marginal note rather than that the marginal note is correct and the accidental slip is in the body of the section itself. Take for instance section 11 of the West Bengal Premises Rent Control Act, 1948. The section says that notwithstanding anything contained in certain Acts specified therein, "no order or decree for the recovery of possession of any premises shall be made so long as the tenant pays to the full extent the rent allowable by this Act and performs the conditions of the tenancy. " The marginal note to that section simply says: " No order for ejectment ordinarily to be made if rent paid at allowable rate." 'In the marginal note the words " or decree " do not find a place at all, a fact which clearly shows that the marginal note was ' not prepared carefully and that it was not a sure guide in the matter of the (1) (2) (I951) (3) (4) (5) 539 interpretation of the body of the section. We have, therefore, to read the words used in the body of section 18(1) of the 195O Act and if we find the meaning clear and unambiguous ' the marginal note should not be permitted to create an ambiguity in the section. Section 18 (1), as it stood on the 4th July, 1950, when the order for possession passed on the 27th February, 1950, was vacated, gave relief to a tenant against whom any decree for recovery of possession of any premises had been made on the ground of default in payment of arrears of rent under the provisions of the 1948 Act, provided that the possession of the premises had not been recovered from him. The relief given by this section is clearly against a decree for possession which "has been made" under the 1948 Act. The language of section 18 (1) of the 1950 Act and in particular the specific reference therein to the Act of 1948 take us back to that Act. Section II of the 1948 Act %refers " to order or decree for the recovery of possession of, any premises". The reference in the non obstante clause of section 11 to the , I 882, clearly indicates that the order for the recovery of possession refers to orders passed under section 43 of the last mentioned Act on applications made under section 41 thereof. Section 11 speaks of both " order " for the recovery of possession and " decree " for the recovery of possession. Therefore, there can remain no manner of doubt that the two words " order " and " decree " in section 11 connote two different things. This is further made clear by the use of two words " suit " or " proceeding " in section 12 of the 1948 Act. It is, thus, quite clear that in the 1948 Act " suit " is different from " proceeding" and " order " is different from " decree ". Therefore, in construing the 1948 Act there can be no occasion for giving any extended meaning to the word " decree" so as to include "order", for the two are distinctly and separately provided for. Section 18 (1) of Act XVII of 1950 does not refer to "decree" 70 540 simpliciter but to "any decree for recovery of possession of any premises on the ground of default in payment of arrears of rent under the provisions of" the 1948 Act. Turning then to that Act we find that a decree for possession on the ground of non payment of rent under that Act is treated distinctly from an order for possession on the ground of non payment of rent under the same Act. A decree for the recovery of possession within the meaning of that Act can, therefore, only mean a decree in a suit for recovery of possession and cannot cover an order for possession passed under section 43 on an application made under section 41 of the . In short, section 18(1) of Act XVII of 1950 expressly attracts the 1948 Act and under that Act there can be no necessity for giving an extended meaning to the word "decree", for "order " is sepa rately dealt with in that Act. It is said that whatever the word "decree" may mean in the 1948 Act it is immaterial for the purposes of construing Act XVII of 1950 for the Court has to ascertain the meaning of the word "decree" as used in section 18(1) of the last mentioned Act. It has been already stated that the language of section 18 (1) attracts the relevant provisions of the 1948 Act and, therefore, the word "decree" occurring in section 18(1) must necessarily be construed in the light of the 1948 Act and it is clear that so construed it cannot cover "order" for possession made under Chapter VII of the . Apart from ' that consideration, the question still remains: What does the word "decree" in section 18 (1) mean? That word has not been defined either in the 1948 Act or in Act XVII of 1950 or in the Bengal General Clauses Act. That word, however, has been defined in the Code of Civil Procedure, 1908, and, as there defined, it means the formal expression of an adjudication which determines the rights of the parties with regard to the matter in controversy in the suit which last word prima facie means a civil proceeding initiated by a plaint (section 26 and Order IV, rule 1, 541 Civil Procedure Code). This is the ordinary accepted meaning of the word " decree " and if that meaning is attributed to the word " decree " occurring in section 18(1) then clearly it cannot cover an order for possession passed under section 43 of the on an application made under section 41 of that Act. It is, however, urged that the word " decree" in section 18 (1) of Act XVII of 1950 should not be read in its strict sense. It is said that although the word "suit" ordinarily means a proceeding instituted by a plaint, it is also used in a wider sense so as to cover proceedings which are not instituted by a plaint and, therefore. , an adjudication in those proceedings which are also suits in that extended meaning may well be said to be a " decree". Reference is made to the explanation of sub section (1) of section 12 of Act XVII of 1950, which expressly provides that in the proviso to sub section (1) the term "suit" does not include proceeding under Chapter VII of the , and it is urged that this explanation inferentially means that the word " suit " occurring in the other sections of Act XVII of 1950 may include a proceeding under Chapter VII of the and, therefore, an order made on such a proceeding may be described as an adjudication in a suit and, therefore, a decree. It is not quite clear how this inference, even if it can be properly drawn, can have any bearing on the construction of the word "decree" in sub section (1) of section 18 of the Act XVII of 1960 where the word " suit " is not used at all. Be that as it may, the argument founded on the aforesaid inference sought to be drawn from the explanation to section 12 (1) of Act XVII of 1950 will clearly appear to be untenable when the provisions of that Act are closely scrutinised, for it will then be found that the word " suit" does not and was not intended to cover any proceeding under Chapter VII of the . Section 12 (1) prohibits the making of any order or decree for the 542 recovery of possession by any Court, notwithstanding anything to the contrary in any other Act or law. This sub section (1), standing by itself, means that no order for possession can be passed by the Presidency Small Cause Court notwithstanding the and no decree for possession can be made by any Court in any suit notwithstanding the Transfer of Property Act or the Contract Act or the Code of Civil Procedure, 1908. The proviso to sub section (1), however, saves "any suit for decree for such recovery of possession" against certain tenants or in certain circumstances. Therefore, it is clear that the proviso to sub section (1) of section 12 does not save proceedings under Chapter VII of the . The explanation to that sub section stating that the word "suit" in the proviso does not include a proceeding under Chapter VII of the appears to have been inserted out of abundant caution to put the position beyond any doubt. Section 16 of Act XVII of 1950 provides that notwithstanding anything contained in any other law a suit by a landlord against a tenant for recovery of possession of any premises to which the Act applies shall lie to the Courts as set out in Schedule B and that no other Court shall be competent to entertain or try such suit. According to Schedule B, where the premises are situate on land wholly within the ordinary original civil jurisdiction of the Calcutta High Court and when the rent does not exceed Rs. 500 per month, the Chief Judge of the Calcutta Court of Small Causes shall entertain and try such suit as a Court of the District Judge, provided that be shall be entitled to transfer the suit to any other Judge of that Court who shall try it as a Court of the Subordinate Judge. The result of sections 12 and 16 read with Schedule B is for all practical purposes to suspend the operation of Chapter VII of the in Calcutta for no one will take proceedings in which no order can be made. The effect of those sections is to confer a new jurisdiction on the 543 Chief Judge of the Calcutta Small Cause Court to entertain and try suits by landlords against tenants for recovery of possession of premises situate within the ordinary original civil jurisdiction of the Calcutta High Court when the monthly rent does not exceed Rs. 600. Thus after Act XVII of 1950 came into force the Calcutta Small Cause Court has ceased to have any power to pass an order for possession under Chapter VII of the and the Small Cause Court of Calcutta can, under that Act,, only pass a decree for possession in a suit Which is saved by the proviso to sub section (1) of section 12 and with regard to which a special jurisdiction is conferred on that Court by section 16 of that Act. That being the position, the word" suit " in none of the sections of Act XVII of 1950 can be said to have been used as including a proceeding under Chapter VII of the . Therefore, the reasoning advanced in support of attributing an extended meaning to the word "suit" and then inferentially to the word decree " in section 18 (1) cannot be sustained. It is next argued that if the word "decree" is construed strictly it will give rise to startling results in that poor tenants against whom orders for possesSion had been made under the 1948 Act will be deprived of the benefit of section 18 (1) while the wealthy tenants paying rents above Rs. 500 per month will get relief under that section and this will frustrate the intention of the Legislature. This argument proceeds on the assumption that the Legislature intended to give relief to all tenants against whom orders or decrees for possession had been made. The language of section 18 (1) clearly shows that the intention of the Legislature was to give relief only to certain tenants in certain circumstances. In the first place relief is given only with respect to decree for possession made on the specified ground and not with respect to a decree for possession made on any other ground. In the next place relief is given only when the possession of the premises in respect of which a 544 decree for possession had been made had not been made over by the tenant. Thus tenants against whom a decree for possession had been made on grounds other than the ground specified. in the subs section and even tenants against whom a decree for possession had been made on the specified ground but who had, voluntarily or otherwise, delivered possession of the premises get no relief under section 18 (1). An order for possession is made by the Presidency Small Cause Court under Section 43 on a summary application under section 41 and the order directs the Bailiff of the Court to deliver possession to the applicant. This order for the recovery of possession which under section 37 of the is final and conclusive and from which there is no appeal or a new trial under section 38 of that Act does not ordinarily take much time to be obtained or to be carried out and certainly much less than what is taken to obtain a decree for possession in a suit and to execute such decree, because both the decree for possession in a suit and the order for execution thereof are subject to appeal. The Legislature may well have thought that cases where orders for possession had been made under Chapter VII of the with respect to premises which were situate within the small area of the ordinary original civil jurisdiction of the Calcutta High Court and which, in spite of such orders, were still in the possession of the tenants at the date of the commencement of Act XVII of 1950 would be few in number as compared to the number of cases where decrees for possession had been made with respect to premises which were situate within a very much larger area and which were still in the possession of the tenants and, therefore, did not think fit to provide for those few cases. It must always be borne in mind, as said by Lord Halsbury in Commissioner for Special Purposes of Income Tax vs Pemsel (1), that it is not competent to any Court to proceed upon the assumption that the Legislature L. R. ; at P. 549. 545 has made a mistake. The Court must proceed on the footing that the Legislature intended what it has said. Even if there is some defect in the phraseology used by the Legislature the Court cannot, as pointed out in Crawford vs Spooner(1), aid the Legislature 's defective phrasing of an Act or add and amend or, by construction, make up deficiencies which are left in the Act. Even where there is a casus omissus, it is, as said by Lord Russell of Killowen in Hansraj Gupta vs Official Liquidator of Dehra Dun Mussoorie Electric Tramway Co., Ltd. (2), for others than the Courts to remedy the defect. In our view it is not right to give to the word " decree" a meaning other than its ordinary accepted meaning and we are bound to say, in spite of our profound respect for the opinions of the learned Judges who decided them, that the several cases relied on by the respondent were not correctly decided. Reference was made, in, course of argument, to section 6 of the West Bengal Act LXII of 1950. That section refers to orders or decrees made between the commencement of Act XVII of 1950 and Act LXII of 1950, i.e., between the 30th March, 1950, and the 30th November, 1950, and cannot have any application to the order for possession made in this case on the 27th February, 1950. For reasons stated above this appeal must be allowed and the order made by the High Court should be set aside and the respondents ' application under section 18 (1) of Act XVII of 1950 should be dismissed and we order accordingly. In the circumstances of this case we make no order as to costs except that the parties should bear their own costs throughout. Appeal allowed. Agent for the respondent : Sukumar Ghose. (1) 6 Moo. P.C. I; 4 M.I.A. 179. (2) (1933) L.R. 60 I.A. I3; A.I.R. 1933 P.C 63.

The expression " decree for recovery of possession " in section 18 (1), of the West Bengal Premises Rent Control (Temporary Provisions) Act (Act XVII of 1950) does not include an order for recovery of possession made under section 43 'of the , and a person against whom an order for 534 recovery of possession has been passed under section 43 of the , is not therefore entitled to claim relief under the provisions of section 18 (1) of Act XVII of 1950. Rai Bahadur Atulya Dhan Banerjee vs Sudhangsu Bhusan Dutta ([1951] 5 , Dhanesh Prokash Pal vs Lalit Mohan Ghosh ([1951] , Mohan Lal Khettry vs Chuni Lal Khettry ([1951] Jethmull Sethia vs Aloke Ganguly ([19511 , Iswari Prosad Goenka vs N. B. Sen ([19511 overruled. In construing a statute it is not competent to any court to proceed upon the assumption that the Legislature has made a mistake and even if there is some defect in the phraseology used by the Legislature, the Court cannot aid the defective phrasing of an Act or add and amend, or by construction, make up deficiencies which are left in the Act. Commissioner for Special Purposes of Income Tax vs Pemsel (11891] A.C. 531); Crawford vs Spooner ([1846 51] 4 M.I.A. 179) and Hansraj Gupta vs Official Liquidator of Dehra Dun Mussourie Electric Tramway Co. Ltd. ([1933] 60 I.A. 13) referred to.

The appellant took a lease of shop premises from the respondent. From the time of letting, a chemist 's business was carried on in the shop by S with the occasional help of the appellant. S and the appellant were living as husband and wife to the knowledge of the respondent. The respondent applied under section 14 of the Delhi Rent Control Act, 1958, for eviction of the appellant on the ground that she had sublet the premises toS. The Rent Controller and the Tribunal on appeal held that the appellant and section were living together as husband and wife, and that therefore there wasno question of any subletting by the appellant. In second appeal, holding that two substantial questions of law were involved namely, one relatingto the status of the appellant as the wife of S, and the other, whether sub lettingwas established, the High Court concluded that there was subletting in favour oOf section Allowing the appeal to this Court, HELD : (1) Under section 39 (2) of the Act the High. Court could interfere in second appeal only if there was a substantial question of law. On the question whether the appellant was legally married no finding was necessary in the eviction suit. It was sufficient for the rent court to proceed on the finding that the appellant and S were living together as husband and wife, whether they were legally married or not. [528C D, E F] (2)The question whether there was subletting is not a mixed question of law and fact. In a mixed question of law and fact the ultimate conclusion has to be drawn by applying principles of law to basic findings, but in the determination of a question of fact no application of any principle of law is required in finding either the basic facts or in arriving at the ultimate conclusion. The question to be determined in the circumstances of this case was whether it was likely that the appellant had sublet the premises to section The negative answer given by the rent court is merely the factual common sense inference which did not call for the application of any principle of law. [528F G; 529A B] Meenakshi Mills, Madurai vs The Commissioner of Income tax, Madras, ; , followed. (3)When eviction is sought on the ground of subletting the onus of proving subletting is on the landlord. If the landlord prima facie shows that the occupant was in the exclusive possession of the premises let out for valuable consideration, it would then be for the tenant to rebut the evidence. But in the present case the respondent produced no evidence to show subletting in spite of the appellant 's denial in the written statement. [527C D] Associated Hotels of India Ltd. Delhi vs section B. Sardar Ranjit Singh, ; , followed. (4)Under section 14 (4) premises could be deemed to have been sub let by the tenant only when the Controller is satisfied that some person is let into possession ostensibly as a partner in business but really for the purposes of subletting. This provision has no application to the facts and circumstances of the present case. [526G H]

The deceased husband of the respondent leased out the entire portion of his house, except a big hall, to tenant in Chandigarh. He was then putting up in a Government quarter. After his death, his widow the respondent, leased out the hall to the appellant on April 1, 1981 for a period of 11 months on a monthly rent of Rs.650. The Government quarter which had been allotted to her husband was transferred to the name of her eldest son. The respondent filed two applications, more or less concurrently, in February 1982 against tenants of both the portions of the house seeking their eviction oh grounds that they had changed the user of the premises to non residential purposes, and that she bona fide required the premises for her own use and occupation. The Rent Controller and the Appellate Authority held that the first tenant had changed the user of the premises and ordered his eviction. Insofar as the appellant was concerned, both the authorities found against the respondent on both the grounds and dismissed the action for eviction. The High Court dismissed the revision preferred by the first tenant, but allowed the one filed by the respondent and ordered the eviction of the second tenant too. The first tenant abided by the order of eviction and surrendered possession to the respondent. The second tenant, however, appealed by special leave to this 553 Court. It was contended that when the Rent Controller and the Appellate Authority have rendered concurrent findings of the fact, the High Court was not entitled to disregard those findings, and come to a different conclusion of its own, that the respondent could not seek recovery of possessing of the hail by means of an application under section 13(3)(a) (i)(a) of the East Punjab Rent Restriction Act, 1949 for residen tial use because even of the hail had been let out for residential and nonresidential purposes, the premises would constitute a non residential building as per the amended definition under the East Punjab Rent Restriction (Chandi garh Amendment) Act, 1982, that he was entitled to raise these questions though they had not been raised earlier because they were questions of law, that as per the second proviso to section 13(3)(a) of the Act the respondent was not entitled to apply once over again for eviction of a tenant on the ground of bona fide requirement after having obtained an earlier order on the same ground. Dismissing the appeal, HELD: 1.1 The findings of the Rent Controller and the Appellate Authority are vitiated by inherent defects. The High Court was, therefore, justified in taking the view that those findings have no binding force on the revisional court. [565E] 1.2 The rule that when the courts of fact render concur rent findings of fact, the High Court would not be entitled to disregard those findings and come to a different conclu sion of its own, would apply where the findings have been rendered with reference to facts. In the instant case, both the statutory authorities have based their findings on conjectures and surmises and lost sight of relevant pieces of evidence which have not been controverted. When the evidence of the respondent and her son, which has not been challenged, was that the Government quarter consisted of only one bed room, one store, one kitchen and one small dining room and nothing more, it has been construed by the authorities as comprising of three bed rooms and held that as there was enough accommodation for the entire family she was not likely to vacate it. When the respondent wanted the entire house to be vacated by the two tenants so that she and her family members could occupy the whole house, the authorities have proceeded on the basis that the respondent was seeking recovery of possession of one hail alone for her residential needs and held that the entire family could not manage to live in a single hail. They have failed to take note that the respondent had con temporaneously initiated proceedings against the 554 other tenant also for recovery of possession of the remain ing portion of the house leased to him. Those proceedings were also before the very same Rent Controller and the Appellate Authority and they themselves had ordered the eviction of the other tenant. The respondent had clearly stated in her evidence that she required the property for her own use and for her children and that she had filed the ejectment petition against the other tenant also. That evidence was not and indeed could not be challenged. When the respondent had not demanded increase of rent, even as per the admission of the appellant, the authorities have proceeded on the basis that the respondent was not likely to forego the income derived by way of rent for the hall. They have failed to give due consideration to the respondent 's statement that her daughter and sons were all fully grown up and she wanted to perform their marriages and as such she was very much in need of the entire house, including the hall, for her occupation. All these findings have been rendered on either non existent or fictitious material. They cannot, therefore, be construed as findings of fact and once they cease to be findings of fact, they stand denuded of their binding force on the appellate or revisional court. [558H; 559A H] Hiralal Vallabhrara vs Sheth Kasturbhai Lalbhai and others, AIR 1967 S.C. 1653, referred to. 2.1 The finding rendered by the Rent Controller and the Appellate Authority about the purpose for which the hall was let out were vitiated by several errors of fact and law. The appellant, therefore, was not entitled to rely on those findings and dispute the respondent 's right to seek his eviction under section 13(3)(a)(i)(a) of the Act. [563C] 2.2 The pleadings of the parties form the foundation of their case and it is not open to them to give up the case set out in the pleadings and propound a new and different case. [560H] In the instant case, the tenant had averred in his written statement that the hall was taken by him for the purpose of his residence and for running his clinic but when he entered the witness box he propounded a different case that the hall had been taken on lease only for non residen tial purposes. The statutory authorities failed to notice the perceptible manner in which the appellant had shifted his defence. [560G] 2.3 Yet another factor which vitiates the findings of the statutory authorities is that both of them have over looked section 11 of the Act and the sustainability of any lease transaction entered in contravention of that 555 provision which interdicts conversion of residential build ings into nonresidential ones without the written consent of the Rent Controller. [561C D] In the instant case the parties had not obtained the consent in writing of the Rent Controller for converting the hall in a residential building into a clinic. Such being the case the appellant cannot get over the embargo placed by section 11 by pleading that the respondent was well aware of his running a clinic in the hall and that she had not raised objection at any time to the running of the clinic. [561D E] Kamal Arora vs Amar Singh & Ors., [1985] SCC (Supplemen tary) 481, referred to. Dr. Gopal Dass Verma vs Dr. S.K. Bhardwaj & Anr., [1962] 2 SCR page 678, distinguished. Having taken a categoric stand during the enquiry that he had taken the hail on rent only for running his clinic and not for his residential needs as well, the appel lant cannot reprobate and contend that the lease of the hall was of a composite nature, to seek the benefit of the en larged definition of a 'non residential building ' given in the Amendment Act. A pure question of law can be raised for the first time before the High Court or the Supreme Court even though the question had not been raised before the trial court or the appellate court. But in the instant case, the conten tions advanced by the counsel on the nature of user of the hail pertain to mixed questions of fact and law. Moreover these contentions run counter to the legislative direction contained in section 11 of the Act prohibiting conversion of a residential building into a non residential one without the written consent of the Rent Controller. These contentions cannot, therefore be said to be pure questions of law. Management of the State of Bank of Hyderabad vs Vasudev Anant Bhide and others; , , referred to. The eviction proceedings were initiated by the re spondent against both the tenants concurrently and not after an interval of time. As such, merely because the respondent succeeded in one of the petitions and failed in the other it cannot be said that the continuation of the proceedings in that case in appeal or revision would amount to applying once over again under the Act to seek eviction of a tenant on the ground of bona fide requirement.

The respondent inherited tenancy of the demised premises alongwith his mother, brothers and sisters from their fa ther. A notice under section 106 of the terminating the tenancy was served on him. It was followed by a suit for ejectment against him. Upholding the validity of the said notice, the trial court took the view that the heirs of the original tenant held the tenancy as joint tenants and, therefore, notice to one of the defendants was sufficient to determine the tenan cy. Allowing the appeal therefrom, the 'High Court took the view that as heirs of the deceased tenant they held the tenancy as tenants incommon and not as joint tenants. There fore, the notice to quit should have been served on each one of the successor tenants. Allowing the appeal by special leave, the Court, HELD: The notice under section 106 of the Transfer of Proper ty Act served by the appellant on the respondent was a valid notice. [771E] On the death of the original tenant, subject to any provi sion to the contrary either negativing or limiting the succession, the tenancy rights devolve on the heirs of the deceased tenant. The incidence of the tenancy are the same as those enjoyed by the original tenant. It is a single tenancy which devolves on the heirs. There is no division of the premises or of the rent payable therefor. The heirs thus succeed to the tenancy as joint tenants. [771C] In the instant case, the respondent acted on behalf of the tenants, he paid rent on behalf of all and accepted notice also on behalf of all. In the circumstances, the notice served on the respondent was sufficient. The suit must, therefore, succeed. [771D] 770 Shrimati Vishnawati vs Bhagwat. Vithu Chowdhry, , affirmed. Ramesh Chand Bose vs Gopeshwar Prasad Sharma, AIR 1977 Allahabad 38, overruled.

The respondent landlord had filed a petition against the appellant tenant under section 14(1)(a) and 14(1)(b) of the Delhi Rent Control Act, 1958 for eviction from a residential cum commercial premises, inter alia, on the ground that the appellant had sublet, assigned or otherwise parted with possession of the premises to his sons who were running their partnership business in the name of Bindra Tent House with which the tenant had no concern. The tenant contested the petition on the ground that he was in exclusive possession of the premises and was carrying on his business therein with the help of his sons who were members of his Joint Hindu Family. In support of his plea that the tenant had parted with possession, the landlord had produced documentary evidence which included copy of a statement made by the tenant before the Income Tax officer, which indicated that the tenant had sold his proprietary business to his sons. The Additional Rent Controller held that there was no subletting by the tenant, but he had unlawfully parted with the possession of the premises in favour of his sons and as such was liable to be evicted. During the pendency of the appeal the tenant sought permission under order 6 Rule 17 of the Code of Civil Procedure to amend his written statement to state that the property was taken on rent by M/s Bindra Tent House. The Tribunal did not permit this belated amendment as this would have introduced an entirely new case. On merits, the Tribunal dismissed the appeal of the tenant. The High Court did not find any substantial question of law in the tenant 's second appeal and dismissed the same. Allowing the appeal, it was, 326 ^ HELD: (1) The only ground perhaps upon which the landlord A was seeking eviction was parting with possession. It is well settled that parting with possession meant giving possession to persons other than those to whom possession had been given by the lease and the parting with possession must have been by the tenant. User by other person is not parting with possession so long as the tenant retains the legal possession himself, or in other words, there must be vesting of possession by the tenant in another person by divesting himself not only of physical possession but also of the right of possession. So long as the tenant retains the right to possession there is no parting with possession in terms of clause (b) of section 14(1) of the Act. [329G H; 330A] (2) Even though the father had retired from business and the sons had been looking after the business in the facts of this case, it cannot be said that the father had divested himself of the legal right to be in possession. [330B] (3) In the instant case, if the father was carrying on the business with his sons and the family was a joint family, it is difficult to presume that the father had parted with possession legally to attract the mischief of section 14(1)(b) of the Act. [330D E] (4) In these days of acute shortage of accommodation both for living and for vocation, one has to take the reality with a pinch of salt and the manner in which the original tenant has conducted himself in shifting his defence would not disentitle him to the benefit of the law. [330Gl Subashini Mojumdar vs Krishna Prasad Mahatoo, A.I.R. ; M/s Modi Spinning and Weaving Mills Co. Ltd. vs M/s Ladha Ram and Co., ; and Smt. Krishnawati vs Shri Hans Rai, , referred to.

The Appellant was ordered to be evicted under section 14(1)(e) of the Delhi Rent Control Act, 1958 on the ground of bona fide requirement of the landlord. Dismissing the Appeal, to this Court, HELD: 1. Sections 14A, 14(e), 25A, 25B and 25C of the Delhi Rent Control Act, 1958, are special provisions so far as the landlord and tenant are concerned and further in view of the non obstante clause in the section these provisions over ride the existing law so far as the new procedure is concerned. Therefore, the Slum Areas (Improvement and Clear ance) Act, 1956, would have no application in cases covered by sections 14A and 14(1)(e) of the Rent Act especially in view of the provisions which were added by the Amending Act of 1976. [690D F] 2. There is no difference either on principle or in law between section 14(1)(e) and 14A of the Rent Act even though these two provisions relate to eviction of tenants under different situations. [690F] 3. In view of the procedure in Chapter III A of the Rent Act, the Slum Act is rendered inapplicable to the extent of inconsistency and it is not necessary for the landlord to obtain permission of the Competent Authority under section 19(1)(a) of the Slum Act before instituting a suit for eviction and coming within section 14(1)(e) or 14A of the Rent Act. [690G H]

The Calcutta Thika Tenancy Act, 1949, came into force before the appellant landlords could obtain possession in execution of their decree for ejectment against the respondent tenants. Failing to get the decree set aside under 0. 9, r. 13 of the Code of Civil Procedure the tenants made an application under section 28 of the said Act praying that the decree against them be set aside on the ground that they were Thika tenants, but the Munsif holding that they were not Thika tenants dismissed their application. While an application by the tenants under section 115 of the Code of Civil Procedure against the Munsif 's order was pending in the High Court the Calcutta Thika Tenancy Ordinance, 1952, and the Calcutta Thika Tenancy (Amendment) Act, 1953, came into force. The 1053 Amendment Act omitted section 28 of the Original Act. The High Court after considering the effect of section 1(2) of the Amendment Act held that it did not affect the operation of section 28 of the Original Act which was applicable to these proceedings. The High Court also found that the tenants were Thika Tenants 591 and remanded the case to the Munsif for disposal according to law whereupon the Munsif rescinded the decree. On an application by the landlord under section 115 of the Code of Civil Procedure against the order of the Munsif rescinding the decree the High Court held that the question of applicability of section 28 was res judicata between the parties and could not be raised again before the High Court and dismissed the landlord 's application. On appeal by the landlord by special leave the respondent contended that the appellant was barred by the principle of res judicata from raising before this Court the question whether on the enact ment of the Thika Tenancy Amendment Act, 1953, section 28 of the Original Act survives or not in respect of proceedings pending on the date of the commencement of the Thika Tenancy Ordinance, 1952 : Held, that the appellants were not precluded from raising before this Court the question that section 28 of the Original Thika Tenancy Act was not available to the tenants after the Thika Tenancy Amendment Act came into force merely because they had not appealed from the High Court 's order of remand. An interlocutory order which did not terminate the proceedings and which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken, could be challenged in an appeal from the final decree or order. Maharaja Mohesur Singh vs The Bengal Government, (1859) 7 M.I.A. 283; Forbes vs Amecroonissa Begum, (1865) 10 M.I.A. 340 and Sheonath vs Ramnath, (1865) 10 M.I.A. 413, followed. Ramkripal Shukul vs Mst. Rup Kuari, (1883) L.R. 11 I.A. 37, Bani Ram and Any. vs Nanhu Mal, (1884) L.R. 11 I.A. 181 and Hook vs Administrator General of Bengal and Oys., (1921) L.R. 48 I.A. 187, distinguished. Section 28 of the Calcutta Thika Tenancy Act, 1949, after its omission by the amending Act was not available in respect of proceedings pending on the date of the commencement of the Thika Tenancy Ordinance of 1952. Mahadeolal Kanodia vs The Administrator General of West Bengal, [196O] 3 S.C.R. 578 followed.

The respondent landlord filed a petition under section 10 of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960, for the eviction of the appellant tenant. There was a compromise. Since the tenant defaulted in payment of the rent thereafter, a registered notice terminating the tenancy issued by the landlord, came back with an endorsement that the appellant had refused to accept it. Later. the tenant was ordered to be evicted. 'The tenant 's appeal to the appellate court and then his revision application to the High Court were rejected. Relying upon an earlier Division Bench decision of that Court, the High Court held that the Act provided a self contained procedure for eviction of tenants, and therefore, compliance with the provisions of section 106, Transfer of Property Act was unnecessary. Dismissing the tenant 's appeal, ^ HELD: The High Court has correctly applied the principle laid down by a Division Bench of that court in Mohan & ors. vs section Mohan Rao & Ors. [1969] An. P.R. Law Journal 351. [553 E] Raval & Co. vs K. C. Ramacharndran & ors. [19741 2 SCR 629 @ 634 and Shri Hern Chand vs Shrimali Sham Devi. ILR 1955 Puni. 36, referred to. In Mangilal vs Sugan Chand Rathi [AIR 1955 SC 101] this Court was considering an entirely different kind of provision of another Act in another State, and this case is distinguishable. In the context of the remedy of ejectment by an ordinary civil suit it was held in that case that the usual notice of termination _ of tenancy under section 106. Transfer of Property Act was necesary. [553F & D] boiler [In cases where a party denies receipt of registered notice it is not always necessary to produce the postman who tried to effect service. Denial of service by a party may be found to be incorrect from its own admissions or conduct. The decision of the Bombay High Court in M. K. Patel vs Kundan Mal Chamanlal and that of the Calcutta High Court in Nirmal Bala Devi. vs Provar Kumar Basu are reconcilable. The Calcutta High Court applied a rebuttable presumption under section 114, Evidence Act, that the letter was received by the addressee in the ordinary course of blazons was refused by him because the presumption from the endorsement made upon it had not been repelled by any , evidence. In the Bombay case, the presumption had been held to have been `J rebutted by the evidence of the defendant on oath so that it meant that the plaintiff could not succeed without further evidence.] [554C E]

303 of 1960. Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. C. K. Daphtary, Solicitor General of India, N. Sharma, section C. Nath and R. Gopalakrisnan, 'for the Petitioner. M. C. Setalvad, Attorney General `for India and Naunit Lal, for the Respondents. September 29. The Judgment of Sinha C. J., section K. Das and Rajagopala Ayyangar was delivered by S.K. DAS. This writ petition by one Mannalal Jain was originally filed on October 17, 1960, and the order complained of was dated September 13, 1960. This was an order made by the Deputy Commissioner, Kamrup Gauhati, rejecting an application made by the petitioner for the grant of a license for the year 1960 for dealing 'in rice and paddy under the relevant provisions of the Assam Foodgrains (Licensing and Control) Order, 1960. This writ petition was put up for 939 hearing in this Court on February 2, 1961. The hearing was, however, adjourned sine die, because it was stated before us that the period of licence for 1960 had already expired and a fresh application would have to be made for a license for 1961. A fresh application was accordingly made by the petitioner on February 4, 1961. But before that date: a fresh Assam Foodgrains (Licensing, and Control) Order, 1961 was made by the Governor of Assam and the application made by the Petitioner had to be dealt with under the new Order. No order having been made on this fresh application by the Deputy Commissioner, the petitioner moved this Court by means of a petition (C.M.P. No. 850 of 1961) asking for certain reliefs, one of which was that the respondents, namely, the licensing authorities, should be directed to consider the application of the petitioner and grant him a license. On April II, 1961 an order was made rejecting the application of the petitioner. This order which is impugned before us was in these terms. Having regard to the existing licenses in these areas (Mangaldai and Gauhati), and the quantity of foodgrains available therein, any further license would be superfluous." When the petition was again put up for hearing on May 1, 1961 the petitioner asked for time to amend his original, petition, which related to the order refusing to grant him a license for 1960. This amendment became necessary by reason of the subsequent order passed on April 11, 1961, quoted earlier, by which the petitioner 's application for a license for 1961 was rejected. This amendment was allowed. Therefore, we have now to deal with the writ petition as amended by the petition dated May 5, 1961 (C.M.P. No. 1140. of 1961). It is necessary now to state the relevant facts out of which the petition has arisen. The petitioner states that he is an Indian citizen carrying on a business dealing in rice and paddy in the district of 940 Kamrup in the State of Assam. In 1955 was enacted the (Act 10 of 1955). In exercise of the powers conferred by section 3 of the said Act, read with a notification by which the said powers were delegated by the Central Government to the Government of Assam, the latter Government made an Order called the Assam Foodgrains (Licensing and Control) Order. The result of this was that no dealing in rice and paddy in wholesale quantities was permissible unless the petitioner obtained a, license from the relevant licensing authority. The petitioner states that he obtained such a license in 1958. This license expired on December 31, 1958. The case of the petitioner is that in 1959 also he carried on his business though there is some dispute as to whether he obtained a license for that year. On November 26, 1959, the petitioner received a letter from the office of the Deputy Director of Supply, Gauhati, which said that his license would not be renewed after December 31, 1959. This communication, it is stated, was the result of a decision taken by the Government of Assam on the advice of a body called the Food Advisory Council to give a right of monopoly procurement of paddy to a cooperative society in the district of Kamrup known as the Assam Co. operative Apex Marketing Society Ltd. (respondent No. 6 before us). In a letter dated November 13, 1959, the Director of Sup ply, Assam, indicated the policy to be followed to give effect to the decision aforesaid in these terms "The right of monopoly procurement in respect of Kamrup district including Mangaldai Sub division, Taxpur Sub division, Cachar district, Nowgong district including United Mikir and North Cachar Hills and North Lakhimpur Sub division has been given to the Co operative Apex Marketing Society. The Society will procure paddy from the 'growers through various service Co operative Societies spread over the district or sub division. They 941 will procure all available surplus paddy and deliver to Supply Department the quantity required for the buffer stock for those areas. Any paddy procured by them which is not required by us may be delivered to the mills. " A copy of the letter was forwarded to all licensing authorities. on January 5, 1960, the Assam Foodgrains (Licensing and Control) Order, 1960, came into force. This replaced the earlier Order of 1958. Clause 5 of the 1960 Order was in these terms: 5. Maiters to be taken into consideration for granting a license. In granting or refusing a license under this Order, the licensing authority shall among other matters have regard to the following, namely: (a) the stock of foodgrains available in the locality for which the license is required; (b) the number of persons who have applied for and/or been granted licenser, in respect of the foodgrains under this Order in the locality (c) the business ordinarily carried on by the applicant; and (d) the past activities of the applicant as a licensee or business man/firm: Provided that the State Government may from time to time modify the conditions for granting a license. " On January 28, 1960 the petitioner made his application for a license for the year 1960. This application was rejected by an order dated February 17, 1960. The reason given for the rejection was in these terms: "You are hereby informed that as ;the Co operative Apex Marketing Society has been given the right of monopoly purchase in the Kamrup district this year, your case. cannot be considered for issue of the license. 942 This reason was obviously based on the decision as to monopoly procurement, which the Government of Assam had adopted. Against this order the petitioner moved the High Court of Assam by means of a writ petition under article 226, of the Constitution. The High Court allowed the petition mainly on the; ground that the application, of the petitioner for a license for, the year 1960 was not considered on merits by the licensing authority in accordance with the provisions of el. 5 of the Assam Foodgrains (Licensing and Control) Order, 1960. The High Court did not go into the larger question whether the State could or could not create a monopoly in the matter of procurement of paddy under the said provisions by means of executive instructions issued to the licensing authorities. It however, quashed, the order dated February 17, 1960 and issued a writ of mandamus directing the licensing authority to consider the application of the petitioner on merits and in accordance with the provisions of the aforesaid Control Order. Till June 7, 1960 no order was passed by the licensing authority, and on that date the petitioner made two applications to the High Court, one for directing the licensing authority to grant,, him & license for 1960 and the other for taking action, for contempt of court. A notice of these applications, it is stated, was served on the respondents. On June 8, 1960 the licensing authority made another order refusing to grant a license to the petitioner. This order stated that "as the Assam Co operative Apex Marketing Society Ltd., had already been granted a license to deal in rice and paddy., with its branches spread all over the district, it was considered unnecessary to grant further dealing licenses to individual dealers for the same area". On June 9, 1960 the applications earlier made by the petitioner to the High Court on June 7, 1960 were withdrawn and a fresh application was made on June 15, 1960, which, was directed against the order dated June 8, 1960. On 943 August 10, 1960 the High Court again set aside the order and directed the licensing authority to act independently of instructions received from the Government and, to apply its mind to the merits of the application and, decide it in accordance with the relevant provisions of the Assam Foodgrains (Licensing and Control) Order, 1960. Again, no orders were made by the licensing authority till September 8, 1960 in accordance with the directions of the High Court, and the petitioner made two applications on that date: one for enforcing the direction of the High Court, and the other for initiating proceedings in contempt. These applications were admitted and it is stated that notices were served on the respondents, including the licensing authority, on that very date. On September 13, 1960 the licensing authority made another order, again rejecting the application of the petitioner. This order stated inter alia: "For the areas for which the application have been made the Assam Co operative Apex Marketing Society Ltd., has earlier. applied for and has been granted license. This is as relevant consideration under Clause 5 (b) of the Assam Foodgrains (Licensing and Control Order, 1960. The stock of foodgrains avail able in the area can easily be procured by the party already given license. Being a on operative, it has better facility in this respect. As such, I do not find it necessary to grant license to the applicant. The petition is, therefore, rejected". This time instead of going to the High Court of Assam, the petitioner came here and filed his writ petition on October 17, 1960 (Writ Petition No. 303 of 1960). Thereafter, certain proceeding ,took place in this Court to which we have earlier referred in the first paragraph of this judgment The amended writ petition as it now stands is directed against the order of the licensing authority dated April 11, 1961, by which it rejected the 944 application of the petitioner for a license for 1961. The provisions of the Assam Foodgrains (Licensing and Control) Order 1960 are no longer relevant, because a fresh Order called the Assam Foodgrains (Licensing and Control) Order, 19,61, was made by the Governor of Assam. We shall, hereinafter call this the Control Order, 1961. It is necessary 'to read here cl. 5 of the Control Order, 1961. Matters to be taken into consideration for granting a license. In granting or refusing a license under this Order, the licensing authority shall, among. other matters, have regard to the following, namely: (a) the stock of foodgrains available in the locality for which the license is required; (b) the number of persons who have applied for and those who have been granted licenses in respect of the foodgrains under this Order in the locality; (c) the business ordinarily carried on by the applicant; (d) the past activities of the applicant as a licensee or business man/firm; and (e) whether the applicant is a cooperative society. It should be noticed that the proviso to old el. 5 was omitted and a new sub cl. (e) was added. This sub clause enables the licensing authority, in granting or refusing a license, to have regard to the consideration whether the applicant is a co operative society. To complete the statement of facts, it may perhaps be observed that on November 10, 1960, the High Court rejected the application for proceeding against the opposite, parties by way of contempt, mainly on the ground. that the order made on September 13, 1960, was not before it. On behalf of the petitioner the order dated April 11, 1961, has been impugned on two main 945 grounds. The first ground of attack is that sub cl.(e) of cl.5 of the control Order, 1961 is ultra vires,because it goes beyond the powers granted to the State Government under section 3 read with section 5 of the '. The second ground of attack is that 'even if sub cl. (e) of cl. 5 of the Control Order. 1961, is intra vires being within the powers granted to the State Government, it merely allows the licensing authority to take into consideration, among, other relevant matters, the circumstance that the applicant for a licence is a co operative society; it does not say that a monopoly right of procurement Should be given in favour of a co operative society by excluding all. Others; therefore, it was not open to the, licensing authority to proceed on the footing as if that subclause bad created a right of monopoly in favour of co operatives. The argument. is that in the present case, the licensing authority instead of applying its mind to the provisions of cl. 5 of the Control Order, 1961, went by the instructions issued by the State Government to grant a. right of ,monopoly to cooperative societies and based its order on such, instructions. , in spite ' of directions to the contrary given by the High Court on earlier applications made by the petitioner. In other words, it is contended that the impugned order was a mere" colourable exercise of power in the sense that instead of exercising the powers in accordance with the provisions of law by which the licensing authority had to be guided, it acted in, accordance with the instructions of the State Government and granted 'a monopoly in favour of co operative, societies, such monopoly not being contemplated by the provisions of cl. 5 of the Control Order, 1961; therefore., the impugned order was bad being without any legal authority or jurisdiction, and as it took away the right of the petitioner to carry on his trade, and furthermore made a discrimination against him for the purpose of granting a monopoly to respondent No. 6 not contemplated by law, it violated the 946 petitioner 's rights under articles 14 and 19 of the Constitution. He is accordingly entitled. to come. to this Court under article 32 of the Constitution to have the order quashed. The petitioner has also claimed that for the same reasons, the grant of a license in favour of respondent No. 6 should also be quashed. On behalf of the respondents, the State of Assam, its officers, and the Assam Co operative Apex Marketing Society Ltd. (respondent No. 6), it has been urged that neither of the aforesaid two grounds of attack is valid. On their behalf the argument is that sub cl. (e) of cl, 5 of the Control Order, 1961, is within the authority and power granted to the State Government under section 3 read with a. 5 of the . Secondly, it is contended that no monopoly has been granted to the Assam Co operative Apex Marketing Society Ltd., and the order of the licensing authority dated April 11, 1961 is based on the considerations referred to in sub cls. (a) and (b) of el. 5 of the Control Order, 1961, and cannot be assailed on a petition under article 32 of the Constitution. We proceed now to a consideration of the grounds of attack and the replies thereto. As to the first ground of attack it must be made clear at the very outset that the vires of the have not been challenged before us. What has been contended before us is that s.3 of the Act gives, certain powers to the Central Government, which powers the Central Government has delegated the State Government of Assam. These powers it is contended, do not authorise the insertion of sub cl. (e) of cl. 5 of the Control Order, 1961; in other words the argument is that whether the applicant for a licence is a, co operative Society or not has no relevance whatsoever to the objects fur which section 3 grants the powers to the Central Government or its delegate to make certain Orders. Sub section (1) of a. 3 is relevant to this argument and reads: 947 "3 (1) If the Central Government is of *onion that it is necessary or expedient an to do for maintaining or increasing supplies of my essential commodity or for securing their equitable distribution and availability at fair prices it may by, order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. " Sub section (2) of section 3 which we need not read enumerates the various categories of Orders which can be made in exercise of the powers conferred by sub s.(1), but without prejudice to the generality of those powers. Now, the argument before us is that the, powers under a. 3 can be exercised when the Central Government or its delegate is of opinion that it it; necessary or expedient to exercise the powers to achieve two objects: (a) for maintaining or increasing supplies of any essential commodity, or (b) for securing their equitable distribution and availability at fair prices. It is contended that the circumstance whether the applicant for a licence is a co operative society or not has no connection what so ever with the aforesaid two objects and therefore, sub cl. (e) of cl.5 of the Control Order, 1961 is not within the powers granted by a. 3 of the Act. We cannot accept this argument in the very broad terms in which it has been stated. We are astisfied that cl. 5 of the Control Order, 1961 does not provide for a monopoly in favour of cooperative societies. The clause enumerates five matters and states that the licensing authority shall have regard to those matters in granting or refusing a license. The five matters enumerated in the clause are not exhaustive of the matters which the licensing authority may consider; because the clause says that the matters enumerated therein are five ""among other matters" which the licensing authority may consider. Obviously enough it is open to Ye licensing authority to 948 consider all matters relevant to, the 'grant or refusal of a license and the; five matters enumerated in the clause merely highlight some of those matters. All that can be said is that sub cl. (e) enables the licensing authority to,; prefer a co operative society in certain circumstances in the matter of granting a license; in other words, there may be cases or localities : where the considerations set out in sub cl. (e) may override other considerations, in the matter of granting a license. We do not think that sub cl. (e) has any more far reaching effect. Indeed the: learned Attorney General appearing for : the respondents conceded that sub cl. (e) of cl. 45 did not have the effect of creating a monopoly in favour of co operative societies. Proceeding, therefore, on the footing that sub cl. (e) of el. 5 does not provide for the creation of a monopoly, can it be said that it is out. ,side the powers conferred. on the State Government by section 3 of ' the ? It is no disputed before us that sub cls.(a) (a) to (d)fall within the powers conferred by section 3. Matters such as the stock of foodgrains, available in the locality for which the license is required, the number, Of persons who have applied for and those who have been granted licenses in the locality, the business ordinarily carried on by the applicant, and the 'Past activities of the applicant as a licensee or businessman, are undoubtedly matter& which have; relation to the two objects mentioned in section 3. Can it be. said that the fifth matter mentioned in sub cl. (e) viz., whether the applicant is a co operative society is completely ' unrelated to those two, objects? We are unable to say that it is. In the counter affidavit filed on. behalf of the respondents it has; been stated that cooperative societies have better facilities for procuring foodgrains and are in a position to ensure scheduled prices to the farmers who, grow paddy. It has been further stated that amongst the cooperative societies, axe primary, societies which 949 consist of the growers of paddy there are also cooperative societies called supply co operatives which are in a position to eliminate middle man 's profits. In para. 4 it was stated that the National Development Council decided that the State should take over wholesale trade in foodgrains with a view to maintaining price levels which are fair to the producer and the consumer and reduce, to the minimum the disparity between the prices received by the farmer and the prices paid by the consumer throughout the year. It was also decided that an adequate number of primary marketing societies should be set up and linked with village cooperatives which should serve as agencies for collection and sale of foodgrains at assured price,% at the village level. The affidavit then stated In view of the decision of the National Development, Council, the Government of Assam in consultation with their State Food Advisory Council decided that in making procurement of rice and paddy in the State, preference should be given to the co operative societies wherever they have resources and facilities. We are of the view that by reason of the position which co operative societies may occupy in the village economy of a particular area,, it cannot be laid down as a general proposition that sub cl.(e) of cl 5 of of the Control Order, 1961, is unrelated to the objects mentioned in section 3 of the . There may be places or areas where co operative societies are in a better position for maintaining or increasing supplies of rice and., paddy and even, for securing their equitable distribution and availability at fair prices. We must, therefore repel the very broadly stated contention of the learned counsel for the petitioner that sub cl. (e) of cl. 5 of the Control Order, 1961, can have no relation whatsoever to the two objects mentioned in section 3 of the . On behalf of them petitioner reliance 950 was placed on the decision in Ramanlal Nagardas vs M. section Palnitkar (1). That was a case in which the validity of State action in entrusting wholesale distribution of sugar which is an essential commodity under the Essential Com modities Act, 1955, to Co operative Societies only and excluding other dealers holding similar licenses like the co operative 'societies from such distribution, was challenged and adore for consideration. It was held that a State could make a classification for the purpose of@ achieving particular legislative objects but the classification must satisfy two conditions : (1) it must be founded on intelligible differentia, and (2) the differentia must have a rational relation to the objects sought to be achieved. The question was considered from the point of view of article 14 of the Constitution and it was held that the action of the State Government in entrusting wholesale distribution of sugar to cooperative societies to the exclusion of other licence holders amounted to a discrimination which violated the right guaranteed under article 14. The principles underlying article 14 of the Constitu tion are now well settled and have been enunciated and explained in a number of decisions of this Court and we consider it unnecessary to refer to those principles in detail. In the case under our consideration no discrimination has been made between one class of license holders and another class of license holders as in the case of Ramanlal Nagardas V. M. section Palnitkar (1). What has happened in the present ' case is that licenses have been granted only to cooperative societies and a license has been denied to the petitioner, the licensing authority proceeding on the footing that a monopoly must be created in favour of co operative societies. A discrimination has indeed taken place 'as against the petitioner, a discrimination which is not justified by the 'Provisions of cl. 5 of the Control Order, 1961. In dealing with the application of the petitioner the licensing authority (1) A. I. R. 1961 Guj. 38. 951 has made, a, discrimination which is met justified by 5. That would take us to the second argument of the learned counsel for the petitioner, but on his first argument the decision in Ramanlal Nagardas vs M. section Palnitkar (1) is of no assistance. Sub clause (e) of el. 5, we have already stated, enables the licensing authority to give preference to a co operative society in certain circumstances; but it does not create a monopoly in favour ;of co operative societies. The preference given has a reasonable relation to the objects of the legislation set out in section 3 of the Act; therefore, sub cl. (e) of cl. 5 of the Control Order, 1961, cannot be held to be bad on the ground of class legislation but the passing of an order under the sub clause for a purpose not contemplated by it will amount to discrimination and denial of the guarantee of equal protection of the law. This brings us to the second argument urged on behalf of the petitioner and here we think that the learned counsel for the petitioner is on much surer ground. It was open to the licensing authority to give preference to co operative societies, if it was of the opinion that granting a license to a co operative society in a particular locality would facilitate the objects of section 3 of the Act. This is not what the licensing authority did. He repeatedly refused a license to the petitioner, for the only reason and purpose of granting a monopoly to co operative societies. In other words, the discrimination that has been made by the licensing authority is really in the administration of the law. It has been administered in a discriminatory, manner and for the purpose of achieving an ulterior object, namely, the creation of a monopoly in favour of co operatives, an object which, clearly enough, is not within sub cl. (e) of el. 5 of the Control Order, 1961. We have quoted earlier the various orders which the, licensing authority had passed. Those orders clearly show that the licensing authority refused a licence to the (1) A.I.R. 1961 Guj. 952 petitioner not on grounds referred to in sub cls.(a) and (b) of cl. 5 but on the ground ' that the State Government had decided to introduce a right of monopoly procurement of paddy in favour of co operative societies and therefore, no licenses should be granted to individual dealers other than cooperative societies. Judged against the background of facts to 'which we have earlier referred in this Judgment, the impugned order dated April 11, 1961 appears to us to have been based on the same ground, namely, the creation of a monopoly in favour of co operatives, even though the order refers to existing licenses and the quantity of foodgrains available in the locality. In the course of the hearing before us, the case was adjourned in order to give the parties an opportunity of filing necessary affidavits to show whether individual dealers other than co operatives have been completely excluded in the whole of the State in the matter of dealing in paddy. The affidavits show that private dealers have been completely excluded. In the affidavit filed on behalf of respondent No. 1, it has been stated in para. 4: "It is not denied that in the year 1961 licenses for the procurement of paddy have been issued to the co operatives in all the paddy producing districts in Assam." To show however that no monopoly hag been created in favour of a particular co operative society like respondent No. 6, it has been stated that a number of co operative societies have been or are being granted licenses for the procurement of paddy. ' In our view these statements in the affidavits filed on behalf of the respondents show only one and one object viz., creation of a monopoly in favour of cooperatives. To achieve that object the State Government has resorted to an indirect method. Instead of making an Order authorising such monopoly (if the State was 953 competent to make such an Order under the , as to which we express no opinion), it has chosen to adopt the indirect method of issuing instructions to the licensing authorities in all the districts to grant licenses to co operatives only. The vice of the impugned order lies in the licensing authority accepting such instructions and passing an order in accordance there with. The duty of the licensing authority was to pass orders in accordance with el. 5 of the Control Order, 1961. Instead of doing that. it passed an order in accordance with the instructions given to it on behalf of the State Government, instructions which appear to us to be not in consonance with sub cl.(e) of el. 5; because sub cl. (e) contemplates a preference to co operative societies in certain circumstances, but not a monopoly in their favour. We accordingly hold that the impugned order is bad as violating the rights of the petitioner guaranteed under articles 14 and 19 of the Constitution. We must, therefore, quash the order of the licensing authority dated April 11, 1961. We must also quash the order by which the licensing authority granted a licence in favour of respondent No. 6. The licensing authority must now consider the application of the petitioner for a license for the year 1961 on merits along with the application , of respondent No. 6 and such other applications as may be still pending. In dealing with these applications the licensing authority must have regard to the provisions of cl. 5 of the Control Order, 1961, and such other provisions of law as have a bearing on them, in the light of the observations made in this judgment. it would be the duty of the licensing authority to ignore all instructions which are not in consonance with the provisions of law by which it is to be guided As the year 1961 will come to an end within a few months. , the applications should be dealt with as expeditiously as possible so that the right of the petitioner may 954 not be rendered infructuous by reason of the delay made in disposing of the applications. Before we part with this case we express our deep concern over the manner in which the State Government or its officers have issued instructions in the matter of granting ' of licenses, instructions which clearly ' enough are not in consonance with the provisions of law governing the grant of such licenses. We doubt the wisdom of issuing executive instructions in matters which are governed provisions of law; even if it be considered necessary to issue instructions in such a matter,, the instructions cannot be so 'framed or utilised as to override the provisions of law. Such a method 'Will destroy the very basis of the rule of law and strike at the very root of orderly administration of law. We have thought it necessary to refer to this matter because we feel that the instructions which the State Government or its officers have issued in the matter of granting of licenses for the procurement of paddy are not in consonance with the provisions of el. 5 of the Control Order 1961, In the result the petition is allowed with costs and the necessary orders should now issue as directed above. SARKAR J. The petitioner is a citizen of India and carries on business as dealer in rice and paddy in the State of Assam. Since 1958, dealing in rice and paddy was controlled in that State by Orders made by the State Government from time to time under the by virtue of powers delegated to it by the Central Government under section 5 of that Act. These Orders here.after called Licensing Orders,, provided that no person could engage in any purchase, sale or storage for sale of any foodgrains, which included rice and paddy in wholesale quantities except, under and in accordance with the terms and condition of a licence business involving issued thereunder. Purchase or, sale in wholesale quantities was defined 955 as purchase, or sale of quantities exceeding ten maunds in any one transaction. The petitioner had obtained a license to deal in paddy for the year 1958. It is not clear whether he had obtained a license to do so for 1959. With these years, however, this case is not concerned. On January 28, 1960, the petitioner had applied under the Licensing Order then in force for a license to deal in paddy in Kamrup district: of Assam for the year 1960. His application was refused by an order made on February 17, 1960 on the ground that it could not be considered as the Co operative Apex Marketing Society had been given the right of monopoly purchase in Kamrup district. The petitioner then moved the High Court of Assam under article 226 of the Constitution to quash this order. On April 27, 1960, the High Court delivered judgment quashing the order on the ground that the authority concerned was bound to ;consider the petitioner 's application for licence and had failed to do so. The High Court issued a writ of mandamus directing that the petitioner 's application be considered on its merits. As the licensing authority did not consider the petitioner 's application till June 7 1960, the latter on that date moved the High Court again for enforcement of the writ issued. On receipt of the notice this motion, the licensing authority passed an order on June 8, 1960 again refusing to grant the petitioner the licence. This order, stated, "Your petition is considered. As the Assam co operative Marketing Society has already been ' granted a licence to deal in rice and paddy with branches spread all over this district, it is considered unnecessary to grant further dealing licences to individual dealers for the same area. Hence the petition is rejected. " The petitioner thereupon dropped his motion to the High, Court of Assam of June 7, 1960 and moved the High Court afresh under article 226 against the order of June 8, 1960 refusing him the licence 956 and the High Court on August 8, 1960, quashed it on the ground that the licensing authority had to act in a quasi judicial capacity and that it bad decided the case on the instructions of the State Government without considering for itself the merits of the case in terms of the Licensing Order. The authority was again directed to decide the case in a quasijudicial capacity. The licensing authority not having taken up for decision the petitioner 's case for the grant of licence as directed by the High Court, he moved. the High Court on September 8, 1960 for appropriate reliefs. On receipt of the notice of this motion the licensing authority passed an order on September 13, 1960, again refusing to grant licence to the petitioner and certain other private dealers. The order stated, "For the areas for which the applications have been made the. Assam Co operative Apex Marketing Society has earlier applied for and has been granted licence. This is a relevant consideration under el. 5(b) of the Assam Foodgrains (Licensing and Control) Order, 1960. The stock of foodgrains available in the area can easily be procured by the party already given the licence. Being a Co operative Society it has better facility in this respect. As such I do not find it necessary to grant licence to these applicants. The petitions are therefore rejected". Thereupon the High Court on November 10, 1960, made an order on the petitioner 's aforesaid motion of September 8, 1960 discharging the rule as the order asked for had been made. It observed that the order of September 13, 1960 was not before it and it was competent to say whether that order was in consonance with its order of August 8, 1960. It also observed that it did not find sufficient reason to take any action against the licensing authority for the delay in the matter of the disposal of the application for licence. Before proceeding further I would like to point out that the Assam Foodgrains (Licensing and 957 Control) Order, 1960 being the Licensing Order by which the petitioner 's application for licence for 1960 was governed did not contain any provision enabling any preference to be given to a co operative society in the matter of the grant of licence. I now come to the present petition. It was ;moved in this Court by the petitioner under article 32 of the Constitution challenging the validity of the order of the Licensing authority dated September 13, 1960, and asking that the licence granted to the Assam Co operative Apex Marketing Society be declared illegal and for an order directing the licensing authority to consider the applications for licences according to the provisions of,the Licensing Order, 1960. The petition came in for hearing on February 2, 1961. By that date the year for which the petitioner had asked for a licence had expired and the Licensing Order, 1960 had been replaced by another Order of 1961. In the result the petition bad become substantially infructuous. The petitioner, therefore, suggested to this Court that he would make an application for a licence for the year 1961 and in the meantime the petition might stand adjourned. An order was thereupon made adjourning the petition sine die. Thereafter the petitioner on February 4, 1961, made a fresh application for licence for dealing in paddy for the year 1961. An order was made by the licensing authority on this application on April 1 1, 1961, in these terms : "Having regard to the existing licences in these areas (Mangaldai and Gauhati), and the quantity of food grains available therein,an further licence,, would be superfluous." In the result the petitioner was refused licence for the year 1961. Thereafter, the petitioner under orders obtained from this Court amended hi,$ petition and now seeks to challenge the. order of April 11, 1961. The respondents to this petition axe the State of Assam and some of its officers including the licensing, authority 958 concerned, as also. the Assam Co operative Apex Marketing Society, hereafter called the Apex Society. As I have already said, the application for licence for 1961 was governed by the Licensing Order, 1961. The dispute in this case mainly turns on cl. (e) of paragraph 5 of this Order. That paragraph is in these terms: .LM15 "In granting or refusing a licence under this Order, the licensing authority shall, among other matters, have regard to the following, namely: (a) the stock of foodgrains available in the locality for which the licence is required; (b) the number of persons who have applied for and those who, have been granted licences in respect of the foodgrains under this Order in the locality; (c) the business ordinarily carried on by the applicants (d) the past activities of the applicant as a licensee or business man/firm; and (e) whether the applicant is a cooperative society. " It is not in dispute that in the areas to which the Licensing Order 1961, had been applied, licences to deal in paddy had been given to: various Co operative Societies which were subsidiaries of the Apex Society and no licence had been given to any private dealer. The respondents say that these grants were duly made under cl. (e) of paragraph 5 of the Licensing Order, 1961. It is this action which forms the main grievance of the ,petitioner. He puts his contentions on two grounds. First, he says that cl. (e) of paragraph 5 of the Licensing Order 1961 is ultra vires as it has no 959 relation, to, the object of the under which it was made. Secondly, he says that in any event the Order has been applied. in a discriminatory manner and with a view to create a monopoly in favour of the Apex Society to deal in paddy and the petitioner 's fundamental rights under articles 19(1)(g) and 14 have thereby been violated. It does not seem to me that either of these two contentions is well founded. I shall first consider whether paragraph 5(e) of the Order is ultra vires the Act. Now it is important to note ,that the validity of the Act is not challenged. It would follow that if the Order made under the Act is not ultra vires, it would be perfectly valid. It is section 3 of the Act which enables the Orders to be made. That section so far as relevant is in these terms section 3 (1). If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, by order, provide for regulating or prohibiting the production, sup ply and distribution thereof and trade and commerce therein. The object of the Act, therefore, is to maintain or increase the supplies of essential commodities which include foodgrains and to secure their equitable distribution and availability at fair prices. Clause (e0 of paragraph 5 of the Licensing Order, 1961 certainly allows a co operative society to be Preferred. in the matter of a grant of licence. The question then is, would the object of the, Act be achieved if the trade in paddy is given to co operative societies ? I think it would. A co operative society is one which has as its object the promotion of the, economic interests of its members in accordance with co operative principles : see section 4 of the 960 . A society carries on business in accordance with co operative principles when it trades with its own members, the profit motive not being paramount in such business. When, therefore, a licence to purchase paddy is given to a co operative society of growers, what happens is that the seller sells to a body of which he is a member. The result is the virtual elimination of the middleman and a consequential reduction in the price. The following observation,% from the judgment of this Court in Narendra Kumar vs The Union of India (1) are, to my mind, very apposite in the present context : "That middleman 's profits increase the price of goods which the consumer has to pay is axiomatic ' " (p. 389). ,,It has therefore been the endeavour at least in modern times for those responsible for social control to keep middlemen 's activities to the minimum and to replace them largely by co operative sale societies of producers and co operative sale societies of the consumers." (p. 390). Therefore, I feel no doubt that if the purchase of paddy is left to growers co operatives and that is what cl. (e) of paragraph 5 aims at rice,, which is husked paddy, can reasonably be expected to be made available to the consumers at a fair price. That would serve the object of the Act and the clause cannot, therefore, be said to be ultra vires the Act. Then it is said that cl. (e) of paragraph 5 would result in creating a monopoly in favour of co operative societies and that would be illegal and also outside the object of the Act. This contention also seems to me to be ill founded. It seems to me that if paragraph 5 had contained only cl. (e) directing preference being given to co operative societies in the matter of grant of licences and that is the basis on which the present contention is advanced that would not have made it bad. The question (1) 961 of creating a monopoly does not really arise in such a case. The Order may then allow one class only, namely, co operative societies, to do the business. That would, as I have already stated, advance the object of the Act. It would also however amount to a prohibition of others doing the business. The only question then would be whether such prohibition would be reasonable under article 19(6). That is how the matter appears to have been considered by this Court in two cases to which I will now refer. The first is the case of Narendra Kumar(1) earlier mentioned. There an order called the "Non ferrous Metal Control Order, 1958" had been issued under section 3 of the , as the Licensing Order now under consideration also was Clause (4) of the order there considered provided that no person could acquire any nonferrous metal except under a permit issued by the Controller in accordance with such principles as the Central Government might from time to time specify. Subsequently, the Central Government enunciated certain principles for the grant of these permits in a certain communication to the Chief Industrial Adviser. Under these principles, no permit could be issued to a dealer but it could only be issued to certain manufacturers. The result was that the dealer 's trade was totally prohibited and only certain manufacturers were eligible for permits to carry on the trade of rolling non ferrous metals. Certain dealers moved this Court under article 32 for a declaration that el. (4) read with the principles formulated by the Government was bad as offending article 19(1)(f) and (g). This Court held that (p. 387) : "It is reasonable to think that the makers of the Constitution considered the word "restriction" to be sufficiently wide to save laws 'inconsistent ' with article 19(1), or "taking away the rights ' conferred by the (1) ; 962 Article, provided this inconsistency or taking away was reasonable in the interests of the different matters mentioned in the clause. There can be no doubt therefore that they intended the word restriction ' to include cases of 'prohibition ' also. The contention that a law prohibiting the exercise of a fundamental right is in no case saved, cannot therefore be accepted. " Having considered the facts of the case, the Court came to the conclusion that el. (3) of the Order, the legality of which also had been challenged, and el. (4) were valid provisions. It observed that, (p. 390): "It must therefore be held that el. 3 of the Order. even though it results in the, elimination of the dealer from the trade is a reasonable restriction in the interests of the general public. Clause 4 read with the principles specified must also, be hold for the same reason to be a reasonable restric tion. " I ought here to point out that the principles enunciated by the Government were held to be of no effect as they had not been issued in compliance with sub sections (5) and (6) of section 3 of the, and on that basis petition was allowed and a writ was issued restraining the Union from giving effect to el. 4 of the order so long as the principles governing the issue of permits were not duly specified. This however does not affect the force of the observations that I have earlier read from the judgment in the case. It seems to me that these observations fully apply to the present case. The order read with the policy statement though it resulted in a complete prohibition in trading by dealers and in the creation of what the petitioner would call a monopoly in favour of certain manufacturers was hold to be good as a reasonable restriction on the 963 dealer 's right to trade under article 19(6) and the Writ was: issued only because the formalities required for specifying the policy statement had not been complied with. There is no defect in the issue of the Licensing Order, 1961, with which the present case is concerned. Therefore, the only question would be whether such a prohibition of the trade of the dealers like the petitioner, if any, by the Licensing Order, 1961 would be reasonable in the circumstances of this case. , The other case to which I wish to refer is Glass Chatons Importers & User 's Association vs The Union of India (1) decided by this Court on April 10, 1961. That case arose out of a petition under article 32 by certain importers of glass chatons. There, the Central Government had issued an order under the Import and Export (Control) Act, 1947, called the Imports (Control) Order, 1955, prohibiting the import of glass chatons except under a licence. Paragraph 6 of the Order laid down a number of grounds on which the Central Government or the Chief Controller of Imports and Exports might refuse to grant a licence or direct any other licensing authority not to grant a licence. The ground mentioned in el. (h) of this paragraph was ,if the licensing authority decide to canalise imports and the distribution thereof through special or specialised agencies or channels. " It appears that since 1958, licences had been granted to the State Trading Corporation. No applications for licences had been, made by the petitioners or any other trader at any time since 1957. It was however contended that so long as paragraph 6(h) of the Order remained, it was useless for the private traders to apply for licences. The argument advanced on behalf of the petitioners was that paragraph 6(h) was void being in contravention of article 19(1)(f) and (g). In regard to this argument this Court observed: (1) (W. P. 65 of 1959, unreported). 964 "It is obvious that if a decision has been made that imports shall be by particular agencies or channels the granting of licence to any applicant outside the agency or channel would frustrate the implementation of that decision. If therefore a canalization of imports is in the interests of the genera l public the refusal of imports licences to applicants outside the agencies or channels decided upon must necessarily be hold also in the interests of the general public. The real question therefore is : Is the canalization through special or specialized agencies or channels in the interests of the general public." The Court held that it was unable to accept the argument that a decision that imports shall be canalised is per se not a reasonable restriction on the right to trade. On the facts of the case, the Court took the view that a decision to canalise imports of glass chatons was in the interest of the general public. In this case, it had been contended that the Government was creating a monopoly in favour of the State Trading Corporation. The Court hold that the period of permits granted to the State Trading Corporation having already expired, the question did not really arise. But, as would have been noticed earlier, the Court really dealt with the same contention in deciding the validity of paragraph 6(h) of the Order. This decision lends equally strong support to the view that preference directed to be given by cl. (e) of paragraph 5 of the Licensing Order with which we are concerned to co operative societies, would not necessarily render it invalid. I feel no doubt on the facts of the present case that a preference to co operative societies even if that resulted in the dealers being prevented altogether from dealing in paddy, would, be a reasonable restriction on the latter 's right of trade. Assam is a deficit State in foodgrains. It is the 965 duty of the State Government to see that the people living within its boundaries are supplied with adequate foodgrains and that at a reasonable price. The If paddy is procured for the use of the consumers in the State through a co operative society, there is good reason, as already stated, to think that rice at a reasonable price would be available to the people of Assam. I will later in detail discuss the structure and the activities of the co operative societies to whom licences had been granted. What I will have to say there will amply establish that it was a reasonable step to have taken to put the trade in charge solely of the co operative societies. I turn now to the petitioner 's second contention, namely. that cl.(e) of paragraph 5 has been worked in a discriminatory manner so as to create a monopoly in favour of the Apex Society. The first thing that I wish to observe is that licences have not been given for the year 1961 to the Apex Society but they have been given to a large number of primary co operative societies of growers. I find it difficult, in any case, to appreciate how this can be said to create a monopoly. It may amount to a prohibition of trade by some persons. That however is a different matter with which I have already dealt. I may state here that it appears that in 1960 the licences had been issued to the Apex Society, but that is not the situation now. Whether what was done in 1960 was strictly legal or not is not a question that now arises, for we are no longer concerned with the licences for 1960. I Before proceeding further, I think it right to I say a few things about the co operative societies with which we are concerned. About 1957, the Assam Government sponsored the formation of the Apex Society. I would like to remind here. that it is one of the directive principles of the Constitution that co operative societies should be encouraged. Now, the structure of the Apex Society is like a pyramid. It appears to have three tiers. On the top is the Apex Society. Under it 966 come various. primary marketing Co operative societies. At the bottom rung are a large number of primary co operative service societies. The membership of the marketing, societies consists mostly of cultivators and service societies, and of the service societies, mostly of cultivators. The function of the Apex Society appears to be to co. ordinate the working of the subsidiary societies and to obtain moneys from the Co operative Apex Bank and there out make advances to the cultivators through the subsidiary societies, to help them in their cultivation. The service societies procure from the growers the paddy grown by them I they can spare and realise the moneys advanced to them out. of the price of the paddy purchased. The money realised is duly passed on to the Apex Society. The paddy collected is sold by the service societies to the marketing societies. The marketing societies in their turn deliver part of the paddy to the Government for creating a buffer stock and the remaining quantity to mills for milling into rice, in both cases according to the directions of the Government. The benefits derived from the whole scheme are obviously very large. The middlemen are eliminated. The growers being themselves members of 'the societies, participate in their profits whatever they are. :This helps to keep down the price because a service society in passing on the paddy to the marketing society charges very little by way of profit and that profit is shared by the groweres who are its members. This enables the growers to sell at a comparatively lower price. The growers have further the advantage of loans from the Apex Society to help them in the Work of cultivation; these loans can be easily advanced and on liberal terms because their repayment is secured by. ,the process of purchase of the produce through the, service societies. It would he reasonable to think that this. would encourage cultivation and result in larger quantities of foodgrains , being produced. That would also help to achieve the 967 object of the Act It may further be pointed out that each of these societies is a body corporate see s.18 of the Co operative Societies Act, 1912. The societies form a net work over the entire surplus grain producing area of Assam, each working in its own area. , A vast number of growers of foodgrains are the members of the primary. marketing and service societies. It is to these societies that the licences had been issued of which, a grievance is being made by the petitioner. It appears that after the Apex and the subsidiary societies had been formed, the State Government with the concurrence of the Central Government decided on a policy of procuring paddy in certain specified areas only through these societies. The State Government thereupon issued instructions to certain officers at the end of 1959 at procurement of paddy for the Kharif year 1959 60 would be made through the co operative societies. It may be that it was for this reason that the licensing authority had stated in its order of February 17, 1930, earlier mentioned, that the petitioner 's application for a licence could not be considered. I have now to remind that the Licensing Order, 1960 did not contain any provision enabling preference 'being given to a co . operative society in the grant of a licence. This case however is not concerned any more with regard to a licence for the year 1960 or the validity of any order of the licensing authority refusing to grant the petitioner any licence for that year. Returning to the contention that the power under paragraph 5 (e) of the Licensing Order had been exercised in a discriminatory manner, I wish first to observe that under the Order which I have already held to be good, the authority concerned in granting the licences was entitled to prefer a co operative society, and this is what, it has ,done. Though the result may have been to prevent the petitioner from carrying on, the trade of purchasing and selling paddy, that, in my view is, in the 968 circumstances of this case, a reasonable restriction on his ' right to trade for that was necessary to secure for the people of Assam supply of foodgrains at a reasonable price and in adequate quantities: I have very grave doubts if the licensing authority was intended to act in a Quasi judicial capacity in the matter of granting licences. It has to be remembered that the question before it was not so , much of the competing rights of various applicants or of any is between an applicant and the State. The duty of the licensing authority was to advance the object of the Act in terms of the Licensing Order. Its main consideration has to be to see that the licences granted by it helped to make foodgrains available at a fair price to the people of Assam. The Act gave the powers for that purpose. It is because this purpose is legitimate that the resultant prohibition of trading by private dealers is also legitimate. I believe that the two cases I have earlier mentioned proceeded on the basis that the licensing authority was not a quasi judicial officer. It is not necessary for me however to pronounce finally on this question. It was contended that the licensing authority in granting the licence to the co operative society had only carried out the directions of the Government and had not acted independently. I find no basis for this contention apart from the bald allegation of the petitioners which is denied by the respondent. N directions by the Assam Government for the year 1961 have been produced. The instructions to which I have earlier referred requiring the licence to be given to the co operative societies were confined to the year 1959 60. That had no force in regard to the year 1961 with which we are concerned. Those instructions cannot be taken as operating for all time to come for then the licensing authority 's order granting licences to a co operative society in future years will always have 'to be held to have been made under these instructions. I am unable to take such a view of the matter. As 969 already stated, the High Court had by its Order of August 10, 1960 asked the licensing authority to proceed in a quasi judicial manner. There is no reason to think that the licensing authority had not observed this direction of the High Court. It also seems to me reasonable to think that the Assam Government inserted cl. (e) in paragraph 5 of the Licensing Order, 1961 in view of the judgments of the High Court of Assam to which I have earlier referred. The Assam Government obviously intended that the licensing authority would in view of cl. (e) give preference to the co operative societies. Furthermore, section 4 of the Act provides that an order made under section 3 conferring powers on any officer or authority may contain directions to him as to the exercise of such powers. In my view, for the reasons earlier stated, a direction in the Licensing Order to give preference to co operative societies would not be bad. It seems to me that cl. (e) of paragraph 5 of the Licensing Order, 1961 really amounts to such a direction. It was not necessary after the Licensing Order, 1961 for the Government of Assam therefore to give any other direction to the licensing authority. I do not think any question of violation of article 14 can be seriously pressed. If the duty of the licensing authority was quasi judicial in its nature, then it is difficult to appreciate how it can be said that its decision would offend article 14. In any case, it seems to me quite clear that the co operative societies form a class by themselves and a provision giving preference to such a class, would be a good provision because the object of the Act would be better served thereby for the reasons earlier mentioned; such provision would have a clear nexus with the object of the Act and therefore satisfy the test of article 14. Looking at the matter from any point of view it seems to me that the Order of the licensing authority giving preference to the co operative 970 Societies is not open to any objection. In my view that was a fair Order to have been made in the circumstances of this case. I would for these reasons dismiss this petition. MUDHOLKAR, J. I agree with the judgment delivered by Sarkar, J. By Court In accordance with the opinion of the majority this Writ Petition is allowed with costs. Petition allowed.

In exercise of the powers conferred by section 3 of the: Essential commodities Art, 1955, the Assam Government made the Assam Foodgrains (Licensing and Control) Order, 1961. This Order provided that no person could do business in foodgrains including, rice and paddy, in wholesale quantities except under a licence issued thereunder. Clause 5 of, the Order laid down in sub. (a) to (e) matters which the licensing authority shall, among other matters, which have regard to in granting or refusing a license sub cl. (e) being whether the applicant is a co operative society". In 1959, directions had been issued to all, licensing authorities by the Government that the rights of monopoly procurement had been given to Apex Co operative Society. The petitioner applied for a licence but was refused in view of the provisions of sub cl. (e) of cl. 5 of the Order. The petitioner challenged the order refusing the licence on the grounds: (1) that sub clause (e) was ultra vires 937 as ' it was beyond the powers granted to the State Government under section 3 read with section 5 of the Act, and (ii) that sub cl (e) had been applied in a discriminatory manner with a view to create a monopoly in favour of the Apex Co operative Society. Held, (per C.J., Das and Ayyangar, JJ.), that sub cl. (c) of cl. 5 of the Order was not ultra vires section 3 read with section 5 of the Act, but the impugned,order rejecting the application of the petitioner was bad as it infringed the rights of the petitioner guaranteed under Arts, 14 and 19 of the Constitution. Section 3 of the Act authorised the making of an order to achieve two objects, for maintaining or increasing supplies of essential commodities and for securing their equitable distribution and availability at fair prices. Sub clause (e) of cl. 5 of the Control Order,, 1961, which enabled the licensing authority to ' prefer a cooperative society in certain circumstances in the matter of granting a licence, was not unrelated to the objects mentioned in s.3 of the Act. A co operative society may, by reason of the place which it occupies in the village economy of a particular area, be in a better position for maintaining or increasing supplies of rice and paddy and even for securing their equitable distribution and availability at fair prices. Ramanlal Nagardas vs M. section Palnitkar, A. I.R. 1961 Guj. 38, distinguished. Sub clause (e) permitted the licensing authority to give preference to co operative societies in certain cases but it did not. have the effect of creating a monopoly in favour of co operative societies. In the present case the licensing authority refused licence to the petitioner for the only reason and purpose of granting a monopoly to co operative societies; it had administered the law in a discriminatory manner and for the purpose of achieving the ulterior object of creating a monopoly in favour of co operatives which object was not within sub cl. (a), The licensing Authority was influenced, not by considerations mentioned in cl. 5 of the Order, but by the instruction issued by the ' State Government to grant licences to cooperatives only. It was not proper for the, Government to issue instructions to the licensing authorities when they were required to act according to the provisions of law. Per Sarkar and Mudholkar,JJ. Sub clause (e) of cl. 5 of the Order served the object of section 3 of the Act to maintain or increase the supplies of essential 'commodities and to secure their equitable distribution and availability at fair prices and Was not ultra vires. Even it the Order allowed only one class, namely cooperative societies, to do the business and prohibited others. it would; still advance the objects, of, the Act; and the prohibition of the others. doing the business would amount. to, reasonable restrictions under article 19(6). 938 Narendra Kumar vs The Union of india, (ISM 2 S.C.R. 375 and Glass Chatons Imports a Users ' Association vs The Union of India, (W.P. 65 of 1959, unreported), relied on. The licensing authority had not exercised its power under sub cl. (e) in a discriminatory manner in the prevent case. The authority was entitled to give preference to a co operative society and that is what it has done. Though the result of this preference was to prevent the petitioner from carrying on his business, it was in the circumstances, a reasonable restriction on his right as it was necessary for securing foodgrains at reasonable prices and in adequate quantities. There were no directions given, by the State Government in 1961 to licensing authorities to grant licences only to co operative societies and it could not be said that the licencing authority had only carried out the directions of the Government and had not acted independently. In fact, the Order itself carried a direction in sub cl. (e) to give preference to co operative societies. The co operative societics formed a class by themselves and a provision giving preference to such a class better served the objects of the Act, and had a clear nexus with the object of the Act and did not offend article 14.

% In a writ petition, the petitioner challenged the price fixation on the ground; that the State Government had not taken into consideration the guidelines in built in sub section 3C of section 3 of the , that the levy order was unreasonable or excessive restriction on the fundamental rights guaranteed under Articles 19(1)(g) and 14 of the Constitution, and that the levy was a colourable exercise of the power as the State Government sold the levy sugar by public auction realising large profit. Dismissing the Writ Petition, ^ HELD: 1.1 The Court does not act like a Chartered Accountant nor acts like an Income Tax officer. The Court is not concerned with any individual case of any particular problem. The Court only examines whether the price determined was with due regard to considerations provided by the statute, and whether extraneous matters have been excluded from determination. [580D E] Union of India vs Cynamide India Ltd. AIR 1987 Sept. SC 180 ' at 1805. followed. 1.2 The primary consideration in the fixation of price would be 578 the interest of consumers rather than that of producers. [581F] Since the petitioners in the instant case, are allowed to sell freely at any rate they like, the remaining 50% of the Sugar (after excluding the 50% which they have to give for levy) as also the produce by the second and third process, the loss if any caused to the petitioners would be minimal. [581Gl New India Sugar Works vs State of Uttar Pradesh & Ors., ; , relied. 1.3 It is clear from the Preamble, that the primary object of the was to control production, supply, and distribution of essential commodities, and to make such commodities available at a reasonable price. The exercise provided under the Act was intended ultimately to serve the interest of consumers. It is fundamental in the entire scheme of the Act. But then, the interest of the industry as a whole cannot be left out. It is also required to be borne in mind. The levy price of sugar should ensure reasonable return to the industry. That is one of the guidelines provided under sub section 3C of section 3 of the Act. But that does not mean that the interest of producers should outweigh the interest of consumers. It would be tilting the balance too much. [582C F] 1.4 There is no colourable exercise of power. There was every justification for the sale by public auction. The petitioner and some other producers delivered inferior quality of Khandsari, which was found to be unacceptable to consumers at Fair Price Shops. The State officers accordingly reported to the Government, which issued instructions to distribute the levy sugar liberally through permits for marriages and religious functions. The consumers, however, could not come forward. The Government then directed the disposal of levy sugar by public auction. It was not with a view to earn profit, although incidentally the Government made some profit. The levy sugar was brought to public sale only to prevent deterioration when the consumers refused to accept it. [583A C] The Panipat Co operative Sugar mills vs Union of India [197312 SCR 860 and Anakapalle Coop. & Industrial Society Ltd. vs Union of India & Ors. , ; , referred to.

The correct test to determine whether a contract made before the partition of India on behalf of the Governor General in Council comes within the purview of cl. (a) of article 8(1) of the Indian Independence (Rights, Property and Liabilities) Order, 1040 1947, so as to be deemed to have been made on behalf of the Dominion of Pakistan, is either (1) if the contract was made on August 15, 1947, it would have been a contract for the purposes of the Dominion of Pakistan ; or (2) if Pakistan had existed on the day the contract was made, it would be a contract for the purposes of Pakistan. Union of India vs Chinu Bhai jeshing bhai, I.L.R. 1953 Bom. 117, approved. The purpose of a contract is not to be confused with the ultimate disposal of the goods supplied thereunder since such disposal can in no way determine or modify it. Nor do the powers of control over military stores vested in the joint Defence Council by article 8(c) of the joint Defence Council Order, 1947, and saved by article 3(2) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, whereby the goods might be transferred anywhere in India, make any difference and the rights and liabilities accruing from such contracts fall entirely to be adjudged by the provisions of the Indian Independence Order and not by the joint Defence Council Order. The concluding part of article 8(1) makes it quite clear that the Article makes no distinction between contracts where the consideration is either executed or executory in nature and applies equally to both. Elahi Bux vs Union of India, A.I.R. 952 Cal. 471 and Krishna Ranjait vs Union of India, A.I.R. 1954 Cal. 623, approved. Union of India vs Loke Nath, A.I.R. 1952 Cal. 140, disapproved. Consequently, in a case where the Union of India was sought to be made liable an the basis of a contract entered into on behalf of the Governor General of India in Council for the supply of fodder to the Manager, Military Farms, Lahore Cantonment, which was in Pakistan on August 15, 1947, and the trial Court found for the Union of India but the High Court, taking the view that the fodder constituted military stores under the exclusive control of the joint Defence Council on August 15, 1947, liable to be transferred anywhere in 'India, reversed that finding, the contract, even assumig that view to be correct, must be held to be one exclusively for the purposes of Pakistan as from the at date and the Union of India could not be made liable thereunder.

The petitioner challenged his detention under the Jammu were sent to him by way of an annexure to the District Magistrate 's order of detention. The petitioner was informed that, if he so desired, he could make a representation to the Government against the alleged order of detention. It was argued on behalf of the petitioner that some of the grounds of detention were so vague that he did not find it possible to exercise his fundamental right of making a representation under article 22(5) of the Constitution and that some of the grounds were irrelevant for the purposes of making an order under section 8. ^ HELD: The argument that only the "preamble" of the order of detention was vague but not the grounds is not tenable. [264B] "Preamble" has been defined "as an introductory paragraph or part in a statute deed, or other document setting forth the grounds and intention of it". The preamble thus betokens that which follows. The respondents ' counsel did not, however, find it possible to point out where the preamble could be said to begin, or to finish, and which of the paragraphs could be said to constitute the grounds of detention as such. [262 G H, 263A] This Court has disapproved of vagueness in the grounds of detention because that impinges on the fundamental right of the detenu under article 22(5) of the Constitution to make a representation against the order of detention when the grounds on which the order has been made or communicated to him. The purpose of the requirement is to afford him the earliest opportunity of seeking redress against the order of detention. But, as is obvious, that opportunity cannot be said to be afforded when it is established that a ground of detention is so vague that he cannot possibly make an effective representation. Reference made to paragraphs which were held to be vague. [263E, H, 264 B D] State of Bombay vs Atma Ram Sridhar Vaidya ; , Tarapada De and Ors. vs The State of West Bengal, ; , Dr. Ram Krishan Bhardwaj vs State of Delhi and Ors. ; , Shibban Lal Saxena vs State oj Uttar Pradesh ; , Rameshwar Lal Patwari vs State of Bihar and Ors., ; , and Pushkar Mukherjee and Ors. vs State of West Bengal, ; 259 It is equally well settled that a ground is said to be irrelevant when it has no connection with the satisfaction of the authority making the order of detention under the appropriate law and taking any such ground into consideration vitiates the order of detention. It was held that irrelevant grounds were, nevertheless, taken into consideration for making the impugned order, and that was quite sufficient to vitiate it. [267A B] Keshav Talpade vs The King Emperor, , Satya Brata Ghose vs Mr. Arif Ali, District Magistrate Shibsagar, Jorhat and Ors, , and K. Yadava Reddy and Ors. vs The Commissioner of Police, Andhra Pradesh, Hyderabad and Anr., I.L.R. 1972 Andhra Pradesh 1025, affirmed. Chinnappa Reddy, J. (Concurring) ^ HELD: A law providing for preventive detention and action taken under such a law, to pass muster, have to satisfy the requirements of both Articles 19 and 22 of the Constitution. [268D E] The interpretation of Article 22(5) consistently adopted by this Court is, perhaps, one of the outstanding contributions of the Court in the cause of Human Rights. The law is now well settled that a detenu has two rights under Article 22(5) of the Constitution (1) to be informed as soon as may be, of the grounds on which the order of detention is based, that is, the grounds which led to the subjective satisfaction of the detaining authority and (2) to be afforded the earliest opportunity of making a representation against the order of detention, that is, to be furnished with sufficient particulars to enable him to make a representation which on being considered may obtain relief to him. The inclusion of an irrelevant or non existent ground among other relevant grounds is as infringement of the first of the rights and the inclusion of an obscure or vague ground among other clear and definite grounds is an infringement of the second of the rights. In either case there is an invasion of the Constitutional rights of the detenu entitling him to approach the Court for relief. The reason for saying that the inclusion of even a single irrelevant or obscure ground among several relevant and clear grounds is an invasion of the detenu 's constitutional right is that the Court is precluded from adjudicating upon the sufficiency of the grounds and it cannot substitute its objective decision for the subjective satisfaction of the detaining authority. [269A D] The argument that only that allegation which was the immediate cause of the order of detention was to be treated as the ground of detention and all other allegations recited in the order of detention were to be treated as introductory and background facts cannot be accepted. The factual allegations contained in the document supplied to the detenu as furnishing the ground of detention cannot be so dissected. The last straw which broke the camel 's back does not make weightless the other loads on the camel 's back. [269 G H, 270E] The expression 'Naxalite ' conveys different meanings to different persons depending on the class to which one belongs, his political hues and ideological perceptions. It is as vague or as definite as all words describing ideologies such as "democracy" etc. It is a label which may be as misleading as any other. [270F G, 271A] Expressions like 'revolt ' and 'revolution ' are flung by all and sundry in all manner of context and it is impossible to attach any particular significance to 260 the use of such expressions. Every turn against the establishment is called 'revolt ' and every new idea is labelled as 'revolutionary '. Without specification of the particular form of revolt and revolution which was advocated, the ground of detention must be held to be irrelevant and vague. [271 C D] A. K. Gopalan vs State of Madras, ; R. C. Cooper vs Union of India, ; distinguished.

These petitions by the holder of Kavalappara Sthanam, his wife, daughters and soil challenged the constitutional validity of the Madras Marumakkathayam (Removal of Doubts) Act, 1955 passed by the Madras Legislature soon after the Privy Council had declared the properties in possession of the Sthanee to be Sthanam properties in which the members of the tarwad had not interest. Section 2 Of the Act, which contained the substantive provision, was as follows: " 2. Notwithstanding any decision of Court, any sthanam in respect of which: (a) there is or had been at any time an intermingling of the properties of the sthanam and the properties of the tarwad, or (b) the members of the tarwad have been receiving main. tenance from the properties purporting to be sthanam properties as of right, or in pursuance of a custom or otherwise, or (c)there had at any time been a vacancy caused by there being, no male member of the tarwad eligible to succeed to the Sthanam, 888 shall be deemed to be and shall be deemed always to have been a Marumakkathayam tarwad and the properties appertaining to such a sthanam shall be deemed to be and shall be deemed always to have been properties belonging to the tarwad to which .he provisions of the Madras Marumakkathayam Act, 1932 (Mad. XXII of 1933), shall apply. " The question for decision was whether the impugned Act infringed the fundamental rights of the petitioners guaranteed by articles 4, 19(1)(f) and 31 of the Constitution. Held (per Sinha, C. J., Subba Rao and Shah, JJ.) that the three tests laid down by the Act were contrary to the well settled principles of Marumakkathayam Law with regard to which there could be no scope for doubt and as such not only not germane but extraneous to the object it sought to achieve. They were a device to deprive the sthanam of its properties and vest them in the tarwad and as such directly hit by article 19(1)(f) and could not be saved by article 19(5). Assuming that the Sthanam properties were held in janmam right and as such were estates within the meaning of article 31A, the impugned Act was immune from challenge. That Article, properly construed, envisages agrarian reform and provides for the acquisition, extinguishment or modification of proprietary and various other kinds of subordinate rights in a tenure called the estate solely for that purpose and must be limited to it. Although it may not be permissible to refer to the statement of objects and reasons of its amendment for purposes of construction, it can be referred to for the limited purpose of ascertaining the conditions prevailing at the time and purpose underlying the amendment. Aswini Kumar Ghose vs Arabinda Bose, [19531 S.C.R. 1, con sidered. There is no substance in the argument that since the impugned Act seeks to regulate the rights of the Sthanee and the junior members of the tarwad inter se it falls within by cl. (2)(b) of article 31A. That clause has to be read with cl. (1)(a) of the Article and since the impugned Act does not contemplate any agrarian reform or seek to regulate the rights inter se between landlords and tenants or modify or extinguish any of the rights appertaining janmam right, leaving all its characteristics intact, it does not come within the purview of article 31A of the Constitution. Sri Ram Ram Narain vs State of Bombay, [1959] SUPP. 1 S.C.R. 489, and Atma Ram vs State of Punjab, [1959] SUPP. 1 S.C.R. 748, referred to. Fundamental rights have a transcendental position in the Constitution and before an Article embodying a fundamental right can be construed to exclude another every attempt should be made to harmonize them and not until it is found impossible to do so, can one be made to yield to the other. Barring such exceptional cases, any law that infringes any of the fundamental rights must be void. 889 The word 'law ' in article 31(1) must mean a valid law, and such a law must satisfy two tests, (1) that the legislature must be competent to enact it and (2) that it must not infringe any fundamental rights. A law that deprives a citizen of his property must, therefore, be invalid if it infringes article 19(1)(f) of the Constitution. Deep Chand vs State Of U. P., [1959] SUPP. (2) S.C.R. 8, and Basheshway Nath vs Commissioner of Income tax, Delhi, [1959] Supp. 1 S.C.R. 528, referred to. Article 31 Of the Constitution, since its amendment by the Constitution (Fourth Amendment) Act, 1955, is no longer a selfcontained Article providing for a subject different from that dealt with by article 19, but deals with two different subjects, CIS. (2) and (2A) dealing with acquisition and requisition and cl. (1) with deprivation of property by authority of law, and can no longer be construed on the analogy of article 2 1 so as to exclude the operation of article 19. The State of West Bengal vs Subodh Gopal Bose, [1954] S.C.R. 587, A. K. Gopalan vs The State of Madras, ; , referred to. State of Bombay vs Bhanji Munji and Any., [1955] 1 S.C.R. 777, held inapplicable. Nor does article 31(1) deal with police power. Although such power, as understood in America, is no arbitrary power divorced from social control and public good, there can be no need of importing such a doctrine into the Indian Constitution. The word 'law ' used by article 31(1) indicates its limitation and refers back to article 19 and any law made under article 31(1) can be sustained only if the restrictions it imposes are reasonable and in the interest of the general public. The Constitution does not confer on the Indian Parliament the same power which the Parliament of England possesses and while it does contemplate a welfare State, that has to be brought about within its frame work of the Constitution itself. The correct approach should, therefore, be first to ascertain the fundamental right and then to see whether the law infringes that right. If ex facie it does so, it has to stand the test of article 19(5). In certain circumstances, however, deprivation of fundamental right to property may also amount to a reasonable restriction under the Article. Narendra Kumar vs The Union of India, [196O] 2 S.C.R. 375, referred to. Individual proprietary rights being ordinarily inviolable unless a clear case is made out for restricting them, there must be a harmonious balancing between the fundamental rights declared by article 19(1) and social control permitted by article 19(5). It is implicit in the nature of restrictions that no inflexible standard can be laid down and each case must be decided on its own facts. But the restrictions must not be arbitrary and must have a reasonable relation to the object sought to be achieved and shall be in the interest of the general public. 890 State of Madras vs V. G. Rao, ; , Henry Webster vs Peter Cooper, ; , and The Citizens ' Savings and Loan Association and Cleaveland, Ohio vs Topeka City, ; , referred to. Although the redress of a real and genuine grievance of a section of the community may be in public interest, it is impossible to hold that the impugned legislation was either justified or in such public interest. Iswari Prosad vs N. R. Sen, A.I.R. 1952 Cal. 273, held in applicable. Marumakkathayam Law is a body of customs and usages that have received judicial recognition, and is fundamentally different from Hindu Law, being a matriarchal system. The family, called tarwad, consists of all the descendants of one common ancestor. It consists of a mother and her male and female children and the children of those female children and so on. Only the senior most male member can attain the sthanam, which is a position of dignity with specific properties attached to it. When he does so and becomes the Sthanee he ceases to have any interest in the tarwad properties. Occasionally a female member also becomes the Sthanee. Like a Hindu widow or an impartible estate holder the Sthanee has an absolute interest in the income of the Sthanam properties or acquisitions therefrom. A member of the tarwad has no right to maintenance from out of the Sthanam properties nor can such property be converted into tarwad property by the grant of such maintenance by custom or otherwise or intermingling of the Sthanam properties with the tarwad properties by the Sthanee. His position approximates to that of a member separated from a Hindu family and there can be no scope for the application of the doctrine of blending. Like the Sthanee who ceases to have any present proprietary interest in the tarwad, the members of the tarwad also can have no present proprietary interest in the sthanam property. They continue to be blood relations with a contingent right of succession to each others ' property that is no more than a spies successions. The right of a subsequently born male member of the tarwad to succeed to the Sthanam and its property is judicially recognised. Case law reviewed. Per Imam and Sarkar, JJ. The impugned Act is protected by article 31A and is not open to question in the ground that it violates articles 14, 19(1)(f) and 31(1) Of the Constitution. There is no basis for the contention that article 31(1)(a) contemplates a law relating to agrarian reform only. The Article makes no mention of any such reform and there can be no doubt that under it a janmam right may be acquired, extinguished or modified whether the land held in such right is agricultural or not. It is not permissible to refer to the objects and reasons stated in the Bills, by which the Acts amending article 31A of the Constitution were introduced, for the construction of the statute and, therefore, the word 'law ' in article 31A(1) cannot be read in relation to sub cl. (a) only as a law intended to achieve agrarian 891 reform on the basis of the supposed object of the Legislature in enacting article 31A. Aswini Kumar Ghose vs Arabinda Bose, ; referred to. It is not correct to say that the impugned Act does not effect any modification of janmam rights and therefore it does not come within article 31A. When the Article speaks of modification of janmam rights, it does not speak of such rights in the abstract but contemplates the modification of such rights held by a person. It would be as much modification of janmam rights, if such rights held by one person are directed to be held by a number of persons jointly, as when the incidents of such rights are altered. Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 S.C.R. 489, and Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748, relied on. It is not correct to say that the Legislature in giving the provisions of the impugned Act retrospective operation or in providing that they should prevail notwithstanding any decision of the court to the contrary, was acting judicially and not in a legislative capacity and that the Act was on that ground invalid. The rule obtaining in America that legislative action cannot retract on past controversies and reverse decisions of courts and the relevant American decisions can have no application in India. Piare Dusadh 's case, , referred to.

The petitioners were detained under r. 30(1) (b) of the Defence of India Rules, 1962, under orders passed by the State Government in March 1965. Their detention was continued from time to time after review under r. 30A. One review was made in February 1967 when the scope of such a review was governed by the judgment of this Court in Sadhu Singh vs Delhi Administration [1966] I S.C.R. 243 to the effect that such review did not require a judicial approach to the question of continuance of detention. Accordingly, at the review in February 1967, no opportunity was given to the petitioners to represent their cases and their detention was continued for a further period of six months. Thereafter, by its judgment in the case of P. L.Lakhanpal vs The Union of India. ; this Court overruled the decision in Sadhu Singh 's case and held that the function of review under r. 30A was quasi judicial and that in exercising it, the rules of natural justice had to be complied with. In view of this judgment the respondent held another review in April 1967, when notice was given to the petitioners and they were given a hearing. Thereafter an order was passed in each case on April 27, 1967, by which the State Goverment directed the continuance of the detention orders for a further period. In the meantime the present petitions under article 32 of the Constitution were filed on March 20, 1967 based on the judgment of this Court in Lakhanpal 's case. It was contended on behalf of the respondent State that as the review made in April 1967 was in accordance with the view taken in Lakhanpalls case, the continuance of the detention thereafter was justified; that the State Government had power to pass a fresh order of detention on the same facts and even if the present petitions were to be allowed, it should be made clear that the State Government had such power and that the decision of this Court in the case of Avtar Singh vs The State of Jammu and Kashmir (de cided on June 9, 1967), was not correct. HELD: (i) The writ petitions must be allowed and the petitioners released. In the Present cases the orders were passed in March 1965 and should have been reviewed after every six months in the manner explained in Lakhanpal 's case. That admittedly was not done upto February 1967, though a number of reviews were made in between. Consequently orders of detention passed in March 1965 fell after six months and there were no orders to continue thereafter. When 198 therefore the State Government ordered the continuance of detention orders upon the review on April 27, 1967, in accordance with the procedure indicated in Lakhanpal 's case, there were no orders to be continued because in between the reviews were not proper and the detention had become illegal. [201 C D). A. K Gopalan vs The Government of India, [1966] 2 S.C.R. 427, distinguished. Although r. 30A (9) only says that the Government shall decide whether the detention order should be continued or, cancelled, that does not mean that if the Government omits to make a review under r. 30A within six months the detention order will still continue and the detenu continue to be detained thereunder. The provision for review in r. 30A is designed, to protect the personal liberty of the citizen and is a mandatory provision; if it is not complied with and ' the Government omits to review the detention order within six months, the order must fall and the detenu must be released. [200 FG] (ii) A fresh order of detention can be passed on the same facts, provided it is not mala fide, if for any reason the previous order of detention or its continuance is not legal on account of some technical or other defect as in the present cases. There is nothing in the Defence of India Act and Rules which forbids the State Government from cancelling one order and passing another in its place. [2O2 C]. Ujagar Singh vs The State of Punjab., ; and Godavari Shamrao Parulekar vs State of Maharashtra and Ora., ; , referred to. The view taken in Avtar Singh vs The State of Jammu and Kashmir, in so far as it says that no fresh order can be passed even to correct any defect in an, order continuing detention under r. 30A(9) is not correct. [204 B].

Pursuant to the Indo Pakistan Agreement, 1958, and after this Court 'section Advisory opinion in In re the Berubari Union and Exchange and Enclaves, , Parliament enacted the Constitution (Ninth Amendment) Act, 1960 for cession of part of the territory of India to Pakistan. In order to implement the provisions of the Act a physical demarcation of the portion that had to be ceaded was necessary. The respondents filed a petition under article 226 of the Constitution before the High Court challenging the validity of the proposed demarcation principally on the ground that they would be deprived of their property without compensation. A single Judge of the High Court held that the cession of the territory involved transfer of ownership and other private property rights to Pakistan through the Union of India, which, though outside cl 2A of article 31 was compulsory acquisition within the meaning of article 31(2). The single Judge granted a certificate under article 132(1) for appeal to this Court. HELD:(i) No question of acquisition within the meaning of Article 31(2) is involved in the present case. The Constitution (Fourth Amendment) Act, 1955, makes it clear that mere deprivation of property unless it is acquisition or requisitioning within the meaning of cl. 2A will not attract cl. (2) and no obligation to pay compensation will arise thereunder and it is essential under clause (2) that in order to constitute acquisition or requisitioning there must be transfer of the ownership or right to possession of the property to the State or to a corporation owned or controlled by the State. Cession indisputably involves transference of sovereignty from one sovereign State to another. But, there is no transference of ownership or right to possession in the properties of the inhabitants of the territory ceded to the ceding State itself. The effect of the Constitution (Ninth Amendment) Act, 1960, can by no stretch of reasoning be regarded as transfer of the ownership or right to possession of any property of the respondents to the "State" within the meaning of Article 12 of the Constitution. [202C F, H] Charanjit Lal Chowdhury vs Union of India, [1950] S.C.R. 869, 902, State of West Bengal vs Subodh Gopal Bose & Ors. ; , Dwarkadas Shrinivas of Bombay vs Sholapur Spinning & Weaving Co. Ltd. & Ors. ; , Saghir Ahmed vs State of Uttar Pradesh, ; and Gullapalli Nageswara Rao & Ors. vs Andhra Pradesh State Road Transport Corporation & Anr. [1959] Supp. 1 S.C.R. 319, referred to. 245 (ii) This Court has on earlier occasions, observed that the practice of single Judge deciding the case and giving a certificate under Article 132 (1) for appeal to this Court, although technically correct, was an improper practice and that such a certificate should be given only in very exceptional cases where a direct appeal was necessary. The present case may be of an exceptional kind; but this Court has been deprived of the benefit of the judgment of a larger Bench of the High Court on points which are of substantial importance. [246B] R.D. Agarwala. & Anr. vs Union of India & Ors. C.A. Nos. 2634/69 etc. dt. 23 2 1970 and Union of India vs J. P. Mitter; , , referred to.

The petitioner 's husband transferred certain property to the petitioner. A notice under section 7, , was issued to the petitioner and to her husband and the husband was declared an evacuee and the property was declared as evacuee property by the Assistant Custodian. An appeal to the Deputy Custodian and thereafter a revision petition to the Custodian General by the petitioner were dismissed. The petitioner applied to the Supreme Court under article 32 of the Constitution contending that her fundamental rights under 64 506 articles 19(1)(f) and 31 were infringed by the order of the Assistant Custodian and prayed for the restoration of the property. Held, that the petition under article 32 was incompetent as no question of violation of any fundamental right arose in the case. The decision of an authority of competent jurisdiction had negatived the existence of the right alleged by the petitioner and unless that decision was held to be a nullity or could be otherwise got rid of, the petitioner could not complain of any infringement of a fundamental right. The alleged fundamental right of the petitioner was dependent on whether her husband was an evacuee and whether his property was evacuee property. The decision on that question had become final and no question of lack of jurisdiction was involved. Sahibzada Saiyed Muhammed Amirabbas Abbasi vs The State of Madhya Bharat, ; , applied.

iminal Appeal No. 65 of 1959. Appeal by special leave from the judgment and order dated January 9, 1959, of the Bombay High Court in Criminal Revision Application No. 1485 of 1958. C. K. Daphtary, Solicitor General of India, B. R. L. Iyengar and T.M. Sen, for the appellant. Nur ud din Ahmed and Naunit Lal, for respondent No. 1. 1961. October 6. The Judgment of the Court was delivered by SHAH, J. This is an appeal by the State of Bombay against the order passed by the High Court of Judicature, Bombay, acquitting the respondents of offences punishable under sections 65(a)(1) and 66(b)(1) of the Bombay Prohibition Act XXV of 1949 hereinafter referred to as the Act. The respondents are residents of Sehore a town in what was at the material time the territory of the State of Bhopal. Respondent 1 is the brother of the owner of a concern which carries on business of manufacturing drugs, in the name and style of Rajkumar Laboratories, Sehore. Prabhat Trading Company a firm carrying on business at Ahmedabad in the State of Bombay placed an order on January 26, 1955, with the Rajkumar Laboratories, for 4800 bottles of Mrugmadasav ' an Ayurvedic 18 preparation. The Rajkumar Laboratories prepared the drug and as it contained rectified spirit, paid Rs. 3600 as excise duty to the Bhopal State. A permit authorising export of the preparation out of the Limits of Bhopal State was also obtained on July 28, 1955. A motor truck belonging to the second respondent was engaged for transporting the preparation from Sehore to Ahmedabad. On July 29, 1955, Sub Inspector Shintre stopped the motor truck at Dohad a. town in the State of Bombay The motor truck on examination was found carrying 7073 bottles of various sizes labelled "Mrugmadasav, Rajkumar Laboratories, Sehore. " on the label was also printed the legend that the preparation contained 85.5% alcohol. Respondents 1 and 2 who were accompanying the motor truck in a jeep in which also bottles of Mrugmadasav were found, were arrested. Samples of the contents of the bottles were drawn and collected in the presence of Panchas and were sent to the Assistant Chemist, Drugs and Excise Laboratory, Baroda, for analysis and report. Samples were also sent to the Principal of R. A. Poddar Ayurvedic college at Bombay. The respondents and eight others were then prosecuted in the Court of the Judicial Magistrate, 1st class, Dohad, State of Bombay for offences punishable under SS. 65(a) and 66(1)(b) of the Bombay Prohibition Act XXV of 1949. The Magistrate convicted the first respondent of offences under 88. 65(a) and 66(1)(b), the second respondent of offences under 8. 65(a) read with 8. 81 of the Bombay Prohibition Act, and four other accused with whom we are not concerned in this appeal, of certain offences. The Court of Session at Panch Mahals at Godhra, in appeal, confirmed the order and sentence, but in exercise of its revisional Jurisdiction, the High Court of Bombay set aside the conviction and sentence passed upon the respondents and acquitted them. The High Court held (a) that the State failed to prove that the contents of the bottles were liquor meant for consumption 19 as intoxicant and (b) that the State Government "could not validly come to the conclusion that the bottles contained intoxicating liquor without obtaining the opinion of the Board of Experts constituted under section 6A of the Bombay Prohibition Act. Against the order of acquittal the State of Bombay has preferred this appeal with special leave. It was the Case for the State that the bottles seized by the police, though labelled "Mrugmadasav", which is an Ayurvedic preparation indicated foruse in delirious fever and cholera, did not contain genuine Mrugmadasav but contained intoxicating liquor, import, transportation and possession whereof without a permit or licence under the Bombay Prohibition Act were prohibited. H. P. Parikh, Assistant Chemist, Drugs & Excise Laboratory, Baroda, stated that on analysis, the samples were found to contain 75.55% to 79.97% V/V ethyl alcohol and that in his opinion contents of the bottles were not an "Asav" preparation. In his opinion the liquid analysed was fit for use as intoxicating liquor and that it was not a standard preparation, though he could not say whether it was a medicinal preparation, he having no means of examining the other active ingredients. M. Y. Lele Principal of R. A. Podar Ayurvedic College, stated that the principal constituent of Mrugmadasav is musk (Mrugmad), which has a characteristic and penetrating odour, and that he could not get any odour of musk out of the sample sent to him and that, in his opinion, the contents of the bottles were not Mrugmadasav at all. He also stated that in about 6 1/2 seers of Mrugmadasav prepared according to the Ayurvedic formula there would be 20 tolas of musk and that the current market rate of musk was Rs. 60 to Rs. 80 per tola. One Ansare, Excise Inspector of Sehore, was also examined on behalf of the prosecution. He stated that the alcoholic proof strength of the liquid in the bottles was 150 and the percentage of alcohol therein was .855% V/V and that the rest was water. The 20 witness deposed that the Mrugmadasav which was meant for export to Ahmedabad was manufactured under his supervision and that it was a "proprietary ayurvedic preparation of added alcohol", and that it was "not a genuine preparation of self generated alcohol". To a question asked in cross examination, the witness stated that in his presence 50 tolas of rectified spirit were added to 4 tolas of musk and 2 tolas each of black pepper, jaifal, pipal and cinnamon. This part of the statement of the witness was disbelieved by the trial Magistrate and by the Sessions Judge. The Magistrate held on review of the evidence that the respondents had imported into the State of Bombay a preparation which contained a large percentage of alcohol which was not self generated that the preparation did not contain musk and that it did not conform to the standard formula of Mrugmadasav and that the preparation seized by the police was meant for internal consumption and as consumption thereof was likely to cause intoxication it was not exempt from the operation of sections 12 and 13 of the Act. The Sessions Judge agreed with the Magistrate. But the High Court disagreed with that view on the ground that the testimony of Lele, who relied solely upon his 'sense of smell" could not justify the conclusion that the liquor(l seized was alcohol meant for consumption as intoxicating liquor and that Parikh, who found on examination that the preparation seized contained 75% alcohol Was unable to state what the other ingredients were. Section 2(24) of the Bombay Prohibition Act defines "liquor" as including (a) spirit of wine, denatured spirit, beer, toddy and all liquids consisting of or containing alcohol; and (b) any other intoxicating substance which the State Government may, by notification in the Official Gazette, declare to be liquor for the purpose of the Bombay Prohibition Act. Section 2(22) defines "intoxicant" as meaning any liquor, intoxicating drug, opium or any other substance, which the State Government may by notification in the official Gazette declares 21 to be an intoxicant. Sections 12 to 24, in Chapter Ill of the Act, contain diverse prohibitions. By section 12 it is provided that "No person shall (a) manufacture liquor; ( b) construct or work any distillery or brewery; (c) import, export, transport or possess liquor; or sell or buy liquor. Section 13 provides that no person shall (a) bottle any liquor for sale; (b) consume or use liquor; or (c) use, keep or have in his possession any materials, still utensils, implements or apparatus whatsoever for the manufacture of any liquor. These prohibitions have to be read subject to section 11 which, in so far as it is material, provides that notwithstanding the prohibitions contained in the Chapter it shall be, lawful to import, export, transport, manufacture, sell, buy, possess, use or consume any intoxicant in the manner and to the extent provided by the provisions of the Act or any rules, regulations or orders made in accordance with the terms and conditions of a licence, permit pass or authorization granted thereunder. The prohibitions contained in ss.12 and 13 are also subject to restrictions contained in section 24A which was added by Bombay Act 26 of 1952. In the Act, as originally enacted, the prohibitions contained in the various sections were, subject to section 11 absolute. The validity of the Bombay Prohibition Act was challenged in the Bombay High Court, and that High Court declared certain provisions of the Act ultra vires (Fram Nusservanji Balsara vs State of Bombay(l). Against the decisions of the High Court an appeal was preferred to this Court(2). Fazal Ali, J., who delivered the judgment of the Court summarised his conclusions in so far as they are material to this appeal, as follows: In the result I declare the following provisions of the Act only to be invalid: (1) 1. L. R. (2) The State of Bombay vs F.N. Balsara ; 22 (1) Clause (c), of section 12, so far as it affects possession of liquid medicinal and toilet preparations containing alcohol. (2) Clause (d) of section 12, so far as it affects the selling or buying or such medicinal and toilet preparations containing alcohol. (3) Clause (b) of section 13, so far as it affects the consumption or use of such medicinal and toilet preparations containing alcohol." The Bombay Legislature there after enacted Act 26 of 1952 which by section 7 added s.24A, which as subsequently amended reads as follows: "Nothing in this Chapter shall be deemed to apply to (1) any toilet preparation containing alcohol which is unfit for use as intoxicating liquor; (2) any medicinal preparation containing alcohol which is unfit for use as intoxicating liquor; (3) any antiseptic preparation or solution containing alcohol which is unfit for use as intoxicating liquor; (4) any flavouring extract, essence or syrup containing alcohol which is unfit for use as intoxicating liquor: Provided that such article corresponds with the description and limitations mentioned in section 59A: Provided further that the purchase, possession or use of any liquor or alcohol for the manufacture of any such article shall not be made or h d except under a licence granted under section 31A." By this addition, the prohibitions imposed by sections 12 and 13 were not to apply to toilet, medicinal, 23 antiseptic and flavouring extract, essence or syrup preparations containing alcohol specified therein. The respondents contend that Mrugmadasau imported by them and found in their possession by the Sub Inspector of Police was a genuine Ayurvedic medicinal preparation; that in ay event, the State must prove that it was not a medicinal preparation; and that the burden lies on the State to prove their case that the importation and possession by the respondents of the contents of the bottles was in violation of the prohibitions imposed by sections 12 and 13 of the Act inviting as a consequence the penal provisions of sections 65 and 66 of the Act. In a criminal prosecution, normally the burden lies upon the prosecution to prove all the ingredients which constitute the offence charged against the accused, and we are unable to agree with the submission of the Solicitor General that a different rule is indicate in the trial of offences under the Act. It was for the State to prove that the substance seized, if a medicinal preparation, was not unfit for use as intoxicating liquor. The State has even under the Prohibition Act to establish that the respondents had infringed the prohibitions contained in sections 12 and 13. Undoubtedly, by virtue of section 24 a the prohibitions do not apply to certain categories of toilet, medicinal, antiseptic and flavouring preparations, even if they contain alcohol; but on that account the burden lying upon the State to establish in any given case in which it is alleged that the accused has infringed the prohibitions contained is sections 12 and 13 that the infringement was not in respect of an article or preparation which was not in respect of an article or preparation which was covered by section 24 A is not shifted on to the shoulders of the accused. Section 24 A is in substance, not an exception; it takes out certain preparations from the prohibitions contained in sections 12 13 But the operation of section 24A does not extend to all medicinal, toilet antiseptic or flavouring preparations containing alcohol; even if the preparation 24 is a toilet, medicinal, antiseptic or flavouring preparation,if it is fit for use as intoxicating liquor the prohibitions contained in sections 12 and 13 will apply. In order that the provisions contained in section 24A is attracted, the contents of the article. even as a medicinal preparation has by the first proviso to correspond with the description and limitations" contained in section 59A i.e. no more alcohol shall be used in the manufacture of such article than the quantity necessary for extraction or solution of the elements contained therein and for the preservation of the article, and in case of manufacture of an article in which the alcohol is generated by a process of fermentation the amount of such alcohol does not exceed 12 per cent. If alcohol in excess of the quantity prescribed by s.59A is found in the article, the provisions of section 24 A will not apply irrespective of the question whether it is fit or unfit to used as intoxicating liquor. Again, the preparation, even if it is medicinal, toilet, antiseptic or flavouring, must to unfit for use as intoxicating liquor i e. it must be such that it must not be capable of being used for intoxication without danger to health. If the preparation may be consumed for intoxication it would still not attract the application of section 24 A provided the intoxication would not be accompanied by other harmful effects. A medicinal preparation which may, because of the high percentage of alcohol contained therein, even if taken in its ordinary or normal dose intoxicate liquor A medicinal preparation containing a small percentage of alcohol ma still be capable of intoxicating if taken in large quantities, but if consumption of the preparation in large quantities is likely to involve danger to the health of the consumer, it cannot be regarded as fit to be used as intoxicating liquor. In the case before us, the preparation which is styled Mrugmadasau was sought to be passed off as a medicinal preparation. If genuine, it could have 25 been used in the treatment of certain fevers and cholera. The preparation, however, contained 75.5 ^ alcohol which is much in excess of the normal percentage of alcohol found in that preparation according to the standard Ayurvedic formula. The other constituents of Mrugmadasav as given in Bharat Bhishag Ratnakar Part IV are honey, water and comparatively small quantities of musk, black pepper, cloves, nut meg and cinnamon, and these are not such as to create any harmful effects or danger to health. From the evidence of Lele, it is clear, not withstanding the assertion to the contrary of Ansare (which is disbelieved by the Trial Magistrate and the Sessions Court) that the preparation seized could not contain any substantial quantity of musk. Having regard to the market price of musk, which ranged between Rs. 60 to Rs. 80 per tola at the material time, it would be impossible for any manufacturer intending to do business as a seller of drugs to price a bottle of Mrugmadasav at Rs.1 12.0 per Lb. When according to the standard formula it would contain about 4.% of musk and according to Ansare the preparation contained 8% of musk by weight. Even according to the standard formula, the value of musk alone in one Ib. Of Mrugmadasav would be from Rs.100 to Rs.140. The preparation seized by the police, therefore, could not contain genuine musk in any substantial or even appreciable quantity. The High Court did not rely upon the bare assertion of Lele because it was founded only upon the "sense of smell"; but the evidence of Lele is corroborated by the circumstance that musk could not be a constituent of the preparation, which was seized in the large quantity which it was claimed it contained. The other constituents of the preparation, according to Ansare, are comparatively speaking harmless drugs and having regard to the large percentage of alcohol even if it be regarded as a medicinal preparation, though not a standard 26 preparation, which was medicinal, prima facie, it was capable of intoxicating taken in a normal dose in which any "Asav" may be consumed. In any serious danger to health or concomitant deleterious effect. In that view of the case it must be held that the preparation seized by the police was not saved by virtue of section 24 A from the prohibitions contained in sections 12 and 13 of the Act. It is not the case of the accused and the burden of proving that case would lie upon the accused, that the importation or possession of the article seized was permitted under section 11 of the Act. The High Court following an earlier judgement of the Bombay High Court in D. k. Merchant vs The State of Bombay (1), decided against the State also on the ground that the prosecution for the offences under sections 65 and 66 could not be maintained unless the State Government was satisfied after consulting the Board of Experts under section 6A that the article was intoxicating liquor. In our view section 6A is not susceptible of the interpretation placed upon it by the High Court. Section 6A provides as follows: "6A. (1) For the purpose of determining whether (a) any medicinal or toilet preparation containing alcohol, or (b) any antiseptic preparation or solution containing alcohol, or (c) any flavouring extract, essence or syrup containing alcohol, is or is not an article unfit for use as intoxicating liquor, the State Government shall constitute a Board of Experts. (1) 27 (2) The Board of Experts constituted under sub section (1) shall consist of such members, not less than three in number, with such qualifications as may be prescribed. The members so appointed shall hold office during the pleasure of the State Government. (3) To members shall form a quorum for the disposal of the business of the Board (4) Any vacancy of the number of the Board shall be filled in as early as practicable: Provided that during any such vacancy the continuing members may act, as if no vacancy had occurred. (5) The procedure regarding the work of the Board shall be such may be prescribed. (6) It shall be the duty of the Board to advise the State Government on the question whether any article mentioned in sub section (1) containing alcohol is unfit for use as intoxicating, liquor and on such other matters incidental to the said question as may be referred to it by the State Government. On obtaining such advice the State Government shall determine whether any such article is fit or unfit for use as intoxicating liquor or not and such article shall be presumed accordingly to be fit or unfit for use as intoxicating liquor; until the contrary is proved. " By the first sub section a duty is cast upon the State Government to constitute a Board of Experts for the purpose of determining whether the medicinal, toilet or antiseptic preparations or flavouring materials containing alcohol are unfit for use as intoxicating liquor. Sub sections (2) to (5) deal with matters purely procedural. By sub section (6) duty is imposed upon the Board to advise the State Government on the question whether any substance mentioned in sub section ( 1 ) containing alcohol is unfit for use as intoxicating liquor and on such other 28 matters incidental to the said question as may be referred to it by the State Government. If the opinion of the Board is obtained, duty is imposed on the Government to determine whether the article is fir or unfit to be used as intoxicating liquor and on the determination so made by the Government a rebuttable presumption arises that the article is fit or unfit for use as intoxicating liquor. Substantially, the section creates three distinct obligations: (1) upon the State to constitute a Board for the purposes specified in sub s.(1): (2) upon the Board, when consulted, to advise the State Government whether a substance mentioned in sub section (1) is unfit for use as intoxicating liquor ; and (3) an obligation on the State, when the advice of the Board is received, to determine whether the article is fit or unfit to be used as intoxicating liquor. There is, however, no obligation expressly imposed upon the State in any given case to consult the Board of Experts, nor can such a provision be implied, and there is nothing in sections 65 and 66 which make the consultation with the Board a condition precedent to the institution of proceedings for breach of the provision of the Act. Section 6A WAS Incorporated in the Bombay Prohibition Act by Act 26 of 1952 which also incorporated section 24 A. In view of the judgement of this Court in Balsaras case (1) it was found that the Bombay Prohibition Act, in so far as it sought to impose restrictions and to provide penalties for infringement of those restrictions in respect of genuine medicinal, toilet, antiseptic preparations and flavouring extracts, was ultra vires. The Legislature enacted section 24 A and restricted the prohibitions contained in sections 12 and 13 qua these preparations. It also provided for setting up machinery for determining whether the preparations specified were unfit for use as intoxication liquor: but the Legislature did not impose any obligation upon the State to resort to the MACHINERY PROVIDED BY section 6A. By declining to avail itself of the machinery provided (1) The State of Bombay vs F. N. Balsara, [1951] section C. R . 682. 29 by sub section (6) of section 6A, in cases which are not sent to the Board, the State may undertake an onerous burden, i.e. it will not be entinled to rely on the presumption arising under the last sentence of that sub section and will have affirmatively to establish the ingredients of the offence. Consultation with the Board and the determination contemplated by 8. 6A would make the task of the State in a prosecution in respect of infringement of prohibitions regarding the liquor contained in ss.12 and 13 somewhat less onerous. The State may in a prosecution for infringement of the prohibition contained in sections 12 and 13 rely. upon the presumption, after resorting to the machinery under section 6A(6), but is not obliged to rely upon the presumption. Imposition of a duty to constitute a Board for the purposes specified in sub section (1), does lot involve a duty to consult the Board and imposition of a duty upon the Board to advise the State Government does not involve a duty to consult the Board in every case where a prosecution is sought to be launched in respect of any medicinal, toilet, antiseptic or flavouring preparation (containing alcohol. The plea that because the Government of Bhopal had levied a duty on the preparation an(l had granted a permit, no offence was committed by importing and possessing the offending preparations in the State of Bombay has, in our judgment, no substance. C which is a permit issued by the Government of Bhopal to export spirit, medicinal, toilet preparations and perfume containing Bhopal made spirit on payment, of duty in Bhopal State does not protect the importer of the preparation in another State against prosecution for an offence according to the law of that other State committed by the importation of such articles. The export permit has not and cannot have extra territorial effect; it merely enables a person seeking to export preparation to do so. The statement in Ext. L, a letter by the Prabhat Trading Co. to 30 Rajkumar Laboratories, Sehore that the former ``hold a licence for possession and sale" without production of such licence, cannot be set up in set up in defence. If it was the case of the respondents (and the burden of proving lay upon the respondents) that the importation and possession of the article was lawful in view of a licence issued under section 11, it was for them to produce the licence granted under that section. None such having been produce, the defence is not available to the respondents. Nor does the order of the Commissioner of Excise Department, Bhopal dated October 14, 1955 (Ext. M) advising against the exportation to the State of Bombay by the manufacturers to in the State of Bhopal of proprietary spirituous preparations including Mrugmadasav or other Ayurvedic preparations which contain a large percentage of alcohol without getting the preparations classified for duty purposes assist their case. It appears that in July , 1954 the Excise and prohibition Director of Bombay had addressed a letter to the Chief Commissioner of Bhopal informing that Officer that "28 restricted Asavas and Arishtas" mentioned in the list appended thereto were liable in the State of Bombay to duty at the rate of Rs 3 per Imperial Gallon of six reputed quart bottles and further requesting that Officer to issue instructions to manufacturers in the State of Bhopal that these preparations should not be exported to the State of a Bombay except on payment of the duty at the above prescribed rate to the credit of the State of Bombay and under cover of an export pass granted by the competent Excise authority of the District of export. The list of restricted Asavas and Arishtas does not include "Mrugmadasav" and it expressly refers to "Ayurvedic preparations prepared according to Ayurvedic process containing self generated alcohol. " There is nothing in the letter dated July 23, 1954, which may lend support to the contention of the respon 31 dents that they had on payment of excise duty been authorised to import "Mrugmadasav" and the prohibitions contained in sections 12 and 13 in respect of preparations containing alcohol were suspended, for the preparation is not one listed in the Schedule nor does it contain self generated alcohol. We are of the view, therefore, that the prohibitions contained in 88. 12 and 13 operated in respect of the preparation seized by the police and that the payment of excise duty to the Bhopal State under the law in force in that State, for exporting the preparation from that State did not protect the respondents from liability to prosecution for infringement of provisions of the Bombay Prohibition Act XXV of 1949 within the State of Bombay. We further hold that the High Court was in error in holding that the consultation with the Board under section 6A(G) of the Act was condition precedent to the launching of prosecution against the respondents. We set aside the order passed by the High Court and restore the order passed by the Judicial Magistrate, 1st Class, Dohad, and confirmed by the Court of Session at Panch Mahals sentencing the respondent No. 1 to rigorous imprisonment for six months, and to pay a fine of Rs. 500 and in default of payment of fine to suffer rigorous imprisonment for three month, and respondent 2 to rigorous imprisonment for one month and to pay a fine of Rs. 300 and in default of payment of fine to uudergo rigorous imprisonment of one month and fifteen days in addition. The order of confiscation of the property is also restored. Appeal allowed.

The respondents were charged with offences punishable under sections 65(a) and 66(1)(b) of the Bombay Prohibition Act, 1949, for violating the provisions of sections 12 and 13 of the Act. The prosecution case was that the respondents brought in their motor truck into the State of Bombay from the adjoining State of Bhopal, bottles labelled Mrugmadasav, and that the bottles did not contain genuine Mrugmasadav, an Ayurvedic preparation, but only intoxicating liquor, import transportation and possession whereof without permit or licence under the Act were prohibited. The Magistrate found that the bottles contained 75.50% alcohol much in excess of the normal percentage of alcohol used in preparing Mrugmadasav, according to the standard Ayurvedic formula 16 that it did not contain any appreciable quantity of musk essential in such a preparation, and that having regard to the large percentage of alcohol it was capable of being used for purposes of intoxication. Accordingly he held that the preparation Was not saved by s 24A from the prohibitions contained in sections 12 and 13 of the Act,and convicted the respondents. The High Court, however, acquitted the respondents on the grounds (a) that the State had failed to prove that the contents of the bottles were. liquor meant for consumption as intoxicant, and (b) that the State could not validly come to the conclusion that the bottles contained intoxicating liquor without obtaining the opinion of the Board of Experts constituted under. s 6A if the Act. In the appeal filed by the State of Bombay with special leave the respondents pleaded that, in any case, as the Government of Bhopal had levied a duty on the preparation and had granted a permit, no offence was committed by importing and possessing the preparations in the State of Bombay. ^ Held:(1) that it was for the State to prove that the substance, if a medicinal preparation. was not unfit for use as intoxicating liquor and to establish that the prohibitions contained in sections 12 and 13 of the Bombay Prohibitions Act, 1949, had been infringed, and that the burden of proof that infringement was not in respect of a preparation which was covered by s.24A was not shifted on the shoulders of the accused; (2) that if alcohol in excess of the quantity prescribed by s.59A was found in the article, the provisions of section 24A would not apply irrespective of the question whether it was fit or unfit to he used as intoxicating liquor; (3) that a medicinal preparation which may, because of the high percentage of alcohol contained therein, even if taken in its ordinary or normal dose intoxicate a normal person, would be regarded as intoxicating liquor within the meaning of section 24A, but such a preparation containing a small percentage of alcohol even though it might be capable of intoxicating if taken in large quantities, could not be regarded as fit to be used as intoxicating liquor within the meaning of that section. (4) that a State may in a prosecution for infringement of the prohibitions contained in sections 12 and 13 of the Act rely upon the presumption after resorting to the machinery under s 6A(6), but these was no obligation upon the State in any given case to consult the Board of Experts under section 6A nor was consultation with the Board a condition precedent to the institution of proceedings for breach of the provisions of the Act . 17 D. R. Merchant vs The State of Bombay, (1958) Bom. I, R. 1183, disapproved. (5) that the payment of excise duty to the Bhopal State under the law in force in the State for exporting the preparation from the State did not protect the respondents from liability to prosecution for the infringement of the prohibition laws in force in the State of Bombay; and (6) that in the instant case the preparation though styled Mrugmadasav was not a genuine medicinal preparation and having regard to the large percentage of alcohol contained therein it was capable of intoxicating taken even in a normal dose, and was not saved by section 24A from the prohibitions contained in sections 12 and 13 of the Act.

The appellant is a foreign national. At Colva, on seeing a police party on patrol he accelerated the speed of his motor cycle ignoring the signal given by Assistant Sub Inspector of Police (P.W. 7) and in that process lost con trol over the vehicle and fell down. Thereafter he immedi ately stood up and removed a paper wrapping from his pant pocket and threw it away which on verification was found to contain a small quantity of brown sugar. The appellant was taken to the nearby police post along with the motor cycle. A hand bag attached to the motor cycle was opened and exam ined in the presence of two pancha witnesses and it was found that there was brown sugar hidden in the Camera case, Ganja oil in the steel container, and opium in the shaving cream tube, torch light and shoe. All the substances were weighed and seized under a panchnama and sample of these contrabands divided into three categories were sent to Chemical Analyst (PW. 6) who found that one sample contained 16.8% w/w of Morphine (an alkaloid extracted from opium), and the other sample contained a dark brown 1026 sticky substance having odour similar to that of extract of cannabis. The quantity of the substance namely a dark brown soft mass having characteristic colour of opium found in the third sample was not sufficient to carry out further analy sis. The appellant was consequently prosecuted for possession of prohibited drugs under the Narcotic Drugs and Psychotrop ic Substances Act, 1985. The Sessions Judge convicted him under Sections 21, 20(b)(ii) and 18 of the Act and imposed a sentence of 10 years rigorous imprisonment and a fine of Rs. 1,00,000 and in default to undergo rigorous imprisonment for one year. The High Court dismissed the appeal of the appel lant and confirmed the sentence passed by the Trial Court but modified the default sentence from one year to six months. In this appeal challenging the correctness of the con viction it was contended on behalf of the appellant that: (i) in the absence of any injury on the person of the appel lant, the case of the prosecution that the appellant fell down from his vehicle is hardly acceptable (ii) the pancha witnesses were not the respectable inhabitants of the local ity therefore the seizure of the contrabands was in viola tion of the provisions relating to search and seizure; (iii) the omission to send sufficient representative quantity of the contrabands for analysis affected the veracity of the prosecution case; (iv) the omission to include the owner of the motor cycle (PW 5) as an accused and the non examination of the person at whose instance the vehicle was lent to the appellant affected the prosecution case; and (v) since the appellant was in possession of these drugs or substances in a small quantity for his personal consumption he was liable to be punished only under section 27(a) of the Act. Dismissing the appeal, HELD: 1. If a person is thrown off or fails from a speeding vehicle he may sustain injuries either serious or simple or escape sometimes unhurt but it depends on the speed of the vehicle, the manner of fall, the nature of the soft and the surface of the earth etc. In the instant case, the evidence and other connected facts lead to the inference that the appellant had fallen down immediately after he attempted to speed up the vehicle and was caught hold of by the police. Therefore it is right that the appellant was caught by the police under the circumstances as put forth by the prosecution and the appellant however escaped unhurt. [1031H; 1032A D] 2. If pancha witnesses are not respectables of the same locality 1027 but from another locality, it may amount only to an irregu larity, not affecting the legality of the proceedings and that it is a matter for Courts of fact to consider and the Supreme Court would not ordinarily go behind the finding of facts concurrently arrived at by the Courts below. [1032G H; 1033A B] Sunder Singh vs State of U.P., ; Tej Bahadur vs State of U.P., and State of Punjab vs Wasson Singh and Ors. , ; ; ap plied. 2.1 In the instant case, the appellant was secured in the midnight near the Police Out Post. It is indisputably shown that the pancha witnesses are not outsiders but are residents of the same area where the Police Out Post is situated. The fact that these two witnesses are not residing in the vicinity of the seizure, does not disturb the accept ance of the evidence relating to the seizure of the contra bands and other articles. Except making some bare sugges tions that both the witnesses were regular and professional witnesses, nothing tangible has been brought out in the cross examination to discredit the testimony. [1033C E] 3. In the instant case, the omission to send sufficient quantity of samples of contrabands for analysis does not affect the intrinsic veracity of the prosecution case. The testimony of the Chemical Analyst and her opinion recorded in the unimpeachable document lend assurance to the case of the prosecution that the contrabands seized from the posses sion of the appellant were prohibited drugs and substances. [1033F H] 4. The Medical Officer is not expected to know the differences in the legal parlance as defined in section 2(xiv) and (xxii) and specified under Schedules I to III of the Narcotic Drugs and Psychotropic Substances Rules 1985 made under the Act. Therefore, the admission of the Chemical Analyst that she does not know the difference between the narcotic drugs and psychotropic substances by itself is no ground for ruling out her evidence. [1034A B] 5. There is absolutely no material to hold that the owner of the motor cycle was in any way connected with the seizure of the contrabands or he has committed any indict able offence though the vehicle belonged to him. The non examination of the person at whose instance the owner lent his motor cycle to the appellant does not in any way affect the prosecution case. [1034C D] 1028 6. Section 27(a) of the Act provides punishment for illegal possession in small quantity for personal consump tion of any narcotic drug or psychotropic substance. The expression 'small quantity ' occuring in that section is explained under Explanation I there of as such quantity as may be specified by the Central Government by Notification in the Official Gazette. [1035A B] In the instant case, the penal provisions of section 27(a) has no role to play as the prohibited drugs and sub stances possessed by the appellant were far in excess of the quantity mentioned in Column 3 of the table under the rele vant Notification. [1036D] Even if a person is shown to have been in possession of a small quantity of a narcotic drug or psychotropic sub stance, the burden of proving that it was intended for the personal consumption of such person, and not for sale or distribution, lies on such person as per Explanation 2 of Section 27 of the Act. [1036E] The very fact that the appellant in the instant case had kept these drugs and substances in many ingeniously devised places of concealment in the camera, shaving tube, torch and shoes would indicate that the appellant was having full knowledge that the drugs he carried were prohibited drugs and that he was having them in violation of law. Therefore, the sentence of 10 years rigorous imprisonment and the fine of Rs.1,O0,000 with the default clause as modified by the High Court does not call for interference. [1036F; 1037D]

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.

With a view to preventing the petitioner detenu from indulging in activities that were prejudicial to the mainte n ance of public Order in Greater Bombay, the Commissioner of Police, Greater Bombay, in exercise of the powers conferred on him by Sub Section (2) of Section 3 of the read with clause 4 of the National Secu rity (Conditions of detention) (Maharashtra) Order 1980 passed on Order of detention, pursuant whereof the Petition er detenu was detained in Central Prison, Nasik. He was furnished with copies of grounds of detention and other material on the basis of which the detaining authority based his subjective satisfaction. In order to challenge the legality and validity of the detention Order, the detenu filed a Writ Petition before the Bombay High Court which was dismissed. Against the Order of the High Court, the detenu petitioner has filed criminal appeal after obtaining special leave. He has also filed a separate Writ Petition in this Court challenging his deten tion. Both were heard together by this, Court. Counsel for the appellant raised several contentions assailing the legality of the detention order, one of which being that there was inordinate and unexplained delay caused by the Union of India in considering and disposing of his representation dated 26 9 88, as such his continued deten tion was unconstitutional and illegal being violative of Article 22(5) of the Constitution. Allowing the appeal as also the Writ Petition this Court 192 HELD: The detenu has an independent constitutional right to make his representation under Article 22(5) of the Con stitution of India. Correspondingly there is a Constitution al mandate commanding the concerned authority to whom the detenu forwards his representation questioning the correct ness of the detention Order clamped upon him and requesting for his release, to consider the said representation within reasonable dispatch and to dispose the same as expeditiously as possible. [198H; 199A B] (Jayanarayan Sukul vs State of West Bengal, ; ; A bdul Karim & Ors. vs State of West Bengal, ; ; Pankaj Kumar Chakravarty & Ors. vs State of West Bengal, ; This constitutional requirement must be satisfied with respect but if this constitutional imperative is observed in breach, it would amount to negation of the constitutional obligation rendering the continued detention constitutional ly impermissible and illegal; since such a breach would defeat the very concept of liberty the highly cherished right which is enshrined in Article 21 of the Constitution. [199B C] The use of the word "as soon as may be" occurring in Article 22(5) of the Constitution reflects that the repre sentation should be expeditiously considered and disposed of with due promptitude and diligence and with a sense of urgency and without avoidable delay. What is reasonable dispatch depends upon the facts and circumstances of each case and no hard and fast rule can be laid down in that regard. [199D] Rashik Sk. vs State of West Bengal, Smt. Shalini Soni & Ors. vs Union of India & Ors. , ; , In the instant case, the gap between the receipt and disposal of the representation is 28 days but upon the date of service of the order of rejection on the detenu the delay amounts to 32 days. The only explanation offered by the 3rd respondent is that further information required from the State Government was received by the third respondent on 17 10 88 after a delay of nearly 14 days and then the repre sentation of the detenu was disposed of on 27 10 88 within which period there were certain holidays. There is an inor dinate and unreasonable delay and the explanation given by the third respondent is not satisfactory and acceptable. Detenu directed to be set at liberty forthwith. [199F H; 200A, B] 193 B. Sundar Rao & Ors. vs State of Orissa, ; Jnanendra Nath Roy vs The State of West Bengal, ; Frances Coralie Muffin vs W.C. Khambra and Others, ; ; Vijay Kumar vs State of Jammu and Kashmir State of Uttar Pradesh and another; , and Mohinuddin alias Moin Master and Ors., vs D.M. Beed, ; , referred to.

The appellant company was engaged in the manufacturing of airconditioning and refrigeration equipment under a proper licence. On January 21, 1970 the appellant cleared from the factory cooling coils, condensers and compressors and supplied the same to M/s. Ravi Cold Storage, Ahmedabad for putting up a cold storage and paid duty of Rs.13,547.20 P in respect thereof. Again on January 21, 1969, the appel lant cleared from the factory various parts of refrigerating and air conditioning appliances and machinery for an Ice factory plant to one M/s. Gujarat Industrial Investment Corporation Ltd., Ahmedabad and paid a duty of Rs. 19,336.87P. Both the aforesaid goods were manufactured at the appellant 's factory. Thereafter the appellant filed two refund applications of the said excise duty before the Assistant Collector of Customs, contending that the refrig erating and air conditioning appliances which they had removed on the aforesaid dates were not excisable goods failing under Tariff Item No. 29A(3). The Assistant Collec tor of Customs rejected both the applications holding that the assessment was correctly made. The appellant company preferred two appeals against these orders before the Col lector of Customs and Central Excise, Chandigarh, who dis missed both the appeals. Thereupon the appellant filed a writ petition in the High Court. The learned single Judge who heard the petition dismissed the same holding that the goods supplied are parts of a refrigerating and air condi tioning appliances, that a complete cold storage plant was not supplied to M/s. Ravi Cold Storage, Ahmedabad or M/s. Gujarat Industrial Investment Corporation Ltd., Ahmedabad and that they would fail clearly within the purview of Tariff sub item (3) of Tariff Item 29 A. An appeal preferred against this judgment was dismissed by a Division Bench in limine. Hence this appeal. Before this Court also the appellant inter alia contended that 571 though in its sweep sub item (3) may appear to cover all and every part of refrigerating and air conditioning appliances and machinery of all sorts, the words "and parts thereof" in the heading controlled the meaning and restrict it in the context only to parts of a completed unit which as such completed unit would have come under sub items (1) and (2) of item 29 A. Dismissing the appeal, this Court, HELD: The legislative history and the notifications of the Government show that sub item (3) of item 29 A is a comprehensive provision encompassing within it all sorts of air conditioning and refrigerating appliances and machinery and the Government of India was issuing notifications of exemptions on the understanding that such parts are covered by sub item (3). The language used in sub item (3) is also wide and comprehensive in its application and could not be given a restricted meaning. Sub items (1), (2) and (3) are independent of each other and mutually exclusive. The scope of sub item (3) is neither restricted nor controlled by the provisions of sub items (1) and (2). [576C D] Whether the manufacturer supplies the refrigerating or airconditioning appliances as a complete unit or not is not relevant for the levy of duty on the parts specified in sub item (3) of item 29 A. [576F G] Complete plants which are covered by items (1) and (2) cannot be considered as parts of machinery and such complete plants would not be classifiable under sub item (3) of Item 29 A. [580B C] Mother India Refrigeration Industries Pvt. Ltd. vs Supdt. of Central Excise and Ors., All, overruled. Blue Star Ltd. vs Union of India and Anr., Bom. ; Joy Ice Cream, Bombay vs Union of India, Bom.; Calicut Refrigeration Co. vs Collector of Customs & Central Excise, Cochin and Ors. , Ker.; Chhibramau Cold Storage vs CEGAT, ; Goptal Cold Storage & Ice Factory vs Union of India and Ors., and Anil Ice Factory & Anr. vs Union of India and Ors., , 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]

After following the procedure prescribed by the Bombay District Municipal Act, 1901, and after obtaining the requisite sanction of the Government the appellant imposed an octroi tax on milk brought within its limits for consumption, use or sale therein. Shortly afterwards the Government passed an 367 order directing that the octroi tax shall not be leviable by the appellant. The appellant contented that the Government had no power to control the imposition of the tax once it had been properly imposed. ^ Held, that the Government was competent under section 59 of the Act to pass the order. Section 59 provided that subject to any general or special orders which the State Government may make, a Municipality may "impose" the tax after following the procedure laid down and after obtaining the sanction of the Government. The word "impose" in section 59 meant the actual levy of the tax after authority to levy it had been acquired by rules duly made and sanctioned and this imposition was subject to the general or special orders of the Government. The general and special orders under section 59 could not be confined to orders under section 73 which gave the Government power to suspend the tax in certain cases. Held, further, that the order of the Government was not discriminatory. Subsequently the Government had prohibited all municipalities from levying octroi tax on milk. For the same reason no question of mala fides could arise. Per Ayyangar, J. Imposition of tax was a continuing power deriving vitality from the power of the authority to impose it. The power of the Government to issue special or general order under section 59 was therefore not exhausted after "imposition" of the tax. There were provisions in sections 47, 73 and 74 for other contingencies but except for the opening words of section 59 there was no provision to enable Government to intervene in cases where the continued levy was against public interest. The opening words of section 59 clothed the Government with power to direct a municipality to desist from imposing a tax.

The first appellant No. 1 sent a consignment of mustard oil in a tank wagon from Firozabad, U. P. to itself at Calcutta where it took delivery of the wagon from the railway authorities. The Food Inspector took samples of the oil from the wagon which on analysis were found to be adulterated. The appellants were prosecuted under section 462 of the Calcutta Municipal Act, 951 for storing adulterated mustard oil for sale. The 665 appellants contended that the presumption under sub section (4) of section 462 that the mustard oil was stored for sale was rebutted in view of certain arrangements between the U. P. Oil Millers Association and the Deputy Commissioner of Police and of a letter written by the appellants to the Association asking that a sample may be taken and tested so that the appellants "may take the delivery of oil only if it is found pure on analysis. " Held, that this was not sufficient to rebut the presumption '. that the oil was stored for sale. The letter did not say that the oil would not be sold; it was not stated as to what would be done if the oil was found to be impure. There was no arrangement between the Association and the Corporation which was the sole authority to take action. The arrangement and the letter were a device to make detection difficult.

Civil Appeal No. 548 of 1958. Appeal by Special Leave from the judgment and order dated March 27, 1957, of the Patna High Court in Misc. Judicial Case No. 315 of 1956. B. Sen, P. W. Sahasrabudhe and A. C. Ratnaparkhi. for the Appellant K. L. Hathi and R. H. Dhebar, for Respondent No. 1. N. C. Chatterjee and section N. Mukerji, for Respondent No. 2. 1961. October 9. The Judgment of the Court was delivered by SARKAR, J. on September 25, 1947, the appellant was appointed by respondent No. 2, the Tata Iron and Steel Co., Ltd. (hereafter called the Company) as the Chief Labour officer of its collieries of which it appears to have a few, and he worked 33 under the Company till the latter terminated his services by a notice dated December 5,1955. On such discharge, the appellant , claiming to be a Welfare Officer of a mine within r.74(2) of the Mines Rules 1955, which rule we shall later ser out, filed an appeal before respondent No.1, the Chief Inspector of Mines in India, under that rule questioning the validity of his discharged by the Company. The Chief Inspector held that the appellant was not a Welfare Officer within that rule and refused to entertain his appeal. The appellant then moved the High Court at Patna under article 226 of the Constitution for an appropriate writ directing the chief inspector to decide the appeal. The High Court dismissed the appellant 's petition agreeing substantially with the view taken by the Chief Inspector. The appellant has now appealed to this Court against the judgment of the High Court. The Mines Rules; 1955 were framed under the , and came into force on July 2, 1956. We are principally concerned with the proviso for. 74(2) but this has to be read with r.72. The relevant portions of these rules are set out below. Rule 72. (1) In every mine wherein 500 or more persons are ordinarily employed there shall be appointed at least one Welfare Officer: Provided that if the number of persons ordinarily employed exceeds 2000, there shall be appointed additional Welfare Officer on a scale of one for every 2000 persons or fraction thereof (2) No person shall as a Welfare Officer of a mine unless he possesses (Here certain qualifications are specified) Provided that in case of a person already in service as a Welfare Officer in a mine the 34 above qualifications may, with the approval of the Chief Inspector be relaxed. (3). . . . . (4) A written notice of ever y such appointment. . and of the date thereof shall be sent by the owner, agent or manager t o the Chief Inspector within 7 days from the date of such appointment. . . Rule 73. Duties of Welfare officers: . . . . . . . . . . (Here certain duties are prescribed) Rule 74. (1). . . . . . . (2) The condition of service of a Welfare Officer shall be the same as of other members of the staff of corresponding status in the mine; Provided that in the case of discharge or dismissal, the Welfare Officer, shall have a right of appeal to the Chief Inspector whose decision thereon shall be final and binding upon the owner, agent or manager of the mine as the case may be. The Chief Inspector mentioned in these Rules is the Chief Inspector of Mines in India. If the appellant was not a Welfare officer within the proviso to r. 74(2) as the company contends, then, of course, no appeal by him lay under it. He would then clearly not be entitled to the writ he asked. The question therefore is whether the appellant was a Welfare Officer within the rule and is really one of construction of it. We desire now to point out certain facts as to which there is no controversy. First, both the Act and the Rules came into force long after the appellant had been appointed by the Company. Secondly no relaxation of qualifications had been sought from or granted by the Chief Inspector with respect to 35 The appellant under the proviso to sub r. (2) of r. 72 after the Rules came in to force. Thirdly, no notice as contemplated in r. 72(4) had been given concerning the appellant. It appears that the Chief Inspector found that the appellant "was performing duties akin to those of Welfare officers contemplated by rule 73 and he was qualified to work as a Welfare officer. " We propose to deal with this appeal on the basis of these findings. Dealing with the contention noticed by the Chief Inspector and the High Court that a Welfare Officer under r. 74(2) is one who is appointed after the Rules came into force, Mr. Sen for the appellant said that a person like the appellant who had the requisite qualifications and was discharging the duties prescribed for a Welfare officer from before the Rules came into force, would be a Welfare officer within them. He pointed out that the proviso to sub r. (2) of r. 72 clearly contemplated the continuance of the service of such a person as a Welfare officer with relaxation where such was necessary and was granted. He also said that sub r. (4) of r. 72 was inapplicable to Such a person because he had been appointed long ago and because the proviso to r. 72(2) indicated that its application was not intended. We do not think it necessary to pronounce on this question in the present case. In our view, the appeal must fail even if Mr. Sen 's contention is right and that for another reason . We observe that the Rules do not define the term "Welfare officer". But we think it is beyond doubt and indeed the contrary has not been contended that the Welfare officer mentioned in the proviso to r. 74(2) is the same officer as is mentioned in sub r (1) of r. 72. Now it is, in our view, perfectly plain that the Welfare officer contemplated by r. 72(1) is such an officer of one mine. The rule says that there shall be at least one Welfare officer for every mine employing between 500 and 2000 persons and this makes any other view impossible 36 As we understood Mr. Sen, he also accepted that the Welfare officer contemplated is one appointed in respect of one mine. Now, the appellant was on his own case, the Welfare Officer of several mines of the Company and not of one of such mines only. Therefore, we think that he was not a Welfare officer within r. 72(1) and hence not within the proviso to r. 74(2). But Mr. Sen contends that the appellant might be considered as having been severally and independently appointed the Welfare officer of each of the Company 's several collieries in his charge. We think that would be an impossible view to take. One appointment cannot be treated as several appointments and it is not in dispute that the appellant had only one appointment for all the Company 's collieries. We think that this appeal fails and we dismiss it with costs. Appeal dismissed.

The appellant was appointed as the Chief Labour officer by the Company in 1947. In December; 1955, the company terminated his services The appellant, claiming to be a Welfare officer, preferred an appeal to the Chief Inspector of Mines under r. 74(2) of the Mines Rules, 1955. ^ Held, that the appellant was not a Welfare officer and as such could not prefer an appeal under r. 74 (2). The Welfare officer mentioned in r. 74 (2) is the same officer as is mentioned in r. 72 (1) which rule contemplates a Welfare officer appointed in respect of one mine. But the appellant was an officer of several mines of the Company and not of one of such mines only.

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).

Section 12 of the , provides that the Central Government may constitute a Mining Board for any part of the territories to which the Act extended or for any group or class of mine . In 1957 only one mining board i.e. the Bihar Mining Board was in existence and other mining boards were not constituted. Section 57 empowers the Central Government to make Regulations. Section 59(3), as it then stood, provided that before the draft of any regulation was published it should be referred to every Mining Board concerned and that it shall not be published until each such Mining Board had had a reasonable opportunity of reporting on it. The Central Government referred the draft of the Coal Mines Regulations to the Bihar Mining Board which circulated the draft to all the members of the Board and the members communicated their opinions individually to the Central Government. Thereafter, the Regulations were duly published and came into force. The petitioner 's, who were being prosecuted in Bengal for violation of the Regulations, contended that the Regulations were invalid as : (i) it was incumbent upon the Central Government under 'section 12 of the Act to constitute all the Mining Boards and to refer the draft Regulations to all the Boards before they. could be published under section 59. and (ii) the communication of opinions by individual members 'of the Bihar Mining Board did not amount to consultation with the Board within the meaning of section 59(3). Held (Per majority, Subba Rao, J., dissenting), that the 'Coal Mines Regulations, 1957, had been duly framed and published. Section 59(3) merely provided that if a Mining Board was in existence at the relevant time it was obligatory on the Central Government to consult it before 905 the draft Regulation was published. But section 12 was not mandatory and it was not obligatory on the Central Government to constitute any or all of the Mining Boards. There was nothing in the Act or. in the context which justified reading the word "may" in section 12 as "shall". The Mining Board constituted under section 12 had to perform two functions, viz., to make a report in respect of regulations or rules referred to it and to decide cases which may be referred to it under section 81. The working of the Act was not dependent on the constituting of Mining Boards. This construction of section 12 did not render the provisions of section 59(3) nugatory. Apart from consulting the Boards, all parties affected by the draft had an opportunity to make their suggestions or objections and these had to be considered before the draft was settled and the regulations were finally made. Banwarilal Agarwalla vs state of Bihar, , explained. Held, further, that the requirement of section 59(3) had been complied with in referring the draft Regulations to the Bihar Mining Board. All that section 59(3) required was that a reasonable opportunity should be given to the Board to make its report. How the Board chose to make its report, was not a matter which the Central Government could control. Per Subba Rao, J. ,The Coal Mines Regulations were not validly made. The Supreme Court had directly decided in Banwarilal vs State of Bihar that the Regulations were bad as there was no consultation with any Mining Board under section 59 (3) as the Boards were not in existence. A fair construction of sections 12 and 59 (3) of the Act ' also showed that if the Central Government wanted to ' make regulations under section 57 it had to appoint Mining Boards and to refer the regulations to them before publication. If the Central Government wanted to exercise the power under section 59 it had first to exercise the power under section 12. The power to make regulations was coupled with a duty to consult the Mining Boards, and to discharge its duty it was incumbent upon the Central Government to appoint the Mining Boards. Apart from this, the Regulations is so far as they purported to regulate mines in West Bengal had not been validly made as no Mining Board for the West Bengal area had been consulted before making the Regulations. The Act did not empower the Central Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the Country. 906 Banwarilal Agarwalla vs State of Bihar. , followed. Alcock Ashdown & Co. vs The Chief Revenue Authority, Bombay, A. I. R. , referred to.

Section 3 of the Bihar Land Reforms Act, 1950 provided for vesting an estate or tenure in the State. Section 2(h) of the defines a 'mine, to mean any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on. Sub clause (iv) thereto includes there in all open cast workings and sub clause (vi) takes in all lands, buildings etc., in or adjacent to a mine and used for the purposes of the mine. Section 3(1) provides for acquisi tion of rights of owners in respect of coal mines by the Central Government. Section 5(1)empowers the Central Govern ment to direct vesting of the said rights in a Government company. Section 6(1) refers properties vested in the Cen tral Government free from mortgages etc. The appellants instituted a suit in respect of a large expanse of land for declaration of their homestead right thereto. The possession in the zamindari right was settled to their ancestor in 1949. They, therefore, claimed owner ship of leasehold land. The respondent Government company resisted the suit on the grounds, firstly, that the disputed land formed part of a colliery which had vested in the Central Government and thereafter in the company under the provisions of the and secondly, that the interest claimed by the plaintiffs, automatically stood extinguished with the vesting of the estate of the plaintiffs ' lessor by reason of the notification issued under section 3 of the Land Reforms Act. The trial court negatived all the defences anti decreed the suit. 284 Reversing the said decree, the High Court held that the lease granted to the plaintiffs was an encumbrance which was annihilated with the issuance of the notification under section 3 of the Land Reforms Act, and that the lease having thus come to an end the plaintiffs had no title to be declared. It further found that the salt lands were adjacent to a coal mine and were being used for the purpose of the said mine. Therefore, it held that the suit lands were more within the meaning of the Nationalisation Act, and that what vests under that Act is the mine and not .merely the interest of the owner of the mine. Dismissing the appeal, HELD: 1.1 The evidence on record both for the plaintif fappellants and the defendant respondents makes it evident that the land was being used for the purpose of the mine for carrying on the mining operations in respect of the part of the seam lying immediately below the surface. There cannot be any working mine without the surface being included in that concept. If the surface does not form part of the concept of mine, it is not possible to have any excavation. Section 2(h)(iv) of the includes open cast working within the definition of 'mine. ' [289E F] 1.2 The suit land was also adjacent to a coal mine and was being used for the purposes of the said mine, namely, stacking of the coal and effecting local sale thereof. It was therefore, a mine as defined under section 2(h)(vi) of the Act. [289G] 2. Under section 3 of the said Act, the right, title and interest of the owners in relation to the coal mines stood transferred to and vested absolutely in the Central Govern ment free from encumbrances. It was immaterial whether the mine belonged to the State or to a private party. The appel lant 's title to the said land, if any, thus stood extin guished. [289H; 290A] State of West Bengal vs Union of India, [1964] 1 SCR 371, referred to. The parties went to trial knowing fully well what they were required to prove. They have adduced evidence of their choice in support of the respective claims. That evidence has been considered by both courts below. The appellants cannot now turn round and say that the evidence should not be looked into. This is a well accepted princi ple. [290C D] 285 Kunju Kesavan vs M.M. Philip & Ors., ; , 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.

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 plaintiff appellant instituted a suit against the defen dants respondents for the recovery of a sum of Rs. 57,000/ . The appellant was holding permanent lease hold rights over a certain colliery. On January 31, 1949 the appellant granted a sub lease of the colliery to respondent No. 4 for a term of 5 years. He joined respondents 1, 2 and 5 as defendants to the suit on the ground that these three persons along with respondent No. 4 formed a partnership firm known as Saurashtra Coal Concern which was joined in the suit as defendant No. 5. The appellant 's case was that respondent No. 4 was a benamidar for the partnership firm and, therefore, all the respondents were liable for the claim. Respondents 1 and 2 denied the appellant 's claim totally. According to them, respondent No. 4 took the sub lease in his personal capacity and not on behalf of the other respondents. Respondents 4 and 5 who are father and son, admitted the appellant 's case that the lease was obtained by respondent No. 4 on behalf of the partnership firm. The trial court passed the decree against all the respondents. On appeal, the High Court set aside the decree as against respondents 1 to 3 but affirmed the same against respondents 4 and 5. Held: that Section 22 of the , clearly provides that in order to bind a firm by an Act or an ins trument executed by a partner on behalf of the firm, the Act should be done or the instrument should be executed in the name of the firm, or in any other manner expressing or implying an intention to bind the firm. The sub lease was not executed in the name of the firm. On the facts of this case it was held that in obtaining the sub lease, the parties to it did not intend to bind the firm by that transaction, and therefore the decree should be limited only against respondents 4 and 5. Karmali Abdullah Allarakia vs Vora Karimji Jiwanji, I.L.R. , Gouthwaite vs Duckworth, (1810) 12 East 421, Mathura Nath Choudhury vs Sreejukta Bageswari Rani, 46 C.L.J. 362, Pandiri Veeranna vs Grandi Veerabhadi aswami. T.L.R. , Lakshmishankar Devshankar vs Motiram Vishnuram, 6 B.L.R. 1106 and Gordhandas Chhotalal Seth v, Mahant Shri Raghubirdasi Gangaramji, 34 B.L.R. 1137, distinguished.

The respondent was holding the post of an Assistant to the Additional Development Commissioner, Planning, Bangalore. A departmental enquiry was held against him and the Enquiry Officer recommended that the respondent be reduced in rank. After considering the report of Enquiry Officer, the Government issued a notice calling upon respondent to show cause why he should not be dismissed from service. The reply of the respondent was that the entire case had been foisted on him. After considering his representation, the Government passed an order dismissing him from service. The reason given for his dismissal was that the respondent had on two earlier occasions committed certain offences and he had been punished for the same. However, those facts were not given as reasons for the proposed punishment. of dismissal from service. 541 The respondent filed a petition in the High Court under article 226 of the Constitution for quashing the order of his dismissal. The High Court quashed the order of dismissal on the ground that the two circumstances on which the Government relied for the proposed infliction of punishment of dismissal were not put to the respondent for being explained by him in the show cause notice which was issued to him. The appellant came to this Court by special leave. The contentions of the appellant were that the Government was entitled to take into consideration the previous record of Government servant in awarding punishment to him and it was not incumbent on it to bring to the notice of the Government servant the said fact in the second notice. Moreover, as the Government servant in this case had knowledge of his two.earlier punishments he was not in any way prejudiced by their non disclosure in the second notice. Dismissing the appeal, Held, that it was incumbent upon the Government to give the Government servant at the second stage reasonable opportunity to show cause against the proposed punishment and if the proposed punishment was also based on his previous punishments or his previous bad record, that should be included in the second notice so that he may be able to give an explanation. The doctrine of "presumptive knowledge" or that of "purposeless enquiry" is subversive of the principle of "reasonable opportunity". Secretary of State for India, vs I. M. Lal, [1945] F.C.R. 103, Khern Chand vs Union of India, ; , Gopalrao vs State, I.L.R. , Shankar Shukla vs Senior Superintendent of Post Offices, Lucknow Division, A.I.R. 1959 All. 624 and State of Assam vs Bimal Kumar Pandit, [1964] 2 S.C.R. referred to.

vil APPEAL No. 198 of 1956. Appeal from the judgment and decree dated August 24, 1950, of the Allahabad High Court in Execution First Appeal No. 399 of 1947. Gopi Nath Kunzru and Ganpat Rai, for the appellants G. section Pathak and G. C. Mathur, for the respondent. October l 2. The Judgment of the Court was delivered by SHAH, J. The Banaras Bank Ltd. a public limited company having its registered office at Banaras (hereinafter referred to as the Bank) was ordered on March l, 1 940 to be compulsorliy wound up by the High Court of Judicature at Allahabad, and the Official Liquidator was appointed to conduct the proceedings in winding up. On September 12, 1942, an order was made by the High Court under section 187 of the Indian Companies Act, 1913 (VII of 1913) for payment of unpaid calls and the appellants Jyoti Bhushan Gupta. and Gokul Chand, whose names had been placed on the list of contributors, were directed to pay with interest Rs. 95,178/5/9 to the official Liquidator of the Bank. This order was, by virtue of section 199 of the Act, enforceable in the manner in which the decree of the High Court made in any suit pending therein may be enforced. On September 12, 1946, the order was transferred to the District Judge, Allahabad for execution. On September 23, 1946, the official Liquidator applied to the District Court, Allahabad for execution of the order dated September 12, 1942, and prayed that certain amounts due to the appellants be attached in satisfaction of the claim. The execution proceedings were transferred by the District Judge 75 to the Civil Judge, Allahabad. The appellants contended Inter alia that as the application for execution was not preferred within 3 years of the order for payment as prescribed by article 182 of the First Schedule of the Limitation Act it was barred by the law of limitation. The official Liquidator contended that the application was governed by article 183 of the Act and that, in any event, certain part payments having been made towards the claim by the appellants, the period of limitation was extended thereby. At the hearing, the alternative plea of part payment was abandoned by the Official Liquidator. The Civi1 Judge held that the application for execution was barred limitation as it was not preferred within 3 years from the order of the High Court. In appeal to the High Court of Allahabad, the order passed by the Civil Judge was reversed and the proceedings were remitted to the Civil Judge with a direction to restore the execution application to its original number and to proceed with it according to law. Against that order with certificate of fitness granted by the High Court under article 133 of the Constitution, this appeal is preferred. Counsel for the Company contended that the order passed by the High Court not being a final order the appeal on certificate granted by this High Court is not maintainable. We have not thought it necessary, having regard to the importance of the question raised by the appellants and the fact that this Court may in a proper case regularise the proceeding in this Court by granting special leave, even if certificate under article 133 of the Constitution could not be issued by the High Court, to hear the parties on the question as to the maintainability of the appeal OD the certificate and have heard the appeal on the merits. We are of the view that the appeal must fail on the merits. 76 article 182 of the Indian Limitation Act provides a period of 3 years for an application for execution of a decreer an order of any Civil Court not provided by article 183 or section 48 of the Code of Civil Procedure, 1908 (V of l908). By article 183 a period of l2 years for enforcing a judgment, decree or order of any Court established by Royal Charter in the exercise of its ordinary original civil jurisdiction is prescribed and the period commences to run from the date on which a present right to enforce the judgment, decree or order accrues to some person capable of. releasing the right. The order sought to be executed was not passed by the High Court in the trial of a suit: it was passed in exercise of the jurisdiction conferred upon the High Court by section 187 of the Indian Companies s Act, 1913. Section 3 of the Indian Companies Act by sub s.(1) enacts that the Court having jurisdiction under this Act shall be the High Court having jurisdiction in the place at which the registered office of the company is situate. By the proviso, the Central Government may by notification in the official Gazette empower any District Court to exercise all or any of the jurisdiction conferred upon the High Court. But it is common ground that no notification conferring jurisdiction and empowering the District Court at Banaras where the registered office of the company is situate to pass orders under B. 187 has been issued. The High Court was therefore the only Court competent to direct under B. 187 of the Indian Companies Act payment of the amount due from the appellants. Counsel for the appellants contends that the authority exercised by the High Court in directing payment under section 187 of the Indian Companies Act, 1913, is neither ordinary, nor original civil. He submits that by section 187 a special power is vested in the High Court by the Indian Companies Act, 1913, which is exercisable in its extraordinary jurisdiction. To appreciate this argument it is necessary to refer to the statute authorising the establish 77 ment of the High Court, and the Letters Patent constituting the same. The High Court for the North Western Province, of which the Allahabad High Court is the successor, was constituted by the Letters Patent issued on March 17, 1866, in exercise of the powers conferred by cl. 16 of the Charter Act of 1861 (24.25 Vict. C. 104). By that clause, Her Majesty the Queen was authorised to establish a High Court and to invest the High Court with such jurisdiction, powers and authority as under the Charter Act may by cl. 9 be conferred upon the High Court to be established in any of the presidencies, i. e., calcutta, Bombay and Madras. The High Courts of Calcutta, Bombay and Madras, which were popularly known as the Presidency High Courts were by cl. 12 of their respective Letters Patent invested with ordinary original civil jurisdiction to entertain and try suits of every description subject to the restriction as to territorial limitations contained in cl. 11 thereof. But by its Letters Patent, the High Court for the North Western Province was not invested with jurisdiction to entertain civil suits in exercise of its ordinary original civil jurisdiction. Counsel for the appellants submits that Art.183 applies only to decrees and orders passed by the High Courts established by the Royal Charter, which by their constitution are authorised to entertain, hear and try civil suits in exercise of their ordinary civil jurisdiction, and as no such power was conferred upon the Allahabad High Court, the order sought to be executed was not passed in exercise of the ordinary original civil jurisdiction. It is true that when the Letters Patent were issued the High Court had no jurisdiction under a law relating to companies of the nature exercised by the High Court, the character whereof falls to be determined in this appeal. But by cl. 16 of the Charter Act and cl. 35 of the Letters Patent of the Allahabad High Court jurisdiction 78 which Was not initially conferred upon the High Court could the conferred by legislation within the competence of the Governor General in Council and the Governor in Council. By the Companies Act of 1913, the High Court was invested with jurisdiction to order payment of the amounts due by debtors of companies ordered to be wound up. This jurisdiction may be invoked as of right against all persons whose names are placed on the list of contributors. The jurisdiction is ordinary: it does not depend on any extraordinary action on the part of the High Court. The jurisdiction is also original in character because the petition for exercise of the jurisdiction is entertainable by the High Court as a court of first instance and not in exercise of its appellate jurisdiction. Again by section 187 no special jurisdiction is conferred. The High Court adjudicates upon the liability of the debtor to pay debts due by him to the Company: the jurisdiction is therefore civil. Normally, a creditor has to file a suit to enforce liability for payment of a debt due to him from him debtor. The Legislature has by section 187 of the Companies Act empowered the High Court in a summary proceeding to determine the liability and to pass an order for payment, but on that account the real character of the jurisdiction exercised by the High Court is not altered. Nor is there any substance in the contention that the authority to order payment of a debt under section 187 is merely a power of the High Court and not its jurisdiction. By section 3 read with section 187 of the Companies Act the High Court has jurisdiction to direct payment of the amount due by a contributory: and an order passed for payment manifestly is an order passed in exercise of the jurisdiction vested in the High Court by section 3 read with 8. 187 of the Companies Act. The Judicial Committee of the Privy Council was called upon In the matter of Candas Narondas Navivahu and C. A. Turner(1) to determine the true (1) I. L. R. (1889) 13, Eom. 79 nature of the jurisdiction exercised by the High Court of judicature at Bombay in respect of insolvent debtors. The Privy Council held that article 180 of Schedule II of the Indian Limitation Act XV of 1877 (which was similar to article 183 of the Indian Limitation Act, l908) applies to a judgment of a Court for the relief of insolvent ebtors entered up in the High Court, in accordance with section 86 of the Statute 11 and 12 Vic., c. 21. It was held in that case that although a Court exercising insolvency jurisdiction determines the substance of the question relating to an insolvent 's estate, the, proceedings in execution and the judgment are the High Court 'section The judgment is entered up in the ordinary course of the duty cast upon the High Court by the law, not by way of special or extra ordinary action, but in the exercise of its ordinary original civil jurisdiction. Lord Hobhouse delivering the judgment of the judicial committee observed: "But it was strongly contended at the bar that this jurisdiction though civil and original, was not ordinary: and Mr. Rugby argued that the passages of the Charter which have just been epitomised divide the jurisdiction into four classes ordinary original, extraordinary original, appellate, and those special matters which are tho subject of special and separate provisions. But their Lordships are of the opinion that the expression "ordinary jurisdiction" embraces all such as is exercised in the ordinary course of law and without any special step being necessary to assume it and that it is opposed to extraordinary jurisdiction, which the Court may assume at its discretion upon special occasions and by special orders. They are confirmed in this view by observing that, in the next group of clauses which indicated the law to be applied by the Court to the various clauses of cases, there is not a four fold division of jurisdiction, but a three fold one, into ordinary, extraordinary, 80 and appellate. The judgment of 1868 was entered up by the High Court, not by way of special or discretionary action, but in the ordinary course of the duty cast upon it by law, according to which every other case of the same kind would be dealt with. It was, therefore, entered up in exercise of the ordineary original civil jurisdiction of the High Court. " Council for the appellants contended that by cl. 18 of the letters Patent the High Court of Bombay was invested with insolvency jurisdiction whereas the High Court of Allahabad is not invested by the Letters Patent with any jurisdiction in the matter of companies and therefore the principle of "In re Candas Narondas" does not apply. But under cl. 18 of the Letters Patent a Judge or Judges of the High Court are to sit as a Court for relief of insolvent debtors and powers and authorities with respect to original and appellate jurisdiction are to be deter mined by reference to the law relating to insolvent debtors. The jurisdiction to deal with the claims of companies ordered to be wound up is conferred by the Indian Companies Act and to that extent the Letters Patent are modified. There is, however, no difference in the character of the original civil jurisdiction which is conferred upon the High Court by Letters Patent and the jurisdiction conferred by special Acts. When in exercise of its authority conferred by a special statute the High court in an application presented to it as a court of first instance declares liability to pay a debt, the jurisdiction exercised is original and civil and if the exercise of that jurisdiction does not depend upon any preliminary step invoking exercise of discretion of the High Court, the jurisdiction is ordinary. In P. T. Munia Servai v The Hanuman Bank Ltd, Tanjore (1), a Division Bench of the Madras (I) 1. L. R. 81 High Court by the Banking Companies Act, ]949 (X of 1949) is part of its ordinary civil jurisdiction within the meaning of article 183 of the Limitation Act and an order passed in exercise of its ordinary original Civil Jurisdiction is governed by article 183 and not by article 182 of the Limitation Act. In that case on an application preferred by the Official Liquidator of the Hanuman Bank Ltd., a direction for payment by the High Court of certain sums of money by the appellant Munia on or before a certain date was made. To an application for enforcement of that liability article 183 of the Limitation Act was held applicable. In our view, the High Court was right ill holding that the application for execution filed by the official Liquidator was within limitation. The appeal, therefore, fails and is dismissed with costs. Appeal dismissed.

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

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

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.

By a resolution dated August 23, 1952 it was resolved to wind up the respondent company and to appoint a liquidator for that purpose. The paid up capital of the assessee was Rs. 25 lakhs, and on the date of commencement of winding up it had an accumulated profit of Rs. 5,34,041, From time, to time the liquidator distributed the assets in his hands among, the shareholders. Out of Rs. 15 lakhs distributed on September 9, 1952 the Income tax Officer brought, in the assessment year 1953 54, to tax Rs. 52,400 as 'dividend ' within the meaning of section 2 (6A) (c) of the Income tax Act 1922 as it then stood. By virtue of an amendment of the said clause as effected by the Finance Act 1956 dividend was to include any distribution made to the shareholders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation whether capitalised or no, On July 24, 1957, the liquidator distributed Rs. 75,000 among the shareholders. The Income tax Officer in the course of assessment for the year 1958 59 sought to bring the entire amount so distributed to tax as 'dividend ' The Appellate Assistant Commissioner confirmed the order of the Income tax Officer. In appeal to the Tribunal it was urged on behalf of the assessee that when Rs. 15 lakhs were distributed on September 3, 1952 and Rs. 2 lakhs 25 thousand on September, 25, 1952 the entire accumulated profit was exhausted and thereafter there were no accumulated profits which could be distributed, and that in any event whenever distribution is made of the assets in the hands of the liquidator, accumulated profits and the capital must be deemed to be distributed in the same proportion in which the accumulated profits and the capital stood on the date of the liquidation. The Tribunal rejected the first contention and did not consider the second. In reference the High Court held that since the Tribunal had not disintegrated Rs.75,000 distributed for ascertaining whether any part of it came out of theaccumulated profits, no part of Rs. 75,000 could be regarded as dividend. The Revenue appealed. HELD : The language used by the Legislature in section 2 (6A) (c) as amended by the Finance Act 1956, is fairly clear. 'Mere is in the bands of the liquidator only one fund. When a distribution is made out of the fund, for the purpose of determining tax liability, and only for that purpose the amount distributed is disintegrated into its components capital and accumulated profits as they existed immediately before the commencement of liquidation. In any distribution made to the shareholders of a company by the liquidator, that part which is attributable to the accumu lated profits of the company immediately before its liquidation, whether such profits have been capitalised or not, would be treated as dividend and liable to tax under the Act. The amount distributed would therefore be deemed to be received by the shareholders partly as accumulated pro M17Stup. CI/66 5 778 fits and the rest as capital, the proportion being the same which the accumulated profits bore to the capital in the accounts of the company at the commencement of winding up, and that part of the receipt which is attributable to the accumulated profits would be taxable. The Income tax Officer has therefore in the first instance to determine the accumulated profits in the hands of the company whether capitalised or not, and the remaining capital immediately before the liquidation : he has to determine the ratio between such capital and the undistributed profits, and then to apply the ratio to the amount distributed to determine the component attributable to accumulated profits. [782 H; 783 C] In the present case therefore the Income tax authorities had to determine what part of the sum of Rs. 75,000 distributed among the shareholders represented accumulated profits. Only that part of Rs. 75,000 which bore the same ratio to Rs. 75000 which the accumulated profits at the liquidation bore to the total assets of the company immediately before liquidation was dividend. [783 G] Commissioners of Inland Revenue vs George Burrell, L.R. , referred to.

The appellant landlord filed an eviction suit for possession of the demised premises mainly on the ground of arrears of rent under Section 12(3) of the Bombay rent Act, 1947. The suit was settled between the parties. By the terms of the compromise, possession would be given by the tenant to the landlord by 10 October 1970, or the landlord may recover possession by execution based on this decree; but, if the tenant paid the entire arrears in full by 10 October 1970, the landlord would not execute the decree for possession. The tenant failing to pay the entire arrears as stipulated the landlord decree holder filed execution proceedings. The executing Court issued a warrant for possession but the Appellate Court set aside the order and dismissed the prayer for eviction. The High Court remanded the matter to the Appellate Court to determine the character of the compromise terms. That court again allowed the appeal and dismissed the execution proceedings altogether. On appeal, the High Court agreed with the Appellate Court. It found 730 that clause permitting eviction was penal in nature and therefore, not enforceable. The questions before this court were:did the parties to the compromise intend to create or continue the relationship of landlord and tenant; whether the compromise terms in the consent decree were penal in nature or merely gave a concession; and whether Section 114 Transfer of Property Act could be invoked while executing a decree for possession, notwithstanding Section 12(3) of the Bombay Act. Allowing the appeal, this Court, HELD: It is well settled that a decree passed on the basis of a compromise by and between the parties is essentially a contract between the parties which derives sanctity by the court superadding its seal to the contract. But all the same the consent terms retain all the elements of a contract to which the court 's imprimaturs is affixed to give it the sanctity of an executable court order. The court will not add its seal to the compromise terms unless the terms are consistent with the relevant law. (735 H) If the law vests exclusive jurisdiction in the court to adjudicate on any matter, the court will not add its seal to the consent terms unless it has applied its mind to the question. In such a case it is the independent satisfaction of the court which changes the character of the document from a mere contract to a court 's adjudication which will stop the tenant from contending otherwise in any subsequent proceedings and operate as resjudicata. (736 B) The character of the con sent decree will depend on the nature of the dispute resolved and the part played by the court while superadding its seal to it. (736 C) (2) If a defendant is required to suffer the consequence of his failure to abide by terms stipulated, such consequence would he penal in nature. But if the defendant gets some benefit by complying with a requirement, such as clause can never be penal in character. (739 B) (3) Admittedly the tenant had failed to pay or tender in court the 731 standard rent and permitted increases due to the landlord. (736 E) The clause in the consent terms whereby, upon payment of the entire rent etc. due from the tenant, by a stipulated date was dearly to secure his dues i.e. arrears of rent etc. This is in the nature of a concession. Where a landlord grants a concession and agrees that if the entire arrears is cleared by a stipulated date, he will not insists possession that will not render the clause penal in nature. (739 E) (4) If the condition precedent for availing of the benefit of concession under clause (3) of the consent terms is satisfied, the relationship of landlord and tenant continues but if the tenant fails to comply with the condition precedent for availing (of the benefit or concession the forfeiture operates and the tenant becomes liable for eviction under the decree. (739 G) (5) After the enactment of clause (b) to section 12(3) which is a special provision incorporating the equity provision contained in section 114, T.P. Act, in a modified form, cases governed under the Act must he resolved in accordance with section 12(3) of the Act and not under section 114, T.P. Act. The landlord 's right to seek eviction has been drastically reduced and circumscribed by sections 12and 13 of the Act. Similarly the tenant must also seek protection from eviction by complying with the requirements of the Act. (740 B) If such is not the legal position, Sections 12 (3) (a) and 12 (3) (b) would be rendered wholly nugatory. Under the Act a tenant is allowed to continue in possession notwithstanding the termination of the contractual tenancy if the abides by the provisions of the Act. If he fails to abide by the requirement of section 12(3) of the Act, he must take the consequences flowing therefrom. There is no question of granting him double protection. (740 C E) Krishnabai vs Hari, 8 BLR 813 and Gajanand Govind vs Pandurang Keshav, 53 B.L.R. 100, referred to. (840 B) Pradesh Kumar Bajpai vs Binod Behari Sharkar, [1980] 3S.C.R. 93, relied on. (840 H)

The appellant was appointed on 20 May, 1965, on two years ' probation. On 1 July, 1967 there was an order extending the period of probation by one year. On May 20, 1968, there was an order terminating the services of the petitioner. On July 20, 1968 there was an order revoking the order of termination and extending the period of probation for six months from 20th May, 1968. The order of termination was on Jan. 30, 1969. This order recited that, having considered him unfit for appointment to the State Police Service the services of the appellant are dispensed with on the expiry of his extended period of probation. Two contentions were raised by the appellant in the High Court. First, the order of termination was passed on Jan. 30, 1969, when the petitioner. by reason of expiry of 3 years stood confirmed on 19/20 November, 1968 and Second, the order of termination was one of punishment and the appellant should have been given an opportunity to show cause against the order of termination under Rule 9 of the Punjab Civil Service (Punishment and Appeal) Rules, 1952. These contentions were rejected by the High Court. Hence the appeal to this Court by Special Leave. Dismissing the appeal, HELD: The object of extending the period of probation is to find out whether the appellant was a fit person. The appellant could not be confirmed, till the period of probation expired. It cannot, therefore, be held that the appellant stood confirmed on 19/20 November, 1968 before the period of probaition expired in January, 1969. [776A B] (2) Termination on account of unsatisfactory record will attract rule 9 of the Punishment Rules. Fitness was a matter to be considered at the time of confirmation. The order terminating the services is unfitness for appointment and not on the ground of any turpitude to attract Rule 9 of the Punishment Rules, 1952. To hold that the words "unfit to be appointed" mentioned in the order of termination, are a stigma, would deprive the authorities to judge fitness 'for work or suitability to a post at the time of confirmation. Termination of services on account of inadequacy for the job or for any tompramental or other defect not involving moral turpitude is not a stigma which can be called discharge by punishment. Fitness for the job is one. of the most important reasons for confirmation. The facts and circumstances do not show that there was any stigma attached to the order of termination and therefore, Rule 9 of the Punjab Civil Service (Punishment & Appeal) Rules, 1952 is not attracted in the present case. [7760 777B]

The respondent company holding leasehold rights in the appellant land went into liquidation. Accepting the. official liquidator 's report the company Judge (Rajasthan High Court) without hearing anyone or issuing notice to the appellant ordered auction of the lease hold right of the respondent company. The appellant sent a letter to the Official Liquidator revoking the licence granted to the company and calling upon him to, deliver possession of the land. The Official Liquidator claimed that the company was entitled to a further period of lease under the agreement. Notice was issued in respect of the proposed auction sale. The appellant filed an appeal before the High Court. The High Court held that since the appellant had not appeared before the company Judge, she was not entitled to maintain the appeal, and further that the only remedy of the appellant was by way of a suit after obtaining leave of the Company Judge under section 446 of the Indian Companies Act. In appeal to this Court, HELD : The High Court was in error in not entertaining and deciding the appeal preferred by the appellant who was the owner of the land in which lease hold rights said to have been created by her in favour of the company in liquidation were sought to be sold. An appeal lies under section 483 of the Act from any order made or decision given in the matter of winding up of a company by the Court and it lies to the same, court to which, in the same manner in which, and subject to the same conditions under which appeals lie from any order or decision of the Court in cases within its ordinary jurisdiction. Therefore an appeal was corn tent against the order of the company Judge. [249 D] It is implicit in Rule 103 of the Company Court Rules that if the directions which have to be given by the Court would affect any person prejudicially he must be served with a notice of the summons under the general rule of natural justice and that no order should be made affecting the rights of a party without affording a proper opportunity to it to represent its case. A] Further, the Official Liquidator as well as the, learned company Judge were bound by the rules of natural justice to issue a notice to the appellant and hear her before making the order appealed against. If there was default on their part in not following the correct procedure the appellant could not be deprived of her right to get her grievance redressed by filing an appeal. [250 C] 248

The appellant was appointed an Assistant Engineer on June 10, 1963 in the Punjab State Electricity Board on probation for two years which ended on June 10, 1965. On bifurcation of Punjab Electricity Board, the service of the appellant was allocated to Haryana State Electricity Board. As a result of a disciplinary proceeding held against him in 1968, a minor penalty of stoppage of one increment without any future effect was imposed on the appellant. After expiry of one year, the appellant was, however, given the increment. By virtue of an order dated March 30, 1970, the appellant and respondents 2 to 19 were confirmed as Assistant Engineers, class II on satisfactorily completing the probation period of two years. Though the others were confirmed with effect from April 1, 1969, the appellant was confirmed with effect from December 1, 1969. Consequently, the appellant 's name was placed last of all the confirmed officers. The appellant challenged the said order by way of a writ petition before the High Court which dismissed the petition. This appeal by special leave is against the judgment of the High Court. G Allowing the appeal, ^ HELD: 1. The penalty by way of stoppage of one increment for one year was without any future effect. In other words, the appellant 's increment for one year was stopped and such stoppage of increment will H 622 have no effect whatsoever on his seniority. Accordingly, the Electricity Board acted illegally and most arbitrarily in placing the juniors of the appellant above him in the seniority list and/or confirming the appellant in the post with effect from December 1, 1969 instead of April 1, 1969. The question of seniority has nothing to do with the penalty that was imposed upon the appellant. It is apparent that for the same act of misconduct, the appellant has been punished twice, that is, first, by the stoppage of one increment for one year and, second, by placing him below his juniors in the seniority list. [624G H; 625A] 2. There is no explanation why the confirmation of the appellant was deferred till December 1, 1969. The explanation that after some substantive posts had fallen vacant on April 1, 1969, the question of confirmation was taken into consideration is not supported by. any material on record inasmuch as there is nothing to show when these posts had fallen vacant. It is difficult to accept that all these posts had fallen vacant on the same day, that is, on April 1, 1969. Though the vacancies had occurred before that day, the Board did not care to take up the question of confirmation for reasons best known to it. While there is some necessity for appointing a person in government service on probation for a particular period, there may not be any need for confirmation of that officer after the completion of the probationary period. The archaic rule of confirmation, still in force, gives a scope to the executive authorities to act arbitrarily or malafide giving rise to unnecessary litigations. It is high time that the Government and other authorities should think over the matter and relieve the government servants of becoming victims of arbitrary actions. [625H; 626B; 625C; D] S.B. Patwardhan & others vs State of Maharashtra & others; , , referred to. [Setting aside the High Court judgment and the seniority list, this Court directed that a fresh seniority list be prepared within six months on the basis of this judgment and maintain the appellant 's seniority in the post to which he has been promoted in the meantime.] [626D]

Civil Appeal No. 529/1959. Appeal by special leave from the Award dated February 28, 1958, of the Central Government Industrial Tribunal Calcutta, in reference No. Of 1957. H. R. Gokhale, Yeshwant Chitale, Ratna Rao and K. R. Choudhri, for the appellants. section T. Desai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondent No. 1. 1961. October 10. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal by special leave is against an award of the Central Government Industrial Tribunal at Calcutta in a dispute referred to that Tribunal by the Central Government under s.10 of the Industrial Disputes Act between the workmen of the Bombay Port Trust, who are the appellants before US and the Trustees of the Port of Bombay, the respondents in the appeal. The workmen concerned in the dispute as referred are shore workers belonging to "A" category, "B" category and casual category. These three categories came into existence under the scheme adopted by the Bombay Port Trust in April 1948 for direct employment of shore workers in place of the system previously in force under which such labourers used to be supplied by contractors known as Toliwallas. The matters in dispute were specified thus in the letter of reference to the Tribunal: "Arrears due to the shore workers belonging to the "A" category, "B" category and casual category in respect of (i) weekly off with pay for the period 15th March, 1951 to 2nd March, 1956; (ii) work on weekly off days during the period 15th March, 1951 to 2nd March, 1956, without a compensatory day off in lieu; and 39 (iii) average daily wages for the weekly off days after the introduction of the piece rate scheme with effect from 3rd March, 1956, when the average fluctuated from week to week. " It became clear at the hearing before the Tribunal that of the period mentioned in Item (i) and Item (ii), viz., the 15th March, 1951 to 2nd March, 1956, no "weekly off" was given at all from the 15th March 1951 to October 1953 but workmen were made to work generally for all the 7 days of the week, and further that from October 1953 to 2nd March, 1956, Sunday was given as the "weekly off" and no work was taken on that day. The real dispute therefore as regards Item (i) and Item (ii) was in respect of (a) arrears of wages for Sunday the weekly off on which no work was done from October, 1953 to March 2 1956, and (b) arrears of wages for work done during the period 15th March, 1951 to October, 1953 on Sundays which should have been given as a weekly off day but was not, though no compensatory day was given in lieu thereof. As regards arrears of wages for Sundays on which no work was done the worksmen 's case is that they were entitled to receive payment for eah such Sunday amounts equal to their average daily wages during the preceding week. But admittedly no payment was made for these Sundays. The respondent 's case however is that on a proper interpretation of Rules 23 of the Minimum Wages (Central) Rules, 1960, the workmen were not entitled to payment for Sundays on which no work was done by them and further that in any case they have been constructively paid for the Sundays also inasmuch as the daily wages were fixed at I/26th of the monthly wage. The Tribunal accepted these contentions raised on behalf of the employer and held that there were no arrears of wages in respect of Sundays 40 for which no work was done. With regard to the period March 15, 1951 to October, 1953 it appears the workmen except morphias were paid at twice J the. Ordinary rate inclusive of all allowances, for all work done on Sundays; Morphias were paid one and a half time the normal rates of wages. The workers ' case is that for the work done on Sundays during this period they were entitled to three time. the ordinary rate. This claim was also rejected by the Tribunal which however held that the Morphias were entitled to double their wages inclusive of all allowances and so directed that they shall be paid for work done by them on weekly rest days from 15th March, 1951 to October 1953 the difference between double their wages inclusive of all allowances and that they have been paid. We may state at once that the dispute as regards arrears due to workers belonging to "casual" category has not been pressed before US and does not therefore require consideration in this appeal. The claim as regards arrears of wages for the period March 15, 1951, to October 1953 (except what has already been awarded for this period to Morphias) does not also merit serious consideration as the learned counsel for the appellant was unable to show any legal basis for such a claim. He tried to persuade to that as Rule 23 of the Minimum Wages (Central) Rules required the employer to give a weekly holiday on Sunday (unless this is given on some other day instead) it is not right that when the employer does not comply with that requirement he should get off with paying nothing more than what he would have paid for such work done on any day of the week because of the Rules in respect of extra payment for over time work. The itself contains provisions for contravention of the provisions of the Act or Rules or orders made thereunder. Section 22 provides for punishment inter alia for contravention of rules or orders under section 13. Section 22A provides for punishment withfine 41 (which may extend to five hundred to five hundred rupees) for contravention of any provision of the Act or of any rule or order made thereunder if no other penalty is provided for such contravention. The Minimum Wages Rules were made by the Central Government in exercise of the powers conferred by section 30 of the (Act XI of 1948) and so contravention of rule 23 of these rules is punishable under section 22A of the Act. Whether or not any action is taken against the employer for such contravention, the Industrial Tribunal has no authority to impose some other penalty in the shape of making the employer pay in respect of work done on Sundays something more than what he would have otherwise have to pay. Neither the Minimum Wages At nor the Rules contain any provision for such additional payment over and above what would be payable for over time work as such. The workmen 's claim for further payment in respect of work done on Sunday during, the period March 15, 1951 to October 1953 has therefore been rightly rejected. In respect of the claim for pay on Sundays during the period October 1953 to March 2, 1956, on which no work was done we have first to decide on the correct interpretation of the words "for which" in Rule 23, as it stood before it was amended by a Notification GSR 918 dated the 29th July, 1960. Tho Rule as it stood before the amendment ran thus: "23. Weekly Holidays (1) Unless other wise permitted by the Central Government, no worker shall be required or allowed to work in a scheduled employment, on the first day of the week (hereinafter referred to as the said day) except when he has or will have a holiday for the whole day on one of the five days immediately before or after the said day for which he shall receive payment equal to his average daily wages during the preceding week. 42 Provided that the weekly holidays may be substituted by another day: Provided further that no substitution shall be made which will result in any worker working for more than ten days consecutively without a holiday for a whole day. " We are not concerned with cl. 2 of Rule 23. The Explanation to the Rule is in the following words: Explanation For the purpose of this rule "week" shall mean a period of seven days beginning at midnight on Saturday night. " The main policy underlying the rule obviously is that workmen shall have full rest at frequent intervals ordinarily once in every 7 days but in no case at intervals of more than 10 days. This was clearly in accordance with the principle laid down in 8. 13 of the that the Government may provide for a day of rent for every period of 7 days even though in framing the Minimum Wages (Central) Rules 1960 (which covers many other matters other than the matters mentioned in 8.13) no reference has been made to section 13 at all. In giving effect to this policy of providing for a day of rest ordinarily once in 7 days but in no case at intervals of more than 10 days the rule making authority has thought fit also to make provision for making some payment in connection with this. Difficulty has however been caused by the unfortunate complexcity of the sentence, in which the main provision as regards the day of rest and also the subsidiary provision for payment have been combined. The dispute is about the meaning of the words "for which". If one remembers the rule of grammar that what the grammarians call the "antecedent" (that is the noun or pronoun to which a relative pronoun relates) should be used as near as possible to the relative pronoun, one is tempted to think that "which" relates to the word "day" of the "said 43 day" immediately preceding the preceding the preposition "for". Breaking up this last portion of the rule, the rule thus analysed would be equivalent to "and for the said day he shall receive payment equal to his average daily wages during the proceeding week". That will be however only A grammarian 's construction. In the Courts however while we have to remember the rules of grammar, because such rules are ordinarily observed by people in expressing their intentions, we have to look a little more closely to understand the: real intention expressed. It seems to us unreasonable to impute the rule making authority an intention that while if the weekly rest is given on the said day" that is, Sunday the workmen shall receive payment, he shall receive no payment if and when the employer takes advantage of the provisions that no workman may be required or allowed to work on Sunday when the has or will have a holiday for the whole day on one of the five days immediately before or after the said day. " For, it that be permitted, the employer would always give the weekly holiday on one of the 5 days immediately before or after the Sunday and thus avoid payment for the rest day. It seems clear to us therefore that in using the words "for which" after the words the said day" the rule making authority did not intend to continue the word "which" to this said day" but intended to relate this "which" to any of the days on which rest is given. In other words, 'for which" was used as short for and on such holiday whether on the said day or not". We do not think the rules of grammar stand in the way of this interpretation. Mr. Desai 's argument on behalf of the respondent is that '"which" relates to the word holiday and that accordingly it is only when the workman has or will have a holiday on one of the five days immediately before or after the said day, that he Shall receive payment. According to him, the two phrases for the whole day" and "one of the five days immediately before or after the said day" are adver . 44 bial phrases modifying the verb "has" and "will have" and no part of these phrases can have any connection with the words for which". Leaving of these out, the rule properly analysed is, he says, in really two portions: the first being "no worker shall be required or allowed to work in a scheduled employment, on the first day of week"; the second being except when he has or will have a holiday for which he shall receive payment equal to his average daily wages during the preceding week". That will however be to re write the sentence in a manner for which we can find no justification. It is proper to remember also that this interpretation will have the peculiar consequence that if the rest day is given on first day of the week no payment will have to be made, but if it is given on some other day payment will have to be made. It will be unreasonable to ascribe such an intention to the legislature. The Tribunal was so impressed by the unreasonableness of such a consequence that it came to the conclusion that no payment will be receivable by the workmen whether the weekly rest day is given on the first day of the week or on one of the five days immediately before or after the said day. Reading the operative portion of this rule with the proviso that the weekly holiday may be substituted by another day it appears to us clear that the rule making authority did not draw any distinction between the holiday on the first day of the week or the holiday on one of the five days immediately before or after the said day. It was this weekly holiday whether given on the 1st day of the week or whether on one of the five days immediately before or after the said day that under the proviso could be substituted by another day. The scheme clearly is for one holiday, generally, once in a week and it is for this one holiday that payment is provided. 45 Our attention was drawn to the view taken by the Bombay High Court in Trustees of the Port of Bombay vs Authority under the payment of Wages Act(1) which was followed by the Madras High Court in A.C.C. vs Labour Inspector(2) that the proper construction of the word "for which" is to relate to word "holiday" preceding the word" "for the whole day". In Jaswant Sugar Mills vs Sub Divisional Magistrate (3) the Allahabad High Court took the view that for which" refers to the weekly holiday whether it is on a Sunday or on any other days of the week as permitted under the Rules. In our opinion, the view taken by the Allahabad High Court correct. On a proper construction of the rule it must, in our opinion, be held that the workmen of categories A and were entitled to receive payment equal to the average wages during the preceding week" in respect of the period October 1963 to March 2, 1956. This brings us to the employer 's claim that there has been constructive payment for the Sundays during this period, viz., October 1953 to March 2, 1956. The argument is that the daily wage for these workmen was fixed by dividing all the Components of the monthly scale of pay and allowances by 26 so that what, a workman receives as daily wage is really 1/26th of the wage for 30 days. Thus, it is said, the total receipts for the 26 days, if no seperate payment is made for the rest days will be 26 x1/26th of 30 days wage. , that is 30 days ' wage. The fallacy in this argument is that it ignores the essential fact that once the daily wage is fixed at a certain figure it no longer retains its character of being 1/26th of the monthly wage. However arrived at, the daily wage is a daily wage and it is wrong to regard it as a certain fraction of the monthly wage. When the Central Government making in these Minimum Wages Rules made this provision for payment on a holiday it clearly (1)1957 (1) L. L. J. 627. (2) 1960(I) L. L. J. 192. (3) 1960 (II) L. L. J. 373. 46 intended that something in addition to what was being actually received for the six days of the week should be paid. This cannot be defeated by a statement that though in form six days wages were being paid, infact and in substance, fieven days wages were being paid. By no stretch of imagination can payment for six days be equated to payment for seven days. We have therefore come to the conclusion that the workmen of the A and categories are entitled to arrears of wages in respect of Sundays during the period octobcr 1953 to March 2, 1956. With effect from March 3, 1856 the piece rate scheme was introduced fer the shore woIkers belonging to the A" category and B ' category. Tbe essentials of this scheme are that a datum line was fixed for the different kinds of u.ork and tl piece rate would vary with the proportion which the out turn of the gang bears to the datum line in the following manner: "For a hift fully occupied in doing piece rate work the piece rate wage of the basic gang worker (inclusive of basic pay and the allowancefi above mentioned) shall rise uniformly from Rs. 3 1 O at 76% to Rs. 4 5 O at lOO% to Rs 8 at 150% of the datum line. The piece rate wage earned after 150% of the datum line shall be processed at double the daily wage that is to say the piece rate wage will rise uniformly from Rs. 8 at 150% to Rs. 12 at to at to 200% of the datum line. " The scheme further provided that: "Rs. 3 1 0 (comprised of Rs. 1 8 3 basic was including allowances and Rs. 1 9 O dearne6s allowance) shall be the mirlimum guar&nteed wage per dav on which a gang worker is given employment; if on any day the piece work earnings plus idle time payment andlor other earnings under this appendix fall short of the said minimum, 47 Port Trust shall make up the difference that day." "Rs. 3 7 0 (comprised of Rs. 1 14 0 basic wage including allowances and Rs. 1 9 0 dearness allowanance) shall be the minimum guaranteed wage per day on which a, morpia is given employment. " On behalf of the respondent a question was raised before us that Rule 23 of the Minimum Wages Rules does not apply to these workmen after the piece rate scheme was introduced. It is urged that for such worker there is no daily wage, as what the piece worker receives varies from day to day according to his total output. It may even happen, it is suggested, that on a certain day on which output is nil, the piece rate worker will receive nothing. Against this, Mr. Gokhale 's argument is that average daily wages during the preceding week means average of the total earnings per day during the preceding week and so there can be no difficulty in ascertaining for every his worker his average daily wages during any week. We are not prepared to accept this construction of average daily wages as average earnings per day. The daily wage has in the industrial world a definite significance in contra distinction to weekly wages or monthly wages. The weekly wages or monthly wages of a person would not as ordinarily understood include the extra earnings of the workmen by working over time. So also, in our opinion, the term daily wages as ordinarily understood does not include over time earnings. If it does not include overtime earnings, can it reasonably be said that it includes the high additional earnings, that a worker may receive by increasing his output above the minimum fixed ? We do not think that to be a reasonable interpretation of the words "daily wages. " At the same time, we see no reason why the guaranteed minimum fixed for each workman 48 per day should not be considered his daily wages. The piece rate system introduced for these work As men has fixed such a minimum. Indeed, the fixation of such A minimum wage for a piece rate system makes, it may be said the piece rate a time rate cum piece rate in which the guaranteed minimum is the time rate daily wage and the extra earnings are piece rates. The argument that Rule 23 does not apply to these workmen after the introduction of the piece rate Scheme must therefore be rejected . As regards this period also (that is, the period from March 3, 1956 onwards) Mr. Desai con. tended that there has been constructive payment of the workers as the guaranteed minimum was arrived at by dividing the monthly wage by 26 For the reasons for which this argument was rejected in respect of the period October, 1953, to March 2, l956, we reject this plea of constructive payment. We are therefore of opinion that the workers of categories A and B are entitled to arrears of wages for the Sundays from March 3, 1956 on the basis that the guaranteed minimum wage was the daily wage. As has already been mentioned, Rule 23 was amended in July 1960, i.e., long after the Tribunal gave the award under appeal. We express no opinion as to what the position in law is, after this amendment of Rule 23. The appeal is accordingly allowed in part. In the circumstances, the parties will bear their own costs in this Court.

The , and the Minimum Wages Rules, framed thereunder, laid down the principle that the Government should provide for a day of 1 est to the workers for every period of 7 days and also to make provisions for making some payment in connection therewith. The dispute between the workers and employers of the present case related to (a) arrears of wages for Sunday, the "weekly off" day on which no work was done and (b) arrears of wages for work 37 done on Sundays which should have been given as a weekly off day but was not so given and no compensatory day was given in lieu thereof as contemplated under the Minimum Wages Rules. As regards arrears of wages for Sundays on which no work was done the workmen 's case was that they were entitled to payment for each such Sunday amounts equal to their average daily wages during the preceding week, that for the work done on Sundays without the compensatory "off day" they were entitled to three times the ordinary rate. The respondent 's case was that on a proper interpretation of r. 23 of the Minimum (Wages Central) Rules, 1960, the Workmen were not entitled to payment for Sundays on which no work was done and that in any case they had been constructively paid for Sundays inasmuch as the daily wages were fixed at I/26th of the monthly wages. The Industrial Tribunal rejected all the claims of the workmen. On appeal by special leave. ^ Held, that contravention of r. 23 of the Minimum Wages Rules was punishable under the but the Industrial Tribunal had no authority to impose penalty in the shape of making the employer pay in respect of work done on Sundays something more than what he would have otherwise to pay. Neither the nor the Rules contain any provision for such additional payment over and above what would be payable for over time work as such. The workmen therefore cannot get three times the ordinary rate. The phrase "for which" in r. 23 referred to the weekly holiday whether it was on a Sunday or on any other day of the week as permitted under the Rules. No distinction was made between the holiday on the first day of the week and holiday on one of the five days immediately before or after the said day. The scheme was for one holiday in the week and it was for that holiday that payment was provided. Trustees of the Port of Bombay vs Authority under the Payment of Wages Act, (1957) I L.L.J. 627, A. C. C. vs Labour Inspector, (1960) 1 L. L. J. 192 and Jaswani Sugar Mills vs Sub divisional Magistrate, , approved. The Central Government clearly intended under the Minimum Wages Rules that for work on a holiday something more than what was actually paid for six days of the week should be paid. This could not be defeated by a statement that in form six days wages were paid, but in fact and in substance seven days wages were paid. The plea of constructive payment must fail. The argument that r. 23 did not apply to the workmen of the present case after the introduction of the piece rate scheme introduced in this case must be rejected 38

The appellants filed writ petitions in the Madras High Court challenging the fixation in 1969 of a uniform reten tion price of Rs. 100 per tonne of cement instead of the existing three different retention prices for different categories of producers fixed earlier on the basis of the recommendations made by the Second Tariff Commission in 1961. The grievance of the appellants was that the fixation of a uniform retention price to be paid to all producers for the cement produced by them and acquired by the State Trad ing Corporation amounted to discrimination contravening Article 14 of the Constitution. The challenge was rejected by a Single Judge and, thereafter, a Division Bench of the High Court. Cement has been a controlled commodity for a long time and its production, distribution and price were regulated by Cement Control Orders issued by the Central Government from time to time in exercise of the powers conferred under sections 18G and 25 of the Industrial (Development & Regula tion) Act, 1951. On behalf of the appellants it was contended that the impugned Order made in 1969 fixing a uniform retention price for all three categories of cement producers treated un equals as equals; that the increase of Rs.7 per tonne was to be made to the existing three tier retention prices, but an irrational basis was adopted in fixing the uniform price of Rs. 100 per tonne which resulted in an unequal increase to the three different retention prices then existing; that clause 12 of the Cement Control Order, 1967 did not permit one uniform retention price; and that atleast in the case of Chettinad Cement Corporation Ltd. discrimination was proved on the basis of the distinction made by the High Court in the case of M/s Travancore Cement Ltd. The appellants howev er did not dispute before this court that no grievance would survive if the uniform retention price was fixed at Rs. 104 per tonne instead of Rs. 100. 851 On behalf of the respondents it was asserted that the industry itself had sought a revision of the prices and had accepted in principle that there should be one uniform retention price. Dismissing the appeals, this Court, HELD: {1) The fixation of Rs. 100 per tonne as the uniform retention price for the entire industry with the solitary exception of M/S Travancore Cement Ltd. for which justification had been shown, was on a rational basis taking into account all relevant data and factors including the cement industry 's acceptance of the principle of a uniform retention price for the entire industry, the only difference being in the price actually fixed at Rs. 100 per tonne instead of Rs. 104 per tonne claimed by the cement industry. It is obvious, therefore, that the principle of a uniform retention price for the entire industry had not been fault ed. [857H; 858A B] (2) The principle of fixation of a uniform price for the industry was an accepted principle and this had to be done by fixing the uniform price on the basis of the cost of a reasonably efficient and economic representative cross section of manufacturing units and not with reference to the cost in relation to each unit. [859A B] M/s. Shri Sitaram Sugar Company Limited & Anr. vs Union of India & Ors. and U.P. State Sugar Corporation Ltd. & Anr. vs Union of India & Ors., J.T. , referred to. (3) Fixation of a uniform retention price being clearly permissible and the same having been determined at Rs. 100 per tonne on the basis of expert opinion, rounded on rele vant factors, there was no scope for interference within the limits of permissible judicial review in the present case. [859E] Anakapalle Co operative Agricultural & Industrial Socie ty Ltd. vs Union of India, and The Panipat Cooperative Sugar Mills vs Union of India, [1973] 2 SCR 860, referred to. (4) The Central Government 's power under Clause 12 of the Cement Control Order, 1967 to refix the price can be exercised 'having regard to any change in any of the factors relevant for determination of price of cement '. The meaning of the expression 'having regard to ' is well settled. It indicates that in exercising the power, regard must be had also to the factors enumerated together with all factors relevant for 852 exercise of that power. One such factor specified in Clause 12 is "such (5) No material has been produced by the appellant to show that M/s Chettinad Cement Corporation is a similar substandard unit without any capacity for expansion, so that it too must continue to be an uneconomic unit like M/s Travancore Cement Ltd. deserving a similar treatment. [860F G]

The non delivery of the goods booked by the respondent on September 5, 1955 to several destinations under "Railway Risk" due to the sinking of "Barge No. 6, carrying the wagons containing the goods" led to the filing of four suits which were dismissed by the Trial Court holding that the accident was not due to the negligence of the Railway employees. The High Court, accepting the appeal of the respondent by its judgment dated April 13, 1966 held that the sinking of Barge was not due to "inevitable accident" but due to the serious negligence of the Railway employees and their failure of duty to take due care which it was required to take as a bailee as revealed by their own Enquiry Committee held with reference to Ss. 83 and 84 of the Railways Act read with section 2 of the Indian Railways Board Act (4 of 1905) and rule 18 of the Railway Board Rules. The High Court remanded the suits for determination of the quantum of the decretal amount due to the respondent. The trial court after remand gave decrees in favour of the respondent on 10th September, 1966 without interest claimed up to the date of filing of the suit and interest "pendent lite". The High Court, on appeal by the respondent by its judgment dated 3 9 1968 allowed interest "pendent lite" and future interest at the rate of 4 1/2% per annum. Dismissing the two sets of appeal by the Union, one by Special Leave against the order dated 13 4 1966 determining the liability and another by certificate against the judgment dated 3 9 1968 awarding interest the High Court. ^ HELD: (1) The liability of the Railway was that of a bailee. The consignments were booked at Railway risk. The onus of proving that the Railway employees took the necessary amount of care and they were not guilty of negligence rested on the Railway Authorities. The question of onus is not important when the entire evidence is before the court. In the instant case there was no legal evidence to prove "inevitable accident" but suppression of important documents and non production of important witnesses in charge of the Barge. The Barge sank because of the serious and gross negligence of the railway employees and the railways did not take due care which it was required to take as a bailee. [617B D; 618F G] (II) The Enquiry Committee, in the instant case, is a Joint Enquiry, under the rules and the report is admissible under Ss. 5, 7 and 9 of the Evidence Act. The claim for privilege is not admissible because no such claim was made before the Courts below and there was no affidavit of the Minister incharge or the Secretary of the Department to support a claim for privilege. [616G H] (III) One of the principles for award of damages is that so far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the contract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, 615 the principle is that as far as possible the injured party should be placed in as good a situation if the contract has been performed. In other words, it is to provide compensation for the loss which naturally flows from the breach. The market rate is a presumptive test because it is the general intention of law that in giving damages for breach of contract, the party complaining should, so far as it can be by money, be placed in the same position as he would have been in if the contract had been performed. The rule as to market price is intended to secure only an indemnity to the purchaser. The market value is taken because it is presumed to be the true value of the goods to the purchaser. In the instant case, the High Court correctly applied these principles and adopted the contract price in the facts and circumstances of the case as the correct basis of compensation. [619 D]

While this appeal by special leave, relating to an industrial dispute was pending in this Court a Director of the appellant employer and a representative of the respondents employees made an application to the Court praying that an order might be passed in terms of a compromise since an agreement was alleged to have been entered into by the appellants and the respondents. Some of the respondents contested this compromise and the court sent issues to the Tribunal for finding whether the alleged com promise actually took place between the parties, and if so, was it valid. The Tribunal returned findings to the effect that the compromise did actually take place and was valid. Those findings were contested in the appeal. Held, that a compromise agreement seeking to settle an industrial dispute which was still pending decision in this Court would not contravene the provisions of section 23 of the Payment of Wages Act which contemplated rights not likely to be modified or reversed in any judicial proceedings. The procedure prescribed by section 6 C of the U. P. and the provisions thereof did not affect the powers of this Court, or the competence of the parties, to amicably settle a dispute pending before it. The procedure for obtaining an order in terms of the com promise entered into between the parties pending the appeal in this Court is prescribed by its own rules and the provisions of section 2(t) of the U. P. and rule 5(1) of the Rules made thereunder have no application to such case.

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.

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.]

The appellant was an Overseer in the Public Works Department of the Central Provinces and Berar Government. In 1947 he was suspended from service and prosecuted under section 161 I.P.C. Ultimately, on orders from the High Court, the prosecution was dropped. In a departmental enquiry also the appellant was exonerated, By an order dated December 1960, the Government held that the suspension of the appellant and the ' departmental enquiry against him "were not wholly unjustified". The order then directed that the appellant should be reinstated in service with effect from the date of the order and retired from the date, he, having already attained superannuation age on September 5, 1952 and that the entire period of absence from duty should be treated as period spent on duty under F.R. 54(5) for purposes of pension only, but that he should not be allowed any pay beyond what he had actually received or what was allowed to him, by way of subsistence allowance during the period of his suspension. The appellant filed a petition under article 226 of the Constitution contending that F. Rule 54(2) governed his case and not F. Rule 54(5). The High Court decided against him but granted him certificate to appeal to this Court. It was contended on behalf of the appellant that before deciding which rule applied to his case the Government should have given him an opportunity to be heard. The respondent urged that in passing a consequential order a hearing is not necessary. Held: An order passed under F R. 54 is not always a consequential order nor is such order necessarily a continuation of the departmental proceeding taken against the employee. [359E F] Consideration under F.R. 54 depending as it does on facts and circumstances in their entirety, passing an order on the basis of factual finding arrived at from such facts and circumstances and such an order resulting in pecuniary loss to the Government servant must be held to be an objective rather than a subjective function. The very nature of the function implies the duty to act judicially. In such a case if an opportunity to show cause against the action proposed is not afforded, as admittedly it was not done in the pre sent case, the order is liable to be struck down as invalid on the ground that it was one in breach of the principles of natural justice. State of Orissa vs Dr. (Miss) Binapani Devi and Ors. ; , relied on. [359H; 360A B] V. R. Gokhale vs State of Maharashtra, I.L.R. [1963] Bom. 537, approved.

The appellant was a jute mill. The Industrial Tribunal framed a gratuity scheme for its workers. It was challenged by the appellant before this Court in an appeal under article 136 of the Constitution. Two contentions were urged, namely : (i) that the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justi fication to frame the impugned scheme; (ii) in view of the losses incurred by the appellant during the years 1960 65, no additional burden should have been cast on it by introducing a gratuity scheme. HELD : (i) The Wage Board 's recommendation pertained to the jute industry as a whole and not to any individual industrial unit. It cannot be understood as recommending that there should be no gratuity scheme for the employees in any particular unit in that industry. What was relevant to find out was whether the appellant could bear the additional burden. [10 B] (ii) The Tribunal recommended the gratuity scheme after taking into consideration the financial position of the appellant as well as the fact that in a sister concern such a scheme was in existence. The losses suffered by the appellant were considered by the Tribunal to be a passing phase. What is of essence is the profit making capacity of the concern. In determining that question one has to take into consideration the paid up capital of the company, its reserves, its earnings in the past and its future prospects. A practical view of the question has to be taken. [10 D, G] In the light of these principles and on the material placed before the Tribunal it was not possible to hold that the Tribunal 's conclusion was without any just basis. [12 A] National Iron & Steel Co. Led. & Ors. vs State of West Bengal & Anr. ; and Calcutta Insurance Co. Ltd. vs Their Workmen, ; , relied on.

Appeals Nos. 503 to 506 of 1958. Appeals by special leave from the judgment and orders dated August 4, 1957, of the Bombay High Court in Letters patent Appeals Nos. 29 to 32, of 1957. J. C. Bhatt, R. P. Bhatt, R. A. Gagrat and G. Gopalakrishnan, for the appellants. N. C. Chatterjee, Madhowdas C. Bhagat and Radhey Lal Agarwal, for the respondents in C. A. No. 503 of 58. Madhowdas C. Bhagat and Radhey Lal Agarwal, for the respondents in C. As. 504 to 506 of 1958. September 29. The Judgment of the Court was delivered by DAS GUPTA, J. When a lessee takes lease of open land for the purpose of constructing on it buildings intended to be used for residence or for business is this "letting for residence,", or "letting for business"? That is the short question which arises for decision in these four appeals. The appellant brought these four suits in the City Civil Courts, Bombay, for recovery of arrears of rent in respect of the premises mentioned in the plaint of these several suits. It is clear under the law that the City Civil Court, Bombay, would have no jurisdiction to try these suits if the provisions of Part II of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Bom. 57 of 1947), which later in this judgment we shall refer to as the "Rent Act", applied to the permises in suits. For this reason the plaintiff stated in the plaint itself that this Rent Act did not apply to the demised premises. The defendant in each case pleaded on 930 the contrary that the Rent Act applied and so the City Civil Court had no jurisdiction to try the suits. The first issue framed in each of these suits therefore was, whether the Court had jurisdiction to entertain the suit. The learned Judge held that Part II of the Rent Act applied to the premises in each of these suits and consequently only the special court,% specified in section 28 of the Rent Act had jurisdiction to entertain the suits and the City Civil Court had no jurisdiction. Accordingly, he ordered the plaint in each of the four suits to be returned to the plaintiff for presentation to the proper Court. The plaintiff appealed to the High Court of Bombay but all the four appeals were summarily dismissed. The Letters Patent appeals preferred by the plaintiff from the decision of the Single Judge were also dismissed summarily. These appeals have been preferred against that decision of the Bombay High Court in Letters Patent Appeals on special leave obtained from this Court. Under a. 5, sub section 8 of the Rent Act unless there is anything repugnant in the context, "premises" means, among other things, "any land not being used for agricultural purposes. " It is 'undisputed in these cases that the land in respect of which the suits were brought was not being used for agricultural purposes and so comes within the definition of " 'Premises" in section 5. The provisions of Part If of the Act do not however apply to all premises which fall within this definition. Section 6 with which this Part II opens provides in its first sub section that this part shall apply to premises let for residence, education, business, trade or storage in areas specified in Sch. It is subject to a proviso that the State Government may direct that in any of the said areas, this Part shall cease to apply to premises let for any of the said purposes, with a further proviso that the State Government may again direct that in any of the said areas this Part shall re apply to premises let 931 for such of the, aforesaid purposes. As there has been no notification under these provisos affecting the premises in suit, we are not concerned with them; nor are we concerned with sub section 1(A) under Which the State Government may direct that this Part shall, apply to premises let for any other purposes. The four premises in respect of which the four suits were brought are all within the city of Bombay and thus in the area specified in Schedule of the Act. In each of these cases we have therefore to examine the, purpose of the lease and to decide whether it was let for residence or for education, business, trade or storage. The lease men tions that the leasee will construct buildings suitable for residential, business, industrial or office purposes. The plaintiff 's case is that as open land is not intended to be used as it is for residence or business but for construction of buildings for residence or business the land is not being let for residence or business. The defendant in each case contends that the letting was for residence or business as that was the ultimate purpose of taking the lease. Mr. Bhatt addressed his arguments to the question whether the letting could be said to be for residence and did not separately address us on the question of letting for business as obviously if the land could not be said to be let for residence it could not also be said to be let for business. The extreme proportion which Mr. Bhatt raised first of all on behalf of the appellant is that open land can never be let for residence and so. when a. 6 speaks of premises being let for residence, land as defined in sub section 8 (a) of section 5 is outside the word "premises". There is, in our opinion,, no substance in this contention. It is quite clear that open land as it is can be used for residence and so there is no reason to think that open land was not intended to be included in ,premises" when a. 6 speaks of premises being let for residence. 932 The more substantial question for consideration is whether when open land is being leased not to be used for residence in its condition of open land but to be used for the purpose of residence after constructing buildings thereon, the letting of the open land can reasonably be called to be letting for residence. Mr. Bhatt contends that as, what is to be considered is whether the letting of the open land is, for residence the land cannot be said to be for residence if not the open land, but, something constructed on the open land is to be used for residence. In such a case, says Mr. Bhatt, the land is let for construction of a building and not for residence. We are unable to accept this argument. Land can be used for many purposes. It maybe used for agriculture; for residence of human beings; for keeping cattle or other animals; for holding meetings; : or carrying on business or trade; for storage of goods; for supply of water by excavating tanks, and many other purposes. Many of these purposes can be achieved on the open land without the construction of any buildings. But many of them can be better achieved if some kind of structure is created on the open land. It seems reasonable to us to think that when the Bombay Legislature took particular care to include open land not being used for agricultural purposes within the word "premises" and then went on in the very next section to speak of premises being let for several specified purposes, it was thinking of the purposes to which the land will be used irrespective of whether the purpose was intended to be achieved with or without construction of a structure. The intention in mentioning only some purposes, viz., residence, education, business, trade or storage in section 6 was to exclude land let for purposes like, keeping of cattle, (except in the way of business or trade), and numerous other purposes to which the land may be put from the benefit of part II of the Act. It seems to us that when people speak ordinarily of land being let for business, they are only 933 thinking that the ultimate purpose behind the letting is that business will be carried on and they are not thinking whether the business will be carried on on the land in its present state or by the construction of temporary sheds or by putting up permanent buildings. Similarly, when a man says that he will take lease of a plot of land for storage of his goods, what he has in mind is that by taking lease of the land he will achieve the object of storing goods, irrespective of whether for such storage he will have to put up a structure or not. In the same way. , we think, that when land has been let for the purpose of constructing buildings for residence, people will say that it is being let for residence, just as they will say that the land has been let for residence if the lessee intends to use it as caravan site so that the people may live on the open land in caravans. In our opinion, the words ', 'let for residence, education, business, trade or storage" are wide enough to include a letting for the achievement of these purposes with construction of buildings as also without construction of buildings. But, says Mr. Bhatt, look at sub a. (i) of section 15 of the Rent Act which is in this very part II and that will show that the Legislature could not have intended land which is let for the construction of buildings for residence to I" within the phrase , 'premises let for residence". Section 15 of the Act after its amendment by Bombay Act 49 of 1959 reads thus: "Notwithstanding anything contained in any law, but subject to any contract to the contrary, it shall not be lawful, after the coming into operation of this Act for any tenant to sublet the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein. " It may be mentioned that as the section originally stood the words "but subject to any contract to the contrary" were not there. When the amending Act 934 of 1959 introduced these words the amendment further provided that these words shall be deemed always to have been there. Even after the amendment, it remains unlawful, where there is no contract to the contrary, for any tenant of premises to sublet the whole or a by part thereof Mr. Bhatts argument is that in every case where there is no such contract to the contrary the difficulty that will result if land let for construction of residential buildings be held to be premises let for residence within the meaning of a. 6. is that after the building is constructed the lessee will not be able to sublet the building or any portion of it; so that in many cases where the real purpose of taking the land is for the construction of building for letting out the same, that purpose will be defeated. This argument as regards the difficulty in the matter of letting out the building constructed on the land on which lease has been taken was more plausible when the saving phrase "but subject to any contract to the contrary" did not form part of the section. Now, however, the cases in which such difficulty will arise, if at all, would be few and far between; for, it is reasonable to expect that when taking lease of land for the construction of building intended to be let out to others for residence, the lessee of the land would take care to include in the contract of lease a term permitting him to let out the building. Assuming that there may be cases where the contract of lease does not contain any such term and assuming further that it will not be lawful for the lessee of the land to let out the building constructed by him, the probability of such difficulty in some cases, can be no reason to out down the ordinary and reasonable connotation of the words , let for residence" in a. 6. It 'is unnecessary for us to decide whether if there is no contract to the contrary, section 15 will really stand in the way of a lessee of the land letting out buildings constructed by him, on such land. We may say however that there is in our opinion 935 much force in the argument which found favour with the Bombay High Court in Vinayak Goapl vs Laxman Kashinath (1), where the very question, which.is now before us arose for decision, that the bar of section 15 will operate only in the way of letting out the land of which lease has been taken, but will not stand in the way of letting the building constructed on the land. In that case the Bombay High Court held that where land is leased for the purpose of construction of buildings for residence the land is "let for residence" within the meaning of section 6 of the Rent Act. Mr. Bhatt devoted a considerable part of his argument to persuade us that some of the reasons given in that judgment do not stand scrutiny. We think it unnecessary however to examine whether all the reasons given in the judgment are correct. For, as already indicated, the words " 'let for residence" on a proper construction would cover the case of open land being let for construction of residential buildings and so the conclusion reached by the Bombay High Court in Vinayak Gopal 's Case(1) is, in our opinion, correct. It is unnecessary for us also to consider for the purpose of the present appeals as to what may happen to the sub lessee if and when on the terms of a particular lease the building ultimately vests in the owner of the land nor as to what may happen if and when on the terms of a particular lease the lessee who has constructed the building gets the right to remove the building. These considerations should not, in our opinion, affect the construction of the words "let for residence". Turning now to the facts of the present case we find that in each of these cases the lease was taken with a view to construct buildings thereon for residential, business, industrial or office purposes. The premises let am therefore "premises" to which (1) I. L. R. 936 under section 6(1) of the Rent Act the provision of part II of the Act, apply. The Trial Court and the High Court were therefore right in holding that the City Civil Court Bombay, had no jurisdiction to try the suits. The appeals are accordingly dismissed with costs. There will be one set of hearing fee for the four appeals. Appeal dismissed.

The appellant took lease of an open land for construction of buildings suitable for residential, business, industrial or office purposes. The appellant brought suits in the City Civil court, Bombay, for the recovery of arrears of rent in respect of premises built on the said open land, all within the city of Bombay thus in the area specified in Schedule I of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The appellant stated in the Plaint itself that the Bombay Rent Control Act, 1947, did not apply to the dcmiscd premises. The defendants pleaded that the Rent Act applied and the City Civil Court had no jurisdiction to try the suit. The trial judge held that part II of the Rent Act applied to the premises and consequently only the special courts specified in section 28 of the Rent Act had jurisdiction to entertain the suit and ordered the plaints in the suits to be returned to the plaintiff, for presentation to the proper court. The Bombay High Court summarily dismissed the appeals from the said orders. The point at issue for decision was whether "when a lessee takes lease of open land for the purpose of constructing on it buildings intended to be used for residence or for business, this amounts to "Letting for residence" or "letting for business". The appellants ' contention was that as open land not intended to be used, as it is, for residence or business but for construction of buildings for residence or business was taken on lease the land was not being let for residence or business. Held, that the words "let for residence, education, business or storage" in s.6 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, are wide enough to include a letting for the achievment of these purposes by construction of buildings as also without construction of buildings. Held, further, that on the facts of the present case, in each of these cages, the lease was taken with a view to construct, buildings thereon for residential, business, industrial or office purposes and the land let was therefore 'premises ' to 929 which under section 6(1) of the Bombay Rent Act, the provisions of Part II of the Act applied. Vinayak Gopal v Laxman Kashinath I. L. R. , approved.

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.

The appellant tenant was in occupation of a double storeyed building on a monthly rent of Rs. 170. The respond ent landlady filed an application under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 for fixation of fair rent. The Rent Controller took note of the fact that 1/3rd portion of the building was being used for residential purpose and the rest of the building for non residential purpose, namely, for running a school. He also appointed an Engineer as Commissioner to evaluate the total cost of the building. The Commissioner adopted the rates prevalent in the Public Works Department and submitted his report. On the basis of the Commissioner 's report, the Rent Controller worked out the cost at Rs.1,51,820. Accordingly, the fair rent for the said premises was arrived at Rs.1518 per month at 12 per cent gross return. Since the respondent landlady had confined her claim for the enhance ment of fair rent to Rs.1,O00 only, the Rent Controller fixed the fair rent at Rs.1,O00. On appeal, the order of Rent Controller was affirmed by the Court of Small Causes. On a revision being preferred, the High Court agreed with the valuation adopted and determined the fair rent on the basis that 1/3rd of the premises was used for residen tial purpose and 2/3rd for nonresidential purpose, and, as per sub sections (2) and (3) of Section 4 of the Act, worked out the rent at 9 per cent and 12 per cent respectively on the cost of construction arrived at. The High Court fixed the fair rent at Rs. 1391.67 per month. It confirmed the fair rent of Rs. 1,000 as was fixed by the Rent Controller and as confined to by the Respondent landlady. This appeal, by special leave, is against the High Court 's order. It 395 was contended that the cost of the building and its market value as worked out was illegal, fallacious and untenable. Dismissing the appeal, HELD: 1. Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prescribes the principles on the basis of which the fair rent is to be fixed. In the light of those principles, the evidence adduced by the parties was considered by the Rent Controller, the appellate court and the High Court and they found that the fixation of the fair rent was much in excess of the claim made by the Respondent landlady. Since she confined her claim to Rs.1,O00 per month, the courts below have fixed the fair rent at Rs.1,O00. Therefore, on the findings of facts based on consideration of the evidence, this court cannot interfere and come to its own conclusion. The finding is neither vitiated nor illegal warranting interference. [210B C] 2.1 Sub section 4 of Section 4 of the Act, clearly indicates that the total cost of construction referred to in sub sections (2) and (3) shall consist of the market value as on the date of application for fixation of the fair rent. [209C] 2.2 It is obvious that at the time when this Court rendered its decision in Nambiar 's case there was no provi sion in Section 4 as to the date on which the cost of con struction was to be determined, and Rule 12 provided the manner in which the fixation of the fair rent has to be made. The subsequent amendment brought on the statute in 1973, by the Amending Act 23 of 1973, has incorporated sub section (4) in Section 4 which amplified the date of appli cation as the starting point to fix market value. As such the fair rent has been rightly determined by the courts below. [209D E; HI K.C. Nambiar vs The IV Judge of the Court of Small Causes, Madras & Ors., , referred to.

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.

In a suit for evicition on the ground of non payment of rent a decree was passed directing the tenant to pay the landlady 's costs, as, by that time, the tenant had paid all the arrears of rent as fixed; but the tenant did not pay or tender the costs. Therefore, the court passed an order of eviction. His appeal, a revision to the High Court, and a review petition to the High Court were all dismissed. In appeal to this Court, HELD : (1) The tenant would be entitled to the protection under section 12(3) (b) of the, Bombay Rent Act, only if he complied with its provisions by paying or tendering not only the arrears of rent but also the costs of the suit. Since the appellant admitted his inability to, comply with the provision, he could not claim protection against eviction. [627 D, G] (2) Assuming that the costs were paid at a later date as alleged by the appellant, that fact was not brought to the notice of the High Court, and therefore this Court will not interfere with the exercise of discretion by the High Court in the set of facts and circumstances presented to the High Court. [628 F G]

The appellant was owner of the suit land. The appel lant 's wife sold this land to respondent No 1. Thereafter, the appellant made an application under section 70(b) of the Bombay Tenancy & Agricultural Lands Act, 1948, for a decla ration that he was a tenant of two of the 4 plots of the land. The dispute went up to the Maharashtra Revenue Tribu nal who rejected the claim of the appellant to tenancy. Thereafter, the respondent filed an application under sec tion 70(b) of the said Act praying for a declaration that the appellant was not a tenant in respect of the remaining two survey numbers also. The respondent alleged that he never leased the land to the appellant and that he came to know of the entry of the record of rights for the year 1955 56 on the strength of mutation alleged to have been made on 30.1.1966. The respondent was cross examined and it was suggested to him that he had made an admission in previ ous deposition although the said deposition was not shown to the respondent. After the cross examination of the respond ent was over, a certified copy of the said deposition was placed on record. Thereafter the appellant was examined and he relied on the extract of the record of rights. The Mamlatdar rejected the claim of the appellant to be a tenant which was confirmed by the Deputy Collector. The Maharash tra Revenue Tribunal held in exercise of its revisional powers that the appellant was proved to be a tenant of the land and set aside the concurrent findings of the two au thorities below. In a writ petition filed by the respondent under article 227 of the Constitution the High Courts set aside the order of the Revenue Tribunal. Dismissing the appeal by Special Leave, HELD : 1. Admission on which reliance has been placed by the appellant suffers from 3 infirmities: (i) Earlier deposition related to two different survey numbers. Whatever was stated about another survey number is irrelevant and inadmissible. Since under section 17 of the Indian Evidence Act an admission is a statement, oral or documentary, which suggests any inference as to any fact in issue or relevant fact. (ii) In fact there was no admission in the earlier proceed ings; and (iii) The deposition was not brought to the notice of re spondent when he was being cross examined. Privy Council has laid down in the case of Bal Gangadhar Tilak that before any person is to be faced with any statement he should be given an opportunity to see that statement and to answer the statement. [673 E, 674 A C, 675 A E] Bal Gangadhar Tilak vs Shrinivas Pandit 42 Indian Ap peals 135 at page 147, applied. There is a presumption about the correctness of the record of rights. However, there is no abstract principle that whatever will appear in the Record of Rights will be presumed to be correct. In the present case it is shown by evidence that the entries are not correct. [676 B D] 672 3. Under section 76 of the Act power of Tribunal to interfere is limited. There was no error of law on the face of the record. If the authority entrusted with adjudication goes into the question and assesses the same, the decision may 'be right or wrong but that will not go to show that there is any error of law on the face of record. [676 E, 677 A B]

This is a tenant 's appeal filed after obtaining Special Leave from the Court. The Respondent landlord of tenanted premises (i.e. two sheds) filed a petition for ejectment of the appellant from the premises in question before the Rent Controller. According to the Respondent landlord the monthly rent payable by the appellant was Rs.950 p.m. which was liable to be enhanced under the provisions of Haryana Urban (Control of Rent and Eviction) Act, 1973 from Rs.950 to Rs.1142 p.m. Accordingly, the respondent caused a notice to be given to the appellant claiming rent @ Rs. 1142 w.e.f. 26.6.1974 till June 1977 and since the appellant defaulted in making payment of the rent, he was liable to be ejected from the demised premises. The tenant denied that the rent was liable to be enhanced as claimed by the landlord. He further asserted that he had already paid rent upto March 1975 by means of cheques and that he had tendered the ar rears of rent together with interest and costs as assessed by the Rent Controller on 5.12.1977. On this reasoning he urged that he was not liable to be evicted on the ground taken in the Petition. The landlord in the replication denied the receipt of rent for the period from May 1974 to November, 1977 @ Rs.1142 p.m. Alternatively he claimed that the rent to the extent of Rs.36,100 was due to him from the appellant @ Rs.950 p.m. from 1st May, 1974 to June 30, 1977. The Rent Controller held that the landlord respondent was not entitled to recover the rent @ Rs.1142 p.m. but only Rs.950 p.m. as agreed between the parties and the appellant has failed to pay the rent from 1.4.1975. Accordingly, the Rent Controller directed the ejectment of the appellant from the premises by granting him two months time. 987 The appellate authority having affirmed the order of the Rent Controller, the appellant filed a Civil Revision before the High Court under Sub section (6) of Sec. 15 of the Act. Before the High Court it was urged by the appellant that since in the application for ejectment no specific amount of arrears of rent due was mentioned as contemplated by CI. (c) of Rule 4 and Clause (1) of Rule 5 of the Haryana Urban (Control of Rent and Eviction) Rules he could not be evict ed. Finding no substance in the said contention, the High Court rejected the Civil Revision. Hence this appeal. The appellant raised two contention before this Court viz., that the High Court has ignored to note the statutory obligation cast on the Rent Controller as per the proviso attached to Sec. 13(2)(1) of the Act requiring him to calcu late and determine the quantum of arrears of rent; even at the first instance has not been complied with and (ii) that the application for ejectment was not in accordance with the mandatory provisions of Rule 4(c) 5(1) and 6 of the Rules framed under the Act. Dismissing the appeal, this Court, HELD: The proviso to Sec. 13(2)(i) requires the tenant to pay or tender the actual arrears of rent within 15 days of the first hearing of the application for ejectment after due service alongwith the interest to be calculated by the Controller at 8 per cent per annum on such arrears together with such costs of the application, if any, as may be al lowed by the Controller. [994B] When there is a statutory obligation on the tenant either to pay or tender the arrears of rent within a period of 15 days of the first hearing of the application for ejectment after due notice it is for him to calculate the exact arrears of rent due and to pay or tender the same and if the tenant fails to do so he is deemed to have not paid or made the valid tender of the rent. [994D] The non compliance of Rule 4(c) i.e. the non mentioning of the quantum of arrears of rent, does involve no invali dating consequence and also does not visit any penalty. [999B C] Rules 4(c), 5(1) and 6 are not mandatory but only directory. [999C] If the statute is mandatory, the things done not in the manner or form prescribed have no effect or validity. But if it is directory, the non compliance may not lead to any serious and adverse consequence. [995H; 996A] 988 The word "shall" in its ordinary import is obligatory. Nevertheless the word "Shall" need not be given that conno tation in each and every case and the provisions can be interpreted as directory instead of mandatory depending upon the purpose which the legislature intended to achieve as disclosed by the object, design, purpose and scope of the statute. [998H; 999A B] No prejudice is writ large in the present case because proof of prejudice is also one of the necessary criteria besides non compliance of the provision to invalidate the Act. [999G] Sheo Narain vs Sher Singh, ; , Not applicable. Sham Lal (dead) by Irs. vs Atme Nand Jain Sabha (Regd.) Dal Bazar, ; , Not applicable. Montreal St. Rly. Co. vs Normandin, ; , re ferred to. Seth BikhrajJaipuria vs Union of India, ; , referred to. Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur, ; , referred to. K. Kamraj Nadar vs Kunju Thevar and Others, , referred to. Subbarao vs Member, Election Tribunal, Hyderabad, ; , referred to. State of U.P. & Others vs Babu Ram Upadhya, ; , referred to. Ajit Singh vs State of Punjab, ; , referred to.

In a suit for specific performance of an agreement to sell filed on the original side of the Bombay High Court the plaintiff (appellant) prayed for certain interim reliefs. A single Judge of the High Court dismissed the application. A Division Bench of the High Court, on appeal by the plaintiff, held that the appeal was not maintainable on the ground that the impugned order of the single Judge was not a 'judgment ' within the meaning of clause 15 of the Letters Patent of the High Court. In appeal to this Court it was contended on behalf of the appellant that since the trial Judge is governed by the procedure prescribed by the Code of Civil Procedure, by virtue of the provisions of section 104 read with Order 43 Rule (1) the impugned order is appealable to a larger Bench; (2) assuming that the Letters Patent was a special law, section 104 read with Order 43 is in no way inconsistent with clause 15 of the Letters Patent; (3) even if section 104 read with Order 43 Rule 1 does not apply an order refusing to appoint a receiver or to grant injunction has the attributes of finality and, therefore, amounts to a judgment ' within the meaning of Letters Patent. Allowing the appeal ^ HELD: (per Fazal Ali and A. Varadarajan, JJ.) (Amarendra Nath Sen, J. concurring.) Since the Order of the trial Judge was one refusing appointment of a receiver and grant of ad interim injunction, it is a 'judgment ' within the meaning of the Letters Patent both because order 43 rule 1 applies to internal appeals in the High Court, and such an order even on merits contains the quality of finality and would be a judgment within the meaning of clause 15 of Letters Patent. Hence an appeal is maintainable to the Division Bench. The Division Bench was in error in dismissing the appeal without deciding it on merits. [259 F G] 188 There is no inconsistency between section 104 read with Order 43 Rule 1, C.P.C. and appeals under Letters Patent. There is nothing to show that Letters Patent in any way excludes or overrides the application of section 104 read with Order 43 Rule 1 or that these provisions do not apply to internal appeals within the High Court. [237 E F] Code of Civil Procedure 1877, by sections 588 and 589, did not make any distinction between appeals to the High Court from the District Court and internal appeals to the High Court under Letters Patent. Notwithstanding the clear enunciation of law by the Privy Council that section 588 did not affect nor was it inconsistent with the provisions of Letters Patent and that, therefore, orders of a trial Judge which fall beyond section 588 could be appealable to a larger bench under the Letters Patent if its orders amounted to a 'judgment ' within the meaning of clause 15 of the Letters Patent, there was a serious controversy among the High Courts on this question. Section 104 of the C.P.C., 1908 made it clear that appeals against orders mentioned in Order 43 Rule 1 were not in any way inconsistent with the Letters Patent but merely provide additional remedy by allowing appeals against miscellaneous orders passed by the trial Judge to a larger bench. [205 E G] In dealing with a suit the trial Judge has to follow the procedure prescribed by the Code. It is indisputable that any final judgment passed by the trial Judge amounts to a decree and under the provisions of the Letters Patent an appeal lies to a larger bench. Letters Patent itself does not define the term 'judgment ' and has advisedly not used the word 'decree ' in respect of a judgment given by the trial Judge. [206 B D] Section 5 of the Code empowers the State Government to apply the provisions of the Code where any enactment is silent as to its applicability. Section 5 makes clear that, excepting the Revenue Courts, all other Civil Courts would normally be governed by the provisions of the Code in the matter of procedure.[206H,207A] Section 4 of the Code which provides that in the absence of any specific provision to the contrary the provisions of the Code do not limit or affect any special or local law, is not applicable in the instant case because even if the Letters Patent is deemed to be a special law within the meaning of this section the provisions of section 104 do not seek to limit or affect the provisions of the Letters Patent. [207 B C] By force of section 104 all appeals, as indicated in the various clauses of Order 43 Rule 1, would lie to the appellate court. In short a combined reading of the various provisions of the Code leads to the conclusion that section 104 read with Order 43 Rule 1 clearly applies to proceedings before a trial Judge of the High Court. [207 H; 209 B] In the instant case, therefore, section 104 read with Order 43 Rule 1 does not in any way abridge or interfere with or curb the powers conferred on the trial Judge by clause 15 of Letters Patent. They only give an additional remedy by way of appeal from the orders of the trial Judge to a larger bench. That being so there is no force in the respondent 's argument that these provisions do not apply to internal appeals in the High Court. [209 D E] 189 Hurrish Chunder Chowdry vs Kali Sundari Debia, 10 I.A. 4, Mt. Sabitri Thakurain vs Savi & Anr. A.I.R. 1921 P.C. 80, Union of India vs Mohindra Supply Co., ; and Shankarlal Aggarwal & Ors. vs Shankarlal Poddar & Ors. , referred to. A number of enactments, as for example, section 202 of the and section 39 of the Arbitration Act widen, rather than limit, the original jurisdiction of the High Court by conferring additional or supplementary remedy by way of appeal to a Division Bench from the judgment of a single Judge. On a parity of reasoning, therefore, section 104 read with Order 43 Rule 1 expressly authorises and creates a forum for appeal against orders falling under the various clauses of Order 43 Rule 1 to a larger bench of the High Court without disturbing, interfering with or over riding the Letters Patent jurisdiction. [211 B C] Dayabhai Jiwandas & Ors. vs A.M.M. Murugappa Chettiar, I.L.R. 13 Rangoon 457, Sonbai vs Ahmedbhai Habibhai [1872] 9 Bom. HC Reports. 398, Rajagopal & Ors. (in Re. LPA 8 of Mad. 447, Ruldu Singh vs Sanwal Singh Lahore 188, Lea Badin vs Upendra Mohan Roy Chaudhary & Ors. , Mathura Sundari Dassi vs Haran Chandra Shaha & Ors. A.I.R. 1916 Cal. 361 Abdul Samad & Ors. vs The State of J & K. A.I.R. 1969 J&K 52, and Kumar Gangadhar Bagla vs Kanti Chunder Mukerjee & Anr., , approved. Ram Sarup vs Kaniz Ummehani, ILR 1937 All. 386 over ruled. Assuming that Order 43 Rule 1 does not apply to Letters Patent appeals the principles governing these provisions would apply by process of analogy. The provisions of Order 43 Rule 1 possess the traits, trappings and qualities and characteristics of a final order. Although the word 'judgment ' has not been defined in the Letters Patent but whatever test may be applied the order passed by the trial Judge appealed against must have the traits and trappings of finality. The appealable orders indicated in the various clauses of Order 43 Rule 1 are matters of moment deciding valuable rights of the parties and are in the nature of final orders so as to fall within the definition of 'judgment '. [237G; 225 E F] Radhey Shyam vs Shyam Behari Singh ; referred to. Pandy Walad Dagadu Mahar & Anr. vs Jamnadas Chotumal Marwadi, ; Vaman Ravi Kulkarni vs Nagesh Vishnu Joshi & Ors, A.I.R. 1940 Bom. 216; Vishnu Pratap & Ors. vs Smt. Revati Devi & Ors. A.I.R. 1953 All. 647; Madhukar Trimbaklal vs Shri Sati Godawari Upasani Maharaj of Sakori & Ors. ; Ratanlal Jankidas Agarwal vs Gajadhar & Ors.; A.I.R. 1949 Nagpur 188; Beads Factory & Anr. vs Shri Dhar & Ors. A.I.R. 1960 All. 692; J. K. Chemicals Ltd. vs Kreba & Co.; A.I.R. 1967 Bom. 56, overruled. Having regard to the nature of the orders contemplated in the various clauses of Order 43 Rule 1 which purport to decide valuable rights of the parties in the ancillary proceedings even though the suit is kept alive these orders possess the attributes or characteristics of finality so as to be judgments within the meaning of clause 15 of the Letters Patent. They are therefore, appealable to a larger 190 bench. The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position. [237H 238A B] The question to be decided in this case which is a vexed and controversial one is as to what is the real concept and purport of the word 'judgment ' used in the Letters Patent. The meaning of the word 'judgment ' has been the subject matter of conflicting decisions of the various High Courts raging for almost a century and over which despite the length of time no unanimity had been reached and it is high time that this controversy should be settled once and for all as far as possible. [238 E F] Out of the numerous authorities cited three leading judgments have spelt out certain tests for determining as to when an order passed by a trial Judge can be said to be a 'judgment ' within the meaning of clause 15 of the Letters Patent and we are inclined to agree generally with the tests laid down in these cases though some of the tests laid down are far too wide and may not be correct. [238 G H] While the view taken in the Justices of the Peace for Calcutta vs The Oriental Gas Company (VIII Bengal L.R. 433) is much too strict, the one taken in T. V. Tuljaram Row vs M.K.R.V. Alagappa Chettiar (ILR 35 Madras 1) is much too wide. The correct test seems to lie somewhere in between the tests laid down in these cases. Similarly the full Bench decision in Manohar Damodar Bhoot vs Baliram Ganpat Bhoot (AIR 1952 Nagpur 357) pithily described the essential requisites and the exact meaning of the word 'judgment ' as used in the Letters Patent. The pointed observations made in this case try to synthesize the conflicting views taken by the Calcutta and Madras High Courts. They represent the true scope and import of the word 'judgment ' as used in the Letters Patent. [The Court reviewed the entire case law on the subject laying down various tests to determine what a judgment is.] The test for determining as to when an order passed by a trial Judge can be said to be a 'judgment ' within the meaning of the Letters Patent are: (1) Where an order, which is the foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a particular party, it amounts to a judgment. [248 B C] Asrumati Debi vs Kumar Rupendra Deb Raikot ; (2) An order dismissing an application for review would be appealable under the Letters Patent being a judgment, though it is not made appealable under Order 43 rule 1. [249 B] State of Uttar Pradesh vs Dr. Vijay Anand Maharaj ; (3) The which confers original jurisdiction on the trial Judge expressly makes an order passed by the trial Judge under section 202 appealable and, therefore, any order passed under that section would be appealable under the and is, therefore, a judgment. [249 C D] 191 Shankarlal Aggarwal vs Shankerlal Poddar (4) Whenever a trial Judge decides a controversy which effects valuable rights of one of the parties it is a judgment within the meaning of the Letters Patent. [249 H] Radhey Shyam vs Shyam Behari Singh ; (5) Where an order passed by the trial Judge allowing amendment of the plaint, takes away from the defendant the defence of immunity from any liability by reason of limitation, it is a judgment within the meaning of clause 15 of the Letters Patent. [250 A B] Shanti Kumar R. Canji vs The Home Insurance Co. of New York ; (6) Clause 15 of the Letters Patent does not define the term 'judgment '. The Letters Patent is a special law which carves out its own sphere and it would not be possible to project the definition of the word 'judgment ' as defined in the Code of Civil Procedure. Letters Patent were drafted long before the Code of Civil Procedure of 1882 was enacted. The word 'judgment ' used in the Letters Patent does not mean a 'judgment ' as defined in the Code. At the same time it does not include every possible order final, preliminary or interlocutory passed by a Judge of the High Court. [251 D E] Mt. Shahzadi Begum vs Alak Nath & Ors. A.I.R. 1935 All 628. Under the Code of Civil Procedure a judgment consists of reasons and grounds for a decree passed by a Court. As a judgment constitutes the reasons for the decree, it follows as a matter of course that the judgment must be a formal adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy. The concept of a judgment as defined in the Code seems to be rather narrow and the limitations engrafted by section 2(2) cannot be physically imported into the definition of the word 'judgment ' as used in clause 15 of the Letters Patent because the Letters Patent has advisedly not used the terms 'order ' or 'decree ' anywhere. The intention of the givers of the Letters Patent was that the word 'judgment ' should receive a much wider and more liberal interpretation than the word 'judgment ' used in the Code of Civil Procedure. At the same time, it cannot be said that any order passed by a trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. The word 'judgment ' has a concept of finality in a broader and not a narrower sense. [2 52 G H; 253 A C] A judgment can be of three kinds: (1) A final judgment: A judgment, which decides all the questions or issues in controversy so far as the trial Judge is concerned and leaves nothing else to be decided is a final judgment. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the trial Judge is a judgment within the 192 meaning of the Letters Patent and amounts to a decree so that an appeal would lie from such a judgment to a Division Bench. [254 D E] (2) A preliminary judgment: A preliminary judgment may be of two forms: (i) where the trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Since the suit is finally decided one way or the other, the order passed by the trial judge would be a 'judgment ' finally deciding the cause so far as the trial Judge is concerned and, therefore, appealable to a larger bench; (ii) where the trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to the maintainability of the suit as for example, bar of jurisdiction, res judicata, a manifest defect in the suit, absence of notice under section 80 and the like. An order of the trial Judge rejecting these objections adversely affects a valuable right of the defendant who, if his objections were held to be valid, is entitled to get the suit dismissed on preliminary grounds. Such an order, though it keeps the suit alive, decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to a larger bench. [254 F H; 255 A B] (3) Intermediary or Interlocutory judgment: Most of the interlocutory orders which contain the quality of finality are clearly specified in clause (a) to (w) of Order 43 Rule 1. They are judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders not covered by Order 43 Rule 1 but possessing the characteristics and trappings of finality because they adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. Thus when an order vitally affects a valuable right of the defendant it will be a judgment within the meaning of Letters Patent so as to be appealable to a larger bench. [255 C E; 256 A] Every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. [256 H 257 A] The following considerations should prevail with the Court in deciding whether or not an order is a judgment: (1) The trial Judge being a senior court with vast experience of various branches of law occupying a very high status, should be trusted to pass discretionary or interlocutory orders with due regard to the well settled principles of civil justice. Thus any discretion exercised or routine orders passed by the trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice one party or the other cannot be treated as a judgment.[258D E] (2) An interlocutory order, in order to be a judgment, must contain the traits and trappings of finality either when the order decides the question in controversy in ancillary proceeding or in the suit itself or in a part of the proceedings. [258 G] 193 It is not the form of adjudication which has to be seen but its actual effects on the suit or proceedings. [243 H] If irrespective of the form of the suit or proceeding, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment. [244A] If the effect of the order, if not complied with, is to terminate the proceedings, the said order would amount to a judgment. [244 B] An order in an independent proceeding which is ancillary to the suit, (not being a step towards judgment) but is designed to render the judgment effectively can also be termed as judgment within the meaning of the Letters Patent. [244C] An order may be a judgment even if it does not affect the merits of the suit or proceedings or does not determine any rights in question raised in the suit or proceedings. [244 D E] An adjudication based on a refusal to exercise discretion, the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would amount to a judgment within the meaning of the Letters Patent. [244 E F] Some illustrations of interlocutory orders which may be treated as judgments may be stated thus: (1) An order granting leave to amend the plaint by introducing a new cause of action which completely alters the nature of the suit and takes away a vested right of limitation or any other valuable right accrued to the defendant. [258 B C] (2) An order rejecting the plaint. [258 C] (3) An order refusing leave to defend the suit in an action under Order 37, Code of Civil Procedure. [258 C] (4) An order rescinding leave to the trial Judge granted by him under clause 12 of the Letters Patent. [258 D] (5) An order deciding a preliminary objection to the maintainability of the suit on the ground of limitation, absence of notice under section 80, bar against competency of the suit against the defendant even though the suit is kept alive. [258 D E] (6) An order rejecting an application for a judgment on admission under Order 12 Rule 6. [258 E F] (7) An order refusing to add necessary parties in a suit under section 92 of the Code of Civil Procedure. [258 F] (8) An order varying or amending a decree. [258 F G] (9) An order refusing leave to sue in forma pauperis. [258 F G] (10) An order granting review. [258 F G] 194 (11) An order allowing withdrawal of the suit with liberty to file a fresh one. [258 G H] (12) An order holding that the defendants are not agriculturists within the meaning of the special law. [258 G H] (13) An order staying or refusing to stay a suit under section 10 of the Code of Civil Procedure. [258 H] (14) An order granting or refusing to stay execution of the decree. [259A] (15) An order deciding payment of court fee against the plaintiff. [259 B] (per Amarendra Nath Sen J concurring) On a plain reading and proper construction of the various provisions of the Code of Civil Procedure, section 104 of the Code applies to the original side of the High Court of Bombay and the impugned order of the single Judge is appealable to a Division Bench under this section read with Order 43 thereof. [279 H; 280 A] The right of appeal under clause 15 of the Letters Patent is in no way curtailed or affected by section 104. By virtue of the provisions of section 104(1) a litigant enjoys the right of preferring an appeal in respect of various orders mentioned therein, even though such orders may or may not be appealable under clause 15 of the Letters Patent as a judgment and the right of appeal under clause 15 remains clearly unimpaired. [275 E G] The argument of the respondent, based mainly on the provisions of sections 3 and 4 of the Code of Civil Procedure that even if various other provisions of the Code apply to the Bombay High Court, including its original side, the provisions of section 104 read with Order 43 could not apply to the original side of a Chartered High Court because the jurisdiction conferred by clause 15 of the Letters Patent is a special jurisdiction is without force. [267 B C] That by virtue of section 1 (which provides for territorial extent of the operation of the Code) the Civil Procedure Code applies to the State of Maharashtra cannot be disputed. [268 E F] Section 3 which deals with subordination of Courts to the High Court has no bearing on the point in issue and does not create any bar to the competence and maintainability of an appeal from an order passed by a single Judge on the original side if the order is otherwise appealable. While dealing with any matter on the original side of the High Court a single Judge is in no way subordinate to the High Court. Nor again, could there be a question of his being a subordinate to the Division Bench which hears an appeal from his judgment. If any order passed by him on the original side is a 'judgment ' within the meaning of clause 15 of the Letters Patent an appeal lies to a Division Bench. [272 E G] Similarly there is no force in the argument that since section 104 and Order 43 of the Code affect the special jurisdiction conferred on the High Court under 195 clause 15 of Letters Patent these provisions are not applicable to the present case. [273 C D] Section 4 of the Code cannot be said to be in conflict with the provisions of clause 15; nor can it be said that it limits or otherwise affects the power and jurisdiction of the High Court under clause 15. [274 A B] Section 4 provides that nothing in the Code shall be deemed to limit or otherwise affect any special or local law in force or any special jurisdiction conferred by or under any law for the time being in force. Clause 15 confers on the litigant a right to prefer an appeal from the court of original jurisdiction to the High Court in its appellate jurisdiction. It confers a right of appeal from a judgment of any Judge on the original side to the High Court. Though this clause is a special provision it cannot be said that it is intended to lay down that no appeal would lie from an order of a single Judge on the original side even if specific provision is made in any statute making the order appealable. By virtue of this provision any order considered to be a judgment would be appealable. If a statute confers on the litigant right of appeal, it cannot be said that such provision would affect the special provisions of clause 15. This special power is in no way affected and is fully retained. In addition, the High Court may be competent to entertain other appeals by virtue of specific statutory provisions. [273 C H: 274 A] On the contrary, the Code contains specific provisions indicating cases in which its provisions are or are not applicable, as for example section 5, which makes specific provision regarding the nature and manner of applicability of the Code to revenue courts. Sections 116 to 120 clearly indicate that section 104 and order 43 apply to the original side of the High Court. Section 104 and Order 43 which is attracted by section 104, clearly provide that an appeal shall lie from the orders mentioned in rule 1 of Order 43. The impugned order is one such order and is clearly appealable. When the legislature conferred such a right on the litigant a Court would be slow to deprive him of the statutory right merely on the ground that the order had been passed by a single Judge on the original side of the High Court. [274 B E] Section 104 recognises that, apart from the orders made appealable under the Code, there may be other orders appealable by any law for the time being in force. It further provides that no appeal will lie from any orders other than orders expressly provided in the Code or by any other law in force. The right of appeal against a judgment of a single Judge on the original side under clause 15 is a right conferred by "any other law in force". [275 C E] Union of India vs Mohindra Supply Co. ; and Mt. Savitri Thakurain vs Savi and Anr. referred to. Mathura Sundari Dassi vs Haran Chandra Shaha, A.I.R. and Lea Badin vs Upendra Mohan Roy Choudhary, A.I.R. 1935 Cal. 35 approved. Vaman Raoji Kulkarni vs Nagesh Vishnu Joshi, A.I.R. overruled. Hurrish Chander Chowdhry vs Kali Sundari Debia, 10 I.A. 4, held in applicable. 196 Unless a right is conferred on him by law, a litigant does not have an inherent right of appeal. An order appealable under the C.P.C. or any other statute becomes appealable because the concerned statute confers a right of appeal on the litigant. But yet such an order may or may not be appealable as 'judgment ' under clause 15 of the Letters Patent. An order appealable under clause 15 as a 'judgment ' becomes appealable because the Letters Patent confers the right of appeal against such order as 'judgment '. Similarly an order appealable under the Letters Patent may or may not be appealable under the Code. [281 C E] The Letters Patent, by clause 15, confers a right of appeal against a 'judgment ' and therefore an order which satisfies the requirements of 'judgment ' within the meaning of clause 15 becomes appealable. What kind of order will constitute a 'judgment ' within the meaning of this clause and become appealable as such must necessarily depend on the facts and circumstances of each case and on the nature and character of the order passed. [281 F G] A comprehensive definition of 'judgment ' contemplated by clause 15 cannot properly be given. Letters Patent itself does not define 'judgment '. The expression has necessarily to be construed and interpreted in each case. But yet it is safe to say that if an order has the effect of finally determining any controversy forming the subject matter of the suit itself or any part thereto or the same affects the question of the Court 's jurisdiction or the question of limitation, it normally constitutes 'judgment ' within the meaning of clause 15 of Letters Patent. [282 E G]

Civil Appeal No. 212 of 1959. Appeal from the judgment and decree dated March 1, 1957, of the calcutta High Court in appeal from original Decree No. 71 of 1954. G. section Pathak and Naunit Lal, for the appellants. A. V. Viswanatha Sastri, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondent. October 13. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by a certificate granted by the Calcutta High Court arises out of a suit filed by the three appellants against the respondent to recover Rs. 83,640/ . The three appellants are respectively the Firm Radhakrishan Shivdutt Rai which carries on business at Banaras and RamKumar Lal for himself and as karta of his joint family as well as Madan Gopal for himself and as karta of his joint family, the latter two being 83 the partners in the first mentioned Firm Radhakrishna Sivadutta Rai; for convenience we will refer to the partnership firm hereafter as the appellant. The respondent Tayeballi Dawoodbhai is a partnership firm which carries on business at Calcutta. The appellant 's case was that the appellant and the respondent had entered into a contract in the first instance on December 18, 1980, through brokers named T. N. Mehrotra & co. ,Calcutta. This contract was later confirmed by two letters written respectively on January 3 and 15, 1951, by the appellant to the respondent and replied to by the. respondent. By this contract the respondent agreed to sell 1000 bales of Banaras Hemp particulars of which were set out in the plaint. According to the appellant, by a letter written on March 14, 1951, the appellant in part performance of the said contract accepted delivery of 110 bales of Banaras Hemp No. 1 and 50 bales of Banaras Hemp No. 2; this delivery was Made by the respondent to L. N. Poddar & Co., who acted as the agent of the appellant and Paid the price of the said 160 bales. In they transaction the respondent realised Rs. 3,840 from the said I,. N. Poddar &; Co. in excess of the actual price of the goods delivered to the said company. Inspite of the repeated demands made by the appellant the respondent failed to deliver the balance of the goods contracted for and thus committed breach of the contract. That is how the appellant claimed Rs.(9,80(j as difference between the market rate on March 31, 1951, and the contract rate of the balance deliverable under the contract in suit. This amount was claimed as damages for the breach of contract. In addition an amount of Rs. 3,840 was claimed as having been paid in excess of tho value of 160 bales delivered to L. N. Poddar & Co., on behalf of the appellant. This claim was resisted by the respondent on several grounds. The principal contention urged by the respondent, however, was that in relation to 84 the contract in suit the appellant had acted as agent for its disclosed principal Messrs Khaitan and Sons Ltd., and as such it was not entitled to bring the present suit. The respondent further alleged that the said disclosed principal Messrs. Khaitan and J. Sons had settled all their rights and loams under the suit contract with their agent and so the present claim for damages was not maintainable. In regard to the claim for Rs. 3,840 tho respondent pleaded that the appellant 's case was untrue. Several other pleas were also raised but with the said pleas we are not concerned in the present appeal. Mr. Justice Bose who tried the suit framed twelve issues. On the principal point in controversy between the parties the learned judge found that the appellant had entered into the contract with the respondent on its own account and not on account of the disclosed principal as alleged by the respondent. According to the learned judge the reference to Messrs. Khaitan and Sons Ltd., made in the bought and sold notes on which the respondent 's plea was based had been inserted by the brokers "by mistake or due to some misconception. " The learned judge also found that the respondent had committed a breach of the contract as alleged by the appellant. The appellant 's case with regard to the excess payment of Rs. 3,840 made by L. N. Poddar & co. was, however, held not to have been proved. In the result a decree was passed in favour of the appellant for Rs. 79,800 along with interest as stipulated in the decree. Against this decree the respondent preferred an appeal; and the main point which was urged on its behalf was directed against the finding of the trial judge that the contract had been entered into by the appellant for itself and not on account of the disclosed principal. This contention was based in the Court of Appeal, as in the trial court, on the bought and sold notes; and it was urged that 85 the bought and sold notes clearly showed that the appellant had entered into the contract on account of the disclosed principal Messrs. Khaitan and Sons Ltd. Before the Appellate Court the respondent 's case was that the said bought and sold notes constituted the terms. Of the contract and no other evidence was relevant and admissible in order to determine the said terms. Das Gupta, J., upheld this. In his opinion the bought and sold notes issued by the brokers Constituted the sole basis for the terms. Of the contract and the two letters subsequently written on January 3 and 15, 1951, were inadmissible and irrelevant for the purpose of determining the said terms of the contract. Tho learned judge, however, considered tho matter also on the alternative basis. that the said letters could be considered for ascertaining the terms. Of the contract and came to the conclusion that can reading the said letters and the bought and sold notes together the result was the same, namely, that the contract had been entered into by the appellant on behalf of the disclosed principal. Bachawat, J., differed from Das Gupta, J., on the question about the relevance and admissibility of the two subsequent letters. According to him the two bought and sold notes. and the two letters between them constituted the terms of the contract. He was inclined to take the view that the letters could not be regarded as inadmissible or irrelevant. Reading the four documents together the learned judge. however, agreed with the conclusion alternatively recorded by Das Gupta, J., and held that the four documents supported the respondent 's plea that the appellant had entered into the contract on behalf of the disclosed principal. Both the learned judges agreed in holding that there was no evidence to support the appellants plea that the reference to the principal made in the bought and sold notes was a result of any mistake. On these findings the decree passed by the trial court was reversed and the appellant 's suit Was ordered to be dismissed. 86 In regard to the costs, however, the Appellante Could took the view that the point raised before the Appellate Court about the effect of the bought and field notes had not been specifically mooted before the trial court and that several other pleas raised by the respondent were found by the trial court to be false and so the proper older as to costs would be that each party should bear its costs throughout. After this judgement was delivered the appellant applied for and obtained a certificate from the High Court and it is with the said certificate that the present appeal has been brought before this Court. On its behalf Mr. Pathak has strenuously contended that the Appellate Court was in error in coming to the conclusion that the contracts in suit had been entered into by the appellant on behalf of the disclosed principal Messrs. Khaitan & Sons Ltd., Banaras. For the purpose of deciding this point we propose to assume in favour of the appellant that the terms of the contract may be gathered from the two bought and sold notes on which the respondent relies as well as the two subsequent letters on which the appellant relies. It would be convenient at this stage to set out the said documents. We will first refer to the brokers ' notes and the confirmation slips in respect thereon. This is how the brokers ' notes read: "T. N. Mehrotra and Co. No. 377 Hemp, Oil and Oil Seedh Pollock House Brokers. (3rd Floor) 28 A, Pollock Street. Any dispute in connection with this deal is subject to Arbitration by Bengal Chamber of Commerce. Calcutta, 18 12 1950. 87 Radhakrishna Sivadutta Rai, A/c Khetan and Sons Ltd., Shewpur, Banaras. Dear Sirs, We confirm having purchased on your account and risk under noted goods from Messrs. Tayeballi Dawoodbhai, 20, Zakaria Street, Calcutta. Commodity: 500 (five hundred) bales of Banaras No. 1 only with Agmark Jan/March '51 at K. P. Docks @ Rs. 165 per bale of 400 lbs. each on receipt of the goods. Yours faithfully, For T. N. Mehrotra and Company, Sd. T. N. Mehrotra. Sales Tax number should be furnished by the Buyers otherwise to be charged." "T. N. Mehrotra and Co. No. 378 Hemp, oil and oil Seeds Pollock House Brokers (3rd Floor) Bank 4718 29 A Pollock street Tel: B.K. 1914 Calcutta, 18 12 50. Any dispute in connection with this deal is subject to arbitration by Bengal Chamber of Commerce. To: M/s. Tayeballi Dawoodbhai, 20, Zakaria Street, Calcutta. Dear Sirs, We confirm having sold on your account and risk, the under noted goods, to M/s. Radakrishan Shiv Dutt Rai with A. G. Mark. A/c Khetan and Sons Ltd., Shewpur, Banaras. Commodity: (500) Five hundred Bales of Banaras No. 1 only with A. G. Mark. 88 Delivery: Jan./March 1951 at K. P. Dock. Price: @ Rs. 165 per bale of 400 Ibs. Terms of Payment on receipt of goods. Brokerage 0 8 O per bale. Sales Tax number should be finished by the buyer otherwise to be charged. Yours faithfully, For T. N. Mehrotra & Co., Sd. T. N. Mehrotra "To M/s. T. N. Mehrotra & Co., Calcutta. We acknowledge receipt of your purchase confirmation memo No. 377 dated 18 12 50. Signature: Gopal Lal Gupta For Radhakrishna Shivadutta Rai." "To M/s. T. N. Mehrotra & Co., Calcutta. We acknowledge receipt of your purchase confirmation memo. No. 378 dated 18 12 50. Signature: Gopal Lal Gupta For Radhakrishna Sivadutt Rai". The said confirmation slips were signed by Gopal Lal Gupta for the firm of Radhakrishna Shivdutt Rai. " After the said notes were sent by the brokers to the respective parties Gopal Lal Gupta on behalf of the appellant wrote a letter to the respondent on January 3, 1951, and on January 15. 1951 the respondent wrote a letter to the appellant. These letters read at follows: "Messrs. Tayeballi Dawoodbhai, 3 1 51. 20, Zakaria Street, Calcutta. Dear sirs, We have boughS from you one thousand bales of Banaras Hemp through Messrs. T. N. Mehrotra & Co., 28 A, Pollock Street, Calcutta, on the following terms: 89 1. 500 (Five hundred) bales Banaras No. 1 with agmark @ Rs. 166 (one hundred and sixtyfive) per bale of about 400 lbs. delivery K. P. Docks during January/March 1951. 2. 500 (Five hundred) bales Banaras No. II with agmark @ Rs. 145 (one hundred and fortyfive) per bale of about 400 lbs. delivery E. P. Docks during January/March 1951. Please note and confirm. Yours faithfully, for Radhakrishna Shivdutt Rai Sd. Gopal Lal Gupta." "Tayoballi Dawoodbhai 20, Zakaria Street, Registered. Calcutta 1. Calcutta, 15th January, 1951. Messrs. Radhakrishna Shivadutt Rai, Banaras. Dear Sirs, We confirm having sold to you through Messrs. T. N. Mehrotra & Co., Calcutta, 1000 (one thousand) bales of Banaras Hemp as follows: (i) 500 (Five hundred) bales Banaras Hemp No. I with Agmark at Rs. 165 per bale of about 400 Ibs. delivery K. P. Docks during January/March 1951. (ii) 500 (Five hundred) bales Banaras Hemp No. II with Agmark at Rs. 145 per bale of about 400 lbs. K. P. Docks delivery during January/March 1951. This confirms your letter of 3rd instant. Yours faithfully, for Tayeballi Dawoodbhai. x x Partner. Copy to Messrs. T. N. Mehrotra & Co., Calcutta, and to Gopinath Mehrotra, Banaras." Mr. Pathak contends that in construing the effect of the relevant documents we should not 90 attach any importance to the reference to Khaitan & Sons made in the bought and sold notes for the simple reason that the said reference is the result of a mistake or misconception on the part of the brokers. In that connection he contended that the J. finding recorded by the trial court on the issue of mistake should be accepted by us and not the finding made by the/ Appellate court. We are not impressed by this argument. In regard to these notes we have the evidence of Trilokinath and Gopinath on behalf of the brokers which negatives the theory of mistake or misconception. Trilokinath has stated on oath that when he got the offer from the respondent he telephoned to his brother Gopinath who is a broker in respect of hemp of the firm of Sewnath Gopinath and he told him about the offer. Gopinath then informed Trilokinath that the offer was closed either on the 16th or on the morning of the 17th. This information was received by Trilokinath from Gopinath on the telephone. Trilokinath was then asked about the information that his brother gave him, and he stated that his brother told him that the offer which he had communicated to him in respect of 1000 bales at Rs. 165 and. Rs. 145 had been sold by him to Khaitan Sons & Co., Fibre Ltd. He also added that he received another message from his brother either on the 18th or on the night of the 17th to prepare a contract so that it will be Khaitan & Sons through the appellant; Thus, it is clear that the evidence of Trilokinath, if believed, clearly shows that there could be no mistake or misappreciation on the part of the brokers, when the notes referred to Khaitan & Sons as principal in respect of the transaction. Gopinath substantially corroborated the evidence given by Trilokinath. He stated that when he got the offer from his brother Trilokinath he went to Deokinandan who was working for Khaitan & Sons and it was after discussion with Deokinandan thatthe souda was closed as one on behalf of Khaitan & Sons. Having thus closed this 91 contract with Deokinandan, who represented the principal Khaitan & Sons, Gopinath told Trilokinath to close the offer and asked him to prepare the note showing that the appellant was acting as agent for the disclosed principal Khaitan & Sons. Reading the evidence of the two brothers who worked as brokers in respect of the transaction in suit it is clear that any possibility of a mistake or misappreciation is wholly excluded. On behalf of the appellant Gopal Lal Gupta has given evidence. He attempted to explain away the fact that he did not protest against, or object to, the insertion of the name of Khaitan & Sons in the notes by suggesting that when he signed the confirmation slips after receiving the notes he had not noticed the reference to Khaitan & Sons. His case was that the purchase had been made by the appellant for itself and not for any other firm, and the suggestion he made was that if he had noticed that the notes had made reference to Khaitan & Sons he would either have insisted upon the said name being delete(l or would not have concluded the contract; but when his statement that he did not notice the reference to Khaitan & Sons was tested in cross examination Gopal Lal was shaken, and he had to admit that when he signed the confirmation slip he may have noticed the reference to Khaitan & Sons but he did not read the document attentively. He was, however, forced to concede that he had gone through the note before he signed the confirmation slip. It was under stress of cross examination that Gopal Lal incidentally mentioned that the reference to Khaitan & Sons may have been made by mistake. It is obvious that Gopal Lal 's evidence which otherwiee suffers from the infirmity that it is full of contradictions cannot be accepted on the question of mistake because his explanation about his conduct in signing the confirmation slips considered by itself is wholly unsatisfactory. Therefore, in our opinion, the Appellate Court was fully justified in 92 reversing the finding of the trial court on this point and in coming to the conclusion that the reference to Khaitan & Sons which the notes made was no the result of any mistake or misconception In this connection it may be relevant to refer to the attitude adopted by the appellant when the dispute arising between the parties in the present contract had gone before the Bengal Chamber of Commerce for adjudication. In those proceedings the respondent had raised the same plea that it has raised in the present suit. It was urged on its behalf that the appellant was not entitled to make ally claim on the contract because it had entered into the contract on behalf of a disclosed principal and on its account. Apparently that plea appears to have been accepted and the arbitration proceedings therefore ended as being without jurisdiction. In meeting the plea raised by the respondent it is significant that the appellant thought it fit to urge that the respondent 's allegation that the appellant was the agent of one Khaitan & Co. was not correct and that there is no firm or company known as Khaitan & Co. Or Khaitan & Sons, Ltd., or Khaitan & Sons in Shewpur, Banaras. The appellant therefore pleaded that the jurisdiction of the Chamber to entertain the case could not be disputed on that score. The appellant also alleged that the reference to Khaitan &; Sons was superfluous and no importance should be attached to the said words. In the suit itself a faint attempt was no doubt made to challenge the identity of the firm Khaitan Sc Sons, but Mr. Pathak has very fairly not attempted to raise that point before us. It would thus be noticed that the principal point made by the appellant in the arbitration proceedings before the Chamber in respect of the reference to Khaitan & Sons in the notes was entirely frivolous; no case of mistake appears to have been set out at that state. Besides, as we have already pointed out, there is no evidence on which a finding of mistake can be reasonably made in favour of the appellant. Therefore, we 93 must proceed to consider the question about the construction of the relevant documents on the basis that the reference to Khaitan & Sons which the notes make is not the result of any mistake and has been made in the ordinary course of businesss by the brokers. Let us then consider what the effect of the bought and sold notes is according to the established custom in the mercantile world. Mr. Viswanatha Sastri, for the respondent, contends that, according to the established commercial usage, if there is no variation or disparity in the bought and sold notes, the bought and sold notes issued by the brokers constitute the terms of the contract between the parties for whom the brokers act. We are inclined to accept this contention. The effect of such notes issued by the brokers has been frequently considered by judicial decisions. As early as 1846 the Privy council had occasion to deal with this question in Cowie vs Remfry (1). In that case a. C & Co and H.& Co; were merchants at Calcutta. The latter sold to the former a large quantity of indigo through the medium of a broker who drew up a sold note addressed to H.& Co. and submitted. it to H. for his approval. H. Objected to a particular word appearing in the note whereupon the broker took the sold note to C. and informed him of His objection. C. then struck his pen through the word objected to by H. placed his initials over the erasure and returned the note to the broker. The broker then delivered it in that altered form to H. & Co. Next day the broker delivered to C. & Co. a bought note which differed in certain material terms from the sold note. In an action brought by H. & Co. against C. & Co. for the breach of the contract as contained in the sold note the Supreme Court at Calcutta was of the opinion that the sold note alone formed the contract and so it decreed the plaintiff 's suit. On appeal by the defendant the Privy Council reversed (1) (1846) 3 M.I.A.448 94 the finding of the Supreme Court and held that the transaction was one of bought and sold notes and Rai held that the circumstances attending C. 's alteration of the sold note and affixing his initials were not sufficient to make that note alone a binding contract. According to the Privy Council, there being a material variation in the terms of the bought with the sold note they together did not constitute a binding contract. It would thus be seen that the Judicial Committee was dealing with a case where the bought and sold notes did not tally and so the decision was that where the bought and sold notes do not tally the sold note alone cannot constitute the terms of the contract. In dealing with this question, however, their Lordships referred to the mercantile custom in regard to the bought and sold notes and observed that "the established usage of dealing in the mercantile world should be held in high respect; the very existence of such usage shows that in practice it has been found useful and beneficial; the presumption is in its favour, and no departure from it is to be inferred from doubtful circumstances". That is why the Privy Council reached the conclusion that "this must be considered as a transaction in the contemplation of the parties by bought and sold notes, and that, the contract is contained in both of the notes, and not in one;" inevitably there being a material variation between the two notes "the consequence follows, from all legal principles, that no binding contract has been effected". This decision shows that the mercantile usage of entering into contracts evidenced by the bought and sold notes issued by the brokers was treated by the Privy Council as well recognised. The next decision to which reference may be usefully made is the case of Sievewright vs Archibald(l). In that case again there was a variation in the bought and sold notes and the variation was material, and so it was held that there was no (1) ; , 1228, 1229. 95 sufficient memorandum of a contract to satisfy the Statute of Frauds. In dealing with the question raised for the decision of the Court Lord Campbell, C. J., has made certain general observations which throw considerable light on the genesis of the bought and sold notes and the effect which is ually attributed to the said notes by commercial usage. "If the bought note case be considered a memorandum of the parol agreement", observed Lord Campbell, C. J., "so may the sold note; and which of them is to prevail ? It seems to me, therefore, that we get back to the same point at which we were when the variance was first objected, and the declaration was amended. I by no means say that where there are bought and sold notes they must necessarily be the only evidence of the contract; circumstances may be imagined in which they might be used as a memorandum of a parol agreement. Where there has been an entry of the contract by the broker in his book signed by him, I should hold without hesitation, notwithstanding some dicta, and a supposed ruling of Lord Tenterden in Thornton vs Meux (M. & M. 43), to the contrary, that this entry is the binding contract between tho parties and that a mistake made by him, when sending them a copy of it in the shape of a bought or sold note, would not affect its validity. Being authorised by the one to sel], and the other to buy, in the terms of the contract, when he has reduced it into writing and signed it as their common agent, it binds them both, according to the Statute of Frauds, as if both had signed it with their own hands; the duty of the broker requires him to do so; and till recent times, this duty was scrupulously performed by every broker. What are called the bought and sold notes were sent by him to his principals by way of information that he had acted upon their instructions, but not as the actual contract which was to be binding upon them. This; clearly appears from the practice still followed of sending the bought note to the buyer, and the sold 96 note to the seller; whereas, if these notes had been meant to constitute the contract, the bought note would be put into the hands of the seller, and the sold note into the hands of the buyer, that each might have the engagement of the other party J, and not his own. But the broker, to save himself trouble, now omits to enter and sign any contract in his book, and still sends the bought and sold notes as before. If these agree, they are held the constitute a binding contrat; if there be any material variance between them, they are both nullities, and there is no binding contract. This last proposition, though combated by the plaintiff 's counsel, has been laid down and acted upon in such a long series of oases that I could not venture to contravene it, if I did not assent to it; but, where there is no evidence of the contract unless by the bought and sold notes sent by the broker to the parties, I do not see how there can be a binding contract unless they substantially agree; for contracting parties must consent to the same terms; and where the terms in the two notes differ there can be no reason why faith should be given to the one more than the other". These observations seem to establish two propositions, first that if the bought and sold notes show a material variation neither of them nor both of them taken together can be re. lied upon for the purpose of proving the terms of the contract, and second if the bought and sold notes agree they are held to constitute a binding contract. To the same effect is the observation made by the Privy Council in Ah Shain Shoke vs Moothia Chetty,(l) when Sir Richard Couch observed that "Moothia Chetty, one of the respondents, said in his evidence he did not consider the contract as concluded until bought and sold notes were signed. He was right in this. They were the only evidence of the contract. " It is in the light of this legal position that we must consider the effect of the bought and sold (1) (1899) L. R. 27 I.A. 30 97 notes in the present case. The notes referred to the appellant and added "A/C Khaitan & Sons Ltd." There is no disparity in the notes at all; and so the two notes can be safely taken to evidence the terms of the contract. When along with the name of the appellant the notes specifically refer to a "Khaitan & Sons Ltd." with the preceding words "A/c ' ', there can be no doubt that the appellant is shown by the notes to be acting on account of the disclosed principal. The appellant realised that the effect of the reference to Khaitan & Sons in the notes would inevitably be to support the plea of the respondent that it was not entitled to bring the present action and so it pleaded that the said reference was the result of a mistake. Therefore, there can be no doubt that if the material question had to be considered in the light of the bought and sold notes alone the appellant was acting on behalf of the disclosed principal and, on the contract thus entered into, it had no right to sue end can claim no cause of action in its favour. In Gadd vs Houghton (1), James, L. J. Observed "when a man says that he is making a contract 'on account of ' some one else, it seems to me that he uses the very strongest terms the English language affords to show that he is not binding himself, but is binding his principal". In that case fruit brokers in Liverpool gave a fruit merchant a sold note which read thus: "We have this day sold to you on account of James Morand &; Co., Valentia, 2000 cases Valentia, oranges, of the brand James Morand & Co., at 12s. per case free on board", and the brokers signed the note without any addition. The purchaser brought an action against the broker for non delivery of the oranges. It was held that the words "on account of James Morand & Co." showed the intention to make the foreign principals and not the brokers liable and that the brokers were not liable upon the contract. It would be noticed that (1)(1876) 98 in dealing with the question about the brokers liability two points fell to be Gonsidered. The first point in support of fixing the liability with the brokers was that the brokers had signed this note without describing themselves as acting for the disclosed principals; and the argument was that "when a man signs a contract in his name he is prima facie a contracting party and liable and there must be something very strong on the face of the instrument to show that the liability does not attach to him". This principle was accepted by the learned judge who decided the case; but it was pointed out that there was another fact which had an overriding effect and that was that the note showed that the brokers were acting for the diclosed principal, and that fact clearly repelled the brokers ' liability in regard to the contract. In dealing with the argument about the effect of the signature Mellish, L. J. Observed "when the signature comes at the end you apply it to everything which occurs throughout the contract. If all that appears is that the agent has been making a contract on behalf of some other person, it seems to me to follow of necessity that that other person is the person liable. This is one of the simplest possible case. How can the words 'on account of Morand & Co. '. be inserted merely as a description ? The words mean that Morand & Co. are the people who have sold. It follows that the persons who have signed are merely the brokers and are not liable". We have referred to there observations made by Mellish, L. J., because as we will presently point out they would be of material assistance in deciding the point which Mr. Pathak has raised on the strength of the two subsequent letters. Thus, the bought and sold notes in this case unambiguously indicate that the appellant was acting for a disclosed principal and the contracting party was the disclosed principal and no other. It is, however, urged by Mr. Pathak that before determining the terms of the contract and the 99 parties to it we must read the notes in question along with the two letters. We have already seen the sequence of the documents. First, the notes were delivered by the brokers to the appellant and the respondent. Then the respective parties filed confirmation slips and then followed the two letters exchanged between them. Mr. Pathak contends that in its letter addressed to the respondent the apellant has definitely stated that 'they ' had bought from the respondent 1000 bales in question. Mr. Pathak places considerable emphasis on the use of the word "we" without reference to the principal; and he also relies on the fact that the letter is signed by the appellant without describing itself as acting on behalf of the principal already disclosed. Similarly he relies on the statement of the respondent 's letter to the appellant that the respondent had sold to the appellant "to you" the bales in question. According to Mr. Pathak the significance of these letters should not be underestimated in determining the parties to the contrat. There is no doubt, and indeed it is a matter of common ground before us, that the letters do not constitute all the terms of the contract, and all that is urged by Mr. Pathak is that they should be consider along with the notes. The notes refer to the fact that if any dispute arises in the deal it is subject to the arbitration by the Bengal Chamber of Commerce. They also refer to the sales tax number which is to be furnished by the buyers, otherwise they would be charged. These terms undoubtedly constitute terms of the contract; but the argument is that in the correspondence which took place between the parties there is no reference to the principal and indeed the correspondence proceeds on the basis that the appellant acts for itself and not for a disclosed principal, and that Should be borne in mind in deciding whether the appellant was acting for tho disclosed principal or not. 100 In support of his argument that the signature of the appellant to its letter of January 3, 1951, and the use of the word "we" in the first paragraph of he letter indicate that the appellant was acting for hi itself. Mr. Pathak relies on a decision of the King 'section Bench Division in H. O. Brandt & Co. vs H.N. Morris o. Ltd. (1). In that case the plaintiffs who carried on business in Manchester gave to the defendants a bought note dated September 3, 1914. This note was addressed to the defendants and was headed From Messrs. H.O. Brandt & Co., 63 Granby Row Manchester, For and on behalf of Messrs. Sayles Bleacheries, Salesville, Rhode, Island, U. section A.". The note stated "we have this day bought from you 60 tone pure an line oil" and it was signed "H. O. Brandt & Co.". The plaintiffs sued for non delivery of the oil. Their claim was resisted on the ground that they had entered into the contract on behalf of a disclosed principal and therefore were not entitled to be sued. It was held by Viscount Reading, C. J., and Scranton, L. J., Neville, J., dissenting, that the plaintiffs were the contracting parties and were entitled to sue upon the contract. The majority decision was based on three grounds. The first ground was that the plaintiffs had signed the note without describing themselves as acting on behalf of the principal and so it was held following the language used by Mellish, L. J., in the case of Gadd (2) that prima facie when a man signs a document in his own name and states therein "I have this day bought from you" he is the person liable on the contract. The second consideration was that the reference to the foreign principal was made in the note in order to declare the destination of the goods. There wax evidence adduced in the case to show that during wartime the destination of goods intended for export had to be made known. Therefore the reference to the foreign principal was treated as having been made for the purpose of meeting the said (1) (2) (1876)1 exhibit D. 357. 101 requirement; and the third circumstance was that the plaintiff 's statement at the head of the note that they were acting for and on behalf of a foreign principal could not get rid of the prima facie presumption that a person signing a contract in his own name is personally liable on it. It would thus be seen that the rule of construction which prescribes that if a person signs a contract prima facie he is the contracting party prevailed in that case because the reference to the disclosed principal was otherwise explained as serving another purpose altogether. The said rule of construction prevailed also for the additional reason that the plaintiffs were acting for a foreign principal. It would be remembered that 8. 230 of the Indian Contract Act provides that in the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. There are, however, three cases specified in the section where such a contract would be presumed to exist; one of these cases is where a contract is made by an agent for sale or purchase of goods for a merchant resident abroad. In other words, under section 230 if an agent enters into a contract for a disclosed foreign principal the main provision of section 230 will not apply because there would be a presumption that there is a contract to the contrary under which the agent would be personally bound by the contract notwithstanding the fact that he has entered into it on behalf of a foreign principal. Therefore, we are not prepared to hold that the decision in the case of H. C. Brandt & Co. (1) lays down an unqualified rule of construction on which the appellant can rely. In fact, it may be pointed out that Neville, J., who dissented from the majority view, has significantly observed that "I rather gaudier that I should not have found myself in isolation on this point were it not for the fact that during the war there is an obligation to disclose the destination (1) [1917] 2 K.B.784. 102 of the goods". this observation shows that reference to the disclosed principal was not given its full effect in considering the question about the liability of the agent because it was held by the majority decision that the said reference was primarily, if not exclusively, made for the purposes of disclosing the destination of the goods. In support of his argument that the relevant recitals in the two letters show that the contract had been entered into by the appellant on its own behalf Mr. Pathak has also referred us to the statement of the law made by Bowstead on "Agency". "The question whether the agent is to be deemed to have contracted personally," it is observed, "in the ease of contract in writing other than a bill of exchange, promissory note, or cheque, depends upon the intention of the parties, as appearing from the terms of the written agreement as a whole, the construction whereof is a matter of a law for the Court (a) if the contract be signed by the agent in his own name without qualification, he is deemed to have contracted personally, unless a contrary intention plainly appear from other portions of the document, (b) if the agent add words to his signature, indicating that he signs as an agent, or for or on behalf of a principal, he is deemed not to have contracted personally, unless it plainly appears from other portions of the document, that, notwithstanding such qualified signature, he intended to bind himself. " In conclusion it is added that "effect should be given to every word used and none should be rejected unless it is apparent that they have been introduce per incuriam" (P. 266, article 116). These observations do not carry the appellant 's case very for because all that they show is that in determining the question as to whether the agent has entered into the contract on behalf of the principal or not the way he has signed the document has to be considered along with the other recitals made in the relevant documents. 103 What then would be the effect of the relevant recitals in the letter on which Mr. Pathak relies? In this connection it is necessary to recall that we are reading these letters along with the bought and sold notes, and that the bought and sold notes have unequivocally and clearly indicated that the appellant was acting on behalf and on account of the disclosed principal Khaitan & Sons. If we read the letters in the light of the bought and sold notes it would be clear that the signature of the appellant will not have much significance, nor would the use of the word "we" by the appellant or "you" by the respondent make any difference. Parties knew that the appellant was acting on behalf of the disclosed principal. It is not suggested that in such a case every time the agent has to sign expressly stating that he is acting on behalf of the disclosed principal. Therefore, if the appellant was acting for the disclosed principal the fact that he did not add the relevant description to his signature, or used the word "we" in the operative portion of the letter would not materially alter the fact spoken to by the notes that the appellant was acting on behalf of the disclosed principal. It cannot be suggested that these letters intended to alter the position disclosed by the notes. The letters, like the confirmation slips, are and must be, presumed to be consistent with the notes; and so it would be unreasonable to attach undue importance to the signature and to the use of the relevant words "we" and "you" on which reliance has been placed. In our opinion, therefore, the appellate Court was right in holding that even if the bought and sold notes are read along with the confirmation slips and the two letters of January 3, 1961, and January 15, 1951, the conclusion is inescapable that the appellant entered into the contract on behalf of the disclosed principal Khaitan & Sons Ltd. If that be so, it follows as a matter of law that the appellant is not entitled to bring the present suit. 104 Mr. Pathak faintly attempted to argue in the alternative that even if the appellant was acting on behalf of the disclosed principal it would be entitled to sue because from the subsequent conduct of the parties a contract to the contrary could be reasonably inferred. We have, however, not allowed Mr. Pathak to argue this point. It was conceded by the appellant before the Appellate Court that if it was held that the plaintiff firm was acting as agent for Khaitan & Sons Ltd., the suit was not maintainable. This concession was made in view of the provisions of section 236 of the Contract Act. Besides, the alternative plea which Mr. Pathak wanted to raise does not appear to have been expressly pleaded or considered in the trial court. In the result the appeal fails and is dismmissed. In the circumstances of this case we direct that the parties should bear their own costs in this Court.

The appellant sued the respondent for damages for breach of contract. The respondent pleaded that the appellant had contracted as agent for its disclosed principal and had no right to sue. The bought and sold notes issued by the brokers showed that the appellant had entered into the contract on account of the disclosed principal; but in the confirmation slips and subsequent letters exchanged between the parties no reference was made to the principal nor did the appellants describe themselves as acting or signing on his behalf. ^ Held, that it is well established in commercial usage that the bought and sold notes issued by the brokers, where 82 there is no variation or disparity between them, constitute the contract that must bind the parties. But where the bought and sold notes show material variations, neither of them nor both of them taken together can be relied upon for proving the terms of the contract. Since there was no disparity in the instant case between the two notes which specifically mentioned the appellants as acting on account of the disclosed partner, it must be held that the appellants had entered into the contract on behalf of the disclosed partner and as such was not entitled to sue. Cowie vs Ramfry, (1846) 3 Moo. I. A. 448, sievewright vs Archibald; , , Ah Shain Shoke vs Moothia Chetty (1899) L. R. 27 I. A. 30 and Gadd vs Houghton (1876) I exhibit D. 357, referred to. Held, further, that in deciding whether or not the agent had entered into the contract on behalf of the principal, the way he signed the document must be considered in the light of the recitals in the relevant document. In the instant case, the letters and the confirmation slips must be read in the light of the bought and sold notes and presumed to be consistent with them and it would, therefore, be unreasonable to attach undue importance to the signature or how the parties described themselves.

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 father and brothers of Respondent No. 1 were running a proprietary business, which was later converted into a partnership firm by a regular deed. On the death of the father, the two brothers had effectively taken control of the business and excluded Respondent No. 1. The suggestion to reconstitute the partnership made repeatedly by Respondent No. 1 had been ignored. The two brothers represented before the Income Tax Officer that a new deed of partnership had been executed on 15.1.1979 to be effective from 1.1.1979 in which Respondent No. 1 had no interest and on that basis the Income Tax Officer passed an order. In the suit filed by Respondent No. 1, he challenged the partnership deed as being illegal and void and prayed for a decree for dissolution of the partnership firm and for accounts. Valuation of the suit was put as Rs.150 i.e., Rs.50 each for declaration, rendition of accounts, and for profit to the share of the plaintiff. Court fee was paid accordingly. The defendants in the suit denied the allegations made in the plaint and also challenged the valuation as being grossly undervalued and arbitrary. The issue relating to the correct valuation and pecuniary jurisdiction of the Court was decided in favour of the plaintiff. The defendants challenged the order by a Civil Revision Application which was dismissed by the High Court. This appeal by special leave is against the High Court 's order. On behalf of the appellant, it was contended that while relief to the tune of lakhs of rupees had been claimed, the plaint had been tentatively valued for Rs.50 only, which is preposterous. The contention of Respondent No. 1 was that a Plaintiff has the absolute right to put on the plaint any 508 value he wishes and the court has no jurisdiction to examine the matter. Allowing the appeal, this Court, ^ HELD: 1. It is true that in a suit for accounts the correct amount payable by one party to the other can be ascertained only when the accounts are examined and it is not possible to give an accurate valuation of the claim at the inception of the suit. The plaintiff is, therefore, allowed to give his own tentative valuation. Ordinarily the Court shall not examine the correctness of the valuation chosen, but the plaintiff cannot act arbitrarily in this matter. If a plaintiff chooses whimsically a ridiculous figure it is tantamount to not exercising his right in this regard. In such a case it is not only open to the Court but its duty to reject such a valuation. [512D E] 2. In the instant case the valuation put by the plaintiff on the plaint is arbitrary and unacceptable. However, the question is remitted to the trial court for reconsideration. It is open to the trial court to take into consideration the statement in the plaint that the plaintiff has been ousted from the partnership business. If the court comes to the conclusion that the tentative valuation of the suit would be beyond its pecuniary jurisdiction, it shall pass an appropriate order under Order VII of the Code of Civil Procedure. [512F G] Smt. Tara Devi vs Sri Thakur Radha Krishna Maharaj, ; Meenakshisundaram Chettiar vs Venkatachalam Chettiar, ; , relied on. Aizaz Ahmad vs Nazirul Hasan, AIR 1935 Allahabad 849; Attar Singh vs Manohar Singh, ILR (1947) Nagpur 933; Mata Ram vs Daulat ILR (1938) Nagpur 588 (F.B.); Salahuddinhyder vs Dhanoolal, [1945] ILR XXIV Patna 334; Shama Pershad Sahi vs Sheopershad Singh XLI I.C. 95 (Patna); Gouri Lal and others vs Raja Babu, AIR 929 Patna 626, approved. Krishnaji Hari vs Gopal Narayan. AIR 1936 Bombay 166 and Ishwarappa vs Dhanji, AIR 1932 Bombay 111, overruled.

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.

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.

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.

A decree passed by the Calcutta High Court on its Original Side in 1923, was transferred by that Court for execution to the Court of the Subordinate Judge of Asansol in 1931 with a certified of the decree, copy of, the order of transmission and certificate of partial satisfaction. The decree holder applied for execution to the Asansol Court but the application was dismissed for default in February,, 1932, and the Asansol Court sent to the Calcutta High Court what purported to be a certificate under section 41, Civil Procedure Code, stating that the execution case was dismissed for default, but neither the copy of the decree nor a covering letter was sent to the High Court. The decree holder again applied for execution in November, 1932, and a certain colliery was proclaimed for sale on April 3, 1933. Meanwhile, other application of the decree holder, the High Court passed an order on March 27, 1933, discharging a Receiver who had been appointed in 1926 and granting liberty to the Court of Asansol to sell the colliery in execution by public auction. After this order was communicated to the Asansol Court, it sold the colliery in auction. The sale was set aside and the colliery was resold. Again the sale was set aside and after the property was sold for the third time the judgment debtor applied under section 47 and 0. XXI, r. 90, Civil Procedure Code, for setting aside the sale on the ground that after the dis missal of the execution case in February, 1932, and the transmission of a certificate under section 41 to the High Court, the Asansol Court had no jurisdiction to execute the decree. Held per DAS J. The order of the High Court dated March 27, 1933, may well be regarded as in substance &mounting to,an order of transmission of the decree to the Asansol Court for execution under section 39, Civil Procedure Code, and after the order had been communicated to the Asansol ' Court, the latter became fully seized of jurisdiction as the executing Court. The omission to send 378 a copy and a fresh certificate of non satisfaction was a mere irregularity which did not affect the jurisdiction of the Asansol Court: Per GHULAM HASAN J. As the judgment debtor did not raise the present objection either when the decree holder made a second application for execution to the Asansol Court in November, 1932, or when the decree holder applied to the High Court in March, 1933, for giving liberty to the Asansol Court to proceed with the execution by sale of the colliery, or in the proceedings for setting aside the sales of the colliery in 1936 or in the appeals therefrom though several other objections were raised, and on one or two occasions when he did raise it, he never pressed the objection, he was precluded from raising the plea at a later stage on the principle of constructive res judicata. The mere fact that the question related to the jurisdiction of the Court would not prevent the operation of the rule of res judicata. MAHAJAN and VIVIAN BOSE JJ. On either of the grounds stated by DAS J. and GHULAM HASAN J., the judgment debtor was precluded from raising the objection that the Court of Asansol had no jurisdiction to execute the decree. Ledgard and Another vs Bull ([1886] 13 I.A. 134), Gurdeo Singh vs Chandrika Singh ([1909] I.L.R. , Rajlakshmi Dasi vs Katyayannee ([1911] I.L.R. and Lakhmichand and others vs Madho Rao ([1930] I.L.R. 52 All. 868)distinguished. Raghubir Saran vs Horilal and Another ([1931] I.L.R. 53 All. 560) overruled. Annada Kumar Boy and Another vs Sheik Madan and Others , Mahadeo Prasad Bhagat vs Bhagwat Narain Singh (A.I.R. 1938 Pat. 428), Bam Kirpal Sukul vs Mussamat Rup Kueri ([1884] 11 I.A. 37), Raja of Ramnad vs Veluswami Tevar and Others ([1921]48 I.A. 45) and Sha Shivraj Gopalji vs Edappakath Ayissa Bi and Others (A.I.R. referred to.

The appellant who was a dealer in textiles in Bombay entered into an agreement with a registered cooperative society for weaving yarn supplied by him into cotton fabrics on powerlooms owned by its members. The Society had obtained L 4 licence as required by the . Under Rule 8 of the Rules made under the Act. the Central Government was empowered to exempt any excisable goods from the whole or any part of duty payable on such goods. In exercise of the power under Rule 8, the Central Government by a notification dated July 31, 1959 ' granted exemption to "cotton fabrics produced by any Cooperative Society/formed of owners of cotton powerlooms which is .registered or which may be registered on or before March 31, 1961" subject to certain conditions set out in the notification. A subsequent notification dated April 30, 1960 granted exemption to "cotton fabrics produced on powerlooms owned by any Cooperative Society or owned by or allotted to the members of the Society which is registered on or before March 31, 1961". On the strength of these notifications the appellant sought exemption from excise duty in respect of ' the cotton fabrics which were manufactured for it on powerlooms by the Cooperative Society. The excise authorities did not accept the claim for exemption and in a writ petition filed by the appellant, the High Court gave only partial relief. In appeal before this Court the question was whether the exemption granted under the; notifications in question could be claimed only when the cotton fabrics were manufactured by a Cooperative Society 'for itself. HELD: On a true construction of the language of the notifications dated July 31, 1959 and April 30, 1960, it is clear that all that is required for claiming exemption is that the cotton fabrics must be produced on powerlooms owned by the Cooperative Society. There is no further requirement under the two notifications that the cotton fabrics must be produced by the cooperative society on powerlooms "for itself '. The appellant was therefore entitled to the exemption claimed. [259 D E] It is well established that in a taxing statute there is no room for any intendment but regard must be had to the dear meaning of words. A statutory notification may not be extended so as to meet a casus omissus. It could be that the object behind the two notifications in question was to encourage the actual manufacturers of handloom cloth to switch over, to powerlooms by constituting themselves into Cooperative Societies. But, the. operation of the notifications had to be judged not by the object which 254 the rule, making authority had in mind but by the words which it had employed to effectuate the legislative intent. Applying this principle, the case of the appellant was covered by the language of the: two notifications and the appellant was entitled to exemption from excise duty for the cotton fabrics. [259 E; 260 A D)] Salomon vs Salomon & Co. ; , 38 and Crawford vs Spooner, , referred to.

ION: Criminal Appeal No. 115 of 1959. Appeal by special leave from the judgment and order dated May 23, 1958, of the Punjab High Court in Criminal Appeal No. 414 of 1957. N.C. Chatterjee. I.M. Lal, C.L. Sareen and Mohan La1 Agarwal, for the appellant. N. section Bindra and P. D. Menon, for the respondent. October 16. The Judgment of the Court was delivered by DAS GUPTA, J. Six persons including the present appellants were tried by the Additional Sessions Judge Ferozpur on several charges in connection with the death by homicidal injuries of two brothers Munshi Singh and Hazura Singh. Of these six, Bhag Singh was the father of the other five accused persons. All the six accused persons were acquitted by the Additional Sessions Judge; on appeal by the State, the High Court of Punjab set aside the orders of acquittal in respect of Harbans Singh and Major Singh and convicted them under section 302 of the Indian Penal Code. The appeal was dissmissed in respect of the other four, viz., Bhag Singh, Gursi, Bant Singh and Gian Singh. It is against this order of conviction that Harbans Singh and Major Singh have filed the present appeal after obtaining special leave from this Court. The prosecution case is that at about 8 or 9 P.M. on July 23, 1956, shortly after Munshi Singh had returned home and complained to his father Hira Singh about the conduct of Harbans Singh and Bant Singh in abusing him. Munshi Singh ran out of his house on hearing some cries; but when he reached the Dharamshala not far from his house 107 these two appellants, along with their father Bhag Singh and their brothers Bant Singh, Gian Singh and Gursi fell upon him and caused numerous injuries with the weapons which they carried. Harbans Singh, it is said, struck Munshi Singh on the abdomen with a Sela in his hand. Munshi Singh 's brother Hazura Singh and his father Hira Singh also had followed Munshi Singh when he ran out of the house. On seeing this attack on Munshi Singh, EIazllra Singh tried to intervene, but he too was attacked and received several injuries. Harbans Singh, it is said, gave him a Sela thrust in the abdomen. Munshi Singh died on the spot; Hazura Singh was brought to the hospital at Gidderbha the following morning and received some treatment but he also died of his injuries the following day, that is, the 24th July. All the accused pleaded not guilty, the defence being that they had been falsely implicated out of enmity. To prove its Base the prosecution relied on the evidence of two persons, the deceased 's father Hira Singh and their uncle Bhag Singh and the dying declaration alleged to have been made by Hazura Singh, once in the village before Devendra Singh, the Sub Inspector of Police who had come to the village that night in connection with some other investigation and for the second time at Gidderbha hospital before a Magistrate. On a consideration of the evidence the Trial Judge came to the conclusion that the prosecution case had not been proved against any of the accused person. Being of opinion that the First Information Report had been recorded as late as 4 30 P.M. On the 24th July he thought that "the complainant party was not able to day who the assailants were and the police was making time to find out the culprits after investigation and the First Information Report was delayed on that account." He was doubtful also about the truth of the Sub Inspector 's 108 story that he actually reached the village of occurrence on that very night and consequently doubtful about any statement having been made by Hazura Singh to him on that night. In any case, he thought Hazura Singh 's dying declaration had little probative value because as many as six persons had been named and that it could not be relied upon without corroboration. The learned Judge was also not satisfied that Bhag Singh (Prosecution Witness) "was present in the village or at his house at the time of the occurrence" since "his statement was not recorded in the Inquest Report prepared by the police at midnight". The learned Judge also thought it unsatisfactory that nobody other than these two near relatives, that is, the father and uncle of the deceased persons had been examined as witnesses of the occurrence. These were the main reasons for which he came to the conclusion that the case had not been proved against any of the accused beyond reasonable doubt and accordingly acquitted the accused The High Court was of opinion that the learned Judge was wholly "wrong in holding that Bhag Singh was not mentioned in the Inquest Report"; that he had misread the time of the first Information Report as 4 30 P. M. for 4 30 A. M. and that he was again in error in concluding that "the statement made by Hazura Singh to the police on their arrival at 1 15 A.M. was inadmissible". After pointing out these "errors" in the reasoning of the learned Trial Judge the High Court said: "We have no hesitation in concluding that for the said reasons the judgment of the learned Additional Sessions Judge is wholly erroneous resulting in complete miscarriage of justice. After having gone through the testimony of both of the eye witnesses and examining the other material, particularly the two dying 109 declarations, we are of the view that the projection case was substantially true and have been proved. As regards complicity of Harbans Singh and Major Singh, there appears to be no doubt. Both of them had been assigned participation and were responsible for the fatal blow on each of the deceased. In this respect the testimony of both of the witnesses and the dying declarations are consistent. They were accordingly held guilty under section 302, Indian Penal code. " The main contention raised by Mr. Chatterjee on behalf of the appellants is that the High Court had no sufficient reasons for interfering with the order of acquittal made by the Additional Sessions Judge and that the High Court itself had been guilty of "errors", especially as the High Court has misread the judgment of the learned Additional Sessions Judge and had attributed to him statements which are not to be found in his judgment. The question as regards the correct principles to be applied by a Court hearing an appeal against acquittal of a person has engaged the attention of this Court from the very beginning. In many cases, especially the earlier ones, the Court has in laying down such principles emphasised the necessity of interference with an order of acquittal being based only on "compelling and substantial reasons" and has expressed the view that unless such reasons are present an Appeal court should not interfere with an order of acquittal. (Vide Suraj Pal Singh vs The State (1); Ajmer Singh vs State of Punjab (2); Puran vs State of Punjab (3). The use of the words "compelling reasons" embarrassed some of the High Courts in exercising their jurisdiction in appeals against acquittals and difficulties occasionally arose as to what this Court had meant by the (1) (2) [1953] section C. R. 418. 3)A.l. R. 110 words "compelling reasons". In later years the Court has often avoided emphasis on "compelling reasons" but nonetheless adhered to the view expressed earlier that before interfering in appeal with an order of acquittal a Court must examine not only questions of law and fact in all their aspects but must also closely and carefully examine the reasons which impelled the lower courts to acquit the accused and should interfere only if satisfied after such examination that the conclusion reached by the lower court that the guilt of the person has not been proved is unreasonable. (Vide Chinta vs The State of Madhya Pradesh (1); Ashrafkha Haibatkha Pathan vs The State of Bombay (2), It is clear that in emphasising in many cases the necessity of "compelling reasons" to justify an interference with an order of acquittal the Court did not in any way try to curtail the power bestowed on appellate courts under s 423 of the Code of Criminal Procedure when hearing appeals against acquittal; but conscious of the intense dislike in our jurisprudence of the conviction of innocent persons and of the facts that in many systems of jurisprudence the law does not provide at all for any appeal against an order of acquittal the Court was anxious to impress can the appellate courts the importance of bestowing special care in the sifting of evidence in appeal against acquittals. As has already been pointed out less emphasis is being given in the more recent pronouncements of this Court on "compelling reasons". But, on close analysis, it iq clear that the principles laid down by the court ill this matter have remained the same. What may be called the golden thread running through all these decisions is the rule that in deciding appeals against acquittal the Court of Appeal must examine (1) Criminal Appeal No. 178 of 1959 decided on l8 11 60. (2) Criminal Appeal No. 38 of 1960 decided on 14 12 60. 111 the evidence with particular care, must examine also the reasons on which the order of acquittal was based and should interfere with the order only when satisfied that the view taken by the acquitting Judge is clearly unreasonable. Once the appellate court comes to the conclusion that the view taken by the lower court is clearly an unreasonable one that itself is a "compelling reason" for interference. For, it is a court 's duty to convict a guilty person when the guilt is established beyond reasonable doubt, no less than it is its duty to acquit the accused when such guilt is not so established. When the High Court 's judgment shows clearly that the matter has been approached in the proper manner and the correct principles have been applied, there is very little scope for this Court to interfere with an order made by the High Court convicting an accused person in an appeal against acquittal. Once it is found that the principles laid down by this Court have been correctly applied this Court will not ordinarily embark upon a reappraisal of the evidence to ascertain whether the High Court was right in its view of the evidence. The only examination of the evidence that this Court may find itself called upon to undertake will ordinarily be just so much as is necessary to see whether the High Court has approached the question properly and applied the principles correctly. The position may however be different if the judgment of the High Court while indicating its conclusion that in its opinion the view taken by the lower court is unreasonable does not disclose a careful examination of the evidence for coming to such conclusion. Or it may appear from the High Court 's judgment that the High Court has erred on questions of law or has obviously misread the evidence on the record or the judgment of the Trial Court. What is this Court to do in such cases ? We are unable to agree 112 with Mr. Chatterjee that the only proper course for this court to take is to set aside the order made by the High Court and restore the order of acquittal. For, even where the High Court 's judgment suffers from any of these defects it may very well be that the High Court 's conclusion that the view of the lower court is unreasonable is correct. So, unless this Court thinks fit to send the case back to the High Court for re hearing of the appeal and its disposal in accordance with law, it becomes the duty of this Court in cases like these which fortunately are likely to be few in number to appraise the evidence for itself, to examine the reasons on which the lower court based the order of acquittal and then decide whether the High Court 's conclusion that the view taken by the lower Court on the question of the guilt of the accused is clearly unreasonable, is correct. If satisfied that the view was clearly unreasonable, this Court is bound to dismiss the appeal and to maintain the order of conviction made by the High Court; if on the contrary, this Court is not satisfied on such examination that the conclusion reached by the lower court that the guilt of the accused has not been proved was clearly unreasonable, the order of acquittal would be restored. The judjment of the High Court in the present case does not contain much discussion of the evidence in the case. All the discussion of the eviddnce is confined to the few sentences which we have quoted earlier in this judgment. We also notice that the learned judges of the High Court were under some misapprehension in thinking that the Additional Sessions Judge had held that Bhag Singh was not mentioned as a witness in the Inquest Report. What the Additional Sessions Judge had pointed out was that Bhag Singh 's statement had not been recorded in the Inquest Report. The Additional Sessions Judge was certainly right in this. While the High Court might have well thought that no doubt against 113 the credibility of Bhag Singh should be based on this fact that his statement was not recorded, the High Court was not justified in attributing to the Trial Judge something which he did not say. It is also not quite clear how the learned Judge said about the appellant Major Singh that he had been assigned participation and was responsible for the fatal blow on each of the deceased. In fact, neither of the two who claim to be the eye witnesses of the occurrence has said that Major Singh dealt a fatal blow on either Hazura Singh or Munshi Singh. While it is true that a general statement is made by both the witnesses as regards all the six accused having attacked both Munshi Singh and Hazura Singh neither of them has spoken of any particular injury having been caused by Major Singh. Hazura Singh himself in his dying declaration did say that Major Singh gave him a Sela blow on his left wrist but does not speak of any other injury having been caused by Major Singh either to him or to Munshi Singh except that he also said generally that all the accused gave blows on the person of Munshi Singh. The High Court has therefore clearly misdirected itself in thinking that Major Singh was responsible for any of the fatal injuries. In view of all this we consider it necessary to examine the judgment of the Trial Court and also the evidence on record ourselves for a proper decision of this appeal. Turning to the judgment of the Trial Court we find that the main circumstance which weighed with him for doubting the truth of the prosecution story is what he considered the considerable delay in recording the First Information Report. From the printed record before us we find that Narendar Nath Moharrir Head Constable, who actually entered the formal First Information Report, stated in his evidence that he made the entry at "4.30 P.M." on the 24th July 1956. It is apparently this 114 fact taken with the fact that the report did not reach the Magistrate Shri Pasricha before 8.45 P.M. on the 24th July that made the learned Judge think that the First Information was made at the Police Station at 4.30 P.M. He has unfortunately not noticed that the record of the First Information Report exhibit PP1 shows the time of record as 4.30 A.M. He also overlooked Narendranath 's own evidence in cross examination in these words: "I have perused the Roznamcha entries and find that this special report was despatched by me through Chanan Singh Foot Constable at 5.15 A.M. I cannot say why he did not deliver it to the Magistrate till 8.45 P.M." It is quite clear that 5.15 A.M. as recorded in the printed record in Narender Nath 's cross examination is not a mistake for 5.15 P.M. If that had been so there would have been no point in his saying that he could not say why the Constable did not deliver it to the Magistrate till 8.45 P.M. when this statement in cross examination is considered along with the recording of the time in exhibit PP1 itself there is no escape from the conclusion that 4.30 P.M. as stated in Narender Nath 's Examination in Chief was a slip of tongue and the correct time of the record was 4.30 A.M. and that the fact that it reached the Magistrate at 8.45 P.M. that day may well be due to the fact that the Constable was negligent and took his own time about going to the Magistrate or to some other reason not clear from the record. The reasoning of the Trial Judge based on his wrong view about the time of recording of the formal First Information Report that the complainant party was not able to say who the assailants were and so delay was made, therefore falls to the ground. The learned Judge has also misdirected himself in thinking that the dying declaration had very little probative value because as many as six accused persons had been named and that no conviction could in law be based on such dying declaration without corroboration. The law does not make any 115 distinction between a dying declaration in which one person is named and a dying declaration in which several persons are named as culprits. A dying declaration implicating one person may well be false while a dying declaration implicating several persons may be true. Just as when a number of persons are mentioned as culprits by a person claiming to be an eye witness in his evidence in court the court has to take care in deciding whether he has lied or made a mistake about any of them, so also when a number of persons appear to have been mentioned as culprits in a dying declaration that court has to scrutinise the evidence in respect of each of the accused. But it is wrong to think that a dying declaration becomes less credible if a number of persons are named as culprits. The contrary view taken in the Lahore High Court in Khurshaid Hussain vs Emperor (1) on which apparently the Trial Judge has relied is clearly erroneous. The learned Judge appears to have relied also on what was said by this Court in Ram Nath vs State of Madhya Pradesh(2) on the need of corroboration for a dying declaration. Speaking for the Court Mahajan J. (as he then was) observed in that case: "It is settled law that it is not safe to convict an accused person merely on the evidence furnished by a dying declaration without further corroboration because such a statement is not made on oath and is not subject to cross examination and because the maker of it might be mentally and physically in a state of confusion and might well be drawing upon his imagination while he was making the declaration. " The question was however considered again by this Court in Khushl Rao vs State of Bombay(3). After pointing out that in Ram Nath 's Case (Supra) the 116 Court after a careful examination of the facts of that case distinctly came to the conclusion that the dying declaration was not true and could not be relied upon this Court stated in the later case that the observations of the Court in Ram Nath 's case were in the nature of obiter dicta. The Court then proceeded to review the relevant provisions of the Evidence Act and of the decided cases in the different High Courts in India and in this Court and stated the law in these words: "that it cannot be laid down as an absolute rule of law that a dying declaration cannot form the sole basis of conviction unless it is corroborated; (2) that each case must be determined on its own facts keeping in view the circumstances in which the dying declaration was made; (3) that it cannot be laid down as a general position that a dying declaration is a weaker kind of evidence than other pieces of evidence; (4) that a dying declaration stands on the same footing as anotherpiece of evidence and has to be judged in the light of surrounding circumstances and with reference to the principles governing the weighing of evidence; (5) that a dying declaration which has been recorded by a competent magistrate in the proper manner, that is to say, in the form of questions and answers, and, as far as practicable, in the words of the maker of the declaration, stands on a much higher footing than a dying declaration which depends upon oral testimony which may suffer from all the infirmities of human memory and human character, and (6) that in order to test the reliability of a dying declaration, the Court has to keep in view the circumstances like the opportunity of the dying man for observation, for example, whether there was sufficient light if the crime was committed at night; whether the capacity of the man to remember the facts stated had not been impaired at the time he 117 was making the statement by circumstances beyond his control that the statement has been consistent throughout if he had several opportunities of making a dying declaration apart from the official record of it; and that the statement had been made at the earliest opportunity and was not the result of tutoring by interested parties. "Hence, in order to pass the test of reliability a dying declaration has to be subjected to a very close scrutiny, keeping in view the fact that the statement has been made in the absence of the accused who had no opportunity of testing the veracity of the statement by cross examination. But once the court has come to the conclusion that the dying declaration was the truthful version as to the circumstances of the death and the assailants of the victim, there is no question of further corroboration. If, on the other hand, the Court, after examining the dying declaration in all its aspects and testing its veracity, has come to the conclusion that it is not reliable by itself, and that it suffers from an infirmity, then, without corroboration it cannot form the basis of a conviction. Thus, the necessity for corroboration arises not from any inherent weakness of a dying declaration as a piece of evidence, as held in some of the reported cases, but from the fact that the court, in a given case has come to the conclusion that that particular dying declaration was not free from the infirmities referred to above or from other infirmities as may be disclosed in evidence in that case. " In view of this latest pronouncement of this Court which it should be stated in fairness to the Trial Judge was made long after he gave his judgment it must be held that it is neither a rule of law nor of prudence that a dying declaration requires to be corroborated by other evidence before a conviction can be based thereon. The evidence furnished by the dying declaration must be considered by the Judge, just as the evidence of any 118 witness, though undoubtedly some special considerations arise in the assessment of dying declarations which do not arise in the case of assessing the value of a statement made in Court by a person claiming to be witness of the occurrence. In the first place, the Court has to make sure as to what the statement of the dead man actually was. This itself is often a difficult task, specially where the statement had not been put into writing. In the second place, the court has to be certain about the identity of the persons named in the dying declaration a difficulty which does not arise where a person gives his depositions is Court and identifies the person who is present in court as the person whom he has named. Other special considerations which arise in assessing the value of dying declarations have been mentioned by this Court in Khushal Rao vs State of Bombay(1) and need not be repeated here. In view of this latest pronouncement of this Court on the question of need of corroboration of a dying declaration by other evidence, it must be held that the Trial Judge was wrong in thinking that he could not act on the dying declaration of Hazura Singh unless it was corroborated by other evidence. In view of the several defects in the reasoning of the Trial Judge, it is necessary for us to examine the evidence on the record to see whether the High Court was right in thinking that the view taken by the learned Judge was clearly unreasonable. The most important evidence in the case is furnished by the dying declaration made by Hazura Singh. The Investigating Officer, Devender Singh has said that on July 22, 1956 he had gone to the village Rikala on an excise raid and from there he went to Mallan at about 2 P.M. on July 23, to investigate a case under section 392 of the Indian Penal Code. His further evidence is that it was on the same night at about midnight that he started for Dhurkot from Mallan. We see 119 no reason to doubt the truth of his statement that he did reach Dhurkot shortly after midnight of the 23rd July and that when on hearing that a murder had taken place near the Dharamshala he came to the Dharamshala. Hazura Singh who was lying injured on a cot there made a statement to him, he recorded the statement correctly. That statement has been marked exhibit PP. The substance of this statement is that at about 9 P.M. on the night of the occurrence his brother Munshi Singh came and complained about the conduct of Bant Singh, Harbans Singh and other sons of Bhag Singh and that shortly after this on hearing shouts of Bant Singh and others near the Lharamshala, Munshi Singh went towards that place followed by Hazura Singh and his father Hira Singh and that when they reached the place they found Harbans Singh and the other accused persons all armed with weapons raising uproar and when Munshi Singh reached the place and returned the abuse Harbans Singh gave the first blow to Munshi Singh with a Sela in his hand hitting him on the front of the chest after which others of the party also gave blows and when Hazura Singh stepped forward to rescue his brother, Harbans Singh gave him a blow with a Sela in his hand which hit him on the abdomen and the other accused also gave him blows. The blow given by Major Singh hit him on his left wrist. It is clear that this statement was made by Hazura Singh shortly after midnight i.e., within about four hours after the occurrence. It has to be remembered that Hazura Singh had one single serious injury viz., the penetrating wound on his abdomen. We are satisfied from the evidence of the witnesses that there was sufficient moonlight that to enable Hazura Singh to recognize clearly the assailant who struck the blow which caused this injury. He could have therefore made no mistake about the indentity of his assailant. Nor is it likely that he 120 would within a few hours of the occurrence ascribe this fatal blow on him to somebody other than the real assailant. The several injuries on Hazura Singh and the numerous injuries on Munshi Singh justify the conclusion that there was more than one assailant in the attacking party. Whether or not Hazura Singh could have made a mistake about the identity of the other assailants or could have implicated some of them at least falsely, it will be unreasonable to think that he would substitute another person for the one assailant who gave him the fatal blow. On a consideration of these circumstances we are therefore satisfied that it would be unreasonable to doubt or disbelieve the truth of Hazura Singh 's statement when he said that Harbans Singh struck him with the Sela in his hand which hit him on the abdomen. Even if there was no other evidence on the records as regards the part taken by the appellant Harbans Singh this dying declaration of Hazura Singh is so clearly true that the only reasonable view for a judge of facts to take is that Harbans Singh caused the death of Hazura Singh by striking him with a Sela. As has already been noticed Hazura Singh in this statement mentioned Harbans Singh as the person who gave the first blow to Munshi Singh, the blow which caused one of the injuries on his chest. We can think of no reason why this main part should be ascribed falsely to Harbans Singh; we think, considering the circumstances in which the statement was made, that this part of Hazura Singh 's statement is also clearly the truth and could reasonably be accepted even without any corroboration. A second statement of Hazura Singh was recorded at the Hospital where he was removed. This statement appears to have been recorded at about midnight of the 24th July. In this statement also he mentioned Harbans Singh and the other accused persons as having taken part in the attack. It appears that when this statement was made 121 Hazura Singh 's condition was very bad. Indeed, after he had made a part of the statement the Magistrate recorded that he had started giving indifferent answers and asked the Doctor to give him the necessary treatment. After the treatment was given the statement was concluded. We would not attach much weight to this statement on the 24th July. But, it will be noticed that there is nothing in this latter statement which detracts from the truth of the earlier statement made shortly after the occurrence to the police sub Inspector. There is apart from this the testimony in Court of Hira Singh the father of the two deceased persons and his uncle Bhag Singh. As regards Bhag Singh the learned Trial Judge has pointed out that Bhag Singh 's statement was not recorded by the sub Inspector in the Inquest Report. While there is nothing in law which requires the statement of witnesses to be recorded in the Inquest Report, it appears to be a common practice in Punjab for police officers to record statements of witnesses in Inquest Reports. In the present case the Sub Inspector appears to have recorded a fairly full statement of Hira Singh as also short statements of Arjan Singh, Matha Singh and Lakal Singh in the Inquest Report itself. It is somewhat curious therefore that the Sub Inspector did not record the statement of Bhag Singh also in this report even though it is found that Bhag Singh was named as a witness of the occurrence in Hazura Singh 's dying declaration itself. It is also difficult to understand Bhag Singh 's statement that he left the place as soon as some neighbours came up after the occurrence and did not go back to the spot till he was called by the police. He has offered no explanation for this rather unusual conduct. In view of all this, we are not prepared to say that tho Trial Judge acted unreasonably in doubting his testimony. We are unable however to discover any valid reason for doubting the presence of Hira Singh at 122 the place of occurrence. It seems to us that the main reason for the Trial Judge to doubt the truth of Hira Singh 's evidence was what he considered the great delay in lodging the formal First Information Report. That reason, as we have already pointed out, does not exist. On an examination, it seems to us quite likely that Hira Singh also accompanied Hazura Singh when the latter followed Munshi Singh towards the Dharmashala and it also seems to us improbable that he would give the main part in the assault falsely to Harbans Singh if somebody else was responsible for the blow which caused Hazura Singh 's death. In our view the learned Trial Judge acted unreasonably in doubting the truth of Hira Singh 's evidence against Harbans Singh. On a consideration of the evidence we are therefore satisfied that the conclusion reached by the High Court that the view taken by the Trial Court as regards Harbans Singh 's guilt Was clearly unreasonable is correct and that the only reasonable view on the evidence can be that Harbans Singh committed murder by causing the death of Hazura Singh and also committed murder by causing the death of Munshi Singh. The position is however different as regards Major Singh. As has already been pointed out the High Court is wrong in thinking that the evidence Shows that Major Singh gave any of the fatal blows. Hazura Singh in his first dying declaration mentioned Major Singh as having given a below on him on his left wrist. Apart from Bhag Singh only Hira Singh has ascribed any specific part to Major Singh in addition to saying generally that he took part in the attack. The evidence therefore leaves scope for thinking that Hazura Singh has made a mistake about Major Singh or has wrongly implicated him. We are not therefore prepared to say that the view taken by the Trial Judge as regards Major Singh is clearly unreasonable. 123 We therefore allow the appeal of Major Singh set aside the order of conviction and sentence made against him by the High Court and restore the order of acquittal made by the Trial Court. The appeal of Harbans Singh is dismissed. Major Singh should be set at liberty at once. Appeal of appellant 2 allowed. Appeal of appellant 1 dismissed.

The High Court set aside the Trial Court 's order of acquittal of the appellants and convicted them on a charge of murder under section 302 of the Indian Penal Code. On appeal by the appellants by special leave ^ Held, that this Court in its earlier decisions emphasised that interference with an order of acquittal should be based only on "complying and substantial reasons" and held that unless such reasons were present an Appeal Court should not interface with an order of acquittal, but this Court did not try to curtail the powers of the appe11ate court under section 423 of the Code of Criminal Procedure. Though in its more recent pronouncements this Court laid less emphasis on 105 "compelling reasons" the principle has remained the same. That principle is that in deciding appeals against acquittal the Court of Appeal must examine the evidence with particular care and must also examine the reasons on which the order of acquittal was based and should interfere with the order only when satisfied that the view taken by the acquitting judge was clearly unreasonable. Once the Court came to the conclusion that the view of the lower court was unreasonable that itself was a "compelling reason" for interference. Once it was found that the High Court applied the correct principles in setting aside the order of acquittal this Court will not ordinarily interfere with the High Court 's order of conviction in appeal against acquittal o enter into the evidence to ascertain whether the High Court was right in its view of the evidence. Only such examination of the evidence would ordinarily be necessary as is needed to see that the High Court approached the question properly and applied the principle correctly. If the judgment of the High Court did not disclose a careful examination of the evidence in coming to the conclusion that the view of the acquitting court was unreasonable or if it appeared that the High Court erred on questions of law or misread the evidence or the judgment of the trial court, this Court would, unless the case was sent back to the High Court for re hearing, appraise the evidence for itself to examine the reasons on which the lower court based its order of acquittal and then decide whether the High Courts view that the conditions of the lower court was unreasonable, was correct. If on such examination it appeared to the Court that the view of the acquitting court was unreasonable the acquittal would be set aside and if on the other had it appeared that the view was not unreasonable the order of acquittal would be restored. Suraj Pal Singh vs State, , Ajmer Singh vs State of Punjab ; , Puran vs State of Punjab A.I.R. 1953 S.C. 459, Chinta vs State of M. P., Cr. A. No. 178 of 59 and Ashrafkha Haibatkha Pathan vs State of Bombay, Cr. A. No. 38 of 1960, referred to. It was neither a rule of law nor of prudence that a dying declaration should be corroborated by other evidence before a conviction could be ba ed thereon. Ram Nath vs state of M. P. A.l. R. 1953 S.C. 420, referred to. Khushal Ram vs State of Bombay, [l958] S.C.R. 552, followed. A dying declaration did not become less credible if a number of persons were names are culprits 106 Khurshaid Hussain. vs Emperor,(1941) 43 Cr.L.J.59, held erroneous.

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.

All the accused were tried for offences section 302/120B and 364 I.P.C., but acquitted by the Additional Sessions Judge, Amritsar. On State 's appeal against acquittal, the High Court convicted five of the appellants (Satbir Singh, Paramjit Singh, Harbhajan Singh, Shiv Narain and M.P. Singh) under section 302/120B I.P.C. and sentenced them to imprisonment for life. Satbir Singh was also convicted on the sole testimony of Puran Singh (PW3) section 364 I.P.C. and sen tenced to rigorous imprisonment for seven years and fine. The High Court held the extra judicial confessions made by Shiv Narain and Harbhajan Singh before R.K. Kapur (PW 41) the commander Border Security Force as admissible in evi dence before convicting them and rejected the plea of en counter on the Indo Pakistan border. The High Court con victed the remaining eight appellants (Ajit Singh, Darshan Singh, Arian Singh, Baghal Singh, Tara Singh, Dial Singh, Bachan Singh and Malook Singh) section 364 I.P.C. and sentenced them also to rigorous imprisonment for seven years with fine. Allowing the appeals under the Supreme Court (Enlarge ment of Criminal Appellate Jurisdiction) Act, 1971, the Court, HELD: (1) This was not a fit case where the High Court should have interfered with the acquittal of any of the appellants. The High Court has not at all considered the reasons given by the Sessions Judge for acquitting the accused. It has given its own reasons for convicting the appellants but that is not enough in an appeal against acquittal. [205 B C] (2) As a practical proposition, in an appeal against acquittal, it is always necessary that the reasons given by the trial court for according an acquittal should be exam ined by the High Court. If the conclusions of the trial court are not based upon any evidence or they are such as no reasonable 'body of men, properly instructed in law can reach, on the evidence, or they are so palpably wrong as to shock 'the sense of justice, the High Court will be justi fied in taking a contrary view by giving its own reasons. It is not enough that it is just possible for the High Court to take a contrary view. While interfering with acquittal the judgment of the High Court should demonstrate clearly the unworthiness of the conclusions of the trial court having regard to all the relevant evidence in record. The High Court has followed these salutary principles in dealing with an appeal against acquittal. [204 G H, 205 A] (3) In deciding whether a particular confession attracts the frown of section 24 of the Evidence Act, the question has to be considered from the point of view of the confess ing accused as to how the inducement. threat or pro raise proceeding from a person in authority would operate in his mind. In the instant case, the extra judicial confessions by the two accused Shiv Narain and Harbhajan Singh, have to be completely excluded from consideration being hit by section 24 of the Evidence Act. When the two accused were questioned separately after several abortive attempts to secure confes sions it cannot be said that there was no inducement, threat or promise of some kind. [203 H 204 A, E] 196 Observation: The witness cannot be relied upon by resort to a kind of special pleading. in his aid. The line of approach in a criminal case in order to find justification for conviction on .shaky testimony by making a virtue of the inalertness of the police administration is not to be commended.

The appellant alongwith Radhey Shyam and Munni Lal were charged with the murder of Gokaran Prasad on 24.11.1975 at about 5 PM. The Trial Court on consideration of the evidence concluded that the prosecution has failed to prove the case beyond reasonable doubts and acquitted the accused persons. On appeal, the High Court appreciating the facts and circumstances of the case convicted Munni Lal along with the appellant for an offence under Section 302 read with 34 I.P.C. and sentenced each of them to undergo rigorous imprisonment for life. During the pendency of the appeal the main accused Radhey Shyam died. This appeal is against the High Court 's Judgment under Section 379 of the code of Criminal Procedure. Allowing the Appeal in part, HELD : 1. The High Court has rightly pointed out that PW 6 was not connected with the prosecution party in any manner and there was no reason for him to depose falsely, claiming to be an eye witness of the occurrence. As such, his evidence can be taken into consideration. to corroborate the evidence of the informant PW 1. (587 C) 2. The occurrence took place at about 5 P.M. and the first information report was lodged at 6.45 P.M. within two hours, the Police Station being at the distance of four miles from the place of occurrence. In the first information report the same version of the occurrence was disclosed, which has been stated in Court. Apart from naming himself, PW 1 also named PW 5 and PW 582 6 as eye witness of the occurrence. The Investigating Officer reached the place of the occurrence at 9. P.M. the same evening. In such a situation there does not appear to be any scope for concoction of a false case to implicate the accused persons leaving out the real culprits. PW 1 being the brother of the deceased, his going to the Court of Tehsildar at Sitapur and returning to village with the deceased is most natural. His evidence cannot he rejected merely on the ground that he happened to be the brother of the victim. It has been repeatedly pointed out by this Court that near relations will be the last persons to leave out the real culprits and to implicate those who have not participated in the crime. Taking all facts and circumstances into consideration, the prosecution has been able to prove the case as disclosed in FIR against the accused persons. (587 E G) 3.The appellant was a school student and there was no reason on his part to share the common intention of committing the murder of the victim. By merely pressing down the victim before the other two accused persons, assaulted him, it cannot be held that appellant had shared the common intention of causing the death of the victim. In the facts and circumstances of the case it has to he held that he shared only the common intention of culpable homicide not amounting to murder. He can be attributed with the intention that the injuries, which were being caused by the other two accused persons, were likely to cause the death of the victim. (588 E F) 4. The conviction of the appellant under Section 302 read with 34 I.P.C. as well as his sentence to imprisonment for life is set aside. He is convicted under Section 304, Part 1, read with Section 34 of the Penal Code sentenced to undergo rigorous imprisonment for ten years. (588 G)

% Sectlon 5 of the Punjab Borstal Act, 1926 empowers courts to pass a sentence of detention in a Borstal institution in the case of male persons less than twenty one years of age convicted of an offence, in lieu of transportation or rigorous imprisonment. Section 2(4)(i)(a) of the Act which defines 'offence ' takes in offences other than an offence punishable with death. In his writ petition under Article 32 of the Constitution, the petitioner who has been convicted for the offence of murder and sentenced to imprisonment for life claimed benefit of the Punjab Borstal Act relying on Hava Singh vs State of Haryana, AIR 1987 SC 2001. The State contested his claim Dismissing the writ petition. ^ HELD: l. l The Punjab Borstal Act does not have application to an offence punishable under section 302 I.P.C.[561F G] 1.2 What is excepted in the definition of 'offence ' in section 2(4)(i)(a) of the Act is an offence which is punishable with death. One of the punishments under section 302 I.P.C. for the offence of murder is death, and. therefore, the offence of murder would be covered with section 2(4)(i)(a) of the Act and to such a conviction the Punjab Borstal Act would have no application. [560F G] 1.3 The petitioner is, therefore, not entitled to the benefit of the Punjab Borstal Act as he has been sentenced to imprisonment for life for the offence of murder punishable under section 302 I.P.C. for which the sentence of death is prescribed as an alternate. [561G] 557 1.4 In Hava Singh 's, case the definition of offence was not placed for consideration before the court and, therefore, the conclusion which has been reached is not correct. [561F] Emperor vs Mt. Janki & Anr., AIR 1932 Nag. 130; King Emperor vs Nga San Htwa & Ors., AIR 1927 Rangoon 205; Chetti vs State of Madhya Pradesh, AIR 1959 MP 291; Emperor vs Bahawati, AIR 1928 Lahore 920; State vs Sheo Shankar, AIR 1956 All. 326; Public Prosecutor of Madras vs Paneswar Rao, AIR 1946 Mad. 178; Sarkar vs Jalam Singh, AIR 1950 Raj. 28 and Narauji Premji vs Emperor, AIR 1928 Bom. referred to. Hava Singh vs State of Haryana, AIR 1987 SC 2001 overruled.

The appellant was charged with an offence under Section 302 I.P.C. After the recording of evidence was concluded, it was pointed out that the Sessions Judge had no jurisdiction to try the appellant as the appellant happened to fall under the provisions of the Haryana Children Act, 1974. On remand, the Magistrate found the appellant was a child and proceeded to try him under the Haryana Act. In a revision petition filed by the brother of the deceased, the High Court held that the provisions of the Criminal Procedure Code 1973 prevailed over the provisions of the Haryana Act. Allowing the appeal, ^ HELD: The High Court was in error in holding that the Code of 1973 over ruled the Haryana Act and that the appellant should have been tried under the Code 1973. The view taken by the Sessions Judge on this point was correct and the case of the appellant should have been referred to the Magistrate concerned for trial in accordance with the provisions of the Haryana Act. [154G H] Section 5 carves out a clear exception to the provisions of the trial of an offence under any special or local law for the time being in force or any special jurisdiction or power conferred or any special form of procedure prescribed by any other law for the time being in force. The Haryana Act was in force when the Code of 1973 was passed and therefore the Haryana Act far from being inconsistent with section 5 of the Code of 1973 appears to be fully protected by the provisions of section 5 of the Code of 1973. [154E 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.

The petitioner was appointed as Excise Sub Inspector in February 1964 in the State of U.P. and was later promoted as Excise Inspector on ad hoc basis on February 24, 1972. He was confirmed as Excise Sub Inspector w.e.f. April 1, 1967. Though promoted on ad hoc basis, the petitioner has continuously been working as Excise Inspector since February 24, 1972. Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner i.e. after 24.2.1972. They were promoted to the post of Excise Superintendent on 29.9.1983 and the petitioner was ignored. Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution. According to the State and other respondents, the petitioner 's promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules, he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules. His name has not been shown in the seniority list of Excise Inspectors. According to them his case has rightly not been considered for further promotion. On the other hand, it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution. It is submitted on his behalf that the petitioner is, in any case, entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards. Respondents concede that the petitioner can be appointed under 1983 rules, but contend that he is not entitled to the benefit of past service for purposes of seniority. 885 Allowing the writ petition this Court HELD: When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors. The nature of duties of both the cadres were similar. The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of excise Sub Inspectors under them. The Excise Sub Inspectors were thus natural contenders for the post of Inspectors. There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors. Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules. [890H 891B] It is not disputed that under the 1983 rules, the petitioner is eligible to be promoted and appointed as Excise Inspector. [891C D] The 1983 rules came into force on March 24, 1983. There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today. Inaction on the part of the State Government is wholly unjustified. The petitioner has been made to suffer for no fault of his. He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily. [891E] Rule 21(i) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date. In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner. The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion. Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972. The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector. The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post. The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post. [891G, 892B E] None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated. The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary. [892F] Masood Akhtar Khan & Ors. vs State of Madhya Pradesh, ; Direct recruits Class II Engineering Officers Association vs State of Maharashtra & Ors., ; ; P. Mahendran & Ors, etc. vs State of Karnataka Singh & Ors. , ; ; Krishena Kumar & Ors. vs Union of India & Ors. , ; ; A.K. Bhatnagar & Ors. vs Union of India & Ors. , ; ; Baleshwar Dass & Ors. etc. vs State of U.P. & Ors. , [1981] 1 S.C.C. 449; Narender Chadha & Ors. vs Union of India & Ors. , ; and Kumari Shrilekha Vidyarthi etc. vs State of U.P. & Ors. , , referred to.

Appeal No. 272 of 1960. Appeal from the judgment and order dated January 28, 1959, of the Rajasthan High Court in D. B. Civil Writ. Petition No. 17 of 1957. H. N. Sanyal,, Additional Solicitor General of India, R. Ganapathy Iyer, Y. section Nasarullah Sheriff, J. L. Datta and K. L. Hathi, for the appellants. G. section Pathak, Syed Anwar Hussain and B. P. Maheshwari, for respondents Nos. 1 to 7. A. G. Ratnaparkhi: for Govind saran for respondents Nos. 8 and 9. H. N. Sanyal, Additional Solicitor General of India, R. H. Dhebar and T. Jf. Sea, for the Intervener. March 17. The Judjment of the Court was delivered by 49 386 GAJENDRAGADKAR, J. In.the High Court of Judicature for Rajasthan at Jodhpur a writ petition was filed under article 226 of the Constitution by the nine respondents who are Khadims of the tomb of Khwaja Moinud din Chishti of Ajmer challenging the vires of the Durgah Khwaja Saheb Act XXXVI of 1955 (hereafter called the Act). In this petition the respondents alleged that the Act in general and the provisions specified in the petition in particular are ultra vires and they claimed a direction or an appropriate writ or order restraining the appellants the Durgah Com mittee and the Nazim of the said Committee from enforcing any of its provisions. The writ petition thus filed by the respondents substantially succeeded and the High Court has made a declaration that the impugned provisions of the Act are ultra vires and has issued an order restraining the appellants from enforcing them. The appellants then applied for and obtained a certificate from the High Court and it is with the said certificate that they have come to this Court by their present appeal. According to the respondents the shrine of Nazrat Khwaja Moin ud din Chishti which is generally known as the Durgah Khwaja Saheb situated at Ajmer is one of the most important places of pilgrimage for the muslims of India. Since persons following other religious also hold the saint in great veneration a large number of non muslims visit the tomb every year. Khwaja Saheb came to India sometime towards the end of the 12th Century A. D. and settled down in Ajmer. His saintly character and his teachings attracted a large number of devotees during his lifetime and these devotees honoured him as a great spiritual leader. Khwaja Saheb belonged to the Chishti Order of Soofies. He died at Ajmer in or about 1236 A. D., and naturally enough after his death his tomb became a place of pilgrimage. The respondents ' case further is that after his death the tomb under which the saint was interred was a kutcha structure and continued to be such for nearly 300 years thereafter. The petition alleged that a pucca structure was built by the Khilji Sultans of 387 Mandu and over the said pucca structure a tomb was constructed. Thereafter successive Muslim Rulers, particularly the Moghul Emperors, made endowments and added to the wealth and splendour of the shrine. Khwaja Syed Fukhuruddin and Sheikh Mohammad Yadgar, who originally accompanied the Khwaja Saheb Syed to India, were his close and devoted followers. After the saint 's death both of them looked after the, grave and attended to the spiritual needs of the pilgrims. The descendants of these two disciples gradually came to be known as Khadims. For generations past their occupation has been that of religious service at the tomb of Khwaja Saheb. The respondents belong to this sect or section of Khadims. They claim that they are members of a religious denomination or section known as Chishtia Soofies. Their petition further avers that throughout the centuries the Khadims had not only looked after the premises of the tomb but also kept the keys of the tomb and attended to the multitude of pilgrime who visited the shrine and acted as spiritual guides in the performance of religious functions to, wit the Fateha (act of prayer) for which they received Nazars (offerings). These Nazars were the main source of income for the livelihood of the Khadims and have in fact always constituted their property. According to the respondents the right of the Khadims to the offerings and Nazars made by pilgrims before the tomb and at the Durgah had been the subject matter of several judicial decisions and the same had been finally decided by the Privy Council in Syed Altaf Hussain vs Dewan Syed Ali Rasul Ali Khan The petition is substantially based on what the respondents regard to be the effect of the said decision in respect of their rights. According to them the rights recognised by the said decision amount to their fundamental rights to property and their fundamental right to manage the said property, and that in substance is the basis of the petition. Thus the respondents challenged the vires of the Act on the ground that its material provisions take (1) A.I.R. 1938 P.C. 71. 388 away and/or abridge their fundamental rights as a class and also the fundamental rights of the muslims belonging to the Soofi Chishtia Order guaranteed by articles 14, 19 (1) (f) and (g), 25, 26, 31(1) and (2) as well as 32. According to the case set out in the petition all Hanafi muslims do not necessarily believe in Soofism and do not belong to the Chishtia Order of Soofies, and it is to the latter sect that the shrine solely belongs; the maintenance of the shrine has also been the sole concern of the said sect. It is this sect which has to maintain the institution for religious purposes and manage its affairs according to custom and usage. That is why the respondents alleged that the material provisions of the Act, were violative of their fundamental rights. In regard to section 5 of the Act under which the Durgah Committee is constituted the respondents ' objection is that it can consist of Hanafi muslims who are not members of the Chishtia Order and that introduces an infirmity which makes the said provision inconsistent with article 26 of the Constitution. On these, allegations the respondents claimed a declaration that certain specified sections of the Act Were void and ultra vires which made the whole of the Act void and ultra vires avid they asked directions or orders or writ in the nature of mandamus or any other appropriate writ to the appellants restraining them from enforcing in any manner the said Act against them. The claim thus made by the respondents was disputed by the appellants in their detailed written statement. They averred that the circle of devotees of, and visitors to, the shrine was not confined to the Chishtia Order; but it included devotees and pilgrims of all classes of people following different religions. According to them the largest number of pilgrims and visitors 'were Hindus, Khoja Memons and parsis. It was denied that the Durgah was looked after by the descendants of Syed Fukhuruddin and Mohamad Yadgar. The allegations made by the respondents in respect of their occupation, duties and rights were seriously challenged and the case made out by them in regard to the receipt of the offerings and Nazars 389 was disputed. According to the appellants the religious services at the tomb were and are performed by the Saiiadanashin of the Durgah and the respondents had no right to look after the premises, to keep the keys of the tomb, to attend to the pilgrims visiting the shrine or to receive any offerings or Nazars. Their case was that the Khadims were and are no more, than servants of the holy tomb and their duties are similar to those of chowkidars. The appellants further pleaded that according to Islamic belief offerings made at the tomb of a dead saint are meant for the fulfilment of objects which were dear to the saint in his lifetime and they are meant for the poor, the indigent. the sick and the stiffering so that the benediction may reach the soul of the., departed saint. The averments made by the respondents in regard to their fundamental rights and their infringement were challenged by the appellants and it was urged that the Act in general and the provisions specified in the petition in particular were intra vires and constitutional. On these pleadings the High Court proceeded to consider the history of the institution, the nature of the rights set up by the respondents and the effect of the impugned legislation on those rights. The High Court has found that the offerings made before the tomb for nearly 400 years before the tomb was rebuilt into a pucca structure must have been used by the Khadims for themselves. It also held that the Khadims were performing several duties set out by the respondents and that it was mainly the Khadims who cir culated the stories of miracles performed by Khwaja Saheb during his lifetime and thus helped to spread the reputation of the tomb. Even after the tomb was rebuilt and endowments were made to it the Khadims looked after the tomb, performed the necessary rituals and spent the surplus income from the offerings for themselves. In due course Sajjanashins came to be appointed, but, according to the High Court their emergence on the scene merely enabled them to become sharers in the offerings. It has further been 390 found by the High Court on a review of judicial decisions pronounced in several disputes between the parties that the offerings made at the tomb are governed by the customary mode of their utilisation and the history of the institution proved that the said offerings have been used according to a certain custom which had been upheld by the Privy Council in the case of Syed Altaf Hussain (1). 'this custom showed that the offerings made before the shrine are divided between the Sajjadanashin and the Khadims in the manner indicated in the said decision. It is in the light of these broad findings that the High Court proceeded to examine the vires of the impugned provisions of the Act. Thus considered the High Court came to the conclusion that the several sections challenged by the respondents in their writ petition are ultra vires. It has held that section 2(b)(v) violates article 19(1)(f), section 5 violates article 26, section 11(f) articles 19(1)(g) and 25(1), sections 11(b) and 13(1) article 25, section 14 article 19(1)(f) and as. 16 and 18 article 14 read with article 32. Having found that these sections are ultra vires the High Court has issued an order restraining the appellants from enforcing the said sections. In regard to section 5 in particular the High Court has found that the said section is ultra vires inasmuch as it lays down that the Committee shall consist of Hanafi muslims without further restricting that they shall be of the Chishtia Order believing in the religous practices and ritual in vogue at the shrine. It may be added that since section 5 which contains the key provision of the Act has thus been struck down, though in a limited way, the whole of the Act has in substance been rendered inoperative. Before dealing with the merits of the appeal it would be relevant and useful to consider briefly the historical background of the dispute because, in determining the rights of the respondents and of the sect which they claim to represent, it would be necessary to ascertain broadly the genesis of the shrine, its growth, the nature of the endowments made to it, the management of the properties thus endowed, the rights of the Khadims and the Sajjadanashin in regard to (1) A.I.R. 1938 P.C. 71. 391 the tomb and the effect of the relevant judicial decisions in that behalf. This enquiry would inevitably take us back to the 13th Century because Khwaja Moin ud din died either in 1236 or 1233 A.D. and it was then that a kutcha tomb was constructed in his honour. It appears that in the High Court the parties agreed to collect the relevant material in regard to the growth of this institution which has now become scarce and obscure owing to lapse of time from the Imperial Gazetteer dealing with Ajmer, the Report of the Ghulam Hasan Committee (hereafter called the Committee). appointed in 1949 to enquire into and report on the administration of the present Durgah as well as the decision of the Privy Council in Asrar Ahmed vs Durgah Commitee, Ajmer (2). The Committee 's report shows that the Committee 'examined a large number of, witnesses belonging to several communities who were devoted to the shrine, it considered the original Sanads and a volume of other documents produced before it, took into account all the relevant judicial decisions to which its attention was drawn, and passed under review the growth of this institution and its management before it made its recommendations as to the measures necessary to secure the efficient management of the Durgah Endowment, the conservation of the shrine in the interest of the devotees as a whole. Presumbly when the parties agreed to refer to the historical data supplied by the Committee 's report they advisedly refrained from adopting the course of producing the original documents themselves in the present enquiry. The political history of Ajmer has been stormy, and through the centuries sovereignty over the State of Ajmer has changed hands with the inevitable consequence that the fortunes of 'the shrine varied from time to time. it is true that the material which has been thus placed before the Court is not satisfactory, as it could not but be so, because we are trying to trace the history of the institution since the 13th Century for nearly 600 years thereafter; but the picture which emerges as a result of a careful consideration of the (2) A. I.R 1947 P.C.I. 392 said material is on the whole clear enough for our purpose in the present appeal. Khwaja Moin ud din was born in Persia in 1143. Later he migrated with his father to Nisharpur near Meshad where Omar Khayyam is buried. Then he moved from place to place until he reached Ajmer about the end of the 12th Country. At Ajmer lie died at the ripe old age of 90. It appear,; that he retired into his cell on the First of Rajab and was found dead in the cell on the Sixth Day when it, was opened. That is why his death anniversary is celebrated every year during the six days of Rajah. He, received formal the logical education at Samarkhand and Bukhara, and in the pursuit of spiritual knowledge he travelled far and wide. Ultimately he became a disciple of Hazrat Khwaja Usman Harooin who was a well known faqir of the Chishti sect. During his lifetime the reputation of Khwaja Moinuddin travelled far and wide and attracted devotees following different religious throughout the country. At his death the saint could not have left any property and so there was no question of management of the property belonging to his tomb. No doubt the tomb itself was constructed immediately after his death but it was a kutcha structure and apparently for several years after his death there does not appear to have been endowment of property to the tomb, and so its financial position must have been of a very modest order. Persons belonging to the affluent classes were not, attracted for many years and so there was hardly any occasion to manage any property of the tomb as such. After his death the family of the saint remained in Ajmer for some time but it appears that the members of the family were driven out of Ajmer for some years and they came back only centuries later. This was the consequence of the change of rulers who exercised sovereign power over Ajmer. The construction of a pucca tomb was commenced in the reign of one of the Malwa Kings whose dynasty ruled over Ajmer up to 1531. There is no evidence to show that any property was dedicated to the tomb even then. It, however, does appear that one of the 393 Malwa Kings had appointed a Sajjadanashin to look after the tomb; this Sajjadanasliin was in later times called Dewan. The construction of the tomb took a fairly long time but even after it was completed there is no trace of any endowment of property. In or about 1560 Akbar defeated the Malwa Kings and Ajmer came under Moghul rule and so the Moghul period began. Akbar took great interest in the tomb and that must have added to the popularity of the tomb and attracted a large number of affluent pilgrims. It was about 1567 A. D. that the tomb was rebuilt and re endowed by Akbar who reigned from 1556 to 1605. A Farman issued by Akhar ascribed to the year 1567 shows that eighteen villages were granted to the Durgah. According to the report of the Committee which had access to the original Sanad and other relevant documents the year of the Sanad was not 1567 but 1575. The report also shows that the object of this first endowment was not one for the general purposes of the Durgah but for a specific purpose, namely, 'langar khana '. It appears that during this period a descendant of the saint functioned as a Sajjadanashin and he also performed the duties of a Mutawalli. There is no reliable evidence in regard to the position of the Sajjadanashin, his duties and functions before the date of Akbar, but it is not difficult to imagine that even if a Sajjadanashin was in charge of the tomb he had really very little to manage because the tomb had not until 1567 attracted substantial grants or endowments. The Committee 's report clearly brings out that the appointment of a Sajjadanashin in the time of Akbar was purely on the basis of an appointment by the State because it is pointed out that as soon as Akbar was not satisfied with the work of the Sajjadanashin appointed by him in 1567 he removed him from office in 1570 and appointed a new incumbent in his place This new incumbent carried on his duties until 1600. Similarly in 1612 Jehangir appointed a Sajjadanashin to function also as Mutawalli. During Jehangir 's time (1605 1627) some more villages were endowed to the Durgah. 50 394 During Shahjehan 's time (1627 1658) some significant changes took place in the management of the Durgah. ,The office of the Sajjadanashin was separated from that of the Mutawalli under the name of Darogah, the Mutawalli was put in charge of the management and administration of the secular affairs of the Durgah. It would also appear that some of the Daro gahs were Hindus. In his turn Shahjehan endowed several villages in favour of the Durgah. This endowment, unlike that of Akbar, was for the general purposes of the Durgah. According to the Committee Shahjehan 's endowment was in supersession of the earlier grants though it is difficult to decide as to whether it was in supersession of Akbar 's grant or of an earlier grant made by Shahjehan himself However that may be, it is quite clear that at the very time when Shahjehan made his endowment he separated the office of the Sajjadanashin from that of the Mutawalli and left it to the sole charge of the Mutawalli appointed by the Ruler to manage the properties endowed to the Durgah. The later history of the institution shows that the separate office of the Mutawalli who was in sole management of the administration of the properties of the Durgah continued ever since, and that throughout its history the Mutawallis have been appointed by the State and were as such answerable to the State and not to the sect represented by the respondents. This state of affairs continued during the reign of Aurangzeb (1659 1707). After Aarangzeb died there. was a change in the political fortunes of Ajmer because Rathor Rajputs seized Ajmer in 1719 and ruled over it for two years thereafter. This change of political sovereignty does not appear to have affected the administration of the Durgah which continued as before. In 1721 the Moghul rule was reestablished over Ajmer but that again made no change to the administration of the Durgah and the management of its properties. The Moghul rule in turn was disturbed in 1743 by the Rajput Rathors who were in power for nearly 13 years. The Rathor rule came to an end when the Scindias occupied Ajmer in 1756 and continued in 395 possession of the city until 1787. In that year the Rathors came back again and remained in possession till 1791 when Scindias overpowered them and continued to occupy it until 1818. In about 1818, after the Pindari War Ajmer passed into the hands of the East India Company and so its connection with the British Government commenced. Whilst political sovereignty over Ajmer was thus changing hands from time to time the state of affairs in relation to ' the Durgah remained as it was during the time of Shahjehan. The Sajjadanashin looked after the performance of the religious observances of the rites and the Mutawalli looked after the administration and management of the properties of the Durgah. In this connection it is relevant and significant to note that the Mutawalli has always been an officer appointed by the Government in power. That in brief is the broad picture which emerges in the light of the material placed by the parties before the Court in the present proceedings. At this stage it would be material to narrate very briefly the relevant history of legislation in regard to the administration of religious endowments which followed the assumption of political power by the British Government. The first Act to which reference must be made is Act XX of 1863. This Act was passed to enable the Government to divest itself of the management of religious endowments which had till then vested in the Revenue Boards. Section 3 of the Act provided, inter alia, that in the case, of every mosque to which the earlier regulations applied Government shall as soon as possible after the passing of the Act make special provision for the 'administration of such mosques as specified in the Act by subsequent sections Under section 4 the transfer of the administration of the said mosque and other institutions to trustees is provided with the consequence that the administration by Revenue Boards had to come to an end. Section 6 deals with the rights of the trustees to whom the property is transferred under section 4; and it also contemplates the appointment of committees which may exercise powers as therein specified. With the rest of 396 the provisions of this Act we are not concerned. The effect of this Act was that the management of religious endowments which had been taken over by the Government and which vested in the Revenue Boards was entrusted to the trustees as proscribed by section 4. In accordance with the provisions of section 6 a committee was appointed to look after the management of the Durgah with which we are concerned and that committee continued to be in. such management until 1936. In 1936 Act XXIII of 1936 was passed specifically with the object of making better provision for the administration of the Durgah and the Endowment of the Durgah of Khwaja Moin ud din Chishti known as the Durgah Khwaja Saheb, Ajmer. This Act consisted of twenty sections and in a sense it provided a self contained code for the administration of the Durgah and its endowments. Section 2(4) defines a Durgah Endowments as including (a) the Purgah Khwaja Saheb, Ajmer,(b)all buildings and movable property within the boundaries of the Durgah Sharif, (c) Durgah Jagir including all land, houses and shops and all landed property wheresoever situated belonging to the Durgah Sharif, (d) all other property and all income derived from any source whatsoever, dedicated to the Durgah or placed for any religious, pious or charitable purposes under the Durgah Administration, and (e) only such offerings as are intended explicitly for the use of the Durgah. It would be noticed that the material provisions of the Act which dealt with the management and administration of the Durgah were intended to operate in regard to the Durgah Endowment thus comprehensively defined. Under section 4 the administration and control of this endowment had to vest in a committee constituted in the manner prescribed. The powers and duties of this committee are prescribed by section 11; whereas section 16 provides for arbitration of disputes that may arise between the committee on the one hand and the sajjadanashin, the Mutawalli and the Khadim or any of them on the other. With the rest of the provisions of the Act we are not concerned. In pursuance of the material 397 provisions of this Act a Durgah Committee was appointed and it has been in management of the Durgah Endowment ever since. As we have already indicated the Government of India appointed the Committee under the Chairmanship of Mr. Justice Ghulam Hasan in 1949 to enquires into and report on the administration of the Durgah Endowment and to make appropriate recommendations to secure the conservation of the shrine by efficient management of the said Endowment. The Committee made its report on October 13, 1949, and that led to the promulgation of Ordinance No. XXIV of 1949 which was followed by Emergency Provisions Act, 1950, and finally by the Act of 1955 with which we are concerned in the present appeal. The Committee held an exhaustive enquiry, considered the voluminous evidence produced before it, reviewed the conduct of the Sajjadanashins and the Khadims, examined the manner in which the offerings were received and appropriated by them, took into account several judicial decisions dealing with the question of the rights and obligations of the said parties and came to the conclusion that "the historial review of the position leads only to the inference that the Sajjadanashins and the Khadims between themselves came to an agreement for mutual benefit and to the detriment of the Endowment and adopted a kind of a practice to realise offerings from visitors to the Durgah on a show of some charitable object and led the ignorant and the unwary into the trap" (1). The Committee has observed that most of the spokesmen before it candidly admitted the existence of many malpractices indulged in by Khadims and a majority of them showed a keen desire to introduce radical social reform in the community, provided they are backed by the authority of law (2). The Committee then commented on the agreement entered into between the Sajjadanashins and the Khadims as ampunting to ' an unholy alliance among unscrupulous persons to trade for their (1) Report of the Durgah Kbwaja Saheb (Ajmer Committee of Enquiry dated October 13, 1949, Published. by Government of India in 1950, p. 63. (2) Ibid, P. 56. 398 personal aggrandisement in the name of the holy saint, and it noticed with regret that the interest of the community had suffered more from the superstitious, ignorant and the reactionary hierarchy than from the doings of zealous reformers (1). According to the Committee "tinkering with the problem will be a remedy worse than the disease and it had no doubt that no narrow and technical considerations should stop us from marching forward". As a result of the findings made by the Committee it made specific recommen dations as to the manner in which reform should be introduced in the management and administration of the Durgah Endowment by legislative process. Speaking generally, the Act ha; been passed in the light of the recommendations made by the Committee. Thus it would be clear that from the middle of the 16th Century to the middle of the 20th Century the administration and management of the Durgah Endowment has been true to the same pattern. The said administration has been treated as a matter with which the State is concerned and it has been left in charge of the Mutawallis who were appointed from time to time by the State and even removed when they were found to be guilty of misconduct or when it was felt that their work was unsatisfactory. So far as the material produced in this case goes the Durgah Endowment which includes movable and immovable property does not appear to have been treated as owned by the denomination or section of the devotees and the followers of the saint, and its administration has always been left in the hands of the official appointed by the State. In this connection it may be relevant to refer to the decision of the Privy Council in the case of Agrar Ahmed (2). The appeal before the Privy Council in that case arose from a suit filed by Syed Asrar Ahmed against the Durgah Committee, in which he claimed a declaration that the office of the Mutawalli of the Durgah Khwaja Saheb, Ajmer, was hereditary in his family and that the Durgah Committee was not competent to question his status as a hereditary Muta walli in succession to the last holder of that office. (5) Ibid. P. 64. (2) A.I.R. 1947 P.C. I. 399 The District Judge who tried the said suit passed a decree in favour of Asrar Ahmed but on appeal the Judicial Commissioner. set aside the decree and dismissed Asrar Ahmed 's suit. On appeal by Asrar Ahmed to the Privy Council the decision of the Judicial Commissioner was confirmed. In dealing with this dispute the Privy Council has considered the genesis and growth of the shrine along with the ' stormy history of the State of Ajmer to which we have already referred. In the course of his judgment Lord Simonds observed that it was not disputed that in the reign of Emperor Shahjehan the post of Mutawalli was separated from that of Sajjadanashin and had become a Government appointment, whereas the Sajjadsnashin remained and continued to be the hereditary defendant of the saint. Then he referred to the firman of Shahjehan issued in 1629 by which the Emperor ordered that the Mutawalli appointed by the State was to sit on the left of the Sajjadanashin at the Mahfils. Similarly the firman issued by Aurangzeb in 1667 directed the order of sitting at the Mahfils by laying down that Daroga Balgorkhana, i.e., Mutawalli of the Durgah or anyone who is appointed by the State do sit on the left of the Sajjadanashin. It is significant to note that Daroga Balgorkhana was a Hindu in Akbar 's time. Having thus held that the office of the Mutawalli was an office created by the State and the holder of the office was a State servant the Privy Council examined the evidence on which Asrar Ahmed relied in support of his plea that by custom the office was hereditary and held that the said evidence did not justify the claim. This decision, supports the conclusion that the Durgah Endowment and its administration have always been in charge of the Mutawalli appointed by the State and that on occasions the post of the Mutawalli was held by a Hindu as well. Having thus reviewed brosoly the genesis of the shrine, its growth and the story of its endowments and their management, it may now be relevant to enquire what is the nature of the tenets and beliefs to which Soofism subscribes. Such an enquiry would serve to 400 assist us in determining whether the Chishtia sect can be regarded as a religious denomination or a section thereof within article 26. According to Murray T. Titus (1) "Islam, like Christianity, has its monastic orders and saints, the underlying basis of which is 'the mystic interpretation of the religious life known as Sufiism". According to this author, the men imbued with soofi doctrine came very early to India is not disputed; but who those earliest comers were or when they arrived cannot be definitely ascertained. He also expresses the opinion that though Soofism is found so extensively "it is not the religion of a sect, it is rather a natural revolt of the human heart against the cold formalism of a ritualistic religion, and so while Sufis have never been regarded as a separate sect of muslims they have nevertheless tended to gather themselves into religious orders". These have taken on special forms of Organisation, so that today there is a great number of such orders, which, curiously enough, belong only to the Sunnis. The author 'then enumerates fourteen orders or families (khandan); amongst them is the Chishtia Order. According to the report of the Committee, however, the Soofies are divided into four main silsilas; amongst them are Chishtias. The report expresses the definite opinion that the Soofi silsilas are not sects (p. 13). The characteristic feature of a particular silsila is confined to a few spiritual practices, like Aurad or Sama, to certain festivals, institutions like veneration of shrines and the devotion to certain leading personalities of the order. Soofism really denotes the attitude of mind, that is to say, a soofi while accepting all that orthodox Islam has to offer, finds lacking in it an emotive principle. According to Soofies a clear distinction has to be drawn between the real and the apparent, and they believed that the ultimate reality could be grasped only intuitively (Ma 'arifat or gnosis). A special feature of Soofi belief is divine love. An intellect, according to Soofies, performs a restricted function. The centre of spiritual life is the Qalb or the Rooh (p. 16). (1) "Indian Islam", a Religious History of Islam in India, by Murray T. Titus, published by Oxford University Press in the Series "The Religious Quest of India pp. 110, 111. 401 In Piran vs Abdool Karim (1), Ameer Ali, J., had occasion to consider the functions of the Sajjadanashin and the Mutawalli. He observed that the Sajjadanashin has certain spiritual functions to perform. He is not only a Mutawalli but also a spiritual preceptor. He is the curator of the Durgah where his ancestor is buried and in him he is supposed to continue the spiritual line (silsila). As is well known these Durgahs are the tombs of celebrated dervishes, who in their lifetime were regarded as saints. Some of these men had established Khamkahs where they lived and their disciples congregated. These dervishes professed esoteric doctrines and followed distinct systems of initiation. They were either Soofies or the disciples of Mian Roushan Bayezid who flourished about the time of Akbar and who had founded an independent esoteric brotherhood in which the chief occupied a peculiarly distinct position. The preceptor is called the pir, the disciple a murid. On the death of the pir his successor assumes the privilege of initiating the disciples into the mysteries of dervishism or Soofism. This privilege of initiation is one of the functions of the Sajjadanashin (p. 220 221). Thus on theoretical considerations it may not be easy to hold that the followers and devotees of the saint who visit the Durgah and treat it as a place of pilgrimage can be regarded as constituting a religious denomination or any section thereof. However, for the purpose of the present appeal we propose to deal with the dispute between the parties on the basis that the Chishtia sect whom the respondents purport to represent and on whose behalf (as well as their own) they seek to challenge the vires of the Act is a section or a religious denomination. This position appears to have been assumed in the High Court and we do not propose to make any departure in that behalf in dealing with the present appeal. The next point which needs to be considered is the duties of the Khadims and their rights on which their claim for an appropriate writ is based in the present (1) Cal. 51 402 proceedings. In the High Court the question about the duties of the Khadims was settled by calling upon the respondents to file an affidavit in that behalf. In accordance with the order passed by the High Court Syed Mohammed Hanis, who is one of the Khadims, made a detailed affidavit, setting forth the duties of the Khadims and the statements made in this affidavit do not appear to have been traversed at the trial. According to this affidavit, every day one Khadim in rotation opens the first gate of the dome containing the shrine at 4 a. m. after pronouncing the sacred call named the "Azan". Accompanied by a few others he then proceeds to open the second gate pronouncing certain sacred formulae in adulation of Khwaja Saheb. Then the Khadime remove the old flowers from the Mazar and put fresh flowers on it. This ceremony is called "Sej". The dome premises are then cleaned, 'Loban ' is burnt and the withered flowers are deposited in a sacred depository. This is followed by general prayer whereupon the Mazar is thrown open for the pilgrims. One Khadim remains on duty inside the dome while others guide the pilgrims. The Khadim who is present inside the dome helps the pilgrims to kiss the Mazar and prays for them, after putting the Daman, that is to say, the cloth coveting of the grave over the pilgrims ' heads. At this stage the pilgrims offer Nazar. At 3 p. m. the dome gates are closed and the flowers are changed once again. At this time the dome is given a paint of sandal paste and the Kabr Posh is also changed. The Khadim offers prayers for all the four silsilas of the Soofies and all other human beings, and this is followed by the opening of the Mazar again. At sunset there is a beat of Nakkara which gathers the pilgrims at the dome. At this time the Khadims carry lamps inside the dome, and while so doing they touch the heads of devotees with their lamps and then the lamps are placed on lamp posts. Madha (song in praise of Khwaja Saheb) is recited followed by the recitation of Dua and all pilgrims join by saying Amin. The Mazar remains open in this way until 10 p. in. when three Khadims give a, ceremonial sweep 403 thrice inside the dome and lock it for the night. Besides these daily duties the Khadims perform a special ceremony during Urs and it is called OusI. On the day, of Basant Panchami Kavvals bring fresh green plants and flowers as presents to the Mazar and they are placed on the Mazar by the Khadims on duty. That in brief is the nature of the duties performed by the Khadims in the Durgah Khwaja Saheb. Let us now consider the rights which according to the respondents have been held established by judicial decisions. In this connection the respondents rely mainly on the judgment of the Judicial Commissioner in the litigation which went before him in 1931 as well as the decision on appeal to the Privy Council in the matter. The contending parties in this litigation were the Dewan (i.e., Sajjadanashin), the Khadims and the Durgah Committee. It is not necessary for our present purpose to set out the respective contentions of the parties. It would be enough if we recite the conclusions reached by the Judicial Commissioner and mention the final decision of the Privy Council in respect of them. This is how the Judicial Commissioner recorded his conclusions at the end of his judgment in paragraph 14: "(a) The rights of the Diwan in respect of offerings made at the Durgah are declared to be as follows: (i) All offerings or presents made to the Diwan at the Diwan 's Khanqah or sitting place within the precincts of the Durgah are the exclusive property of the Diwan. (ii) Offerings or presents of gold or silver vessels or implements or Qabarposhes for the use of the Durgah are the property of the Durgah Committee as trustees for the Durgah irrespective of the payment of Tawan to the Khadims, and irrespective of the spot at which they are presented. (iii) Other offerings if made outside the dome of the Shrine are the perquisites of the Khadims, with the exception that offerings of animals or such bulky articles as cannot conveniently be brought within the dome shall, if made at the steps of the Shrine 404 be divided between the Diwan and the Khadims respectively in equal shares. (iv) Other offerings if made within the dome of the Shrine shall be divisible between the Diwan and the Khadims respectively in equal shares irrespective of the spot at which they are deposited within the dome, provided that the following class of offerings shall be the perquisites of the Khadims exclusively: (a) Copper coins and cowries and gold or silver articles (other than coins) of a value less than 8 Annas, and cotton cloth of inferior quality. (b) All offerings made between the hours of 4 a.m. and 4 p.m. on 'Qul ' day i.e. the last day of the 'Urs '. (v) Cash or other offerings sent by post shall be deemed to be offerings made at the Shrine, i.e. within the dome, unless addressed. specifically to the Durgah Committee, the Diwan or the Khadims for their exclusive use. (vi) In the case of articles falling within the scope of clause (ii) the payment of Tawan shall be deemed conclusive proof that an article is presented for the use of the Durgah and in case in which no Tawan is paid in respect of an article falling within the scope of clause (ii) the Durgah Committee shall be the authority to decide whether such article is required or should be retained for the use of the Durgah. (b) The defendant Khadims are enjoined to refrain from any interference with plaintiff 's rights as above declared. " It has been strenuously urged before us by Mr. Pathak on behalf of the respondents that the only offerings ' to which the Durgah Committee can lay a claim under this judgment are those specified in cl. (a) (ii), and he contends that these offerings are none other than the presents of, specified articles as therein indicated; in other words, the argument is that it is only offerings of certain articles for certain specific uses of the Durgah that constitute the property of the Durgah; all other offerings fall to be distributed either 405 under cl. (a)(iii) or cl. (a)(iv). If the offerings are made outside the dome with the exceptions there specified they go to the Khadims exclusively; if they are made Co,, within the dome they are to be divided between the Dewan and the Khadims in equal shares, but even in respect of such offerings those that fall within cl. (a)(iv)(a) or cl. (a)(iv)(b) have to be paid to the Khadims. Mr. Pathak thus suggests that cl. (a)(ii) refers Gaj only to specific presents given for specific purposes and the opening word "offerings" in the said clause really refers to the said presents and nothing else. We would read this clause as confined to specific presents and as excluding every other offering altogether. In our opinion this contention is unsound. In dealing with the effect of the finding recorded by the Judicial Commissioner we cannot lose sight of the fact that we are not construing terms of a statute but we are attempting to find out the effect of the findings made in judicial proceedings. The said findings cannot therefore be divested from the rest for the reasons given in the judgment, and those reasons do not support the construction suggested by Mr. Pathak. Besides, cl. (v) specifically refers to cash or other offerings Sent by post, and it provides, inter alia, that if the said cash or other offerings are addressed specifically to the Dargah Committee they would belong to the Durgah just as if they are addressed specifically to the Dewan or the Khadims they would belong to them respectively to the exclusion of anyone else. Clause (v) thus clearly postulates that cash or other offerings maybe sent by the devotees to the Durgah Committee specifically for the purposes of the Committee, and that must inevitably mean that offering may be made in cash or may take other forms, and if it is earmarked even generally for the Durgah Committee it would go to the Durgah Committee, and neither the Sajjadanashin nor the Khadim can claim any share in it. Construing the word "offerings" in cl. (a)(ii) in the light of cl. (a)(v) we are disposed to take the view that the word "offerings" includes also an offering besides presents which are specifically referred to in that clause; and so it follows that even according to the findings 406 considered as a whole, if any offerings in cash or kind are made in favour of the Durgah and in that sense earmarked for its general purposes they would belong only to the Durgah and neither the Khadim nor the Sajjadanashin can make any claim in regard to it. This matter had gone before the Privy Council in Syed Altaf Hussain vs Diwan Syed Ali Khan (1), J. Dealing with the question of the offerings and the rights of the respective parties thereto the Privy Council observed that it was conceded by the parties before the Court of Appeal that a distinction must be drawn inter alia between those articles such as Qaberposhes which are presented for the use of the Durgah and the, other offerings which are made at the Durgah; and it added that while the offerings belonging to the latter category may be divisible between the Dewan and the Khadims those made for the specific use of the Durgah are the property of the Durgah. In appreciating the effect of this observation it must be remembered that the controversy between the parties at that stage was not as to whether offerings made otherwise than in the form of specific articles but earmarked to the Durgah would belong to the Durgah or not. Even in respect of the articles specifically given to the Durgah for specific purposes the Khadims made a claim and that was rejected. This background of the dispute cannot be overlooked in judging the effect of the decision itself and observations made in. the course of the judgment. Even so, it is significant that the Privy Council specifically observed that "it appears that the offerings which are not intended for the use of the Durgah are made at various places of the buildings attached to the shrine". In other words, it would appear that the, offerings which were intended for the use of the Durgah were treated as constituting a class of offerings apart from the other offerings which were divisible between the Khadims and the Sajjadanashins, and that clearly is consistent with the view which we have taken in regard to the effect of the findings recorded by the Judicial Commissioner in appeal. The Privy Council found that Khadims who (1) A.I. R. 407 work as the servants of the Shrine were no doubt entitled to the offerings as already indicated but that they can make no claim in regard to the offerings which are intended for the use of the Durgah. At this stage we ought to examine the scheme of the Act and read its material provisions the vires of syed, which is challenged by the respondents. The Act consists of 22 sections, and like its predecessor Act Gaja XXIII of 1936 it provides a self contained Code for the administration of the Durgah and the Endowment of the Durgah. Section 2(d) defines Durgah Endowment in five clauses. The first three clauses are exactly in the same terms as the corresponding clauses of section 2(4) of the earlier Act XXIII of 1936. Clause (iv) of a. 2(d) is substantially similar to the corresponding clause in the earlier section except that it includes the Jagirdari villages of Hokran and Kishanpur in Ajmer expressly, whereas cl. (v) is somewhat differently worded. Under cl. (v) all such nazars or offerings as are received on behalf of the Durgah by the Nazir or any person authorised by him are included in the Durgah Endowment. By section 3 the provisions of the Act are given overriding effect even though they may be inconsistent with the provisions contained in Act XX of 1863. Section 4(1) deals with the appointment of the Committee in which the administration, control and management of the Durgah Endowment shall be vested. This Committee shall be called the Durgah Committee, Ajmer that is the effect of section 4(2). Section 5 prescribes the composition of the Committee. It provides that the Committee shall consist of not less than five and not more than nine members all of whom shall be Hanafi Muslims and shall be appointed by the Central Government. Section 6 deals with the terms of office and resignation and removal of members and casual vacancies. Section 7 provides for the election of the President and the Vice President of the Committee. Section 8 prescribes the conditions under which the, Committee may be superseded. Section 9 provides for the power of the Central Government to appoint a Nazim, and section 10 contemplates the appointment of an Advisory Committee to advise the 408 Nazim. Under section 11 the powers and duties of the Committee are specified. All of these powers are in (regard to the administration, control and management of the Durgah Endowment. Two of these ought to be specified because they are the subject matter of challenge. , Section 11(f) refers to the power of the Committee to determine the privileges of the Khadims and to regulate their presence in the Durgah by the grant to them of "licences in that behalf if the Committee thinks it necessary so to do", and under section 11(h) power is given to the Committee to determine the functions and powers, if any, which the Sajjadana. shin may exercise in relation to the Durgah. Under section 12 provision is made for the remuneration of the Sajjadanashin. Succession to the office of the Sajjadanashin is the subject matter of section 13. Section 13(1) provides that as soon as the office of the Sajjadanashin falls vacant, the Committee shall, with the previous approval of the Chief Commissioner, make such interim arrangements for the performance of the functions of the Sajjadailashin as it may think fit and immediately thereafter publish a notice in such form and manner as may be determined by the Committee, inviting applications for the office of the successor as therein specified. Four other sub sections of section 13 deal with the appointment of the successor but they are not the subject matter of any controversy and so it is unnecessary to refer to them. Section 14 is important. It makes it lawful for the Nazim or any person authorised by him in this behalf to solicit and receive on behalf of the Durgah any nazars or offerings from any person, and it adds that notwithstanding anything contained in any rule of law or decision to the contrary no person other than the Nazim or any person authorised by him in this behalf shall receive or be entitled to receive nazars or offerings on behalf of the Durgah. This section prohibits the Khadims or the Sajjadanashins to solicit offerings on behalf of the Durgah and is the subject matter of dispute. Section 15 enjoins upon the Committee to observe Muslim law and tenets of the Chishti saint in conducting and regulating the established rites and 409 ceremonies at the tomb. Section 16 provides for the appointment of a Board of Arbitration. If any dispute arises between the Committee on the one part c and the Sajjadanashin, any Khadim and any person claiming to be the servant of the Durgah on the other part provided such dispute does not, in the opinion of the Committee, relate to any religious usage or custom or to the performance of any religious office, it has to go before the Board of Arbitration which consists of a nominee of the Committee and a nominee of the other party to the dispute and a person who holds or has held the office or is acting or has acted as a district judge to be appointed by the Central Government. This section provides that an award of the Board shall be final, and shall not be questioned in any court. Section 16(2) lays down that no suit shall lie in any court in respect of any matter which is required by sub section (1) to be referred to a Board of Arbitration. Section 17 then lays down that any defect in the constitution of, or vacancy in, the Committee would not invalidate its acts and proceedings; and section 18 provides for the enforcement of the final orders passed by the Committee in the same manner and by the same procedure as if the said orders were a decree or order passed by a civil court in a suit. Section 19 provides for the audit of accounts and annual report, and section 20 empowers the Committee to make bye laws to carry out,, the purposes of this Act. Section 21 deals with transitional provisions, and section 22 repeals the earlier Act of 1936. That in brief is the nature and scope of the material provision, of the Act. The challenge to the vires of the Act rests broadly on two principal grounds. It is urged that its impugned provisions are inconsistent with article 26(b), (c), (d) of the Constitution and thereby violate the right to freedom of religion and to manage 'denominational institutions guaranteed by the said Article. It is also argued that some of its provisions are violative of the respondents ' fundamental right guaranteed under article 19(1)(f) and (g). It would be convenient to deal with these two principal grounds of attack before 52 410 examining the other arguments urged against the validity of different sections. We will first take the argument about the infringement of the fundamental right to freedom of religion. Articles 25 and 26 together safeguard the citizens right to freedom of religion. Under article 25(1), subject to public order, morality and health and to the other provisions of Part 111, all persons are equally entitled to freedom of conscience and their right freely to profess, practise and propagate religion. This freedom guarantees to every citizen not only the right to entertain such religious beliefs as may appeal to his conscience but also affords him the right to exhibit his belief in his conduct by such outward acts as may appear to him proper in order to spread his ideas for the benefit of others. Article 26 provides that subject to public order, morality and health every religious denomination or any section thereof shall have the right (a) to establish and maintain institutions for religious and charitable purposes; (b) to manage its own affairs in matters of religion; (c) to own and acquire movable and immovable property; and (d) to administer such property in accordance with law. The four clauses of this Article constitute the fundamental freedom guaranteed to every religious denomination or any section thereof to manage its own affairs. It is entitled to establish institutions for religious purposes, it is entitled to manage its own affairs in the matters of religion, it is entitled to own and acquire movable and immovable property and to administer such property in accordance with law. What the "expression "religious denomination" means has been considered by this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1). Mukherjea, J., as he then was, who spoke for the Court, has quoted with approval the dictionary meaning of the word "denomination" which says that a (1) ; , 1023, 1024 411 "denomination" is a collection of individuals classed,. together under the same name, a religious sect or body having a common faith and Organisation and, designated by a distinctive name". The learned Judge has added that article 26 contemplates not merely a religious denomination but also a section thereof Dealing with the questions as to what are the matters of religion, the learned Judge observed that the word "religion" has not been defined in the Constitution, and it is a term which is hardly susceptible of any rigid definition. Religion, according to him, is a matter of faith with individuals or communities and it is not necessarily theistic. It undoubtedly has its basis in a system of pleas or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it is not correct to say that religion is nothing else but a doctrine or belief. A religion may not only lay down a code of ethical rules for its followers to accept, it might prescribe rituals and observances, ceremonies and modes of worship which are regarded as integral parts of religion, and these forms and observances might extend even to matters of food and dress. Dealing with the same topic, though in another context, in Sri Venkataramana Devaru vs The State of Mysore (1), Venkatarama Aiyar, J. spoke for the Court in the same vein and observed that it was settled that matters of religion in article 26(b) include even practices which are regarded by the community as part of its religion, and in support of this statement the learned Judge referred to the observations of Mukherjea, J. which we have already cited. Whilst we are dealing with this point it may not be out of place incidentally to strike a note of caution and Observe that in order that the practices in question should be treated as a part of religion they must be regarded by the said religion as its essential and integral part; otherwise even purely secular practices which are not an essential or an integral part of religion are apt to be clothed with a religious form and may make a claim for being treated as religious practices within the (1) ; 412 meaning of article 26. Similarly, even practices though religious may have sprung from merely superstitious beliefs and may in that sense be extraneous and unessential accretions to religion itself. Unless such practices are found to constitute an essential and integral part of a religion their claim for the protection under article 26 may have to be carefully scrutinised; in other words, the protection must be confined to such religious practices as are an essential and an integral part of it and no other. In the present appeal we are concerned with the freedoms guaranteed under article 26(c) and (d) in particular. The respondents contend that the appointment of the Committee contemplated by sections 4 and 5 has effectively deprived the section of the denomination represented by them of its right to own the endowment properties and to them. We have already stated that we propose to deal with this appeal on the assumption that the respondents have filed the present writ petition not only for the Khadims but also for and oil behalf of the Chishtis and chat the Chishtis constitute a section of a religious denomination. Considered on this basis the contention of the respondents is directed against the powers conferred on the Committee for the purpose of administering the property of the Durgah and in substance it amounts to a challenge to the validity of the whole Act, because according to them it is for the section of the denomination to administer this property and the Legislature cannot interfere with the said right. In dealing with this argument it is necessary to recall the fact that the challenge to the vires of section 5 has been made by the respondents in their petition on a very narrow ground. They had urged that since the committee constituted under the Act was likely to include Hanafi muslims who may not be Chishtis muslims the provision authorising the appointment of the Committee was ultra vires, and in fact the decision of the, High Court is also based on this narrow ground. Now, it is clear that the vires of section 5 cannot be effectively challenged on any such narrow ground. If the right of the denomination or a section of such denomination is adversely affected by the statute the relevant 413 provision of the statute must be struck down as a whole and in its entirety or not at all. If respondents could properly invoke article 26(d) it would not be open to the statute to constitute by nomination a Committee for the management and administration of the property of the denomination at all. In others words, the infirmity or the vice in the statute cannot be cured by confining the members of the proposed Committee to the denomination itself. This no doubt is a serious weakness in the basis on which they levelled their attack against the validity of section 5 in the court below. Besides, it is significant that the property in respect of which the claim has been made by the respondents is only the property consisting of offerings made either in or outside the shrine. We have already seen that the Durgah Endowment contains several other items of property and none of these items except the offerings has been referred to in the petition, and that reasonably suggests that the respondents were conscious that the other items of properties though they formed part of the Durgah Endowment were never in the management of the denomination as such and so as to which they could legally make no claim. That is another infirmity in the claim made by the respondents in challenging the vires of section 5. However, we have allowed Mr. Pathak to argue this part of the respondents ' case on the broad and general ground that the Chishtia Soofies constitute either a denomination or a section of a denomination and as such they are entitled to administer and manage all the properties of the Durgah including the offerings to which specific reference has been made in the petition by the respondents. The challenge thus presented to the vires of section 5 and other subsidiary sections dealing with the powers of the Committee cannot succeed for the simple and obvious reason that the denomination never had the right to administer the said property in question. We have already seen how the history of the administration of the Durgah Endowment from the time the first endowment was made down to the date of the Act clearly shows that, the endowments 114 have always been made on such terms as did not confer on the denomination the right to manage the properties endowed. The management of the properties endowed was always in the hands of officers appointed by the State who were answerable to the State and who were removable by the State at the State 's pleasure. We have already seen that until Akbar made his endowment in favour of the Durgah the position of the Durgah and its properties was very modest and there was hardly any property to manage or administer. Ever since the first endowment was made and subsequent additions by similar endowments followed the administration and management of the property has been consistent with the same pattern and the said pattern excludes any claim that the administration of the property in question was ever in the hands of the said denomination. It is obvious that article 26(c) and (d) do not create rights in any denomination or its section which it never had; they merely safeguard and guarantee the continuance of rights which such denomination or its section had. In other words, if the denomination never had the right to manage the properties endowed in favour of a denominational institution as for instance by reason of the terms on which the endowment was created it cannot be heard to say that it has acquired the said rights as a result of article 26(c) and (d), and that the practice and custom prevailing in that behalf which obviously is consistent with the terms of the endowment should be ignored or treated as invalid and the administration and management should now be given to the denomination. Such a claim is plainly inconsistent with the provisions of article 26. If the right to administer the properties never vested in the denomination or had been validly surrendered by it or has otherwise been effectively and irretrievably lost to it article 26 cannot be successfully invoked. The history of the administration of the property endowed to the tomb in the present case which is spread over nearly Four Centuries is sufficient to raise a legitimate inference about the origin of the terms on which the endowments were founded, 415 an origin which is inconsistent with any rights subsisting in the denominations to administer the properties belonging to the institution. It was because the respondents were fully conscious of this difficulty that they did not adopt this broad basis of challenge in their writ petition. In considering this question it is essential to remember that the pilgrims to the tomb have at no time been confined to Chishtia Soofies nor to muslims but that in fact a large number of Hindus, Khoja Memons and Parsis visit the tomb out of devotion for the memory of the departed saint and it is this large cosmopolitan circle of pilgrims which should in law be held to be the circle of beneficiaries of the endowment made to the tomb. This fact inevitably puts a different complexion on the whole problem. We must, therefore, hold that the challenge to the vires of section 5 and the subsidiary sections which deal with the powers of the Committee on the ground that the said provisions violate the fundamental right guaranteed to the denomination represented by the respondents under article 26(c) and (d) fails. That takes us to the other principal challenge based on article 19(1)(f) and (g). This challenge is directed partly against cl. (v) in section 2(d) which defines a Durgah Endowment. We have already seen that by this clause all such Nazars or offerings as are received on behalf of the Durgah by the Nazim or any other person authorised by him are included in the Durgah Endowment. Section 14 may be read along with this definition. This section confers power on the Nazim or his agent to solicit or receive offerings on behalf of the Durgah and prohibits any other person from soliciting such offerings. The respondents contend that these Provisions infringe their fundamental right to property inasmuch as offerings or Nazars which under the custom judicially recognised would have gone to them are now sought to be diverted to the Durgah to their detriment. This argument proceeds on the assumption that it is only particular presents made for certain specific purpose of the Durgah that would belong to the Durgah and that the rest of the offerings 416 would be divisible between the Khadims and the Sajjadanashins as directed in the earlier litigation to which with have already referred. If the assumption made by the respondents was well founded that the effect of the said decision was to limit the right of the Durgah only to the receipt of the specific articles for specific purposes then of course there would have been considerable force in the argument that section 2(d)(v) and section 14 seek to augment that right and to that extent diminish or prejudicially affect the rights of the respondents. But, as we have already indicated, the decision of the Judicial Commissioner as well as that of the Privy Council do not support the claim made on behalf of the respondents. Even under the said decisions, specific articles given for specific purposes as well as offerings made for the general purposes of the Durgah and earmarked for it always belonged to the Durgah and it is only these offerings which are included within the definition of the Durgah Endowment by section 2(d)(v). Offerings or Nazars which are paid to the Durgah and as such received on behalf of the Durgah constitute Durgah Endowment and section 14 authorises the Nazim or his agent to receive such offerings and prohibit any other person from receiving them. In other words, the effect of the two provisions is that when offerings are made earmarked generally for the Durgah they belong to the Durgah and such offerings can be received only by the Nazim or his agent and by nobody else. It is clear that these offerings never belonged to the respondents and they pan therefore have no grievance against either section 2(d)(v) or section 14. That is a matter concerning the property of the Durgah and it is open to the Legislature to regulate by providing that the said offerings can be solicited by the Nazim or his agent and by no one else. The Khadims ' right to receive offerings which has been judicially recognised is in no manner affected or prejudiced by the impugned provisions. Even after the Act came into force pilgrims might and would make offerings to the Khadims and there is no provision in the Act which prevents them from accepting such offerings when made. Therefore, in our opinion, the challenge to the vires of these two provisions must also fail. 417 Before we Part with section 2(d)(v) it may be pertinent to observe that in substance the relevant portion of the definition of the Durgah Endowment is the same as in the earlier Act. Under the earlier Act only sub offerings as were intended explicitly for the use of the Durgah were included in the Durgah Endowment, while under section 2(d)(v) all Mazars and offerings which are received on behalf of the Durgah are so included. The omission of the word "explicitly" from the present definition is merely intended to make it clear that if from the nature of the offering or the circumstances surrounding the making of the offering or from other relevant facts it appears that the offering was made for the purpose of the Durgah and was accepted on behalf of the Durgah as such it would be an item of the Durgah Endowment though the offering may not have been explicitly made for the Durgah as such; but the broad idea underlying both the definitions is that where offerings are made apart from the gifts of specific articles intended for specific purposes of the Durgah and it is found that they are earmarked or intended for the Durgah for the general purposes of the institution they would constitute a part of the Durgah Endowment. Therefore the contention that by enlarging the definition of Durgah Endowment section 2(d)(v) has made an encroachment on the fundamental rights of the respondents is not at all well founded. That takes us to section 11(f) and (h). The challenge to the vires of these two provisions proceeds on the assumption that they encroach upon the fundamental right of the respondents under article 25(1). It is urged that the Committee has been given power by these provisions to determine the privileges of the Khadims as well as the, functions and powers, if any, which the Sajjadanashin may exercise in relation to the Durgah and that means infringement of, the freedom of the Khadims to practice their religion according to the custom and according to their concept. We are not impressed by this argument. What the relevant provisions intend to achieve is the regulation of the discharge of duties by the Khadims and the discharge 418 of functions and powers by the Sajjadanashin. It is common ground that the Khadims discharged their duties by rotation and that itself proves that some regulation is necessary, and so the impugned provisions merely provide for the regulation of the discharge of the duties by the Khadims and nothing more, and so the plea that the freedom to practice religion guaranteed by article 25(1) has been violated does not appear to be well founded. In this connection we ought to refer to section 15 which makes it obligatory for the Committee in exercise of its powers and discharge of its duties to follow the rules of Muslim law applicable to Hanafi muslims in India, and so all the ceremonies in the Durgah have necessarily to be conducted and regulated in accordance with the tenets of the Chishti saint. The powers conferred on the Committee by section 11 (f) and (h) must be read in the light of the mandatory provisions of section 15. Thus read the apprehension that the fundamental right to freedom of religion is infringed by the said provisions will clearly appear to be wholly unjus tified. There is yet another section which is relevant in dealing with the present point, and that is section 16. Under section 16 arbitration is provided for when disputes arise between the Committee on the one part and the Khadims and others on the other. This provision applies to all disputes except those that relate to any religious usage or custom or to the performance of any religious office. In other words, disputes in regard to secular matters are left for the decision of the arbitrators, and that, in our opinion, is a very sensible provision. The composition of the Board of Arbitration is based on well recognised principles; the two parties to the dispute name their respective nominees and an impartial member is required to be appointed on the Board with the qualifications specified by section 16(1)(iii). The argument that section 16 offends against the fundamental right guaranteed by article 14 read with article 32 seems to us to be wholly untenable. The policy underlying section 16 is in our opinion healthy and unexceptionable and so the provisions of a. 16 can be sustained 419 on the ground that they are obviously in the interest of the institution as well as the parties concerned. The provisions for compulsory adjudication by arbitration are not unknown and it would be idle to contend that they offend against article 14 read with article 32. If a dispute arises between the Committee and the Khadims in regard to a religious matter it would necessarily have to be decided in accordance with the, ordinary law and in ordinary civil courts of competent jurisdiction. Such a dispute is outside the purview of section 16; and indeed, in respect of such a dispute the Committee is not authorised to make any orders or issue any directions at all. Therefore the conclusion appears to us to be inescapable that the provisions of section 11(f) and (h) are valid and do not suffer from any constitutional infirmity. The next section which is challenged is section 13(1). The validity of this section has not been specifically attacked in the petition but even so since the whole of the Act has in a general way been challenged we have allowed Mr. Pathak to urge his arguments against the validity of section 13(1). Section 13(1) authorises the Committee to make provisional interim arrangement if a vacancy occurs in the office of the Sajjadanashin. Now, in considering the scope and effect of this provision it cannot be read apart from the provisions of the remaining sub sections of section 13. Section 13 is really intended to lay down the procedure for determining disputes as to the succession to the office of the Sajjada nashin. That is the main object of the section, but if a vacancy occurs suddenly as it always will in the case of death for instance some interim arrangement must obviously be made; and all that section 13(1) empowers the Committee to do is to make an appropriate interim arrangement in that behalf and to proceed to take the necessary steps for the appointment of a permanent successor as prescribed by the other provisions of section 13. Therefore it is futile to contend that section 13(1) offends against article 25(1) of the Constitution. Section 14 is attacked on the ground that it violates the respondents ' right to property under article 19(1)(f). We have already discussed this question in dealing 420 with section 2 (d)(v). As we have pointed out all that section 14 does is to create a statutory right in the Nazim or his agent to solicit and receive offerings on behalf of the Durgah. That does not affect the right of the respondents to receive offerings paid to them by the pilgrims visiting the Durgah. The respondents cannot possibly claim a, right, to solicit or receive offering, intended for take benefit of the Durgah. In fact no such claim has been. made in the petition and no claim can be made at ill. Therefore the validity of section 14 is not shaken by the challenge made by the respondents under article 19(1)(f). That leaves only one section to be considered and that is section 18. It is urged that section 18 also violates the fundamental rights guaranteed to the respondents under articles 14 and 32 of the, Constitution. It is difficult to appreciate the It may be conceded that section 18 is somewhat clumsily worded. The final orders whose enforcement is provided for by section 18 would appear to be final orders passed in matters within the competence of the Committee as to which no dispute is raised by the persons against when, the said orders are passed. We have already seen that if disputes arise in respect of any matters left to the jurisdiction of the Committee and they are not of a religious character then they have to be referred to arbitration provided for by section 16, and in that case it is the award passed by the board of Arbitration that would be in force. If disputes arise between the parties on any religious matters they will have to be decided in accordance with law in the ordinary civil courts of competent jurisdiction and so decisions in these disputes are also outside s.18. Thus considered the scope of section 18 would be confined only to such final orders as are passed by the committee within its jurisdiction against persons who do not object to them but who fail to comply with them. If that is the scope of section 18, as we hold it is, it is, idle to contend that either article 14 or Art.32 or the two read together are contravened. During the course of his argument Mr. Pathak emphasised the fact that though the provisions of the 421 enactment may be within the four corners of the Constitution and none of the impugned provisions may be found to be ultra vires his clients were apprehensive that in fact and in practice their rights to receive offerings would be prejudicially affected. That is a matter on which we propose to express no opinion. All that we are concerned to see is whether the legal rights of the respondents or of the section of the denomination they, seek to represent are prejudicially affected by the impugned legislation contrary to the provisions of the Constitution; and a careful examination of the relevant sections in the light of the criticisms made by Mr. Pathak against them has satisfied us that none of the impugned sections can be said to be unconstitutional. If as a result of the enforcement of the present Act incidentally more offerings are paid to the Durgah and are received on behalf of the Durgah that is a consequence which the respondents may regard as unfortunate but which introduces no infirmity in the validity of the Act. In the. result the appeal is allowed, the order issued by the High Court is set aside and the petition filed by the respondents dismissed with costs throughout. Appeal allowed.

The respondents, who were the Khadims of the tomb of Hazrat Khwaja Moin ud din Chishti of Ajmer challenged the constitutional validity of the Durgah Khwaja Saheb Act, 1955 (XXXVI of 1955) and certain specified sections by a petition filed under article 226 of the Constitution in the Rajasthan High Court. The High Court substantially found in their favour and made a declaration that the impugned provisions of the Act were ultra vires and restrained the appellants from enforcing them. The respondents claimed to represent the Chishti Soofies who, according to them, constituted a religious denomination or a section thereof to whom the Durgah belonged and their case was that the impugned Act had interfered with their fundamental right to manage its affairs. Their further case was that the Nazars (off erings) of the pilgrims constituted their customary and main source of income and were their property, recognised by judicial decisions including that of the Privy Council in Syed Altaf Hussain vs Dewan Syed Ali Rasul Ali Khan, A.I.R. , that the impugned Act and its material provisions violated their fundamental rights guaranteed by articles 14, 19(1) (f) and (g), 25, 26, 30(1) and (2) and 32 of the Constitution. It was contended that sections 4 and 5 of the Act, which provided for the setting up and composition of the Durgah Committee consisting of Hanafi Muslims none of whom might belong to the Chishtia order, infringed the rights of the. denomination guaranteed by Art, 26(b), (c) and (d) that cl. (v) of section 2(d) of the Act, by which all such Nazars as were received on behalf of the Durgah by the Nazim or any person authorised by him were to be included in the Durgah Endowment, infringed their fundamental right to property, that sections 11(f) and (h) which empowered the committee to determine the privileges of the Khadims and the functions and powers of the Sajjadanashin and section 13(1) which authorised the committee to make provisional interim arrangement in case the office of Sajjadanashin fell vacant, infringed 384 their fundamental rights under article 25(1), that section 14 by creating a statutory right in the Nazim or his agent. to solicit and receive offerings on behalf of the Durgah and prohibiting the Khadims and the Sajjadanashin from doing so, violated their right to property and section 118 which provided for the enforcement of the orders of the committee as orders and decrees of a civil court violated articles 14 and 32 of the Constitution. The past history of the Endowment for centuries showed that its management was always vested in Mutawallis appointed by the State, some of whom were Hindus, and that the pilgrims who visited the Durgah and made offering were not confined to Moslems alone but belonged to all communities. Held, that the contentions of the respondents must be nega tived. Although this Court has laid down what is a religious deno mination and what are matters of religion, it must not be overlooked that the protection of article 26 of the Constitution can extend only to such religious practices as were essential and integral parts of the religion and to no others. Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; and Sri Venkataramana Devaru vs The State of Mysore, ; , discussed. Assuming that the Chishti order of Soofies constituted such a denomination or section of it whom the respondents represented, it was obvious that cls. (c) and (d) of article 26 could not create any rights which the denomination or the section never had; they could merely safeguard and guarantee the continuance of such rights which the denomination or section had. Where right to administer properties had never vested in the denomination or had been surrendered by it or had otherwise been effectively and irretrievably lost to it, article 26, could not be successfully invoked. In the instant case, since Chishti Soofies never had any rights of management over the Durgah Endowment for centuries since it was created, the attack on SS. 4 and 5 of the Act must fail. Asrar Ahmed vs Durgah Committee, Ajmer, A.I.R. 1947 P.C. 1, referred to. It was not correct to say that SS. 2(d)(v) and 14 of the impugned Act infringed article 19(1)(f) and (g) of the Constitution. Those sections, properly construed, meant that offerings earmarked generally for the Durgah belonged to the Durgah and could be received only by the Nazim or his 'agent. These offerings, as found by judicial decisions, never belonged to the respondents and the impugned sections did not affect what was found to belong to them. Syed Altaf Hussain vs Dewan Syed Ali Rasul Ali Khan, A.I.R. , referred to. 385 There could be no doubt as to the competency of the Legis lature to regulate matters relating to the property of the Durgh by providing that the said Offerings could be solicited by the Nazim or hi,, agent. It was, liower, not correct to say that the omission of the word explicitly ' contained in the definition in the earlier Act from the present Act enlarged the scope of the definition in any way. The powers conferred on the committee by section 11(f) and (h), which must be read in the light of the mandatory provisions of section 15 which made it obligatory on the committee to observe Muslim Law and the tenets of the Chishti saint and which had to be exercised within the limits laid down by section 16, could not be said to violate article 25(1) of the Constitution. section 16 in providing for the setting up of a Board of Arbitration, embodied a healthy and unexceptionable principle, obviously in the interest of the institution as well as the parties, and could not be said to infringe Arts 14 or 32 of the Constitution. Section 13(1) could not be read apart from the other provi sions of section 13. That section really intended to lay down the procedure for determining disputes relating to succession to III Office of Sajjadanashin and it was therefore fertile to contend that section 13(1) offended against article 25(1). since section 18 was confined to such final orders as were within the jurisdiction of the committee and passed against persons who did not object to them but failed to comply with them, it did not contravene articles 14 or 32 of the Constitution.

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 petitioner, who was detained under sub section (2) of section 3 of the Gujarat Prevention of Anti Social Activities Act, 1985, by an order dated 11th june, 1987 filed a writ petition in this Court, alleging that both the detaining authority as also the State Government had not considered the representation, dated 15th july, 1987 made by him, with utmost promptitude and that, in fact, there was no disposal of the said representation by these authorities. In the counter affidavit filed by the detaining authority, it was averred that the representation, received by it on 21st July 1987 was duly considered and rejected the same day. Allowing the appeal, ^ HELD: The right of representation under Article 22(5) of the Constitution of India is a valuable and constitutional right. The Government is expected to ensure that the constitutional safeguards embodied in Article 22(5) are strictly observed. [830E F] Mohinuddin vs District Magistrate, Beed & Ors., ; relied on. In the instant case, the petitioner had the right to make a representation not only to the detaining authority but also to the State Government which had the power to revocation. Although the representation made by him to the detaining authority has been considered and rejected, this is not a substantial compliance of the 829 constitutional rights enshrined in Article 22(5) of the Constitution. The allegation made by the petitioner that he made a further representation to the State Government had not been controverted. The State Government had disdained from filing any counter affidavit for obvious reasons. [830C E] The wholly unexplained and unduly long delay rather the undeniable failure on the part of the State Government in the disposal of the representation, renders the detention of the petitioner iilegal. [829G H] The order of detention made under sub section (2) of section 3 of the Gujarat Prevention of Anti Social Activities Act, 1985 is accordingly quashed. [831D]

The appellant challenged the election of the 1st respondent to the, Legislative Assembly on the ground that the latter had embraced Buddhism and had ceased to be a member of a Scheduled caste within the meaning of the Constitution (Scheduled Castes) Order, 1950, and was thus disentitled from being a candidate for the particular seat. The Election Tribunal upheld the contention and set aside the election. On appeal, the High court held that the conversion of the 1st respondent to Buddhism had not been established by evidence and upheld his election. On appeal to the Supreme Court, HELD : (i) The word "profess" in the Order means "to declare one 's belief in". A declaration of one 's belief must necessarily mean a declaration in such a way that it would be known to those whom it may interest. Therefore, if a public declaration is made by a person that he has ceased to belong to his old religion and has accepted another religion he will be taken as professing the other religion. It is unnecessary to enquire further as to whether the conversion to another religion was efficacious. [859 A D] (ii)No doubt the definition of "Hindu" contained in the Explanation to Article25 is expanded but that is only for the purposes of sub cl. (2) of cl. (2)of that Article and for no other. The mention of Sikh religion in Para 3of the Order clearly shows that the word "Hindu" in the order is used in the narrower sense of orthodox Hindu religion which recognises castes and contains injunctions based on caste distinctions. It is not comprehensive enough to include Buddhism. [859 H; 860 B C] Karwade vs Shambhakar, I.L.R. over ruled.

The subject matter of the Writ Petition is the gradation list dated 9.1.1986 of the Inspectors of Excise by which the Government of Bihar has finally fixed the inter se seniority of the Petitioners who were promoted vis a vis the appel lants in the present appeal who were promoted to posts of Inspectors of Excise in 5% quota reserved for promotion from the posts of Upper Division Assistants of Excise Department. In the gradation list the appellants who joined as Inspectors of Excise on 7.5.76 were shown as senior to the Excise Inspector who were promoted from Sub Inspectors on 24.4.74 in the vacancies of direct recruits. The gradation list was challenged in the High Court by the Respondents on two grounds i.e., (1) the State Govern ment has no jurisdiction to determine the seniority or gradation list of the Excise Inspectors, the competent authority is the Excise Commissioner (2) The Respondents in the present appeal have been continuously officiated for years together in the vacancies of direct recruits and thus could not be pushed down for determining the seniority and shown as juniors to the contesting appellants. The High Court allowed the Writ Petition in part. It was held that 5% quota to be filled up by promotion from Upper Division Assistants of Excise Department was notified only on 31st March 1975, whereas the appellants have been promot ed in the 5% quota of vacancies of the year 1974 75. Hence they have not been promoted in the 5% quota. The Respondents in the present appeal were promoted as Excise Inspectors on 24.4.74 in the quota of direct recruits and thus they could not be shown as juniors to those who were promoted and joined on 7.5.76 from 5% quota of the 1974 75 year vacan cies. The High Court quashed the 194 gradation list and directed the State Government to draw up a fresh list in the light of the observations made. Further it held that State Government is the competent authority to determine inter se seniority because where in any provisions of Bihar Excise Act 1915 government has vested the Excise Commissioner with the power of determining the seniority of the Excise Inspectors. Hence the gradation list prepared by the State Government is legal and valid. The appellants filed Special Leave petition in this Court against the High Court Judgment and Order. Allowing the Special Leave Petition, this Court, HELD: The appellants claimed to be promoted to the posts of Inspectors in the 5% quota set apart for promotion from the Upper Division Assistants against the vacancies of the year 1974 75. Since under Bihar Excise Act 1915 vide notifi cation No. 417 of 15.1.1919 clause (iv) the Excise Commis sioner was given only the powers to appoint Excise Inspec tors by promotions but not to determine inter se seniority etc. Hence vide Excise Recruitment Rules 1936, Rule No. I vide notification No. 411 dated 31.3.75, after clause (2) clause (3) was added making provision for promotion from selected confirmed Upper Division Assistants and Head Clerks of the District Excise Office and also added at the end of the Rule 1 that at least 5% of the total vacancies shall be filled up by promotion from among the above notified staff. In this rule the provision for relaxation of direct recruit ment quota was made but there was no relaxation of the quota of promotees. [197G; 198C; 199E] The State Government made this decision and order on 20.3.74 regarding reservation of 5% of the total vacancies to be filled by promotion for the year 1974 75 but the notification to that effect was published on 31.3.75. The promotion could not have been given unless the decision was confirmed by notification. It was only after the notifica tion of 31.3.75, that the Upper Division Assistants were promoted as Excise Inspectors for the first time out of the 5% quota created in the vacancies of 1974 75, in the year 1976. [205G H; 206B] The Government has rightly promoted the appellants within their quota in the vacancies occurred in 1974 by its orders. [211D] When there is no relaxation in the quota vacancies as between the direct recruitment and promotees, the determina tion of inter se 195 seniority shall be determined in the order of rotation of vacancies reserved for both categories, the direct recruits made within their quota would always deemed to be senior to those promotees recruited inexcess of their quota. [210H; 21 1A] V.B. Badami vs State of Mysore, AIR 1980 SC 1561; A. Janardhana vs Union of India & Ors., ; and O. Singla & Anr. vs Union of India & Ors. , ; , relied on. It is only when the quota rule was not adhered to or followed for a long time and the promotees are allowed to officiate in the quota of direct recruits for a period of 15 to 20 years, in such circumstances Government is empowered to relax the quota rule and the promotees will have seniori ty from the date of the continuous officiations in the cadre, grade or service. [210F] Narendra Chadha vs Union of India, ; and G.S. Lamba & Ors. vs Union of India & Ors. , ; Quotas are fixed under the relevant rules of recruit ments and can be altered only by fresh determination of quotas under the relevant rules of recruitments. [201 C] In the instant case, there was no rule for relaxation of the quota. The respondent Nos. 3 & 4 who were promoted from selected Excise Sub Inspectors to the Inspectors of Excise in 1974, officiated till 7.5. 1976 when the appellants joined as Inspectors of Excise from their 5% quota. It cannot be said in such circumstances that the quota was not filled up for a long period nor can it be said that the respondents 3 & 4 who were promoted in excess of their quota have worked as inspectors of Excise for long time and as such the respondents 3 & 4 cannot claim to be seniors to the appellants. [210G H; 211A] The appellants being promoted as Inspectors of Excise from the 5% quota of vacancies of the year 1974 75, were rightly shown as seniors. in the gradation list prepared by the Government on 9.1.1986 which is legal and valid. [21 1D]

In the writ petition filed before this Court regarding alleged handcuffing of a practising advocate, contrary to law, while he was being taken to the court after he had been arrested on the charge of a criminal offence, it was alleged that the Union Government and the Delhi Administration had not issued necessary instructions to the police authorities with regard to the circumstances in which an accused, arrested in a criminal case, could be handcuffed or fettered in accordance with the judgment of this Court in Prem Kumar Shukla vs Delhi Administration, The question whether this Court can issue a writ for bringing into force section 30 of the , providing the right to every advocate, whose name was entered in the State roll to practice throughout the territories to which the Act extended before the Courts, Tribunals and other authorities or persons referred to in the Scction, in view of section 3(1) of the Act empowering Central Government to decide the dates on which various provisions of the Act, including section 3. should be brought into force, also came up for consideration. On behalf of the respondents, it was submitted that it was for the Union of India to issue necessary instructions regarding handcuffing of an accused to all the State Governments and the Governments of Union Territories in accordance with the judgment in P.K. Shukla 's case, and that this Court had jurisdiction to issue a writ directing the Central Government to consider the question of bringing into force section 30 of the . PG NO 223 PG NO 224 Disposing of the writ petition, HELD: 1.1 It is not open to this Court to issue a writ in the nature of mandamus to the Central Government to bring a statute or a statutory provision into force when according to the said statute the date on which it should be brought into force is left to the discretion of the Central Government. [229D] A. K. Roy, etc. vs Union of India and Another, ; , followed. However, this Court is of the view that this cannot come in the way of this Court issuing a writ in the nature of mandamus to the Central Government to consider whether the time for bringing section 30 of the into force has arrived or not. [229E] 1.2 Every discretionary power vested in the Executive should be exercised in a just, reasonable and fair way. That is the essence of the rule of law. [229F] In the instant case, the Act was passed in 1961 and nearly 27 years have elapsed since it received the assent of the President of India. In several conferences and meetings of lawyers resolutions have been passed in the past requesting the Central Government to bring into force section 30 of the Act. It is not clear whether Central Government has applied its mind at all to the question whether section 30 of the Act should be brought into force. [229F G] Even today there are laws in force in the country which impose restrictions on the fight of an advocate to appear before certain courts, tribunals and authorities. ln many of the cases which come up before the Courts or Tribunals before which advocates cannot appear, as of right, questions of law affecting the rights of individuals arise for consideration and they need the assistance of advocates. We have travelled a long distance from the days when it was considered that the appearance of a lawyer on one side would adversely affect the interests of the parties on the other side. The legal Aid and Advice Boards, which are functioning in different States, can now be approached by people belonging to weaker sections, such as, Scheduled Castes, Scheduled Tribes, women, labourers etc. for legal assistance and for providing the services of competent lawyers to PG NO 225 appear on their behalf before the Courts and Tribunals in which they have cases. In these circumstances prima facie there is no justification for not bringing into force section 30 of the Act. [227D, G H, 228A B] 1.3 Even though the power under section 30 of the is discretionary, this Court is of view that the Central Government should be called upon to consider within a reasonable time the question whether it should exercise the discretion one way or the other having regard to the fact that more than a quarter of century has elapsed from the date on which the Act received the assent of the President of India. [230A] A writ in the nature of mandamus will issue to the Central Government to consider within a period of six months whether section 30 of the Act should be brought into force or not. The Union of India is directed to frame rules or guidelines as regards the circumstances in which handcuffing of the accused should be resorted to in conformity with the judgment of this Court in Prem Shankar Shukla vs Delhi Administration, and to circulate them amongst all the State Governments and the Government of Union Territories within three months.[226E] Prem Shankar Shukla vs Delhi Administration, ; , referred to.

By a notification issued in 1937 the respondent State of Madras had made Ch. VI A of the Hindu Religious Endowments Act, 1926, applicable to the Thiyagarajaswami temple at Tiruvarur. In 1956 the aforesaid notification was extended for a period of five years beginning on September 30, 1956. This was done in exercise of powers under section 64(4) of the Madras Hindu Religious and Charitable Endowments Act, 1951. The appellant challenged the issue of the notification under section 64(4) in a writ petition before the High Court. At the hearing it was urged that the impugned notification was invalid as it had been passed without giving a reasonable opportunity to the appellant to show cause against it. The High Court while accepting this contention, nevertheless refused to issue. the writ prayed for because: (1) the said plea had not been taken in the writ petition and (2) the period for which the notification had been extended was shortly due to expire. The appellant came to the Supreme Court with certificate of fitness. It was contended on behalf of the appellant that the two reasons given by the High Court for not issuing a writ were wrong. The respondent State on the other hand contended that no quasi judicial enquiry was necessary for extending an existing notification under section 64(4) although such an enquiry was necessary before issuing a notification for the first time under section 64(3). HELD: (i) ' Whether f,or issuing a notification under 64(3) or for extending an existing notification under section 64(4) the process of dec.ision is the same. In either case the Government had to satisfy itself whether supervision by the Executive Officer under the notification is required for public good. The Government cannot legitimately and satisfactorily consider the question as to whether the notification should be cancelled without hearing the party asking for cancellation; nor can it legitimately and reasonably decide to extend the notification without hearing the trustee. Circumstances could arise after the issue of the first notification which would help the Trustee to claim that the notification should either be cancelled or should not be extended. The nature of the order which can be passed under section 64(4) and its effect on the rights of the Trustee are exactly similar to the order which can be passed under section 64(3). [25 A E] The High Court was therefore right in holding that it was obligatory on the respondent State as a matter of natural justice to give, notice to the appellant before the impugned notication was passed by it. [25E] Shri Radeshyam Khare & Ant. vs State of Madhya Pradesh and Ors. , distinguished. 18 (ii) Although the plea of denial of natural justice had not been taken by the appellant in his writ petition, it had been taken in the rejoinder, and the respondent thereafter had full notice of the said plea. Therefore the first reason given by the High Court for refusing the writ was wrong. [25G H] (ii) The High Court ignored the fact that before it delivered its judgment a new Act had come into force, namely, Madras Act XXII of 1959, whereby the life of the impugned notification had been extended. Therefore the second reason which weighed with the High Court in not issuing a writ in favour of the appellant, that the impugned notification would remain in operation for a very short period after it delivered its judgment, was also wrong. [26C E]

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.

Civil Appeals Nos. 356 and 357 of 1961. Appeals by special leave and certificate from the judgment and orders dated October 16, 1959, and February 16,1960, of the Madhya Pradesh High Court in L. P. A. No. 93 of 1957 and Misc. Petition No. 254 of 1959 respectively. 152 section T. Desai and N. H. Hingorani, for the appellant. M. R. Nambiar, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondent No. 1. 1960. October 20. The Judgment of the Court was delivered by HIDAYATULLAH, J. These two appeals by special leave have been filed by the Municipal Committee, Raipur, against two different respondents who carry on business of extraction of oil from oil seeds. The case involves an interpretation of the Byelaws of the Municipal Committee and the determination of octroi duty which was payable by the respondents in the relevant years of assessment on sarso oil seeds brought by them within the area of the appellant Committee for purposes of their business. The Municipal Committee demanded an ad valorem octroi duty Rs. 4 11 0 per cent from the respondents, claiming to levy it under item 44 of the Schedule of goods liable to octroi duty in the Raipur Municipality, appended to the Rules framed on June 4, 1951. The respondents, on the other hand contended that a duty of 2 annas per maund was leviable under item 4 of the same Schedule, which covered the case of oil seeds. The respondents made representations described as appeals, but were unsuccessful. Their demand for refund of octroi duty paid by them was refused and they, therefore, filed petitions under article 226 of the Constitution in the High Court of Nagpur (later, of Madhya Pradesh) against the appellants alleging inter alia that this imposition of octroi duty ad valorem at Rs. 4 11 0 percent on sarso oil seeds as against other oil seeds was ultra vires the Municipal Committee under article 14 of the Constitution. They also averred that octroi duty was properly leviable under item 4 and not under item 44. In the High Court, the petition out of which Civil Appeal No. 356 of 1961 arises, was heard by a learned single Judge, who held that 153 sarso oil seeds were chargeable to duty under item 44 and not under item 4. From the order of the learned single Judge, it does appear that the constitutional question was urged before him. Against this order, a Letters Patent Appeal was filed, and the Divisional Bench, which heard the appeal, held, disagreeing with the learned single Judge, that duty was properly leviable only under item 4. Before the Divisional Bench also, it does not appear that the constitutional question was argued. The petition, out of which Civil Appeal No. 357 of 1961 arises was heard by a Divisional Bench, which, following the earlier decision, decided against the appellant Committee. The entries in the Schedule of goods liable to octroi duty in the Raipur Municipality contain eight classes of goods. Under them are grouped 67 items, the serial numbers running consecutively through all the classes. Class I is headed "Articles of food or drink or use for men or animals". Item 4, which is in that Class reads "Oil seeds of every description not specifically mentioned elsewhere". Class V is headed "Drugs, spices and gums, toilet requisites and perfumes", and item 44 reads "Betel nuts, gums, spices, Indian herbs and Indian raw medicines and drugs, such as nuts, ilaichi, laung, jaiphal, jaipatri, dalchini., sont, katha, zeera, Dhania garlic, dry chillies, pepper, shahzeera, maithi, sarso, etc. and known as kirana" (groceries). Item 4 is chargeable to a duty of 2 annas per maund, and item 44 is chargeable ad valorem at Rs. 4 11 0 per cent. In addition to these entries, there is item 17, which reads "Vegetable oils (not hydrogenated) not provided elsewhere such as Tilli Tel, Sarso Tel, Alsi Tel, Falli Tel, Narial Tel, Andi Tel ', which are chargeable to a duty of 4 annas per maund. It is conceded on all hands that sarso is an oil seed, and if there was nothing more in the Schedule a duty of 2 annas per maund would be leviable on sarso as an oil seed. The dispute arises, because 154 sarso is mentioned again in Item 44 with a very much higher duty, and it is contended by the appellant Committee that the words "not specifically mentioned elsewhere" in item 4 exclude sarso from that item, and that its specific mention in item 44 makes it liable to the higher duty indicated there. The learned single Judge of the High Court held in favour of the Municipality. According to him, this reason was sound and the higher duty demanded was the proper duty payable. The Divisional Bench on the other hand, points out that the two classes (I and V) are entirely different. Class 1 deals with articles of food or drink for use for men and animals while Class V deals with drugs, spices and gums, toilet requisites and perfumes. The division indicates clearly that goods belonging to one category are not included in the goods belonging to the other. The Divisional Bench also points out that item 4 must be read as it stood and the specific mention must be in the same manner in which that entry was framed. Item 4 deals with "oil seeds", and the specific mention must be as "oil seeds" elsewhere in the Schedule. It was also argued for the respondents that "elsewhere" meant elsewhere in the same Class. But the appellant Committee pointed out that the serial numbers were all consecutive, and that the specific mention could be anywhere in the Schedule. The two arguments are equally plausible, and nothing much, therefore turns upon them. In our opinion, the Divisional Bench of the High Court was right when it said that the specific mention elsewhere must be as oil seeds and not as something else. Class V deals with spices and groceries and the concluding words of item 44 known as "kirana" determine the ambit of that item. Though sarso might be mentioned there, it must be taken to have been mentioned as a spice or as kirana and not as oil seed. The extent of item 4, which deals with oil seeds of every descrip 155 tion, could only be cut down by a specific mention elsewhere of an item as an oil seed. Item 44 contains fairly long list, out of which we have quoted a few illustrative items. Each of these items is referable to the general heading either as a drug or a spice or gum, etc. Sarso, it is admitted, is sold as kirana and as a spice. The mention of sarso there is limited by the general heading to which it belongs, namely, a spice, drug or herb sold as kirana. No doubt, sarso as an oil seed is the same article as sarso sold as kirana but we must take into account the intention behind the bye law and give effect to it. If it was intended that sarso as an oil seed was to be taxed in a special way, it would be reasonable to expect that it would have be found a specific in mention as an oil seed with a different duty. One would not expect that it would be included in a long list of articles of kirana and in this indirect way be taken out from a very comprehensive entry like item 4, where oil seeds of every description are mentioned. Though the next argument is not conclusive because there is no logic behind a tax, still it is to be noticed that sarso oil (a maund of which, as the affidavit of the respondents shows, is expressed from three maunds of oil seed) bears only an octroi duty of 4 annas per maund, while three maunds of sarso oil seed under item 44, if it were applicable, bear a duty of Rs. 4 3 6 per maund, if the price of sarso is taken as Rs. 30 per maund as stated in the affidavit. This leads to an anomaly, which, in our opinion, could hot have been intended. Finally, it may be said that if there be any doubt, the Divisional Bench of the High Court very properly resolved it in favour of the taxpayer. We, therefore, hold that the judgment of the High Court is correct, and dismiss these appeals with costs. Appeals dismissed,.

The respondents carried on business of extraction of oil from oil seeds. The appellant Municipality charged octroi duty at Rs. 4 11 0 percent ad valorem under item 44 of the schedule of goods attached to the Rules framed by the Municipality. The respondent 's case was that they were liable to pay octroi under item 4 of the said Rules at the rate of 2 as. per maund. The schedule consisted of eight classes with 67 items of goods, the serial number running consecutively. Class I was headed "Articles of food or drink or use for men or animals". Item 4, which was in that class, read "oil seeds every description not specifically mentioned else where". Class V was headed "Drugs, spices and gums, toilet requisites and perfumes" and item 44 which was in that class read "betel nuts, gums, spices, sarso etc. and known as kirana" (groceries). 'I`he single Judge who heard the matter in the first instance held in favour of the appellant but the court of appeal held in favour of the respondent. ^ Held, that the view taken by the Court of appeal must be upheld. The words not specifically mentioned elsewhere" in item 4 of the Schedule must mean mention as an oil seed. The words "known as Kirana" in item 44 clearly indicated that sarso fell within its ambit only as a spice or as Kirana and not as an oil seed. Although there could be no doubt that sarso as an oil seed was the same thing as Kirana, but the intention behind the bye law to charge oil seeds at a lesser rate was clear and must be given effect to.

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.

Nine employees of the octroi department, 13 employees of the water works. department and a time keeper of Nagpur Corporation applied under section 20 of the Minimum Wages Act to the Small Causes Court of Nagpur for overtime wages at the rate of double the wages for the period they worked beyond prescribed hours and holidays. The authority raised several issues but they were decided against the applicants and their applications were dismissed. Being aggrieved the said decision, four applications were presented before the High Court under article 227 of the Constitution and the High Court also upheld the view of the authority. It was contended by the appellants that under Rule 25 of M.P. Minimum Wages Rules, 1,1951, they were entitled to overtime wages at double the ordinary rate of wages for the period they worked beyond prescribed hours and holidays. For their claims they relied on 2 minimum wages notification one dated 21 2 51 and the other dated 23 2 56. On behalf of the appellants the only point canvassed before this Court was the rejection of their claim with regard to overtime work done by them and work done on weekly rest days. The respondent contended that as the employees of the Corporation were paid higher wages than those fixed under the Act as minimum wages, the Act did not operate, and the employer could not be compelled to pay higher wages. Secondly, the second notification did not supersede the first notification which only applied to unskilled labour as to, cover all employees skilled or unskilled. Further, the provision inquiring payment at double the ordinary rate of wages contained in Rule 25 must be read as the ordinary rate of minimum wages fixed. Allowing the appeal, HELD : (i) Rule 25 contemplates overtime work at double the rate of wages, which the worker actually receives, including the casual requisite and other advantages mentioned in the explanation. By using the phrase "double the ordinary rate of wages", the rule making authority intended that the worker should be the recipient of double the remuneration which he, in fact, ordinarily receives, and not double the rate of minimum wages fixed for him under the Act. Had it been intended to provide for merely double the minimum rate of wages fixed under the Act, the rule making authority could have so expressed its intention in clear and explicit words. The word "Ordinary" used in rule 25 reflects the actuality rather than the workers ' minimum entitlement under the Act. 169A D] (ii) The second notification was not applicable to all categories of labour as wrongly held by the High Court. The second notification has to be read in the background of the first notification with the result that 162 the later notification must also to, be held to be confined to unskilled labour in so far as it varies revises some of the rates fixed in the earlier notification without extending its operational boundaries by deleting the word "unskilled" from the explanation "unskilled labour". [170G] Union of India v B. D. Rathi, A,. I. R . 1963, Bom,. 54, referred to and distinguished.

By a notification in June 1949, the State Government, in exercise of a power under section 2(1)(a) of the Madras Commerical Crops Market Act, 1933, declared coconuts and copra to be 'commercial crops ' within the meaning of the Act. The respondent Market Committee IL vied in respect of the declared commerical crops, a fee on the goods 'bought and sold ' within the notified area under section 11(1) of the Act, read with Rule 28(1) of the Rules made under the Act. The appellants filed various suits contesting the levy on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State; consequently, they sought refund of the fees collected by the respondent committee. The suits filed were tried together and the trial Judge held that the levy, though called a "fee", was really a "tax", and that the Committee was only empowered to impose such tax when the goods were bought and sold within the notified area. He therefore passed decrees in all the suits .for refund of the fees collected. The first appeal by the respondent Committee was dismissed by the Sub Judge who further held that the fee in substance being a tax, such tax on sales completed outside the State would also offend article 286 of the Constitution. However, a second appeal to the High Court was allowed on the view that the transactions which were the subject matter of the levy under Section 11(1) were transactions consisting of the purchase of the goods by the appellants and the corresponding sales to them by the producers and not the subsequent sales effected by the appellants to their cus tomers outside the notified area or the States; therefore the transactions on which the said fee was levied were effected and completed inside the notified area and fell within the expression "bought and sold" in section 11(1). In the appeal before this court it was contended on behalf of the appellants that the transactions effected by them consisted in their purchasing the goods and stopped at the stage of goods "bought" so that no fee could be levied in the absence of the other ingredient, i.e., sale within the notified area. HELD : The construction placed on section II (1) by the High Court was correct and the respondent Committee had therefore rightly charged the fee. [983 B] 975 The words "bought and sold" used in section 11(1) aim at those transactions where under a dealer buys from a producer who brings to the market his goods for sale. The transaction aimed at must be viewed in the sense in which the legislature intended it to be viewed, that is, as one transaction resulting in buying on the one hand and selling on the other. Such a construction is commendable because it is not only in consonance with the words used in section 11 (1) but is consistent with the object of the Act as expressed through its various provisions,, i.e., to prevent the mischief of exploitation of producers of commercial crops such as coconuts and copra and to see that such producers got a fair price for their goods. [982 A B, E F] Kutti Koya vs State of Madras A.I.R. 1954 Mad. 621; Satyanarayana and Venkataraju Firm vs Godavari Market Committee A.I.R. 1959 Andh. Pra. 398; M.C.V.S. Arunachala Nadar vs The State of Madras [1959] Suppl. 1 S.C.R. 92; Louis Drevfus & Co. vs South Arcot Groundnut Market Committee ; referred to.

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.

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.

% 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 respondent filed a Writ Petition in the High Court questioning the inclusion in the list of Deputy Tahsildars eligible for promotion to the post of Tahsildars of the names of 63 persons who were impleaded as respondents 4 to 66, in the Writ Petition. The 63 persons were working as Upper Division Clerks in the erstwhile State of Hyderabad. The State Government in consultation with the Government of India issued an order on 7 4 1960 stating that the first stage promotion of the employees of the erstwhile Government of Hyderabad should be governed by the Hyderabad Cadre and Recruitment Rules for promotion which were applicable to them before that date. The subsequent promotions after the first stage of promotion would be governed by the relevant rules in force in the newly formed State. By virtue of this order the aforesaid 6 employees were promoted to the post of Deputy Tahsildars which was the first stage promotion for them. In 1962, Andhra Pradesh Civil Services (Coopera tion Branch ) Special Rules were framed, but were made effective retrospectively from 1st November, 1956. Under rule 4(a) the State Government has to prepare in consulta tion with the Public Service Commission a list of persons eligible for appointment as Tahsildars. The 63 erstwhile employees of the Government of Hyderabad did not have the opportunity to acquire the qualifications prescribed under rule 4(a) of the Special Rules on their promotion as Deputy Tahsildars. The Government felt that they should not be left out of consideration for appointment, as Tahsildars and asked the Public Service Commission to consider the names of such Deputy Tahsildars for inclusion in the list of eligible candidates assuring the Public Service Commission that the Government would relax the requirements as to qualification in favour of such Deputy Tahsildars provided they were otherwise found suitable by the Commission. By order dated 30 6 1971 the Governor relaxed the provisions of rule 4(a) of the Special Rules in exercise of powers under section 47 of the Andhra Pradesh State and Subordinate Services Rules 1962. The respondents filed a Writ Petition for quash ing the order dated 30 6 1971 in the High Court. The re spondents contended that as a result of the said order their claims for appointment to the posts of Tehsildar had been passed. over in favour of unqualified persons. The High Court allowed the Writ Petition. The High Court held that rule 47 did not confer any power to relax a rule retrospec tively. It was also held that under rule 47 power was given to Governor personally and therefore the exercise of it by the Governor was invalid. In an appeal by special leave the appellant contended: 1. That rule 47 did not confer any power to relax a rule retrospectively. The power was given to the Governor personally to relax the rules and since the impugned order was not passed by the Governor but by the Govt. of Andhra Pradesh it was invalid. Allowing the appeal, HELD: 1. The view taken by the High Court that the power conferred by rule 47 is exercisable by the Governor personally is based on the judgment 703 in Sardarilal vs Union of India, [1971] 3 S.C.R. 461. The said decision stands overruled by the later decision of this Honble Court in Shamsher Singh vs State of Punjab, ; [706 E F] 2 Rule 47 empowers the Governor to relax the general rules in such manner as may appear to him to be just and equitable. It is clear that power under rule 47 is to be exercised in the interest of justice and equity. It is not difficult to see that the occasion for acting under rule 47 arises after the attention of the Government is drawn to a case where there has been a failure of justice. In all these cases justice can be done only by exer cising the power under rule 47 with retrospective effect otherwise the object and purpose of the rule will be largely frustrated. Such a provision is not unique and is to be found in several statutory rules. [707 A C] R.P. Khanna & Ors. vs S.A.F. Abbas & Ors., ; , followed. '

Appeal No. 153 of 1951. Appeal from the Judgment and Decree dated 2nd January, 1946, of the Chief Court of Auadh in First Civil Appeal No. 9 of 1940 arising out of the Decree dated 6th November, 1939, of the Court of Civil Judge in Regular Suit No. 36 of 1937. Bakshi Tek Chand (Onkar Nath Srivstava, with him) for the appellants. Achhru Ram (Bishan Singh, with him) for the respondents. January 23. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal from the judgment and decree passed by the late Chief Court of Oudh, affirming the judgment and decree passed by the Civil Judge of Sitapur, dismissing the plaintiffs ' suit. One, Thakur Shankar Bux Singh, proprietor of the Estate known as Rampur Kelali, situated in District Sitapur (Oudh) was heavily indebted and the estate had been in the possession of Deputy Commissioner of Sitapur as receiver from 1892 up to 11th July, 1901. Thereafter he was declared a disqualified proprietor under the provisions of Section 8 (D) (1) of the U.P. Court of Wards Act (U.P. Act III of 1899) and the Court of Wards took possession of the estate on the 1st August, 1901. Under Section 34 of the Act he was 916 not competent to dispose his property by will without the consent in writing of the Court of Wards, though prior to the 1st August, 1901, he had made four successive wills, the last being dated 19th June, 1901, under which he gave his estate absolutely to his wife. On the 30th November, 1901, he made a will giving a life interest to his wife and the remainder over to his cousin Ganga Bux Singh after providing for certain legacies by way of maintenance in favour of his three daughters, his father 's sister and his mother. The Court of Wards withheld its consent to this will which thus fell through. On the 7th January, 1904, Ganga Bux Singh executed in his favour a registered deed of agreement agreeing to pay him Rs. 50 per month during his lifetime with effect from the month in which he would execute a will in favour of Ganga Bux Singh and his sons and submit the same for sanction of the Members of the Board of Revenue. A draft of the will was accordingly prepared by him on the 18th January, 1904, under which he gave a life interest to his wife and the residue of the property to Ganga Bux Singh and after him to his sons after providing legacies for maintenance in favour of his daughters, father 's sister and mother. The Board of Revenue intimated on the 25th May, 1904, that it would not withhold its consent to a will similar to that contained in the draft but altered in the light of the proposals contained in the further letter dated 27th April, 1904. He thereupon duly made and published a will on the 28th July, 1904, in accordance with the suggestions contained in the Board 's letter dated 25th May, 1904, cancelling all the previous wills executed by him. It appears that he handed over the original of this will to Ganga Bux Singh but did not give any intimation of the execution thereof to the authorities and the authorities could only come to know of the same when Ganga Bux Singh gave the original will to the Special Manager on or about the 19th December, 1905. He appears to have changed his mind thereafter and having embraced Christianity intended to marry a Christian woman and submitted to the Court of Wards on the 8th June, 1906, the draft of a new will which he 917 intended to execute in favour of his Christian wife. The Board withheld its consent to that new will and intimated on the 13th July, 1906, its refusal and also communicated thereby the withholding of its consent to the will already executed by him on the 28th July, 1904. A further attempt by him on the 21st November, 1906, to obtain the consent of the Court of Wards to another draft will was also unsuccessful and the will dated the 28th July, 1904, was the only last will and testament executed by him and got registered after consent obtained from the Court of Wards. Shankar Bux Singh died thereafter on the 28th July, 1922, and he being a Christian at the time of his death successsion to his property was governed by the Indian Succession Act. His wife got 1/3rd of the estate and the remaining 2/3rds were divided in equal shares between his surviving daughter and the son of a predeceased daughter of his. Mutation was effected in the records of rights and the name of the widow was .shown there as the owner of the estate in his place and stead. The Court of Wards relinquished charge of the estate sometime in November, 1925. The widow executed on the 16th August, 1927, a deed of gift conveying the bulk of the estate to her daughter and the son of the predeceased daughter. She also executed another deed of gift in the same year conveying the rest of the properties and on the 8th September, 1928, Ganga Bux Singh filed a suit in the Court of the Subordinate Judge of Sitapur for a declaration that under the aforesaid will she had only a life interest in the property and the transfers made by her were void. This suit was contested by her and one of the defences taken was that Ganga Bux Singh could not maintain the suit without first obtaining letters of administration with the will annexed. This defence was upheld and the suit was dismissed on the 14th July, 1930. Ganga Bux Singh having died in the meanwhile on the 19th October, 1929, his sons applied for letters of administration with the will annexed on the 25th September, 1930, on the original side of the Chief Court of Oudh. This application was opposed by the 918 widow and other heirs of Shankar Bux Singh inter alia on the ground that the will had been executed without the sanction of the Court of Wards. Mr. Justice Kisch delivered an elaborate judgment, negatived all the objections and granted letters of administration with the will annexed to the sons of Ganga Bux Singh on the 16th November, 1931. An appeal filed by the widow and heirs of Shankar Bux Singh against that decision was allowed by the Bench of the Chief Court of Oudh at Lucknow on the 8th September, 1933, and the orders passed by the lower court granting letters of administration with the will annexed were set aside. The sons of Ganga Bux Singh took an appeal to the Privy Council and their Lordships of the Privy Council on the 7th May, 1937, reversed the decree of the Appeal Court and restored the decree passed by Mr. Justice Kisch. Their Lordships however observed that the only effect of their decision was that letters of administration with a copy of the will annexed must be granted as prayed but that would not in any way prejudice any proceedings against any of the beneficiaries which may be open to the respondents or any of them. On the 9th September, 1937, the widow, the daughter and the son of the predeceased daughter of Shankar Bux Singh, the plaintiffs, 'filed the suit out of which this appeal arises, against the three sons of Ganga Bux Singh, the defendants, for a declaration that the will dated the 28th July, 1904, was inoperative and ineffectual and that in any case the defendants had no right, title or interest in the properties in suit, that plaintiff I was entitled to hold the property in suit under the will of Shankar Bux Singh dated 19th June, 1901, or that the plaintiffs 1 to 3 were entitled to the same as heirs at law of Shankar Bux Singh deceased under the provisions of the Indian Succession Act, and for further and other reliefs. In the plaint they alleged that the will was inoperative as Shankar Bux Singh had no animus testandi and that it was void and inoperative in respect of the testamentary disposition in favour of Ganga 919 Bux Singh and his sons because Ganga Bux Singh failed to perform his part of the contract as regards the payment of monthly allowance and the defendants therefore could not take advantage of or claim any benefit tinder that testamentary disposition and further the payment of the said allowance being a condition precedent and the condition not having been fulfilled the disposition became inoperative. The defendant 3 filed a written statement on the 7th February, 1938, contesting the plaintiff 's claim. He contended that the plea as to the validity or effect of the will was barred by resjudicata by virtue of the judgment of the Privy Council dated 7th May, 1937. He denied that the will was executed in consideration of the agreement. He also denied that there was any contingent or conditional contract or any trace of the alleged condition in the whole of the correspondence between Shankar Bux Singh and the Board of Revenue. The learned Civil Judge, Sitapur, after considering the evidence, oral as well as documentary, led before him held that the will as well as the agreement formed one contract, that Ganga Bux Singh had failed to perform his promise or his part of the contract, that the only point which was agitated before their Lordships of the Privy Council was as regards the consent of the Court of Wards and that therefore even though the plaintiffs were precluded from disputing the genuineness of the will they were not precluded from seeking a declaration to the effect that the defendants were not entitled to any benefit under the will, and that the decision therefore did not operate as res judicata so far as issues in the present case were concerned. He however held that the contract clearly provided a remedy for breach on the part of either party, that Shankar Bux Singh did not in fact cancel the will and could not be said to have treated it as inoperative, that Ganga Bux Singh acquired a vested interest in the estate on the death of the testator and that on his death that interest devolved on his sons amongst whom were the defendants in the suit and that the plaintiffs were, not entitled to any relief as claimed, The 920 plaintiffs filed an appeal to the Chief Court of Oudh. The Chief Court of Oudh negatived the contention that Shankar Bux Singh had no animus testandi and that it was a will in form only and not in substance, holding that it was barred by res judicata by reason of the decision of their Lordships of the Privy Council. It also negatived the contention that the bequest in favour of Ganga Bux Singh was a conditional bequest or that Ganga Bux Singh having failed to fulfil his obligation to pay the gujara his original character as a legatee changed into that of a trustee and he must hold the beneficial interest for the testator or his heirs. The appeal was therefore dismissed with costs. The plaintiffs applied for leave to appeal to the Privy Council and the necessary certificate was granted by the Chief Court of Oudh on the 8th August, 1947. It is necessary at the outset to set out the deed of agreement and the will executed by Ganga Bux Singh and Shankar Bux Singh respectively on dates the 7th January, 1904, and the 28th July, 1904. The deed of agreement dated the 7th January, 1904, ran as under: "Whereas, my cousin Thakur Shankar Bakhsh Singh, Taluqdar of Rampur Kalan, has proposed to make a bequest of his taluka, immovables, movables, rights etc. in favour of his wife and, after her death in my favour and that of my sons Dwarka Nath Singh, Ajodhya Nath Singh and Tirbhuwan Nath Singh, there fore by way of consideration for this concession and favour, I, the executant, out of my own free will do hereby execute this agreement in favour of my cousin aforesaid that in the month in which the said cousin might execute the said will in my favour and that of my sons and lays the same along with an application before the Deputy Commissioner, Sitapur district, for sanction of the Members of the Board of Revenue, I shall from the 1st date of the month following that month, continue to pay to my said cousin Rs. 50 in cash every month during his life, so long as the said will remains in force and under this contract I make my person liable and hypothecate the same by virtue 921 of this agreement. If I, the executant, fail to perform the said contract the said cousin has power to have the same performed by me, the executant, through Court. If the will mentioned above executed by the said cousin, be not sanctioned by the Members of the Board of Revenue or if under any circumstance, the kV said cousin may himself revoke the said will, then from the time of revocation or refusal by the Board of Revenue the said cousin shall not be entitled to receive the aforesaid monthly amount of Rs. 50 and whatever money the said cousin might have received from me, the executant, up to the said refusal or revocation the said cousin shall necessarily be bound to refund that money to me, the executant. " The will dated the 28th July, 1904, was executed by Shankar Bux Singh in the terms following: " I am Thakur Shankar Baksh alias section John son of Thakur Anant Singh, Taluqdar of Rampur and Grantee of Piprawan, district Sitapur. Out of my own free will, inclination and accord and consent I make a will that after my death my wife for her lifetime shall remain in possession of my entire Ilaqa (estate) as well as the movable and immovable property, left by me, together with the rights etc., relating to the said properties, without the power of any sort to transfer the said properties and rights, that on the death of the said wife all the aforesaid property and the rights shall devolve on my real cousin, Ganga Bakhsh with all the proprietary powers, and that on the death of Ganga Bakhsh the said entire property and the rights shall devolve on Dwaraka Nath, Ajodhia Nath and Tirbhuwan Nath, sons of Ganga Bakhsh, like Ganga Bakhsh himself, in the following shares: Dwaraka Nath annas 6, Ajodhia Nath aninas 5, Tirbhuwan Nath annas 5: and that the persons mentioned below shall continue to get the maintenance allowance (Guzara) according to the amounts and conditions noted below: Musammat Permeshuri, my eldest daughter, married at Allahabad to the son of Rai Anant Ram, generation 922 after generation, (limited) to male issue, Rs. 100 per month; Musammat Chandrani, my younger sister, married to Rai Raghubir Bakhsh, son of Rai Kunwar Bahadur, Rais of Shahabad, district Hardoi, generation after generation (limited) to male issue, Rs. 60 per month; Mussamat Roop Rani, my real paternal aunt (father 's sister), wife of Munshi Chedi Prasad deceased, Rais of Qasba Mahona, district Lucknow, generation after generation, (limited) to male issue, Rs. 45 per month; Musammat Sohni, my mother for her life, Rs. 70 per month. * * * * * Be it also known that my estate (Ilaqa) is under the Superintendence of the Court of Wards and the Hon 'ble Members of the Board of Revenue have granted me power to execute the will so I do hereby execute this my last will cancelling all the previous wills executed by me ' " It is clear from the terms of the deed of agreement that Ganga Bux Singh agreed to pay Rs. 50 in cash every month during the lifetime of Shankar Bux Singh in consideration of Shankar Bux Singh having proposed to make a bequest of the remainder in favour of Ganga Bux Singh and his sons and that it was after the deed of agreement was got registered by Ganga Bux Singh on the 11 th January, 1904, that the draft of the will was submitted on the 18th January by Shankar Bux Singh to the Court of Wards. It was this draft of the will amended as it was by the letter dated 27th April, 1904, that was engrossed in the will which was ultimately executed on the 28th July, 1904, after the letter of sanction obtained from the Board on 25th May, 1904. The learned Civil Judge under the circumstances came rightly to the conclusion that the deed of agreement and the will formed part of the same transaction, that the consideration for the will was the deed of agreement and the consideration for the agreement was the will and that the will 923 as well as the agreement formed one contract. This finding was not challenged before the Chief Court of Oudh and could not be challenged before us. There was also a further finding of fact which was recorded by the learned Civil Judge and it was that Ganga Bux Singh failed and neglected to make any payment to Shankar Bux Singh in terms of the deed of agreement even though Shankar Bux Singh executed the will and laid the same along with the application before the Deputy Commissioner, Sitapur, for sanction of the Members of the Board of Revenue and that Ganga Bux Singh thus failed to perform his part of the contract. This finding also was not challenged before the Chief Court of Oudh and could not be challenged before us. The question therefore which falls to be considered by us is what is the effect of the failure on the part of Ganga Bux Singh to make the payments to Shankar Bux Singh in terms of the deed of agreement. It was urged by Dr. Tekchand, who appeared for the plaintiffs before us that by reason of such non payment and the breach of contract on the part of Ganga Bux Singh the will became ineffective and inoperative, that the payment of Rs. 50 per month during the lifetime of Shankar Bux Singh was a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh and that condition not having been fulfilled the legacy did not vest in Ganga Bux Singh and that on a true construction of the terms of the will Ganga Bux Singh acquired no vested interest in the remainder. He also urged that the scope of the Privy Council judgment was misunderstood by the Chief Court of Oudh and that both the questions as regards animus testandi and the payment of Rs. 50 per month being a condition precedent though they were barred by res judicata in regard to the due execution of the will were still open to him as affecting the right of Ganga Bux Singh to the legacy which was provided for him by Shankar Bux Singh under the will. In regard to the last contention urged by Dr. Tekchand both the courts below were of the opinion that the question of animus testandi was barred by res 924 judicata. It was held by their Lordships of the Privy Council that the will in dispute was not revoked and that it was the last will and testament of Shankar Bux Singh. That decision necessarily meant that the testator when he appended his signature to the will was in a sound and disposing state of mind, was a free agent and 'duly executed the will in accordance with the law. The decision was conclusive as regards the testamentary capacity, due execution and the representative title of the person to whom the letters of administration with the will annexed were granted. It was not open therefore to the plaintiffs to contend that the will which was executed by Shankar Bux Singh was a will merely in form and not in substance. The question of animus testandi was therefore barred by res judicata. In regard however to the question whether the bequest in favour of Ganga Bux Singh could take effect by reason of default in payment the decision of the Privy Council did not constitute res judicata and it was open to the plaintiffs to urge that contention. Both the courts ' below therefore allowed the plaintiffs to agitate that ques tion though they came to a conclusion adverse to the plaintiffs. We are of the opinion that there was no bar of res judicata and the courts below were right in allowing the plaintiffs to agitate that question. The payment of Rs. 50 per month to Shankar Bux Singh during his lifetime might be a condition precedent to the whole will coming into operation or might, be a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh. If the plaintiffs urged the former position that plea would certainly be barred by res judicata. No court would grant a probate or letters of administration with the will annexed in regard to a will which has ceased to be operative and was a mere scrap of paper. The plaintiffs could not therefore be heard to say that 'by reason of the non fulfilment of the condition precedent the whole will had become inoperative, for that would run counter to the decision of the Privy Council. Even on merits such a position would be untenable for the simple reason that besides 925 Ganga Bux Singh there was the widow, who was given a life interest and there were the three daughters, the father 's sister and the mother who were given legacies by way of maintenance and they were certainly not guilty of non fulfilment of any condition precedent. The will would certainly therefore stand so far as they were concerned and the whole effect of the non fulfilment of the condition precedent qua Ganga Bux Singh would be to prevent the vesting of the legacy in his favour. The latter position therefore would be available to the plaintiffs and they could contend that by reason of the non fulfilment of the condition precedent by Ganga Bux Singh the legacy provided in his favour did not vest in him. If the payment of Rs. 50 per month therefore constituted a condition precedent the plaintiffs were on firm ground and that position could not and was not contested before us by the learned counsel appearing for the defendants. It therefore remains to be considered whether the payment of Rs. 50 pet month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh. There is no doubt, as held by the learned Civil Judge, that the consideration for the will was the deed of agreement and the consideration for the agreement was the will and that the will as well as the agreement formed one contract. But for Ganga Bux Singh having executed the deed of agreement Shankar Bux Singh would not have forwarded the draft will to the Court of Wards for its sanction and he would also not have executed the will on the 28th July, 1904. The contract was an overall contract under which both the parties had to perform their respective obligations. The obligation on the part of Ganga Bux Sigh was to execute the deed of agreement, agreeing to pay the moneys to Shankar Bux Singh in accordance with the terms thereof. The obligation on the part of Shankar Bux Singh was to execute the will and submit it to the Court of Wards for its sanction. Both these obligations were fulfilled by the parties and the two documents were supported by consideration and became binding 926 on both the parties. The nonperformance of the agreement to pay by Ganga Bux Singh constituted at best a failure. to fulfil his obligation and Shankar Bux Singh became entitled to pursue his rights and remedies against Ganga Bux Singh by reason of the breach of contract by him. It was urged by Dr. Tekchand that the consideration here constituted a condition precedent and that the non payment of Rs. 50 per month by Ganga Bux Singh constituted non fulfilment of condition precedent. He relied upon the observations of Chief Justice Wills in Acherley vs Vernon, 125 English Reports 1106 at page 1108 (Willes 153 at page 156): " I know of no words that either in a will or deed necessarily make a condition precedent, but the same words will either make a condition precedent or subsequent according to the nature of the thing and the intent of the parties. If therefore a man devise one thing in lieu and consideration of another, or agree to do anything or pay a sum of money in consideration of anything to be done, in these cases that which is the consideration is looked upon as a condition precedent. So is the case of Peters vs Opie, I Ventr. 177, and I Saund. If a man agree to pay a sum of money to another pro labore suo in pulling down a house, the pulling down of the house is a condition precedent. So is the case of Thorpe and Thorpe. I Salk. 171, where a man agreed to pay a sum of money to another he releasing the equity of redemption in certain lands. And so is the case of Turner vs Goodwin, adjudged by Lord Macclesfield and the rest of the Judges of B. R. upon great consideration, P. 13 Anne, in which case Goodwin was to pay Turner 15001. be assigning a judgment. In all which cases it was holden that the party who was to receive the money was not entitled to demand it until he had performed that which was the consideration of the payment, and which was considered in all these cases to be in the nature of a condition prece dent. * * * * 927 So likewise if it plainly appear to be the intent of the testator that the devise shall not have the benefit of the devise unless he perform a certain act enjoined him by the devisor, this is a condition precedent; and the devisee shall have no benefit of the devise until he perform it, even though the condition be never so unreasonable if it be not illegal or impossible; for cujus est dare ejus est disponere. " These observations were particularly relied upon by Dr. Tekehand in support of his contention that the payment of Rs. 50 per month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh. While recognising the force of these observations we are constrained to observe that the terms of the deed of agreement negative any such contention. The agreement itself provided what was to happen if payment was not made in accordance with the terms thereof. If Ganga Bux Singh failed to perform the contract Shankar Bux Singh was to have the power to have the same performed by Ganga Bux Singh through Court. This consequence could not be contemplated if the payment constituted a condition precedent and the non fulfilment of the condition precedent was to have the effect of rendering the agreement inoperative. In that event the agreement itself would become inoperative and no rights under the agreement would survive to Shankar Bux Singh. The right which was therefore given to Shankar Bux Singh to have the agreement performed by Ganga Bux Singh contemplated the existence and the continued existence of the agreement so as to enable Shankar Bux Singh to hold Ganga Bux Singh to its performance, The continued existence of the contract was in contemplation of the parties and so far as Ganga Bux Singh is concerned it was at no stage contemplated that he could forego the performance of the obligation on his part to pay Rs. 50 per month to Shankar Bux Singh during his lifetime so long as the will stood unrevoked. 928 It is significant to observe on the other hand that two events were contemplated so far as Shankar Bux Singh himself was concerned. The one was the withholding of the consent of the Court of Wards and the other was the revocation of the will by Shankar Bux Singh himself. The sum of Rs. 50 per month was agreed to be paid by Ganga Bux Singh to him from the month when Shankar Bux Singh executed the will and laid it before the Court of Wards for its sanction. The Court of Wards might withhold its consent to the will and in that event whatever payments were made during the interval by Ganga Bux Singh to Shankar Bux Singh had to be refunded by the latter. Even though the Court of Wards might sanction the will Shankar Bux Singh might later on revoke the will and the consequence of such revocation was also provided in that Shankar Bux Singh was to refund to Ganga Bux Singh the amounts which he had paid up to the time of revocation to Shankar Bux Singh in accordance with the terms of the agreement. It has to be observed moreover that all these constituted independent obligations on the part of both the parties. The obligation on the part of Ganga Bux Singh was so long as the will stood unrevoked to pay to Shankar Bux Singh Rs. 50 per month during his lifetime and the obligation on the part of Shankar Bux Singh was to obtain the consent of the Court of Wards and to leave the will unrevoked during his lifetime. These obligations were independent of each other and the consequences of the non performance of these obligations on the part of each of the parties were expressly provided in the agreement itself. It could not therefore be contended that the payment of Rs. 50 per month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in his favour. That was merely a consideration provided by Ganga Bux Singh for the execution of the will by Shankar Bux Singh in his favour and if Ganga Bux Singh committed a breach of the agreement the only result was that Shankar Bux Singh would become entitled to recover the amount due on such default 929 from Ganga Bux Singh by having recourse to a court of law. The contract would continue to subsist, the parties being relegated to their rights and remedies thereunder as contemplated by the parties. In spite of the non payment by Ganga Bux Singh of the sum of Rs. 50 per month to Shankar Bux Singh in accordance with the terms of the agreement at no time did Shankar Bux Singh revoke the will nor did he pursue Ganga Bux Singh in a court of law for the recovery of the amounts in respect of which Ganga Bux Singh was in default. He left the will unrevoked and on his death the will became effective as his last will and testament and operated to vest in Ganga Bux Singh ail interest in the remainder as therein provided. There is nothing in the will itself which in terms makes the bequest conditional on regular payment of the amount under the agreement. The argument which was advanced by Dr. Tekchand based on section 81 of the Indian Trusts Act could not avail him for the simple reason that the intention of Shankar Bux Singh had to be gathered as on the date of the execution of the will and not at any subsequent time thereafter. That intention was clearly to effect a testamentary disposition of the remainder in favour of Ganga Bux Singh. It was certainly farthest from the thought of Shankar Bux Singh not to dispose of the beneficial interest in the remainder in favour of Ganga Bux Singh with the result that there could neither be a secret trust nor a trust of imperfect obligation created in favour of the heirs at law of the testator Shankar Bux Singh. The argument of Dr. Tekchand that the remainder did not vest in Ganga Bux Singh but fell into residue by reason of his having predeceased the widow of Shankar Bux Singh is equally of no avail. The legacy in favour of Ganga Bux Singh was a legacy of the remainder of the estate which vested in Ganga Bux Singh but was deferred in possession till after the extinction of the life interest created in favour of the plaintiff 1. Such vested interest could devolve upon the defendants, the heirs and legal representatives of 120 930 Ganga Bux Singh on the death of the latter and the defendants were therefore as the heirs and legal repre sentatives of Ganga Bux Singh since deceased rightly entitled to the same. As the bequest was not conditional and did not lapse there could be no question of any resulting trust or of any intestacy with respect to the remainder. The result therefore is that the appeal fails and must be dismissed with costs. Appeal dismissed. Agent for the appellants : Rajinder Narain.

On the 7th January, 1904, G, a cousin of S, executed an agreement in favour of S, the material portion of which ran as follow&: "Whereas my cousin S has proposed to make a request of his taluka in favour of his wife and after her death in my favour and 118 914 that of my sons therefore by way of consideration for this concession and favour, I, the executant, out of my own free will do hereby execute this agreement in favour of my cousin aforesaid that in the month in which the said cousin may execute the said will in my favour and that of my sons and lays the same along with an application before the Deputy Commissioner, Sitapur district, for sanction of the Members of the Board of Revenue, I shall from the 1st date of the month following that month continue to pay the said cousin the sum of Rs. 50 in cash every month during his life so long as the said will remains in force If I fail to perform the said contract the said cousin has power to have the same performed by me through the Court. " This agreement was registered on the 11th January. On the 18th January, S submitted a draft will for sanction and the will as amended and sanctioned was executed on the 28th July, 1904. This will provided as follows: "after my death my wife for her lifetime shall remain in possession of my entire estate without the power of any sort to transfer the said properties and rights, that on the death of the said wife all the aforesaid property and rights shall devolve on my cousin G with all proprietary powers and that on the death of G, the said entire property and rights shall devolve on X, Y, Z, sons of G, in the following shares . " The will also provided for maintenance for the daughter, sister, aunt and mother of section On the application of G 's sons (G having died) letters of administration with the will annexed were granted to them by the Chief Court of Oudh and this decision was affirmed by the Privy Council on appeal in 1937. The heirs of S thereupon instituted a suit against the sons of G for a declaration that the will was inoperative and ineffectual and that G 's sons had in any case no right to the properties of S, as S had no animus testandi and G had also failed to pay Rs. 50 to S as agreed: Held, (i) that the deed of agreement and the will formed parts of one transaction and formed one contract, consideration for the will being the agreement, and consideration for the agreement being the will; (ii) as the Privy Council had decided that the will was the last will and testament of S and granted letters of administration, the question of animus testandi was res judicata ; (iii) with regard to the plea that the monthly payment of Rs. 50 was a condition precedent to the validity of the will and that by reason of the non fulfilment of this condition the will had become inoperative, such a plea was also barred by res judicata as the Privy Council bad granted letters of administration; and even on the merits the plea was untenable as the wife and other relations of the testator had also certain rights under the will which did not depend on the monthly payment by G; (iv) the question whether the payment of Rs. 50 was a con dition precedent to the vesting of the legacy in G or G 'B sons was 915 not, however, res judicata and it was open to the plaintiff to raise such a plea; (v) on a proper interpretation of the terms of the agreement, the payment of Rs. 50 per month was not a condition precedent to the vesting of the legacy in G, but merely a consideration, and the plaintiffs ' remedy was to enforce the agreement if it was not duly performed; (vi) that as G obtained a vested remainder under the will, his interest did not fall into the residue on his death before the widow, but vested in his sons; and as the bequest to G did not lapse there was no question of any resulting trust or of any intestacy with respect to the remainder, and G 's sons were entitled to the estate under the will.

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.

The appellant 's father, a Talukdar of the Estate of Khajur gaon, executed a simple mortgage of his proprietary interest in the estate consisting of sixty seven villages to the Allahabad Bank Ltd. While execution proceedings were pending, the U. P. Zamindari Abolition and Land Reforms Act, 1950, came into force from July 1952. As a result, the Zamindari rights of the appellant judgment debtor were abolished and it was no longer possible to sell these rights in the 67 villages. The respondent Bank made an application before the executing court that as the Zamindari rights could not be sold, only such rights of the judgment debtor as remained in him after coming into force of the Act might be sold along with certain other rights. Objections were taken and finally the matter came up by appeal to the High Court and it, inter alia, upheld the view of the executing court that the execution could proceed against the Bhumidari rights created in favour of the appellant under section 18 of the Act. The question was whether the Bhumidari rights created under section 18 of the Act could also be sold in execution of the decree in view of the fact that the proprietary rights bad vested in the State. Held, that the intention of the U. P. Zamindari Abolition and Land Reforms Act was to vest the proprietary rights in the Sir and Khudkast land and grove land in the Estate by virtue of section 6(a)(i) and resettle it on the intermediary not as compensation but by virtue of his cultivatory possession of lands comprised therein and on a new tenure and confer upon the intermediary a new and special right of Bhumidari, which he Dever had before, by section 18 of the Act. The proprietary rights in Sir, Khudkast land and grove land which were mortgaged were extinguished, and the Bhumidari right which was altogether a new right could not be con sidered to be included under the mortgage. 442 The mortgagee could only enforce his rights against the mortgagor in the manner as provided by section 6(h) of the Act read with section 73 of the Transfer of Property Act and follow the compensation money; and so far as the Sir, Khudkast land and grove land were concerned, he could not enforce his rights under the mortgage by the sale of the Bhumidari rights created in favour of the mortgagor against them as a substituted security. In the instant case the Bhumidari rights created in favour of the appellant could not be sold in execution of the decree held against him by the respondent under the mortgage Of 1914.

The respondent had filed a suit before the Senior Sub Judge, against the appellant for ejectment and recovery of arrears of rent and damages for use and occupation of the shop, let out to him. The suit was decreed ex parte on October 20, 1977. The application under Order 9, Rule 13. C.P.C. to set aside the ex parte decree was dismissed on January 10, 1979 and was confirmed on appeal on August 7, 1979 and later in revision by the High Court. When the respondent landlord took out execution proceed ings for ejectment of the appellant tenant, he objected under Section 47 of Code of Civil Procedure contending that the decree passed by the civil court was a nullity, as the premises in question was governed by the Haryana Urban (Control of Rent and Eviction) Act 11 of 1973. According to him the Controller under the Act was the competent authority regarding claims for ejectment and by necessary implication, the civil Court was divested of jurisdiction to take cogni sance and pass a decree for ejectment. That objection was overruled and further revision to the High Court also failed. Simultaneously the appellant had also filed a writ petition under article 227 of the Constitution which was also dismissed. Hence this appeal by the appellant tenant by special leave. Allowing the appeal, this Court, HELD: Normally a decree passed by a court of competent jurisdiction after adjudication on merits of the rights of the parties, operates as res judicata in a subsequent suit or proceedings and binds the parties 150 or the persons claiming right, title or interest from the parties. Its validity should be assailed only in an appeal or revision as the case may be. In subsequent proceedings, its validity cannot be questioned. [162G] A decree passed by a court without jurisdiction over the subject matter or on other grounds which goes to the root of its exercise of jurisdiction, lacks inherent jurisdiction. It is a coram non judice. A decree passed by such a court is a nullity and is non est. Its invalidity can be set up whenever it is sought to be enforced or is acted upon as a foundation for a right, even at the stage of execution or in collateral proceedings. The defect of jurisdiction strikes at the authority of the court to pass a decree which cannot be cured by consent or waiver of the party. [162H; 163A] (See Kiran Singh & Ors. vs Chaman Paswan & Ors., ; Ferozi Lal Jain vs Man Mal & Anr., AIR 1979 SC 794: Bahadur Singh vs Muni Subrat Dass, ; Smt. Kaushalya Devi & Ors. vs K.L. Bansal, AIR 1970 SC 838; Chandrika Misir & Anr. vs Bhaiya Lal, ; ; Ledgard vs Bull, [1886] Law Report, 13 AC 134; Bartan vs Fincham, [1921] 2 K.B. Division, 291 at 299; Peachery Property Corporation vs Robinson, ,983; Choudari Rama (dead) per L.R. Choudharv Ganapathi vs Qureshi Bee, [1983] 2 Andhra Law Times 133 approved;) A question relating to jurisdiction of a court or inter pretation of provisions of a statute cannot be deemed to have been finally determined by an erroneous decision of a court. Therefore the doctrine of res judicata does not apply to a case of decree of nullity. If the court inherently lacks jurisdiction consent cannot confer jurisdiction. Where certain statutory rights in a welfare legislation are creat ed, the doctrine of waiver also does not apply to a case of decree where the court inherently lacks jurisdiction. [163F G] (See Mathura Prasad Bajoo Jaiswal & Ors. vs Dossibai N.B. Jeejeebhey, ; ; Tarini Charan Bhattacher jee 's case I.L.R. It is the Controller under the Act that has exclusive jurisdiction to order ejectment of a tenant from a building in the urban area leased out by the landlord. Thereby the civil court inherently lacks jurisdiction to entertain the suit and pass a decree of ejectment. [164A] (See Barrachlough vs Brown, ; Doe vs Bridges, 151 ; at 859; Premier Automobiles vs K.S. Wadke; , Therefore in the instant case, though the decree was passed and the jurisdiction of the court was gone into in issue Nos. 4 and 5 at the ex parte trial, the decree there under is a nullity and does not bind the appellant. There fore it does not operate as res judicata. The courts below have committed grave error of law in holding that the decree in the suit operated as res judicata and the appellant cannot raise the same point once again at the execution. [164B] Hari Prashad Gupta vs Jitender Kumar Kaushik, [1982] Vol. 84, Punjab Law Reporter, 150; Sadhu Singh vs District Board, Gurdaspur & Anr., [1962] Punjab Law Reporter, Vol. 64, 1; Vasudev Dhanjibhai Modi vs Rajabhat Rabdul Rehman & Ors., ; Seth Hiralal Patni vs Sri Kali Nath, ; ; Phool Chand Sharma & Ors. vs Chandra Shankar Pathak dr Ors., 828; Mohanlal Goenka vs Benoy Krishna Mukherjee & Ors.

On 23rd August, 1970, when the respondent was travelling by car, alleged to be belonging to his brother, from Ambala to Batala, the Customs officer intercepted him near the Beas river and forcibly taken along with the driver, Gurunam Singh to the Customs House at Amritsar. The respondent along with the driver was searched and the customs authorities took into possession Rs.33,500 in Indian currency, 10 gold sovereigns and the car in which he travelled. The Customs authorities, thereupon initiated departmental proceedings under section 110(II) of the and extended the period of issuing of the show cause notice under section 124 of the . These proceedings were quashed by an order of the Learned Single Judge of the High Court of Punjab on 24th April, 1372 following an earlier decision of that Court. After the said judgment, the respondent approached the customs authorities for the return of the money and the car on 11.5.1972. The gold sovereigns were not demanded because ac cording to the respondent these did not belong to him. He had been directed to come on the following day to get back the currency notes and the car. On the next day, however the Income Tax officer served the warrant of authorisation dated 10th May, 1972 issued under section 132 of the Income Tax Act, read with Rule 112(II) of the Rules on the respondent as well as on the customs department with the result the cash was taken possession of by the Income Tax authorities. Thereafter 295 the respondent filed another writ petition under Article 226 and 227 of A the Constitution. The customs authorities also filed an appeal against the decision of the Single Judge dated 24th April, 1972. The writ petition and the appeal were heard together by a Division Bench of the Punjab High Court. Dismissing the appeal and allowing the writ petition the High Court held that where the amount was seized by the customs authorities and the seizure was held illegal by the Court customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the ; that the Income Tax authorities could not seize such an amount from the customs authorities under section 132 of the Income Tax Act and authorisation of search and seizure was illegal if issued in the name of the person who did not have possession of the Article in respect of which it was issued. Hence this appeal by the revenue by special leave. Dismissing the appeal, the Court, ^ HELD: 1.1 on a construction of section 132 of Income Tax Act, 1961 and the context, in which the words "search", "possession", and "seizure" have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority where the location of the property was known to the Government one government department could not search another department and seize them. [301E F] 1.2 Sub Section (3) of section 132 of the Act uses the expression "who is in immediate possession or control thereof". "Possession" is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense. Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys. When the physical custody of the moneys and goods were with the customs authorities, and that too by a legal sanction and authority to have that custody, it cannot be said that possession as used in section 132 of the Act was still with the respondent Tarsem Kumar. [30 1F H] 1.3 Reading the expressions "retention" and "custody" in some of the sub sections of section 132 in the context these have been used, it cannot be said, that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in section 132 of the Income Tax Act, 1961. [302A B] 296 The Commissioner of Income Tax vs Ramesh Chander & Ors. , PunJab; Tarsem Kumar & Anr. vs The Commissioner of Income Tax, Haryana, Himachal Pradesh & Delhi & ors. , ; Laxmipat Chororia vs K.K. Ganguli Motilal and ors. vs Preventive Intelligence officer, Central Excise and Customs, Agra & Ors., Allahabad, distinguished and partly overruled. Noor Mohd. Rahimatulla Gillani vs The Commissioner of Income tax Vidrabha and Marathwada, Nagpurand Anr., [1976] Taxation Law Reports, 688, Bombay; Pannalal vs Income Tax officer, Ward. Chhindwara and ors. , 93 ITR p. 480 Madhya Pradesh; Gulab and Company and Anr. vs Superintendent of Central Excise (Preventive) Trichy, and ors. , Madras; Assainar and Anr. vs Income tax officer, Calicut and ors. , Kerala, overruled. 1.4 It is true that in the instant case, the title was not transferred to the Customs authorities by seizure under the . But in the context, in which the expressions "possession" and "seizure" have been used, it cannot be considered to mean that the possession was where the legal title was, physical possession was with the Customs authorities, title was with the respondent herein. In this context, the physical possession having regard to the language used is relevant and material. Physical possession was with the Customs authorities when the seizure authorisation was passed. Therefore, where the exact location of the property was known and there was no need to seize the money, the Income tax department could direct handing over the money to the Income tax authorities or take steps for such direction through appropriate authorities and not by resort to section 132 of the Income Tax Act. This is so because if the location was certain then there was nothing to search or look for. [304G H; 305A B]

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]

These appeals are by tenants against the land owners. One Bishan Das owned considerable extent of land in Pakistan. He died on April 11, 1948 after he had migrated to India. After his death the Rehabilitation Department allot ted 124 standard acres and 4 I/4 units of evacuee land to Respondents Nos. 2 to 5 his sons and to Nos. 6 & 7 who were the legal heirs of one his deceased son. Each of the five sons was deemed entitled to 24 standard acres and 13 units of land and accordingly mutuation in respect of each of them was allowed by the Rehabilitation Department. Permanent rights in regard to the allotted land were also conferred by the authorities on the said respondents. Thereupon the said respondents land owners initiated ejectment proceedings under sec. 9(1)(i) of the Punjab Security of Land Tenures Act, 1953 against the tenants who were then in occupation of the Lands in question on the ground that each one of them was a small land owner as defined in Section 2(2) of the Act and that they required the land for self cultivation. The Assistant Collector, Hissar rejected the application. Their appeals were dismissed by the Collector on 4.4.1965. Their revision preferred before the Commissioner, Ambala Division was also rejected. Land owners ' further revision to Finan cial Commissioner also failed whereupon they filed a Writ Petition before the High Court on the ground that the land had been allotted to them in lieu of the land owned by their father in Pakistan and consequently the permissible area of each of them was to be computed under the proviso to section 2(3) of the Act, and so computed the holding of each of the five was well below the permissible limit of 30 standard acres prescribed thereunder. The High Court dismissed the Writ petition. Respondents preferred Letters Patent Appeals wherein the High Court held that in view of the Explanation to the proviso to section 2(3), the heirs and successors of the displaced persons to whom lands were allotted could not claim the benefit of the proviso and that the permissi 210 ble area under the substantive part of section 2(3) was 60 ordinary acres, The respondents preferred appeals to this Court. This Court confirmed the view of the High Court. However this Court accepted an argument advanced on behalf of the re spondents land owners that in computing the permissible area of each of the land owner, the uncultivated area of "banjar Jadid", "banjar Kadim" and "gair Mumkin" lands as on April 15, 1953 could not be included. As the authorities had wrongly included these types of lands, their orders were set aside and the case was remanded to the Collector concerned with a direction that should ascertain the extent of "banjar Jadid", "banjar Kadim" and "gair mumkin" lands of the Re spondents allotted as on 15.4.1953. When these proceedings were pending, applications filed by the appellants tenants under section 18 of the Act for purchase of surplus area also came to be considered by the authorities. When the matter came up before the Financial Commissioner he set aside the orders of the Collector and remanded the appel lants tenants cases for purchase of surplus land with a direction that the Collector must decide the cases of sur plus area after allowing the permissible 60 acres to the land owners. In a subsequent proceedings, the Financial Commissioner directed the Collector to determine the permis sible area after excluding all "banjar lands". The tenants filed Petitions before the Financial Commissioner against the order. However by the time these cases came up for orders, this Court had decided the land owners ' eviction cases viz in Munshi Ram & Ors. vs Financial Commissioner. Haryana & Ors., ; As such the revision Petitions were dismissed and the Collector was asked to determine the permissible area with reference to relevant date viz., April 15, 1953. By his order dated 6.5.82 the Collector accordingly determined the area held by each of the land owner after excluding the "banjar lands", as less than the permissible area and found that no area owned by them could be declared surplus and on that footing dismissed the purchase applications filed by the appellantstenants. Their Petitions having been dismissed by the Authorities under the Act, they fried Writ Petitions questioning the dismissal of their purchase applications. The High Court having dismissed the Writ Petitions, they have filed these appeals. Dismissing the appeals, this Court, HELD: The Punjab Security Land Tenures Act 1953 is intended to 211 place a ceiling on holding of land by fixing a maximum area permissible to be held by a land owner. In other words the excess over the permissible area shall be available as surplus area to be dealt with under the provisions of the said Act. [217H] In calculating the total extent held by a person on the date of the Act for purposes of determining whether a person is small land owner, the banjar lands cannot be taken into account. [216C] The need to make a reservation would arise only when the land owner on the relevant date held land in excess of the permissible area. [217C] The right of reservation given to a person who holds land in excess of the permissible area is, among others to give him an option to select that land which he would like to retain for himself and avoid one of the consequences of enabling the tenant to choose under section 18 of the Act any land including that which is under the personal cultiva tion of the land owner. [218B] It is not necessary and the Act does not make it obliga tory, on pain of consequences provided under section 5C, for a small land owner to make a reservation under sections 3, 4, 5, 5A or 5B. [218C] Bhagwan Das vs State of Punjab, ; Gurbux Singh vs State of Punjab, AIR 1964 SC 502, referred to.

FACTS three civil appeals, stemming from three revision petitions to the high court of orissa under the orissa estates abolition act, 1951. the high court, after deciding various issues, remanded the cases to the compensation officer under the act, after over-ruling most of the contentions pressed before it by the appellant. shri achutananda purohit, appellant, was the intermediary in respect of vast forests and other lands comprised in the estate of jujumura in the district of sambalpur. the appellant has received around rs. 3,00,000/- but much more, according to him, is due. ARGUMENT the argument is that for certain reasons the appellant could not derive actual income from the forests taken over by the state from him and therefore there was no income-tax payable on any agricultural income from these forests. the contention is that therefore in arriving at the next income the deduction of income-tax is not permissible. ISSUE the estate vested in the state on april 1, 1960 by force of the act and the crucial question consequentially turns on the quantum of compensation awardable under chapter v of the orissa estates abolition act, 1951. the meat of the matter, the primary question agitated in the appeal, lopping off the fringe issues of lesser import, consists in the statutory methodology and functionaries prescribed by the act for quantifying the compensation and the compliance therewith by the statutory machinery in the case of the appellant. ANALYSIS the compensation officer is charged with fixing the quantum in the prescribed manner. a compensation assessment roll containing the gross asset and net income of each estate, together with the compensation payable in respect of such estate, has to be prepared by him. the dynamic rule of law, with a social mission, makes a meaningful distinction between rights steeped in the old system and compensation for deprivation of those interests, on the one hand, and the ordinary commercial transactions or regulation of rights untinged by social transformation urges, on the other. this gives rationality to the seeming disparity. moreover, the high court has rightly pointed out that the validity of s. 37(3) of the act which fixes a small rate of interest on the compensation amount has been upheld by the supreme court in gajapati narayan's case. for the purposes of the law, the rupee of long ago is the same as the rupee of today, although for the purposes of the market place and cost-of living, the housewife's answer may be different. art. 31(3) read with art. 31(2) bars any challenge to the amount of compensation on acquisition by the state subject to compliance with the prescriptions in the said sub-articles, on the ground that the amount so fixed or determined is not adequate. presidential assent has been accorded to this state act and so the ban operates. moreover, art. 31a repels the applicability of arts. 14, 19 and 31 to the acquisition by the state of any estate or of any rights therein etc. in the case of forests it is the assumed income and not the actual income that forms the basis of calculation of compensation. on the other hand, statutory compensation is provided for on the formula of assumed income in the previous year. similarly, an assumed income- tax also has to be worked out and deducted. the statutory scheme of compensation for forest lands consists of machinery for assessment of the net income which is multiplied on a sliding scale and the method of challenge to the determination by the aggrieved owner of state. so the first step is for the government to appoint forest officers from out of d.f.os. in the forest department, for the purposes of the act. those officers ascertain the income from the forest concerned and the figure so fixed is subject to the approval of the c.c.f. (chief conservator of forests). the power to approve implies the power to disapprove or modify but not to report or arrive at an income de hors the forest officer's report altogether. indeed, there was a fundamental difference in the basis adopted by the forest officer and the chief conservator in the matter of assessing the income of the forests in question. this was wrong and contrary to s. 26. it is astonishing that anyone should urge, as the appellant did, that the date of vesting is the last date by which the calculation of compensation should have been made and since that had not been done, the compensation officer had become functus officio in awarding compensation. in this context, it is perhaps not irrelevant to remember that the appellant, a freedom-fighter, is an 83-year-old man and, at this stage of his life, the state should show ommiseration not merely in quickly disposing of the proceedings but also in not being cantankerous in awarding and disbursing the balance compensation. STATUTE s. 24 of the orissa estates abolition act, 1951 stipulates that the compensation shall be determined for the estate as a whole and not separately for each of the shares therein. s. 26 has great relevance as it lays down the method of arriving at the gross asset and s. 27 has like significance as it focuses on the manner in which the net income from an estate shall be computed by deducting certain items from the gross asset of the estate. s. 28 states how the amount of compensation is to be determined and the methodology of payment. there are a few other s.s in chapter vi which deal with payment of compensation. the act also provides for appeal, second appeal and revision, the last being to the high court and the earlier ones being to the collector and a board constituted under s. 22. the rule-making power is vested in the government under s. 47 and there is a routine 'removal of difficulties' clause contained in s. 50. the policy of the law of agrarian reform postulates the extinguishment of ancient privileges and cornering of land resources, and the socioeconomic yardstick is different from what applies to ordinary purchases of real estate and this is manifest in the special provisions contained in art. 31a and art. 31b of the constitution.

Civil Appeal No. 285 of 1958. Appeal from the judgment and decree dated September 22, 1955, of the former Nagpur High Court in Mis. (First) Appeal No. 201 of 1952. N. C. Chatterjee, D. R. Baxy and Dharam Bhusan, for the appellant. B. section Sastri and Ganpat Rai, for the respondent. October 16. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. This appeal, on certificate granted by the High Court at Nagpur, is directed against its order dismissing the appellant 's appeal against the dismissal of his objection, under section 47 of the Code of Civil Procedure, by the III Civil Judge, Class I, Nagpur. The respondent purchased at auction sale, held by the Revenue Officer for recovery of arrears of land revenue, eight anna share of Ganpatrao in mouza Vadoda, Tehsil and District Nagpur, in the Central Provinces, and obtained formal possession of that share on September 23, 1938. Ganpatrao relinquished his share in khudkahst lands they were recorded as the occupancy land of his wife and sons. They surrendered those fields to lambardar Narain, who leased those fields in occupancy right to tho appellant in 1940. The respondent filed a suit for possession of certain fields including the fields in suits viz., fields khasra Nos. 147 and 154, 126 and based his claim on his proprietary right to recover possession and not on the loss of possession on account of the appellant 's dispossessing him. The suit was decreed and the decree was upheld by he Nagpur High Court by its order dated April 20, 1951, it being held that the respondent was entitled to the fields in suit which were originally khudkasht fields as part and parcel of the eight anna share of Mahal No. 2 purchased by the respondent. It so happened that between the closing of the arguments in the appeal before the High Court, some time before March 31, 1951, and the delivery of judgment on April 20, 1951, the Madhya Pradesh Abolition of proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (M.P. Act No. 1 of 1951), hereinafter called the Act, came into force. This fact does not appear to have been brought to the notice of the High Court as it did not consider the effect of the Act on the appeal before it. The respondent decree holder filed execution application for the recovery of costs and delivery of possession on July 23, 1951. The appellant paid up the costs, but, on August 31, 1951, filed an objection to the application for delivery of possession on the ground that the respondent decree holder had no right to dispossess the appellant judgment debtor, as the respondent had lost his proprietary rights to the fields and the appellant had acquired rights to occupy them subsequent to the confirmation of decree for possession by the High Court. It was stated that the malguzari proprietary rights of the respondent decree holder, except his rights over home farm fields, ceased to exist on March 31, 1951, by virtue of section 3 of the Act and vested in the State thereafter. Home farm fields were those fields which were recorded as khudkasht or sir fields in the Jamabandhi of 1948 49. The fields in suit were not so recorded and were recorded as occupancy fields of appellant,. 127 It was further contended that the State had, after the date of vesting, collected rent from the appellant recognizing the land in suit to be the tenancy land of the appellant. On September 24, 1951, the appellant filed an application stating further facts in support of his objection. He stated that the respondent neither claimed, in the ex propriation proceedings before the Compensation Officer, Nagpur, the fields in suit as his khudkasht lands, nor raised any such claim in proceedings for fixation of assessment on his home farm and that the decree holder had not been declared malik makbuza of the land in suit. He further stated that the respondent had included the rent of the fields in suit in the area of the village for the purpose of claiming compensation and thereby got more compensation on that account and that the fields in suit had been declared malik makbuza of the appellant on July 22, 1952, under section 41 of the Act. The respondent contended before the Executing Court that the appellant could not raise such objections in the Executing Court and should have raised them in the High Court before it had passed the orders in the appeal. He further contended that he had not lost his right to possess the fields in suit and that his claim to possession of the fields was not affected by the Act the provisions of which did not apply to the facts of the case. He also contended the State had absolutely no right to collect any rent for the fields from the appellant and any collection made did not affect the respondent 's rights. He further contended that the appellant could not take any advantage of his omission to claim the land in suit as his home farm as he could not have moved in the matter without obtaining possession or of a declaration of malik makhbuza under section 41 of the Act during the pendency of the execution application as he had fraudulently suppressed the fact that he had been hold by the 128 High Court not to have been an occupancy tenant of the land in suit and that the respondent had a decree for possession against him. The State of Madhya Pradesh was served with notice of the objection and filed its statement of facts stating therein that the plots in suit were not shown as home farm by the ex proprietor respondent, that no Jamabhandhis as required by section 2(g) of the Act, were filed in the compensation proceedings and that, consequently, the respondent was not declared mailk makbuza of those plots. It was also stated that the appellant had been declared malik makbuza of the plots under section 41/56 of the Act on application under section 4(2) of the Madhya Pradesh Agricultural Raiyats and Tenants Acquisition of Privileges) Act, 1950 (M. P. Act XVIII of 1950), and that he has paid land revenue to the State. The Execution Court dismissed the objection. It held that the vesting of respondents proprietary rights in the State did not come in his way to take possession of the fields ill execution of the decree, as the Deputy Commissioner could not take possession of the fields in suit under section 7 of the Act as they were occupied lands. It further held that the land in suit did not form the respondent 's home field that the respondent could not be the malik makbuza of the fields under section 38 (1) of the Act as the fields were not in his possession. It further held that the declaration of the appellant, who was a trespasser as a malik makbuza, was illegal. The appellant then went in appeal to the High Court. The High Court relied on the case reported as Rahmatulla Khan vs Mahabirsingh (1) in which it was held that the definition of a 'home farm ' in section 2, clause (g), of the Act, should be liberally construed and should include the fields of a proprietor who was entitled to get the Revenue papers of 1948 49 corrected as a result of the decree in his favour, (1) I.L.R. 129 even though the fields were not recorded as his khudkasht in the 1948 49 papers, because it was the duty of the Revenue Authorities to make correct entries in the Jamabandis and other village papers. The High Court, however, pointed out that the decision in Rahmatullah 's Case(1) made out an exception in the definition which is not in it and in effect laid down that the application of the Act depended upon the result of pending litigation, a view which was not accepted in the earlier Full Bench case of Chhote Khan vs Mohammad Obedullakhan (2). The learned Judges further said: Though we do not agree with the view of Mudholkar, J., the decision ranks as a Division Bench Case and we follow it, though reluctantly. " The learned counsel for the appellant has urged that the respondent is not entitled to execute the decree for possession as he had lost the proprietory right which entitled him to get possession. It is further urged that the appellant has secured the rights of malik makbuza of the land subsequent to the decree and has thus got a right to remain in possession in spite of the decree. The learned counsel for the respondent mainly relies on the contention that the Execution Court cannot go behind the decree and therefore must execute it and deliver possession to the respondent. Before considering the question arising for determination in this appeal, it will be convenient to detail the relevant provisions of the Act and their effect. The preamble of the Act says that it is expedient to provide for the acquisition of the rights of the proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected therewith. This indicates that the Act purported to deal with the rights of the proprietors and not directly with the rights of other persons in the (1) I.L.R. (2) I.L.R 130 estates, mahals, alienated villages and alienated lands. The proprietors were intermediaries between the persons actually cultivating the land and the Government. They realised rent from the former and paid revenue to the latter. Section 3 is the vesting section and its sub sections (1) and(2) read: (1) Save as otherwise provided in this Act, on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the estate for the purposes of the State free of all encumbrances. (2) After the issue of a notification under subsection (1), no right shall be acquired in or over the land to which the said notification relates, except by succession or under a grant or contract in writing made or entered into by or on behalf of the State; and no fresh clearings for cultivation or for any other purpose shall be made in such land except in accordance with such rules as may be made by the State Government in this behalf. " In accordance with the provisions of this section, the proprietary rights in an estate, mahal, alienated village or alienated land in the area specified in the notification vesting in a proprietor of such estate etc., were to pass from such proprietor and vest in the State for purposes of the State free from all encumbrances. These provisions themselves were sufficient to divest the proprietor of such estate etc., of his proprietary right. The consequences of such 131 vesting are further specified in section 4. In view of sub section (2) of section 3, no right could acquired over the land which had vested in the State except by succession or under a grant or contract in writing made or entered into by or on behalf of the State. This means that no person could acquire any right over such land under a decree passed in his favour subsequent to the vesting of the estate on the notified date and that therefore the respondent did not acquire the right to possess this land under the decree in his favour. The relevant portions of sub section (1) of section 4 are: (1) When the notification under section 3 in respect of any area has been published in the Gazette, then, notwithstanding anything contained in any contract, grant or document or any other law for the time being in force and save as otherwise provided in this Act, the consequence as hereinafter set forth shall, from the beginning of the date specified in such notification (hereinafter referred to as the date of vesting), ensue, namely (a) all rights, title and interest vesting in the proprietor in such area including land (cultivable or barren), shall cease and be vested in the State for purposes of the State free of all encumbrances. . . . . . . . . . . . . . (e) the interest of the proprietor so acquired shall not be liable to attachment or sale in execution of any decree or other process of any court, civil or revenue, and any attachment existing at the date of vesting or any order for attachment passed before such date shall, subject to the provisions of section 73 of the , case to be in force." ' sub sections (2) and (3) of section 4 are as follows: (2) Notwithstanding anything contained in sub section (1), the proprietor shall continue 132 to retain the possession of his homestead, home farm land, and in the Central Provinces also of land brought under cultivation by him after the agricultural year 1948 49 but before . the date of vesting. (3) Nothing contained in subsection (1) shall operate as a bar to the recovery by the outgoing proprietor of any sum which becomes due to him before the date of vesting by virtue of his proprietary rights and any such sum shall be recoverable by him by any process of law which but for this Act would be available to him. " It is to be noted that the consequences mentioned in 8. 4 follow the notification under 8. 3, notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force. The question is whether the word 'document ' includes a decree of the Court. We do not see any good reason why a decree of the Court, when it affects the proprietary rights and is in relation to them, should not be included in this expression. The main object of sections 3 and 4 and in fact, of the Act itself, is that all the bundle of rights which a proprietor possess on account of his proprietorship of the land within the estate etc., should cease, except such rights which are saved to the proprietor under some specific provision of the Act. Any rights which accrue to the proprietor under a decree by virtue to his proprietary right will not, under the scheme of the Act, prevail over the statutory consequences following the vesting of the proprietary rights in the State and will be lost to the proprietor. One such right is the right of the proprietor under a decree to obtain possession over certain land. Such a decree for recovery of possession is the result of the recognition of the proprietor 's right of possession as proprietor over that land as against the claim of the judgment debtor to 133 retain possession of that land. The proprietary right vests in the State and as a consequence of it the proprietor 's right under the decree to obtain possession also vests in the State, even though tho State gets right to the possession of the land under other provisions of the Act as well. Section 7 empowers the Deputy Commissioner to take charge, on the date of vesting, of all lands other than occupied lands and homestead of all interest vesting in the State under B. 3. This means that the Deputy Commissioner could take possession of the land in suit on the date of vesting, i. e., on March 31, 1951, as it was neither the proprietor 's home farm nor occupied land, as defined in cl. (k) of c. 2, of the appellant who was held by the High Court to be a trespasser vide judgment of the High Court dated April 20, 1951, now reported in Subhan vs Madhorao (1). `Occupied land ' means, in relation to the Central Provinces, according to sub cl. (1), land held immediately before the date of vesting in absolute occupancy or village service tenure, or land held as malik makbuza, or land comprised in a home farm. Occupied land did not include land held by a person as a trespasser. The provisions of cl. (e) of sub section (1) of section 4 indicate that certain decrees against the interest of the proprietor become inexecutable on the vesting of his rights in the State. There is therefore good reason to hold that decrees in his favour also become inexecutable if they are based on his proprietary right which he possess no more and which has vested in the State. The Act provided, by sub section (3) of section 4, that the out going proprietor was free to recover any sum which had become due to him before the date of vesting by virtue of his proprietary rights by any process of law which, but for the Act, would be (1) I.L.R. 134 available to him. It does not provide for the outgoing proprietor to recover possession of land by any process of law if he had become entitled to the possession of that land before the date of vesting. The absence of any such provision adds strength to the view that the proprietor 's right to obtain possession of land under a decree in his favour gets lost to him after the date of vesting. Sub section (2) of section 4 of the Act provides that the proprietor can continue to retain possession of home farm land after the vesting of his proprietary right in the State. The respondent cannot take advantage of this provision even if the land in suit be held to be home farm. He was not in possession of the land in suit on the date of vesting and no question of continuing to retain possession arose. In fact, the fields in suit could not be his home farm and therefore he got no right to retain possession over them. Clause (g) of section 2 of the Act defines `home farm '. It reads. (g)`home farm ' means, (1) in relation to Central Provinces, (ii) land recorded as sir and khudkasht in the name of a proprietor in the annual papers for the year 1948 49, and (ii) land acquired by a proprietor by surrender from tenants after the year 1948 49 till the date of vesting; (2) in relation to merged territories, that part of the land under the personal cultivation of the proprietor on the date of vesting which was similarly under cultivation in the agricultural year 1949 50 and which he is omitted to retain on the termination of proprietary tenure under any instrument having the force of law and applicable to such tenure. Explanation. Land under personal cultivation includes land allowed to lie fallow in 135 accordance with the usual agricultural practice but does not include any land in lawful possession of a raiyat or tenant. . . . . . . . . . . It is significant to note in this completion that sub cl. (1) refers to land actually recorded as sir and khudkasht in the annual papers of 1948 49 and does not refer in terms to land which was the sir and khudkasht of the proprietor in that year and which ought to have been recorded as such in those papers but had not been so recorded. Another point to be noted is that though cl. (ii) refers to land acquired by the proprietor by surrender from tenants between the close of the year 1948 49 and the date of vesting no reference is made in this definition to land the possession of which had been obtained by the proprietor as a result of a decree during that period or to the possession of which the proprietor was held entitled under the decree of the Court passed before the date of vesting. It is also significant to notice that in sub section (2), the land answering the description of 'home farm ' is described differently. Only that land comes within the expression `home farm ' ' which had been under the personal cultivation of the proprietor on the date of vesting and which had been similarly under cultivation in the agricultural year 1949 50, and which he is entitled to retain even on the termination of his proprietary tenure under any instrument having the force of law and applicable to that tenure. Personal cultivation of the proprietor at two relevant dates was the main criterion. Such cultivation was not made the criterion in the definition in sub cl. (1) of sub section It is not necessary, according to that sub clause, that the proprietor be personally cultivating that land. The only condition requisite for the proprietor having certain land treated as his home farm was the fact that the annual papers of 1948 49 recorded that land as his sir and khudkasht. The basis was the record and 136 not the fact of actual cultivation or his title to that an land The definition evinces the intention of the Legislature to remove the question of certain land being `home farm ' or not from the sphere of litigation. Recorded entry was treated to be the basis for adjudging tho land to be `home farm. ' There is no ambiguity about the definition of 'home farm ' and so the question of strict or liberal construction does not arise. These consideration lead to the conclusion that land cannot come within the definition of `home farm ' which had not been actually recorded as sir and khudkasht in the name of the proprietor in the annual papers for the year 1948 49 or which had not been acquired by the proprietor by surrender from tenants after the years 1948 49 till the date of vesting. The plots in suit were neither actually recorded as the respondent 's sir and khudkasht in the 1948 49 annual papers nor had been acquired by him by surrender from tenants during the period mentioned in sub cl.(ii) of cl. (1) of the definition and so could not be the respondent 's home farm. The decree of the trial Court was passed on July 12, 1944. As that decree was under appeal in 1948 49, it would not be right to say that the Revenue Authorities were in error in not correcting the entries in the annual papers. They could Not have corrected them merely on the basis of the decree. Correction in the entries would have been made if there had been change of possession. No change of possession took place and therefore no entry could have been made in the annual papers of 1948 49 with respect to the plots in suit to be the khudkasht of the respondent. In fact, even if the respondent had taken possession over the land in suit by executing the decree passed by the trial Court, an entry of his holding that land as khudkasht could have been made only if he had brought 137 that land under his own personal cultivation and not if he had let out the land to some other person. This consideration, again, would go against the respondent even if a liberal interpretation was to be given to the definition of `home farm '. Section 12 requires that every proprietor should file a statement of claim in the specified form and verify that statement in accordance with order VI, rule 15, Code of Civil Procedure. The respondent filed his compensation statement, Document No. 1, on September 20, 1951, and mentioned in his claim the total gross rental of his proprietary share. This rental included the recorded rent of the land in suit. Section 83 provides that every entry in the record of rights, the annual papers and the register of proprietary mutations in the Central Provinces, shall, for purposes of assessment and payment of compensation be presumed to be correct. This means that for the purpose of settlement of the claim filed by the respondent under section 12, the entry of the appellant 's being an occupancy tenant in the annual papers had to be presumed to be correct and, as a consequence of such a presumption, the land in suit cannot be taken to be the respondent 's khudkasht in 1948 49, and this supports the construction we have placed on the definition of `home farm ' in section 2 (g). Sub section (1) of section 38 provides that every proprietor who is divested of his proprietary rights in an estate or mahal, shall, with effect from the date of vesting, be a malik makbuza of the home farm land in his possession. The respondent does not appear to have taken any steps to get himself recognized as a malik makbuza of the land in suit on the ground that it was, his home farm. In fact, he estates in his reply to the appellant 's objection that he could not have moved in the matter without obtaining possession. 138 Exhibit A 1, dated May 8, 1951, is the statement of fixation of assessment on the home farm of the respondent. It does not include the land in suit. Section 45 provides inter alia that any person who, immediately before the date of vesting, was in possession of any holding, as an occupancy tenant, shall be deemed to be a tenant of the State and shall hold the land in the same rights and subject to the same restrictions and liabilities as he was entitled or subject to, immediately before the date of vesting. Section 41 provides inter alia for occupancy tenants to be declared in the prescribed manner to be malik makbuza of the land comprised in their holding on payment of the amounts mentioned in the section. The appellant applied for such a declaration on July 22, 1952 and got the declaration i his favour on the basis of the entry in the village papers, though that entry of his being an occupancy tenant was wrong in view of the finding of the High Court. Exhibit A 4 is the declaration by the Naib Tehsildar, Nagpur, on July 22, 1952, under s.41 of the Act, that 'the appellant was malik makbuza in respect of the land in suit. Exhibit A 6 is the copy of the Jamabandhi for holding serial No. 121 of mauze Vadoda for the year 1948 49, showing the respondent to be the occupancy tenant of the land in suit. Section 46 provides that every person deemed or declared to be a malik makbuza under section 33 or section 33 and every other malik makbuza in a mahal, shall be entitled to any right which a tenant has under the village wajibul arz. The appellant therefore got entitled to such rights of a tenant. It is clear from the various provisions of the Act already discussed in relation to the facts of this case, that the respondent was not recorded 139 and could not have been recorded to have khudkhast in the land in suit in the papers of 1948 49 and therefore could not have claimed this land as his home farm. In fact, he did not claim so. He therefore lost his proprietary rights in this land and they got vested in the State; He therefore had no subsisting right to recover possession of the land in suit, in spite of; the decree in his favour passed on the basis of his being the proprietor of the land in suit, and the appellant being in wrongful possession of that land. On the other hand, the appellant continued in possession and has, on the basis of the entries in the village papers which had to be presumed correct for the purpose of assessment of compensation secured a declaration of his being malik makbuza of such land from an officer of the State in whom the land in suit now vests. His right to occupy the land under this right was not adjudicated by the High Court in the judgment leading to the decree ought to be executed. He can therefore object to the execution of the decree for the delivery of possession as the respondent has no subsisting right and as he has secured from the State a good right to possess it as malik makbuza, even though it be on the basis of a wrong entry in the village papers. The right to possession vests in the State and under section 7, the Deputy Commissioner formally takes possession of the land, which is not home farm or occupied land within the definition of these expressions in the Act. If the land in suit be treated to be the appellant 's occupancy tenancy, his right to remain in possession as occupancy tenant continues after the vesting of the land in suit, in the State. If the land in suit be not taken to be occupancy land of the appellant in view of the finding of the High Court, the Deputy Commissioner would be deemed to have taken possession of the land from the appellant and any subsequent 140 possession of the appellant would be deemed to be possession under the State. The contention that the Executing Court can not question the decree and has to execute it as it stands, is correct, but this principle has no operation in the facts of the present case. The objection of the appellant is not with respect to tho invalidity of the decree or with respect to the decree being wrong. His objection is based on the effect of the provisions of the Act which has deprived the respondent of his proprietary rights, including the right to recover possession over the land in suit and under whose provisions the appellant has obtained the right to remain in possession of it. In these circumstances, we are of opinion that the Executing Court can refuse to execute the decree holding that it has become inexecutable on account of the change in law and its effect. Chhote Khan 's Case (1) has net much bearing on the question under consideration in the present case, as it did not deal with the executability of the decree obtained by a proprietor against a trespasser subsequent to the coming into force of the Act. It dealt with the executability of decrees in favour of the proprietors and passed prior to the enforcement of the Act and held that they had become inexecutable as the effect of sections 3,4,5,7,50 and 60 of the Act was that the rights which were exercisable by the proprietor, lambardar and sadar lambardar by reason of holding that character could no longer be exercised by them and that, even though the cause of action for enforcing those rights arose before the Act came into force, they could not be continued by those persons after the Act came into force as they had ceased to hold that character. The fact in Rahmatullah 's Case (a) were as follows: The plaintiff sued for possession in respect of 9.18 acres khudkasht lands on the allegation that his predecessor. in interest, Khubiram, had purchased the defendant 's interest in the village (1) I.L.R. (2) I.L.R, (1955) 983. 141 including khudkasht lands at a revenue auction sale on April 29, 1936. It was contended that the defendant has no right to remain in possession of the khudkasht lands which along with the, proprietary interest, passed at the revenue sale The defendant contented the suit on the grounds that his khudkasht lands did not pass in the revenue sale, that he had continued all along in possession in respect of the same and had thus acquired the rights of occupancy tenancy which were confirmed in consolidation proceedings. The suit was decreed in its entirety by the trial Court but the 1st appellate Court confirmed the decree with respect to a portion of khudkasht land which was held to be included in the revenue sale. By the time the second appeal was heard in the High Court, the Act had come into force. It was contended on behalf of the defendant judgment debtor that the suit must fail in view of the provisions of the Act as interpreted in Chhote Khan 's Case (1). In view of the difference of opinion between the learned Judge who heard the second appeal, two questions were referred to a third Judge for opinion and one of the questions was: Does the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) 'Act, 1950 (No. 1 of 1951) bar a suit by an ex proprietor for recovery of khudkasht lands purchased by him before the Act came into force ?" Mudholkar, J., to whom the questions were referred said at p. 996: It is clear from the documents on record that Khubiram had obtained possession of the land in suit after he purchased it along with the village share. The land was thus khudkasht of Khubiram and accordingly it continued to be khudkasht of the respondent who is a successor in title of Khubiram. No doubt, this land, though the khudkasht of the 142 respondent, was wrongly recorded as occupancy land of the appellant. But an erroneous recording of a khudkasht land as an occupancy land would not in law alter the real character of that land. Thus, despite the wrong entry, the land must be regarded as having always been the khudkasht of the respondent. If this Court affirms the decree of the two Courts below, the effect of its decision would not be to alter the character of the land and convert a land which is not khudkasht into a khudkasht land. " Interpreting the definition of `home farm ' in the Act to include such land, which, though not recorded as khudkasht of the proprietor in the annual papers of 1948 49, ought to have been recorded as such, he held that the suit was not barred. This is not a correct view, for the reasons stated by us earlier. As we are of opinion that the land in suit could not be the `home farm ' of the respondent as it was not recorded as his khud kasht in the annual papers of 1948 49, the respondent 's proprietary right of this land was lost and got vested in the State on the coming into force of the Act. On the other hand, we have also held that the appellant obtained a declaration of malik makbuza in his favour from the State, and thus has secured a right to possess it. In these circumstances, the decree ought to be executed by the respondent has become inexecutable and therefore the order under appeal deserves to be set aside We accordingly allow the appeal and set aside the order of the Court below and Allow the objection of the appellant to the execution of the decree and dismiss the execution application filed by the respondent. In the circumstances of the case, we make no order as to costs. Appeal allowed.

The respondent purchased at a revenue auction sale eight anna share of and obtained formal possession of that share on September 23, 1938. relinquished his share in Khudkasht lands and they were recorded as the occupancy lands of his wife and sons. In 1940 the appellant got a lease of those fields. The respondent instituted a suit for possession of the lands against the appellant basing his claim on his proprietary right to recover possession, and obtained a decree on July 12, 1944. The trial court 's decree was confirmed on April 20, 1951, by the High Court which held that the respondent was entitled to the lands as they were originally Khudkasht fields as part and parcel of the eight anna share purchased by him. In the meantime on March 31, 1951, the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, had come into force but the High Court did not consider the effect of the Act on the appeal before it. Under section 3 of the Act the proprietory rights in an estate specified in the notification passed from the proprietor and became vested in the State free from all encumbrances, rand by section 4, after the issue of the notification under section 3 124 notwithstanding anything contained in any contract, grant or document or any other law for the time being in force, all rights, title and interest which a proprietor possessed on account of his proprietorship of the land within the estate became vested in the State, except, inter alia, His home farm land and occupied land. Under section 2(g) of the Act home farm lands were those which were recorded as Sir and Khudkasht in the name of a proprietor in the annual papers for the year 1948 49, but in the present case the lands in respect of which a decree had been passed in favour of the respondent, were not so recorded. On the other hand, the lands were declared Malik Makbuza of the appellant under section 41 of the Act. In the execution application for the recovery of possession filed by the respondent the appellant raised objections that the respondent was not entitled to execute the decree for possession as his proprietary rights except his home farm lands, ceased to exist on March 1, 1951, by virtue of sections 3 and 4 of the Act and became vested in the State thereafter, and that the State had, after the date of vesting recognized the lands in suit to be tenancy land of the appellant. The respondent 's plea was that The appellant was not entitled to raise such objections ill the executing court, that the executing court could not go behind the decree and, therefore, must execute it and deliver possession to the respondent. The executing court dismissed the objections raised by the appellant, and the High Court took the view, relying upon Rahmatullah Khan vs Mahabirsingh, I. L. R. , that the lands in suit must be treated as home farm as it was the duty of revenue authorities to make correct entries in the village papers. ^ Held, that: (1) the principle that the executing court cannot question the decree and has to execute the decree has no operation on the facts of the present case because the objection of the appellant was based not with respect to the invalidity of the decree but on the effect of the provisions of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, which deprive the respondent of his proprietary rights including the right to recover possession over the lands in suit; (2) the word "document" ill section 4(1) of the Act includes a decree of the court; (3) the lands in suit could not be the home farm of the respondent as they were not recorded as his khudkasht in the annual papers of 1948 49, and consequently, his proprietary right was lost and got vested in the State on the coming into force of the Act; Rahmatullah Khan vs Mahabir Singh, I. I,. R. , disapproved. 125 Chhote Khan vs Mohammad Obedullakhan, I. L. R. , distinguished. (4) since the Act did not provide for the outgoing proprietor to recover possession of land by any process of law if he had become entitled to the possession of that land before the date of vesting, his right to get possession by executing his decree got lost to him after the date of vesting; and (5) the executing court should, therefore, have refused to execute the decree holding that it became inexecutable on account of the change in law and its effect.

The appellant was the owner of the suit land. Alleging that the 2nd respondent, who was the Mahant of an Akhara, was the occupancy tenant and that he had allowed his lessee to dig it up and rendered it unfit for cultivation, the appellant evicted the 2nd respondent from a part of the land in 1940, and from the rest of it in 1943. In 1950, the 2nd respondent was removed from the office of Mahant, in proceedings under section 92, C.P.C., and in 1953, the 1st respondent was appointed in his place. In 1957 the 1st respondent filed a suit for possession of the land, alleging that the Akhara itself was the occupancy tenant. The trial court decreed the suit and the High court confirmed the decree. In the appeal to this Court, the appellant contended that the suit was barred by limitation. HELD: Upon the eviction of the 2nd respondent the occupancy right in the land merged in the right of ownership of the appellant. Apart from it, the actual physical possession of the land having been continuously with the appellant to the exclusion of the occupancy tenant, whether it was the 1st respondent or the Akhara itself, for a period of more than 12 years before the institution of the suit, the occupancy right was extinguished. If the 2nd respondent represented the Akhara in the eviction proceeding the decrees therein would bind the 1st respondent as his successor. If the 2nd respondent did not represent the Akhara, the possession of the appellant under those decrees would be adverse to the Akhara. The 2nd respondent as the Mahant, or the Receiver appointed by the Court In the section 92 proceedings, could have filed a suit on behalf of the Akhara, and so, the 1st respondent 's suit after 12 years of adverse possession by the appellant was barred. (436D E; 438F H] Sudaram Das vs Ram Kirpal, L.R. 77 T.A. 42 and Subbaiya V. Mustapha, L.R. 50 I.A. 295, applied Dwijendra Narain Roy vs Joges Chandra De, A.I.R. 1924 Cal. 600, referred to.

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]

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 respondent gave notice to the appellants terminating the lease of agricultural land situated within two miles of the limits of the Municipality and filed a suit for eviction. The suit was contested, inter alia, on the ground that under the provisions of the Bombay Tenancy Act, 1939, the defendants had acquired tenancy rights. The civil Judge, inter alia, held that the 1939 Act was repealed by the Bombay Tenancy and Agricultural Land Act, 1948, which did not apply to the suit land, as it was within two miles of the limits of the Surat Borough Municipality and decreed the suit. On appeal, the District Judge held that the 1948 Act applied to the Suit land and set aside the decree of the trial Court. In second appeal by the plaintiff, the High Court held that the suit land was within two miles of the limits of the Municipality and therefore, the 1948 Act did not apply to the suit land. On appeal by Special Leave the appellants contended that their rights under the 1939 Act were saved and preserved under section 89(2) of the 1948 Act with the result that the lease extended to 10 years under the 1939 Act was saved thereunder, and by reason of the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1952, which brought the suit land within the scope of the 1948 Act, their rights so preserved came to be governed by the provisions of he 1948 Act and, therefore, they could not be evicted except in the manner prescribed by the provisions of the Act. The respondent contended that the saving provision in section 89(2) of the 1948 Act operates only if there is no express provision to the contrary and that the saving of the appellant 's right would be otiose, as he could not enforce his right under the 1948 Act. Held:(i) Before the suit was disposed of, the 1952 Act came into force, and by reason of the extension of the 1948 Act to the suit land, the respondent could not evict the appellants except in the manner prescribed by the 1948 Act. (ii)The respondent 's contention must be rejected. There is an express provision found in section 88(1) of the 1948 Act, in as much as it says that the provisions of sections 1 to 87 will not apply to the area in question. (iii)As there was a right recognized by law there was a remedy and, therefore. in the absence of any special provisions indicating a 774 particular forum for enforcing a particular right the general law of the land would naturally take its course. The High Court, therefore, was wrong in holding that the appellants could not claim the benefit of the provisions of the 1948 Act. Sakharam (a) Bapusaheb Narayan Sanas vs Manikchand Motichand Shah ; relied on.

On the strength of a Will dated 25th May 1959, executed in her favour by one Purohit Mani Ram, the respondent Smt. Ishroo Devi filed a suit for recovery of the schedule property in the plaint. It was alleged in the plaint that the appellants (A 1, son; A 2, Wife; and A 3, grand daughter of Purohit Mani Ram) after the death of Purohit Mani Ram wrongfully disposed her after getting the name of appellant No. 1 mutated in the records and that the three items of the schedule property were the separate properties of the testa tor and that he was entitled to dispose them under the Will. The appellants averred in their written statement that the properties belonged to the joint family of which the first appellant and his father Purohit Mani Ram were members and as the properties were joint family properties, they cannot he disposed of by Will. It was further alleged that the Will was a forged one and is fictitious. The trial court, accepting the evidence of PW1, an advocate, who advised in the preparation of the Will and also an attest ing witness, PW2 the scribe and PW3 who deposed the fact that the properties were self acquired ones of late Purohit Mani Ram, decreed the suit as regards item No. 1 (a) of the plaint schedule but dismissed the claim as regards items l(b) and 2 holding that they were ancestral ones. On ap peal, the High Court accepted the findings of the trial court and confirmed the decree as regards item l(a) of the property but modified the order as regards item l(b) and 2 by allowing the claim of the respondent to the extent of 1/2 share since under section 27 of the Jammu & Kashmir Hindu Succession Act Mani Ram was entitled to dispose of his interest in the joint family property by Will. In appeal by certificate to this Court, the appellant contended: (i) The Will was not a valid one for the reasons, namely, (a) it was ante dated in order to escape the prohi bition against alienation introduced by Ordinance which came into force in July 1959; (b) the signature on the Will was forged; (c) the Will is a most unnatural one as it had not provided for the son or the wife or any near relative but has provided to a distant relative and (d) in a suit for partition filed by the son against Mani Ram, the latter gave an undertaking in the court not to alienate his properties which would improbalise the execution of the Will; (ii) The hereditary profession of Mani Ram being that of a priest whatever he earned while practising that profession and all his acquisitions should be held to be joint family property. (iii) In view of the Mitakshara law applicable to the estate when partition of the joint family property takes place during the father 's life time at the instance of the son, the mother also has a share equal to him. The Court confirmed the decree in respect of item 1 (a) of the property in favour of the respondent, modified the decretal order of the High Court in respect of items 1(b) and 2 of the schedule property as 1/3rd in favour of appel lant No. 1, 1/3rd in favour of appellant No. 2 and 1/3rd in favour of respondent as entitled by the Will. The Court, HELD: (1) The plea that the Will was executed after July 1959 when there was a prohibition against the alienation and that it was pre dated and not executed 401 on the day on which it purports to be is without any sub stance and against the evidence on record. [403 H, 404 A] (2) The contention that the Will is an unnatural one is also without substance. The non disclosure of the execu tion of the Will is understandable because Mani Ram did not want anyone, particularly his son, to know about his pos sessing of the property by Will. [404 B, D] (3) The findings of the two lower courts that the Will is a genuine one and was executed by Mani Ram by his own free will cannot be assailed. In fact, there was no chal lenge to the gist of the Will noted by PW2, the scribe, in one of his regularly kept record; there was no denial by the first appellant, the son of Mani Ram that the signature found in the Will was not that of his father and there is no reason why the cogent evidence of PW 1, a respectable advocate who spoke of his advising in the preparation of the Will having seen the executant sign the Will in his presence be not accepted. [405 A C] (4) The income from the practice of a hereditary profes sion will not be a joint family property. Item 1 (a) of the Property is the self acquisition of Mani Ram and the decree of the appellate court so far as item No. 1 (a) is concerned must be confirmed. [406 A, D] Hanso Pathak vs Harmandil Pathak and Anr., AIR 1934 Allahabad 851, approved. Chalabhai Gaurishankar vs Hargowan Ramji & Ors. I.L.R. 36 Born. 94, over ruled. (5) Under the Mitakshara law excepting Madras, in the other states referred to in the decisions cited when there is a partition between the son and his father the mother is entitled to a share equal to that of the son. In the in stant case the case of the first appellant was that the joint family consisted of himself and his father alone, though in the earlier partition suit filed by him he claimed 1/3rd share conceding that his father and mother are entitled to the other 2/3rd share. As no decision in re spect of the interest of the male Hindu in Jammu & Kashmir was cited the question is remitted to the High Court for decision as to what is the extent of the interest as regards items I(b) & 2 of the plaint Schedule properties. [406 E F, 407 B E] Dular Koeri vs Dwarkanath Misser ILR ; Sumrun Thakoor vs Chunder Mun Misser & Ors., ILR ; Hos banna Devanna Naik vs Devanna Sannappa Naik and Ors. ILR and Pratap Singh vs Dalip Singh ILR 52 All. 596, approved. (6) In view of section 27 of the Jammu & Kashmir which provides that any Hindu male may dispose of by Will any property which capable of being disposed of by him in law and also explanation to that section which makes it clear that the interest of a male Hindu in a Mitakahara coparcenary property be deemed to be property capable of being disposed of by him within the meaning of the sub section, in the instant case Mani Ram can dispose of his share under a Will. Admittedly the respondent, will be entitled to 1/3rd share in respect of item l(b) and 2 of the plaint schedule in addition to the decree in her favour in respect of item 1 (a). [406 D E, 407 E F] [The Court remitted the case back for the determination of the interest which Mani Ram had in the joint family property at the time of his death which he could dispose of by his Will and grant a decree accordingly.]

The appellant Board passed a special resolution on September 28, 1956, imposing water tax in Hapur and a notification by the Uttar Pradesh Government was published in the Uttar Pradesh Gazette under section 135(2) of the U.P. Municipalities Act (2 of 1916) notifying the resolution. Fifteen house owners of Hapur who received notices from the appellant Board for the payment of the tax petitioned to the High Court under article 226 ,of the Constitution and asked for a writ or order preventing the appellant Board from realising the tax. The main objections were (a) that the resolution of the appellant Board framing the proposal was not pub lished in a local paper of Hapur published in Hindi and (b) that the rules framed for the imposition of the tax did not accompany the resolution which was affixed on the notice board at the office of the appellant Board in purported compliance with the requirements for publication. The imposition was also challenged on the ground that articles 14 and 19 of the Constitution were violated. A single judge of the High Court held that the tax was illegal inasmuch as the mandatory requirements of the Municipalities Act were not complied with by the appellant Board while imposing the tax and that section 135(3) of the Act (which cures all defects in the imposition of the tax by making the notification of Government conclusive evidence of the legality of the imposition) was ultra vires article 14 of the Constitution because it created a bar against proof and left no remedy to the tax payers thereby making a discrimination between them and other litigants. He further held that the sub section by making Government the sole judge of compliance with the Act conferred judicial power on Government contrary to the intendment of the Constitution. The appellant Board appealed under the Letters Patent. The Divisional Bench upheld the order of the single judge. The case was however certified as fit for appeal under article 133 and the Board appealed to this Court. The contentions raised in appeal were: (i) s.135(3) shuts out all ,enquiry into the procedure by which a tax had been imposed and therefore suffered from excessive delegation of legislative function. (ii) The tax had not been validly imposed a there had been non observance of mandatory provisions; (iii) section 135(3) was discriminatory; and (iv) the sub section was also bad because it conferred judicial functions on the State Government. HELD : Per Gajendragadkar, C.J., Hidayatullah, Shah and Sikri. JJ. (i) The rule of conclusive evidence in s.135(3) does not shut out all enquiry by courts. There are certain matters which cannot be established by a notification under s.135(3). For example no notification can issue unless there is a special resolution under section 134. The special resolu 951 tion is a sine qua non for the notification. Again the notification cannot authorise the imposition of a tax not included in section 128 of the Municipalities Act. Neither the Municipal Board nor the State Government can exercise such power. What the section does is to put beyond question the procedure by which the tax is imposed, that is to say the various steps taken to impose it. A tax not authorised, can never be within the protection afforded to the procedure for imposing taxes. Such a tax may be challenged, not with reference to the manner of imposition but as an illegal impost. [958 A D] (ii) There can be no doubt that some of the provisions of sections 131 to 134 of the Act are mandatory. But all of them are not of the same character. In the present case, as in Raza Buland Sugar Co. Ltd. and in Berar Swadeshi Vanaspati, the provisions not observed were of a directory character and therefore the imposition had the protection of section 135(3). [958 H] Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur. ; and Berar Swadeshi Vanaspati vs Municipal Committe, Committee Sheogaon & Anr. , relied on. (iii) Mandatory provisions must be fully complied with, and directory provisions should be substantially complied with. In either case the agency for seeing to this compliance is the State Government. It is hardly to be expected that the State Government would not do its duty or that it would allow breaches of the provisions to go unrectified. In cases of minor departure from the letter of the law especially in matters not fundamental, it is for the Government to see whether there has been substantial or reasonable compliance. Once Government condones the departure, the decision of the Government is rightly made final by making the notification conclusive evidence of the compliance with the requirements of the Act. [959 H 960 D] (iv) The power to tax belongs to the State Legislature but is exercised by the local authority under the control of the State Government. It is impossible for the State Legislature to impose taxes in local areas because local conditions and needs must very. The power must be delegated. The taxes however are predetermined and a procedure for consulting the wishes of the people is devised. But the matter is not left entirely in the hands of the Municipal Boards. As the State Legislature cannot supervise the due observance of its laws by the municipal Boards power is given to the State Government to check their actions. The proceedings for the imposition of the tax must come to a conclusion at some stage after which it can be said that the tax has been imposed. That stage is reached, not when the special resolution of the Municipal Board is passed but when the notification by Government is issued. After the notification all enquiry must cease. This is not a case of excessive delegation unless one starts with the notion that the State Government may collude with the Municipal Board to disregard deliberately the provisions for The imposition of the tax. There is no warrant for such a supposition. The provision making the notification conclusive evidence of the proper imposition of the tax is conceived in the best interest of compliance of the provisions by the Board and not to facilitate their breach. [960 F 961 E] Excessive delegation is most often found when the legislature does not perform all the essential legislative functions and leaves them to some other agency. The Legislature here performs all essential functions in the imposition of the tax. The selection of the tax for imposition in a municipal area is by the legislative will expressed in section 128. Neither the Municipal Board, nor the Government can go outside the list of taxes therein included. The procedure for the imposition of the tax is also, laid down 952 by the Legislature for the Municipal Board to follow and the State Government is there to ensure due observance of that procedure. in view of all this there was no excessive delegation or conferral or legislative functions on the appellant Board or the State Government. [961 F 962 C] (v) There are numerous statutes including the Evidence Act, in which a fact is taken to be conclusively proved from the existence of some other fact. The law is full of fictions and irrebuttable presumptions which also involve proof of facts. The tax payers in the Municipality are allowed to object to the proposal for the tax and the rules and to, have their objections considered. They cannot be allowed to keep on agitating. Section 135(3) which only concludes objections against the procedure followed in the imposition of the tax cannot be said to be discriminatory and viola tive of article 14. [962 D H] (vi) The objection that the impugned sub section involves the exercise of judicial functions not open to the legislature is wholly erroneous. The subsection only shuts out further enquiry and makes the notification final. [962 H] Per Wanchoo, J. (dissenting) (i) Section 135(3) bars enquiry by courts into all procedural provisions relating to imposition of taxes and therefore it bars enquiry into any matter covered by section 131 to section 135(1) of the Act. It cannot be read down as barring enquiry only into some procedural provisions i.e. from section 131 to section 133 and not into the other procedural provisions i.e. section 134 and section 135(1). [968 D] Section 135(3) is not a rule of evidence; it is a substantive provision which lays down in effect that once a notification under section 135(2) is issued it will be conclusively presumed that the tax is in accordance with all the procedural provisions with respect to the imposition thereof. [969 E] Ishar Ahmad Khan vs Union of India, [1962] Supp. 3 S.C.R. 235, referred to. The effect of section 135(3) is that the procedural provisions are given the go by in the matter of imposition of tax and as soon as a notification under section 135(2) is shown to the court, the court is helpless, in the matter even though none of the provisions of section 131 to section 135(1) may have been complied with. [969 H] (ii) In the field of local taxation relating to municipal boards and district boards and similar other bodies there are reasons for delegating :fixation of rate to such bodies subject to proper safeguards. This is exactly what has been done under the Act subject to the safeguards contained in sections 131 to section 135(1). If those safeguards are followed the delegation would be proper delegation and could not be challenged as ultra vires on the ground of excessive delegation. But if the legislature after laying down with great care safeguards as to the imposition of tax including its rate makes a blanket provision like section 135(3), which at one stroke does away with all those safeguards and this is what section 135(3) has done in the present case the position that results is that there is delegation of even the essential function of fixing the rate to the subordinate authority without any safeguard. Such a delegation would be excessive delegation and would be ultra vires. [972 D F] (iii) Section 135(3) inasmuch as it makes the delegation contained in sections 128 to 135(2) excessive must be severed from the rest of the sections which are otherwise a proper delegation of legislative authority and should be struck down on the ground of excessive delegation. [973 B] 953

The plaintiff 's rather was the last holder of the office of Desai. After his death the plaintiff, who was his eldest son, was recognised as the watandar. In 1904 service appurtenant to the office of Desai was commuted by the imposition of 'judi ' or quit rent. Under section 4 (1) of the Bombay Pargana and Kulkarni Watans (Abolition) Act, 1950 and section 7 of the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955 all the watan lands were re granted to the plaintiff and he was deemed to be the occupant thereof within the meaning of the Bombay Land Revenue Code. The plaintiff (appellant) filed a suit against respondents who were members of a joint Hindu family holding properties described as Kundgol Deshgat Estate claiming a declaration that the estate formed an impartible estate governed by the rule of lineal primogeniture. The plaintiff claimed that as the present holder of the office of Desai he was entitled to remain in full and exclusive possession and enjoyment of the suit properties and that other members of the family had no right, title or interest therein but were only entitled to maintenance and residence and in the alternative for partition and separation of 1/6 share therein. Denying all the plaintiff 's claims the respondents pleaded that the entire properties belonged to the joint Hindu family and were therefore liable to be partitioned. Rejecting all the claims of the appellant the Trial Court held that the properties belonged to the joint Hindu family and were therefore partible. On appeal the High Court, subject to a modification, upheld the decree of the court of first instance. The question at issue in the appeal to this Court was whether, (1) even assuming that the estate was impartible and governed by the rule of lineal primogeniture by custom as pleaded, the incidents of impartibility as well as the rule of 342 lineal primogeniture being nothing more than an incident of the watan, stood abrogated by section 3(4) of the 1950 Act and section 4 of the 1955 Act and as such it was not open to the plaintiff to make any claim on the basis of the alleged custom, (2) with the resumption of the watan and the re grant of the watan lands to him, the suit properties lost their character as being joint family property and had become, under the provisions of the 1950 and 1955 Acts, the plaintiff 's exclusive property by reason of his status as watandar and as such were not capable of being partitioned. Dismissing the appeal, ^ HELD: It is well settled that property though impartible may be the ancestral property of the Joint Hindu Family. The impartibility of the estate does not per se destroy its nature as joint family property or render it the separate property of the last holder, so as to destroy the right of survivorship; hence, the estate retains its character of joint family property and its devolution is governed by the rule of survivorship. To establish that a family governed by the Mitakshara in which there is an ancestral impartible estate has ceased to be joint, it is necessary to prove an intention, express or implied, on the part of the junior members of the family to renounce their succession to the estate. [354 C D] Martand Rao vs Malhar Rao, [1928] 55 IA 45: AIR 1928 PC 10: Adrishappa vs Gurushidappa, (1880) 7 IA 162: ILR 7 Cal. LR 1 (PC); Vinayak Waman Joshi Rayarikar vs Gopal Hari Joshi Rayarikar, [1903] 30 IA 77: ILR 7 Cal. WN 409; Shiba Prasad Singh vs Rani Prayag Kumari Debi, (1932) 59 IA 331: AIR 1932 PC 216: ; Collector of Gorakhpur vs Ram Sunder Mal, (1934) 61 IA 286: AIR 1934 PC 157: CIT vs Dewan Bahadur Dewan Krishna Kishore, (1941) 68 IA 155: ; Anant Bhikappa Patil vs Shankar Ramchandra Patil, (1943) 70 IA 232: AIR 1943 PC 196 and Chinnathayi vs Kulasekara Pandiya Naicker, ; ; , relied on. Mirza Raja Shri Pushavathi Viziaram Gajapathi Raj Manne Sultan Bahadur vs Shri Pushavathi Visweswar Gajapathi Raj, ; and Rajah Velugoti Kumara Krishna Yachendra Varu vs Rajah Velugoti Sarvagna Kumara Krishna Yachendra Varu, ; (1969) 3 SCC 281: ; , distinguished. Neelkisto Deb Burmono vs Beerchunder Thakoor, (1867 69) 12 MIA 523; Rani Sartaj Kuari vs Rani Deoraj Kuari (1888) 15 IA 51: ILR (1888) 10 All 272 (PC); Rama Krishna Rao Bahadur vs Court of Wards, (1899) 26 IA 83: ILR ; Raja Ram Rao vs Raja of Pittapur, (1918) 45 IA 148: AIR 1918 PC 81; Baijnath Prasad Singh vs Tej Bali Singh, (1921) 48 IA 195: AIR 1921 PC 62 and Bhaiya Ramanuj Pratap Deo vs Lalu Maheshanuj Pratap Deo , referred to. 2. The plaintiff 's contention runs counter to the scheme of the Bombay Hereditary offices Act, 1874, and is against settled legal principles. The plain 343 tiff 's rights to such watan properties, whatever they were, were subject to the rights of the other members of the family. [359 C D] In the former Bombay Presidency, a Desghat watan had always been treated to be the joint family property and the grant of watan to the eldest member of a family did not make the watan property the exclusive property of the person who was the watandar for the time being. The definition of the term "watandar" as contained in section 4 of the Bombay Hereditary offices Act is in two parts: the first sets out what "watandar" means and the other states what is included in it, that is, the entire definition of watandar must be looked upon as one, the latter part being supplementary and additional to what is contained in first part. Thus, a person who acquired watan property or held hereditary interest in it without acquiring the hereditary office and without being under an obligation to perform the services attached to such office was also a "watandar" within the meaning of the Watan Act. There can be no doubt that the Watan Act was designed to preserve to pre existing rights of the members of a joint Hindu family. The expression "watandar of the same watan" would include members of the family other than the watandar, who were entitled to remain in possession and enjoyment of the watan property. [359 G H 361 F] Vijyasingrao Balasaheb Shinde Desai vs Janardanrao Narayanrao Shinde Desai, ; Kadappo Bapurao Desai vs Krishtappa Bachappa Desai, 37 Bom. LR 599: AIR 1935 Bom. 380 and Laxmibai Sadashiv Date vs Ganesh Shankar Date, AIR 1977 Bom. 350, approved. Tarabai Sriniwas Naik Guttal vs Murtacharya Anantacharya, , overruled. The commutation of service under section 15(3) of the Watan Act by which the watandars were relieved in perpetuity from liability to perform the services attached to their offices in consideration of 'judi ' or quit rent charged upon the watan land unless where it was otherwise provided for, had not the effect of converting watan land into the private property of the watandars with the necessary incident of the alienability, but to leave them attached to the hereditary offices, which although free from the performance of services, remain in tact. Despite commutation of service, the office of watandars ordinarily survived without liability to perform service, and on that account the character of the watan lands still remained attached to the grant. [364 D F] Collector of South Satara vs Laxman Mahadev Deshpande, ; , relied on. Appaji Bapuji vs Keshav Shamrav, ILR , referred to. Bachharam Datta Patil vs Vishwanath Pundalik Patil, ; 1956 SCJ 721, referred to. 344 5. The impartibility of the watan lands of the applicability or the rule of lineal primogeniture regarding succession to the estate, by the alleged custom as pleaded, being nothing more than an incident of the watan, stood extinguished by s.3(4) of the 1950 Act and s.4 of the 1955 Act. The effect of these Acts was to bring out a change in the tenure or character of holding as watan lands but they did not affect the other legal incidents of the property under the personal law. That being so, the members of a joint Hindu family must be regarded as holders of the watan land along with the watandar for the time being and therefore regrant of the lands to the watandar under section 4(1) of the 1950 Act and under section 3 of the 1955 Act must enure to the benefit of the entire joint Hindu family. [365 C, E; 367 E] 6. Section 4(2) of the 1950 Act and section 7(3) of the 1955 Act do not create a statutory bar to a transfer or a partition once the conditions mentioned therein are fulfilled. [370 B] Laxmibai Sadashiv Date vs Ganesh Shankar Date, and Dhondi Vithoba Koli vs Mahadeo Dagdu Koli, AIR 1973 Bom. 323, approved. Kalgonda Babgonda Patil vs Balgonda Kalgonda Patil, , overruled.

ION: Criminal Appeal No. 71 of 1961 . Appeal from the judgment and order dated January 18, 1961 of the Calcutta High Court in 51 Criminal Appeals No. 314. 318 an(l 319 of 1960 and Reference No. 3 of 1960. Nur ud din Ahmed and Pritam Singh Safeer, for the appellants. D. N. Mukherjee, P. K. Mukherjee and P. K. Bose, for the respondent. October 10. The Judgment of the Court was delivered by SHAH, J. At 9 :30 P.M . On March 21, 1959, four persons Rampiari, Hiralal, Shyama Prosad Missir and Surajnath Dubey all residing within Police Station (Golabari in the town of Howrah suffered incised and punctured injuries and died in consequence thereof. The appellants and two others were tried before the Extra Additional Sessions Judge, Howrah with a jury for rioting and causing fatal injuries to these four victims and thereby committing offences punishable under sections 148, 302 and 302 read with 149 of the Indian Penal Code. The jury brought a unanimous verdict of guilty against appellants Ram Shankar Singh, Bimala and Sudama Singh for offences punishable under ss.148,302 and 302 read with 149 of the Indian Penal Code and against Ramnarayan Missir for offences punishable under sections 148 and 326 read with 149 of the Indian Penal code and a verdict of not guilty against Depali wife of Ramnarayan Missir The Sessions Judge accepted the verdict and sentenced the appellants, subject to confirmation by the High Court, to suffer the penalty of death and Ramnarayan Missir to suffer rigorous imprisonment for 10 years, and acquitted Depali. The reference for confirmation of death sentence and the appeal filed by the appellants and Ramnarayan Missir against the order of conviction and sentence were heard by the High Court of Judicature at Calcutta. The High Court held that the verdict of the jury was vitiated on account of misdirection by the Sessions Judge, and after an elaborate examination of the evidence found the appellants Ram Shankar and Bimala guilty of offences under 302 read with 34 of the Indian Penal Code for causing the death of Rampiari and Hiralal, The 52 High Court also found appellant Ram Shankar guilty of murder for causing the death of ,Surajnath Dubey by stabbing, him With a knife, and appellant Sudama Singh for causing the death of Shyama Prosad Missir by stabbing him with a knife, and confirmed the sentence of death passed by the Sessions Judge. The High Court, acquitted Ramnarayan Singh of the offence of grievous hurt of which he was convicted by the trial court. With certificate granted by the High Court this appeal is preferred by the three appellants. Two bustees in the town of Howrah No. 7 Madhab Ghosh Road and No. 7 Tikiapara Road are separated by a common courtyard. Ram Shankar, Bimala, Ramnaryan Singh and Depali lived in No. 7 Madhav Ghosh Road. Ramdeo Ahir, his wife Rampiari and son Hiralal lived in a room in 7 Tikiapara Road and Shyama Prosad Missir lived in another room in that bustee. Surajnath Dubey lived in a room in No. 9 Madhab Ghosh Road. At about 11 A. M. On March 21, 1959 there was an altercation in the common courtyard between Ramnarayan Missir, his wife Depali and Ram Shankar 's wife Bimala on the one hand and Ramdeo, his wife Rampiari and his son Hiralal on the other. This attracted the attention of several residents of the locality, and the parties were pacified by Jadunandan Roy and Joy Lal Choudhury and were pursuaded to retire to their respective room. At about 7 P. M. On the same day, after Ram Shankar returned home there was another altercation and Jadunandan and others again intervened and pacified the parties, who were quarreling. Hiralal and his mother Rampiari returned to their room and apprehending an assault they chained the door from within. It was the case for the State that at about 9 r. M., 5 to 7 Hindusthani" came armed with iron rods and knives to 7 Madhab Ghosh Road and joined Ram Shankar, Sudama Singh, Bimala, Ramnarayan Missir and Depali who were also armed with lethal weapons, such as knives, 53 swords an iron roads. The whole party then proceed to No. 7 Tikiapara Road and Sudama singh broke open the door of the room of Ramdeo Ahir. Ram Shankar and his wife Bimala then entered the room, Sudama Singh standing outside. Ram Shankar and Bimala attacked Rampiari and Hiralal and stabbed them to death. On hearing the shrieks of Rampiari and Hiralal, Shyama Prosad Missir proceeded towards the courtyard, but was stabbed by Sudama Singh in the chest with a knife and collapsed on the spot. Sudama Singh was held by Jadunandan Roy, but was rescued by his Supporters who beat Jadunandan Roy with iron rods. At this juncture Ram Shankar and Bimala came out of Ramdeo 's room with their knives and cloths stained with blood. Surajnath Dubey who reached the room of Ramdeo was stabbed by Ram Shankar in his abdomen. Surajnath Dubey ran a short distance pressing his abdomen with his hands and fell down near the dispensary of one Dr. Dhruba Das Pandey where from he was removed to the Howrah General Hospital. He succumbed to his injuries on March 23, 1959. Ramnaryan Missir was present in the courtyard at the time of this assault and carried a sword in his hand and his wife Depali carried a sword iron rod. After killing Rampiari Hiralal, Shyama Prosad Missir and causing injuries to Surajnath Dubey, Ram Shankar and his supporters fled along the Madhab Ghosh Road. The sword carried by Ramnarayan was snatched away by Jivan Prosad Sett and in doing so the latter received a slight injury Ramnarayan and his wife Bimla and others were chased by a large crowd, but many of the miscreants made good their escape. Ramnarayan and his wife Depali took shelter in the house of one Lakshman Mahato. Ram Shankar, Bimala and Sudama Singh entered the godown of Bhola Singh at Sailen Bose Road. In the meantime, the officer incharge of the police station having received information on the telephone proceeded to Bhola Singh 's godown and 54 arrested Sadaman Singh and Bimala, Ram Shankar having run away from the godown. Sudama Singh and Bimla were brought to the scene of offence injuries on the dead bodies of Rampiari, Hiralal Shyama prosad Missir were examined. Information of tho offence was the recorded. At the trial of the appellants and other accused evidence was led in support of the case for the State that quarrels took place at 11 A. and 7 p.m. On the day in question between Rampiari and Hiralal on the one hand and Bimala, Ramnarayan Singh and Depali on the other and that at the quarrel at 7 P. M. Ram Shankar was also present. Evidence was also led to show that shortly after 9 P.M. Ram Shankar, his wife Bimala accompanied by Sudama Singh Ram Shankar 's cousin Ramnarayan Missir and his wife Depali and five or seven Hindusthani men approached the courtyard in front of No. 7 Tikiapara Road and Sudama Singh broke open the door of the room of Ramdeo Ahir and Ram Shankar and his wife Bimala entered the room armed with knives and emerged from the room sometime later with knives stained with blood. Evidence was also led that Shayama Prosad Missir was stabbed by Sudama Sihgh and Surajnath Dubey by Ram Shankar in tho presence of witnesses. The State also led evidence that the fleeing miscreants were chased by the residents of the locality and that Bimala and Sudama Singh were arrested in the godown of Bhola Singh. Before the High Court the verdict of the jury was successfully assailed by counsel for the appellants. The learned Judges of the High Court held that the verdict was vitiated on account of misdirection on material questions, and they accordingly disregarded the verdict and proceeded to consider the evidence independently of the verdict. They held that appellants Nos. l and 2 Ram Shankar and his wife Bimala were guilty of offences punishable 302 read with 34 of 55 the Indian Penal Code for causing in furtherance of their common intention death of Rampiari and Hiralal in the room of Ramdeo Ahir. The High Court also held Ram Shankar guilty of causing the death of Surajnath Dubey, and Sudama Singh of causing the death of Shyama Prosad Missir by stabbing him in the chest. The first question that falls to be determined is whether the High Court was, in the circumstances of the case, competent to appraise the evidence after discarding the verdict of the jury and to confirm the sentence of death after modifying the order of conviction. Section 423 of the Code of Criminal Procedure invests the High Court hearing on appeal against all order of conviction or acquittal passed by a Subordinate court of criminal jurisdiction with certain powers. These powers are exerciseable in appeals against orders passed in proceedings which are tried with or without the aid of jury. By section 418 (l), an appeal, in a case tried by jury, lies only on a matter of law. But if the High Could on a consideration of the materials on the record reaches the conclusion that the verdict in a case tried with jury erroneous owing to some misdirection by the Judge of misunderstanding of the law by the jury, the High Court has the power to reverse the finding and to acquit or discharge the accused or to order retrial or to alter the finding maintaining the sentence, or, with or without altering the finding, to reduce the sentence, or with or without such reduction and with or without altering the finding to alter the nature of the sentence. The High Court may in an appeal against an order of acquittal even in a case tried with jury reverse the order and direct that further inquiry be made or that the accused be retried or committed for trial, or the High Court may find the accused guilty and pass sentence on him according to law. These powers can be effectively exercised only if the High Court has the power to appraise the evidence and 56 that is made clear by sub section (2) of section 423, which by the clearest implication enacts that the Appellate Court may alter or reverse the verdict, if it be of the opinion that it is erroneous owing to misdirection by the Judge, or misunderstanding of the law by the jury. The power to direct retrial or to consider the case on the merits being conferred on the High Court in appeals against orders of acquittal as well as conviction, it can effectively be exercised only if the High Court is competent apart from the verdict to appraise the value of the evidence on which the order of the trial court is founded. The High Court is not bound when it arrives at the opinion that the verdict of the jury is vitiated to interfere with the verdict. The Court is, therefore, competent in appeals against orders of conviction and sentence or against orders of acquittal even in cases tried with jury to order a retrial or to maintain the convection and sentence on a reconsideration of the evidence. Counsel for the appellants does not challenge this interpretation of the powers of the High Court under sections 418 and 423 of the Code. In Abdul Rahim vs Emperor (1) in dealing with the powers of a High Court in a reference under section 374 for confirmation of death sentence passed by the Court of Session n a trial held with jury, where the verdict of the jury was found to be vitiated on the ground of admission of evidence, which, in law, was inadmissible, the Judicial Committee of the Privy Council observed: :Where inadmissible evidence has been admitted in trial by jury, the High Court on appeal may, after excluding such evidence, maintain a conviction, provided the admissible evidence remaining is in the opinion of the Court sufficient to establish the guilt of the accused. The High Court is not bound to order retrial in such cases. " (l) (1946) L. R 57 The Judicial Committee also observed "The primary duty of the Court on an appeal is indicated in section 423(1). It is to consider with the record before it whether there sufficient ground for interfering '. In a trial by jury, that there has been a misdirection is not of itself a sufficient ground to justify interference with the verdict. The Court must proceed to consider whether the verdict is erroneous owing to the misdirection or whether the misdirection has in fact occasioned a failure of justice. If the Court so finds then it has a plain justification for interfering and indeed a duty to do so. " The Judicial Committee also observed, "An appeal may be entertained only on a question of law, but once it has been held by the Appellate Court that there has been an error in law it is open to it to interfere ' with the jury 's verdict and if it thinks that the error in law affords sufficient ground for doing so it will then proceed to consider which of the various forms of 'interference ' it will adopt. Section 4,3 clearly indicates that within its meaning a misdirection by the Judge falls within the category of error in law, for it contemplates in sub s.(2) that an appeal is competent on the ground of misdirection. But a misdirection having been found to have occurred it is not necessarily a ground for interference. It may have been of a more or less trivial character. But if it has led to an erroneous verdict being returned or to a failure of Justice the statute plainly indicates that a case for interference has arisen. What form the interference shall take is left to the Court which is given a wide discretion. It need not order a retrial. It may for example acquit the accused. To order a retrial might well operate injustice in readily conceivable circumstances. " 58 We ale therefore of the opinion that s.423 applies to all appeals before the High Court whether from a trial by jury or otherwise and then the High Court finds that the verdict of the jury is vitiated on account of someone defect of law or misdirection it has full power to deal with the appeal in the manner specified in section 423 and for that purpose it may appraise the evidence to decide what course it will follow. But it is contended that where the Court of Session in a trial held by jury sentences the accused to suffer the penalty of death and the case is submitted to the High Court under section 374 of the Code of Criminal Procedure for confirmation of sentence and the accused also appeals against the order of conviction and sentence, the High Court is bounded to hear and decide the appeal in the first instance, and if on a consideration of the appeal, the High Court holds that the verdict was vitiated on account of misdirection or misunderstanding of the law on the part of the Jury, the verdict must, be set aside and with the disappearance of the verdict disappearance the order of sentence, and it is not open to the High Court to confirm the sentence of death on a reappraisal of the evidence. The High Court is bound in these cases, says counsel for the appellants to order retrial of the accused. An appeal under sub section (l) of 8. 418 of the code lies on a matter of fact as well as on matter of law, except where the trial is by Jury, in which case the appeal lies on a matter of law only. But that is not the only provision which invests the High Court with jurisdiction to deal with the case of an accused person when he is tried by jury and is sentenced to suffer death. The sentence of death passed by the Court of session in a reference under 8. 374 of the code cannot be executed unless it be confirmed by the High Court. Under section 376 the High Court dealing with a case submitted to it under 8. 374 (l) may confirm the sentence, or pass 59 any other sentence warranted by law, or (b) may annul the conviction, and convict the accused of any offence of which the Sessions Court might have convicted him, or order a l new trial on the same or an amended charge, or (c) may acquit the accused person. These powers are manifestly of wide amplitude, and exercise thereof is not restricted by the provisions of section 4l8 (l) and 423 of the Code Of Criminal Procedure. Irrespective of whether the accused who is sentenced to death prefers an appeal, the High Court is bound to Consider the evidence and arrive at an independent conclusion as to the guilt or innocence of the accused and this the High Court must do even if the trial of the accused was held by jury. In a case where the death sentence is imposed no sanctity attaches to the verdict of the jury. The verdict is not binding if the High Court holds on the evidence that the order of conviction is not warranted. Indeed, duty is imposed upon the High Court to satisfy itself that the conviction of the accused is justified on the evidence, and that the sentence of death in the circumstances of the case, is the only appropriate sentence. It has been the uniform practice of the High Court in India to hear the reference for confirmation of sentence of death and the appeal preferred by the accused together and to deal with tho merits of the case against the accused in the light of all the material questions of law as well as fact and to adjudicate upon the guilt of the accused and the appropriateness of the sentence of death In this case also, the High Court did hear the reference and the appeal together. On the view that the verdict of the jury was vitiated, the High Court was obliged to consider what order in the circumstances of the case was appropriate. The High Court was not bound in exercising powers under 8. 423 to order a retrial; it could exercise any of the powers under 8. 423(1)(b). The High Court had also to consider what order should be passed OD the reference under section 374, and to decide on an appraisal of the evidence 60 whether the order of conviction for the offences for which the accused were convicted was justified and whether, having regard to the circumstances, the sentence of death was the appropriate sentence. High Court is of course competent when dealing with a reference under section 374 to order a retrial but the High Court is not bound to do so in every 3 tried with jury when the verdict of the jury is found to be vitiated because of error of law or misdirection. The right, of trial by jury is an important right conferred upon accused persons in the trial of certain serious offences; but under our jurisprudence the right to trial by jury is a creation of statute and the question whether the accused in a given case having had the benefit of a trial by jury should because of misdirection be ordered to be retried, or his case be considered on the evidence by the appellate court, is one of the discretion and not of right. The High Court has, in the present case, exercised this discretion and we see no adequate ground to interfere with the exercise of that discretion. Learned counsel for the State invited our attention to judgment of this Court in Bhusan Biswas vs The State of West Bengal (1), in which this Court set aside the order passed by High Court directing retrial of a case which was tried with jury, in which the verdict was vitiated, and ordered that the High Court should hear the case on the evidence. The Court in that case observed, "In the circumstances of this case we are of the opinion that the High Court was in error in remanding the case for retrial; it should have followed the procedure laid down in the Privy Council case and should have gone into the evidence and determined for itself whether the accused were guilty or not." It is manifest that this Court vacated the direction of the High Court ordering retrial in the special circumstances of the case: the Court did not lay down any general rule that in every case where the verdict (1) Cr. A. 113 of 1956, decided on February 14,1957, 61 of the jury in a case where the accused has been convicted at a trial held with jury is found to be h vitiated the High Court must not remand the case for retrial. Counsel for the appellants, contended that in this case there had been no proper trial of the appellants before the Court of Session and therefore the order of the High Court should he set aside and retrial ordered. Counsel strongly relied upon the manner in which the examination of the accused under 8. 342 by the court of Session was conducted and submitted that the Sessions Judge asked complex questions to each of the accused relating to several distinct pieces of evidence brought on the record. For instance, Ram Shankar asked "You have heard the evidence as well as the cross examination of the prosecution witnesses. They have stated that you together with your wife Bimala Devi, brother Sudama Singh, Ramnarayan Missir and his wife Depali Missir and 5/7 other Hindusthani men armed with iron rods, daggers and swords formed an unlawful assembly at No. 7 Tikiapara Road on the 21st March, 59 with the intention of murdering one Rampiari and her son Hiralal and that you intentionally killed Rampiari and Suraj Dubey of 9 Madhab Ghosh Road with a knife. Do you want to say anything in your defence in connection with this charge?" Similar questions were also asked of accused Bimala and Sudama Singh. With regard to the events subsequent to the murder of Rampiari, Hiralal and Shyama Prosad Missir another complex question was asked. It is urged that the examination of the accused held in this manner was not in accordance with section 342 of the Code of Criminal Procedure, the terms whereof are mandatory and the Sessions Judge having failed to comply therewith the accused it must be presumed were prejudiced. It was submitted in support of this contention that if the several components of the questions which dealt with independent matters on which evidence was led by the prosecution had 62 been split up, the accused might have given some explanation acceptable to the jury. The Sessions Judge having failed to do so, the trial must be regarded as vitiated. In our view, the learned Sessions judge in rolling up several distinct matters of evidence in a single question acted irregularly. Section 342 of the code of Criminal Procedure by the first sub section provides, in so far as it is material: "For the purpose of enabling the accused to explain any circumstances appearing in the evidence against him, the Court . . . . . . . shall . . . question him generally on the case after the witnesses for the prosecution have been examined and before he is called on for his defence. " Duty is there by imposed upon the Court to question the accused ganerally in a ease after the witnesses for the prosecution have been examined to enable the accused to explain any circumstance appealing against him. This is a necessary corollary of the presumption of innocence on which our criminal jurisprudence is fonded. The object of the section is to afford to the accused an opportunity of showing that the circumstance relied upon by the prosecution which may be prima facie against him, is not true or is consistent with his innocence. The opportunity must be real and adequate. Questions must be so framed as to give to the accused clear notice of the circumstances relied upon by the prosecution, and must give him an opportunity to render such explanation as he can of that circumstances. Each question must he so frilled that the accused may be able to under stand it and to appreciate what use the prosecution desired to make of the evidence against him. Examination of the accused under section 342 in not intended to be an idle formality, it has to be carried out, in the interest of justice and fairplay to the accused: by a slipshod examination which is the result of imperfect appreciation of the evidence, 63 idleness or negligence the position of the accused cannot be permitted to beamed mere difficult than what "it is in a trial for an offence. This Court pointed out in Ajmer Singh State of Punjab(1) that "it is not a sufficient compliance with the section (s.342 Code of Criminal Procedure) to generally ask the accused that, having heard the prosecution evidence what he has to say about it. He must be questioned separately about each material circumstance which is intended to be used against him. The whole object of the section is to afford the accused a fair and proper opportunity of explaining circumstances which appear against him and the questions must be fair and must be couched in a form which an ignorant or illiterate person may be able to appreciate and understand. " The examination by the Sessions Judge of the appellants perfunctory, but as observed in Ajmer Singh 's case, every error or omission complying with section 342 does not vitiate the trial. "Errors of this type fall within the category of curable irregularities and the question whether the trial has been vitiated depended in each case upon the degree of error and upon whether prejudice has been or is likely to have been caused to the accused". To the questions asked by the. judge, the answers given by the appellants were either "I am innocent" or "the story is false". Failure on the part of the Sessions Judge to split up the questions so as to deal with each distinct feature or material piece of evidence separately, however, does not, in the circumstance as of the present case, justify an inference that prejudice was thereby caused to the appellants. accused for the appellants has not been able to suggest, having regard to the line of cross examination adopted and the criticism of the evidence of the prosecution witnesses offered by him, what explanation besides completo denial of the prosecution story, the appellants could have offered in answer to the questions relating to the different circumstances and pieces or features of evidence (1) ; 64 on which the prosecution relied. It is true that the prosecution strongly relied upon two circumstances against Bimala (1) that when she came out of the house of Ramdeo Ahir, she had a blood stained knife in her hand and (2) that when she was arrested from the godown of Bhola Singh; the knife was in her hand. To these matters of evidence attention of the accused Bimala does not appear to have been invited. Similarly. attention of Ram Shankar to the evidence that when he came out of the room of Ramdeo Ahir, he had a knife in his hand was not invited. But we have already observed, beyond a bare denial, the learned counsel was unable to suggest any other answer which the accused could give to these pieces of evidence even if they had been specifically put to them. It is also to be noticed that the plea that the appellants had not been properly examined under 8. 342 of the Code of Criminal Procedure was not raised before the High Court: at least there is no reference in the judgment of the High Court to any such argument. Failure to comply with the provisions of section 342 an irregularity; and unless injustice is shown to have resulted therefrom a mere irregularity is by itself not sufficient to justify an older of retrial. The appellate court must always consider whether by reason of failure to comply with a procedural provision, which does not affect the jurisdiction of the court, the accused have been materially prejudiced. In the present case, we are of the view, having regard to the circumstances, that the appellants have not been prejudiced, because of failure to examine them strictly in compliance of the terms of s 342 of the Code and that view is strengthened by the fact that the plea was not raised in the High Court by their counsel who had otherwise raised numerous question in support of the case of the appellants. Rampiari, her son Hiralal, Shyama Prosad Missir and Surajnath Dubey received fatal injuries shortly after 9 P.M. On the night of March 21, 65 1959. Rampiari had on her person two incised injuries on the left side of chest cutting through the Ra ribs. Hiralal had six injuries on his chest, abdomen and arms four incised injuries and two punctured. Shyama Prosad Missir had one injury on the chest piercing the thoracic cavity. Surajnath Dubey had injury in the abdomen. These injuries were in the ordinary course of nature sufficient to cause death. The appellants contend that they were not responsible for the injuries to these victims. We were taken through the entire evidence which is material to the case of the three appellants by the learned counsel for the appellants. In respect of the first incident when took place in the morning of the fateful day, there is the evidence of Jadunandan Rao which is corroborated by the statement contained in the First Information Report, and also corroborated by the statement of Ramdeo husband of Rampiari. The second incident, took place at about 7 P. M. The witnesses in connection with that incident are Jadunandan Roy, B. P.Singh and Jangli Bahadur. It appears from the evidence of these witnesses that the parties Rampiari and Hiralal on the one hand and Ram Shankar, his wife Bimala Devi, Ramnarayan Missir and his wife Depali on the other were quarrelling and were pacified and Rampiari and Hiralal were persuaded to go back to their room and bolt it from inside. The High Court has believed the evidence relating to these two incidents and we see no reason for not accepting it. The third incident consists of three phases (i ) assault upon the room of Ramdeo Ahir, the breaking open of the door and attack on Rampiari and Hiralal resulting in their death; (2) assault on Shyama Prosad Missir by Sudama Singh and (3) assault on Surajnath Dubey. The evidence discloses that the common courtyard between 7 Madhab Ghosh Road and 7 Iikiapara Road was lit up by the light of an electric lamp in the house of Joy Lal Choudhury, two of the 66 windows of the first floor being open. There is also the evidence that in the room of Ramdeo on the occasion in question a kerosene lantern was burning. It is so recited in the First Information Report and the kerosene lantern was seen by the Sub Inspector of Police when he arrived on the scene of offence. It cannot be disputed, therefore, that the scene of offence was fully lighted at the time of the assault and the witnesses could identify the assailants. About the assault upon the room of Ramdeo Ahir and the entry of appellants Ram Shankar and his wife Bimala Devi into the house after the door was broken open by Sudama Singh, there is the evidence of as many as six eye witnesses they are Jadunandan Roy, Ram Chandra Goala, Tribeni Jadab, Sukdeo Majhi, Hosila Jadab and Sundar Jadab. Thc First Information Report lodged by Jadunandan Roy substantially gives the same story. Jabunandan Roy has deposed to the entire story of the breaking open of the doer by Sudama Singh and the entry by Ram Shankar and Bimala into the room, the shrieks of Rampiari and Hiralal and about Ram Shankar and Bimala coming out of the room after stabbing Rampiari and Hiralal. Ram Chandra Goala stated that when he came near the house of Ramdeo he found Ram Shankar and Bimala coming out of the room with knives in their hands. Tribeni Jadab stated that he saw Sudama Singh breaking open the door of Ramdeo Ahir with an iron rod, that thereafter Ram Shankar and Bimala entered the room each carrying a knife, that is heard shrieks of Rampiari and Hiralal and that after some time Ram Shankar and Bimala came out of the room with knives. Sukdeo Majhi stated that he saw Ram Shanknr and Bimala coming out of Ramdeo 's room with knives in their hands. There is also the evidence of Hosila Jadab who stated that he saw Ram Shankar and Bimala coming out of Ramdeo 's room with blood stained knives. Sundar Jadab has stated that when he reached the courtyard he found Sudama Singh 67 breaking open the door of Ramdeo 's room with all iron rod and thereafter Ram Shankar and his wife getting into the room with knives in their hands, and he heard Hiralal and his mother shouting for some time. The High Court has accepted the testimony of these witnesses. It is true that Jadunandan Roy stated that, he saw through the open door of the room of. Ramdeo Ahir, after it was broken open, Ram Shankar stabbing Rampiari and Bimala stabbing Hiralal and the High Court regarded this part of the story as an embellishment which must be discarded. The mere fact that the witness Jadunandan Roy had improved his story will not by itself be sufficient to disregard his testimony in its entirety. About the assault on Shyama Prosad Missir, when he tried to intervene,there is the evidence of Jadunandan Roy, Tribeni Jadab, Sukdeo Majhi, Hosila Jadab and Sundar Jadab. Each of these witnesses has deposed that Shyama Prosad Missir who intervened was stabbed by Sudama Singh in the abdomen. About the assault on Suraj Dubey by Ram Shankar, there is the evidence of Jadunandan Roy, Tribeni Jadab and Hosila Jadab. In the cross examination of these witnesses for the production, it was suggested that there was a free fight between some "Hindusthanis" and "goalas", in the course of which injuries may have been suffered by Rampiari, Hiralal, Shyama Prosad Missir and Suraj Dubey. But Rampiari and her son Hiralal were found dead in their own room: the dead bodies were lying of a cot. The body of Shyama Prosad Missir was lying with a single injury at the gate of 7 Tikiapara Road and Surajnath Dubev was stabbed a short distance away. There is no evidence of any serious injuriy suffered by any other person. If there had bee a free fight, some injuries to participants on both the sides may reasonably be expected. It is true that according to the prosecution besides the accused there were 68 present 5 or 7 Hindusthani men, who were also armed. There is no evidence, however, that any of these Hindusthanis took any active part in the assault on Rampiari, Hiralal, Shyama Prosad and Surajnath. The Hindusthanis were not identified and have never been traced; but there is no evidence that they participated in the assault. The story of a free fight, between the goalas and the Hindusthani men has been discarded by the High Court and, in our judgment, properly. Certain matters of general criticism of the evidence were also urged by the learned counsel for the appellants. He contended that no reliance should be placed on the contents of the First Information because it showed inherent evidence that it must have been fabricated some time after the investigating officer commenced investigation and in support of that contention reliance was placed upon the fact that even though it was alleged to have been despatched on the night of March 21, 1959 from the police station, a copy of the First information reached the Sub Divisional Magistrate Howrah on March 26, 1959. Section l57 of the Code of Criminal Procedure enjoins that a copy of the First Information Report be sent forthwith to the Magistrate having jurisdiction. It is also true that the copy of the First Information Report passed through the Court Inspector 's office on March 25, 1959 and reached the Sub Divisional Magistrate on March 26, 1959. The Sub Inspector of Police in charge of the investigation stated in his cross examination that he could not explain why the copy did not reach the Sub Divisional Magistrate before March 26, 1961. If, however, it was the case that the copy was not despatched from his office at the time when it was claimed it was despatched, further cross examination should have been directed, the mere endorsement of 26th March, 1959 as the date on which the First Information reached the Sub Divisional Magistrate is not 69 in itself sufficient to disregard a mass of direct evidence. It was then urged that the story that Bimala was carrying a knife even when she was arrested was on the ground of utter improbability unreliable. It was urged that the normal reaction of an assailant running away from the scene of offence to escape arrest would be to throw away the weapon of offence. But this argument based on mere improbability would not be sufficient body of disinterested testimony about the knife being in her hand when she was arrested. It was also submitted that the story of Jadunandan Roy that he caught Sudama Singh after the latter had stabbed Shyama Prosad Missir is untrue. It was urged that if Sudama Singh, who was armed with a knife was over powered by Jadunandan Roy, the story that Sudama Singh ran away with the other assailants could not be true. But Jadunandan in his evidence has deposed that when he caught Sudama Singh he was assaulted by others who accompanied Sudama Singh and was struck on his head and on other parts of body with a rod. This story is corroborated by the medical evidence about injuries on the person of Jadunandan Roy Learned counsel for the appellants strongly relied upon the fact that even though a large majority of the prosecution witnesses who came near 7 Tikiapara Road deposed to the presence of Ramnarayan Missir and his wife Depali and further deposed that Ramnarayan Missir had a sword in his hand, the Sessions Judge acquitted Depali and the High Court acquitted Ramnarayan. It is urged that if the testimony of these witnesses who deposed to the presence of Depali and Ramnarayan Missir is found to be untrue, the Court should scrutinize the evidence of the other witnesses witnesses with care and having regard to the unsatisfactory features disclosed in the cross examination, the rest of the evidence should also be discarded. But it was not the evi 70 dence of any of the witnesses for the prosecution that Depali had taken part in the assault. Her presence with a rod in her hand is deposed to by the witnesses ut it is not alleged that she had taken any part in the assault on any one. Similarly, though there was evidence that Ramnarayan Missir was present carrying a sword, yet the High Court on a consideration of the evidence came to the conclusion that in the absence of reliable evidence that he participated in the assault near 7 Tikiapara Road the case against him was not proved. We do not think; that because the High Court held the case against Ramnarayan as not established, the prosecution evidence in its entirety may be disregarded. On a review of the evidence, we hold that the First Information about the commission of the offence was given immediately: in the First Information the names of the three appellants and the part played by them was set out in detail. The police officer who arrived on the scene shortly after the incident found the door of Ramdeo Ahir 's room broken and blood marks were found at various places in Ramdeo Ahir 's room as well as in the courtyard. Many of the witnesses who supported the case for tho State wore disinterested and independent. No injuries were found on any of the party of the accused which could be attributed to a fight between their party men and the goalas. Having regard to these circumstances, we are of tho view that the High Court was right in holding that the prosecution story was true. Counsel for the appellants submitted that, in any event, against Sudama Singh the evidence was not strong enough to warrant his conviction. It was contended that Sudama Singh resides not in Madhab Ghosh Road but in the godown in which he was arrested. It is also urged that no extensive blood marks were found on his clothes and the knife alleged to have been used by him is not found. In our opinion, there is a mass of reliable evidence 71 against Sudama Singh which establishes his presence at the scene of the offence and the part played by him. There is the evidence of five eye witnesses to which we have already referred. His presence at the scene is corroborated by the testimony of Basanta Prosad Singh who had heard Depali shouting shortly before the assault commenced that Sudama Singh had arrived. Then there is the evidence of Jiban Prosad Sett who deposed that he ad on the night in question Then Ram Shankar, Sudama Singh, Bimala and Ramnarayan Missir, all coming from Madhab Ghosh Road towards Tikiapara Road and that he had seen Sudama Singh with a knife. Sewdhari Sharma stated that he had been Sudama Singh and 3 or 4 other persons running away from the scene of offence and at that time he had a knife in his right hand. Subinspector Deepak Das stated that he had arrested Sudama Singh near the godown. Sub Inspector Z. Haque attached the dhoti from the person of Sudama Singh and that dhoti was sent to the Chemical Analyses an I Serologist. According to the Chemical Analyses the dhoti, bore blood marks. In the seizure list the dhoti is described as having "slight" blood stains and the Assistant Serologist reported that the blood on the dhoti, was so disinterested that its origin could not be determined. The testimony of Jadunandan Roy, Tribeni Jadab, Sunder Jadab, Jiban Prosad Sett, and Sukdeo Majhi abundantly establishes the presence of Sudama Singh at the scene of the offence and the part played by him. He is also seen running away from the scene of offence. The knife carried by him is not found: blood marks found on his dhoti are also not proved to be human in origin, but, having regard to the evidence of the eye witnesses, which is both independent and disinterested, we see no reason to disagree with the view of the High Court that Sudama Singh was present at the scene of offence and he broke open the door of Ramdeo Ahir 's house to facilitate the entry of Ram Shankar and 72 Bimala to murder Rampiari and Hiralal and that he stabbed Shyama Prosad Missir with a knife. Ram Shankar and Bimala forceably entered the house of Ramdeo Ahir and killed Rampiari and Hiralal. Ram Shankar also stabbed Suraj Dubey when he attempted to protest against his conduct. Sudama Singh, besides breaking open the door of Rmdeo Ahirs room to facilitate the entry by Ram Shankar and Bimla stabbed Shyama Prosad Missir when the latter tried to intervene. The assault upon the members of the family of Rmdeo Ahir was conceived and initiated with deliberation, and with the object of slaughtering a defenceless woman and her young son. Innocent persons who intervened were mercilessly stabbed and killed. There is no ground, therefore, for disagreeing with the High Court that this is pre eminently a case in which death sentence should be imposed on the three appellants. On the view taken by us this appeal fails and is dismissed. Appeal dismissed.

The appellants and two others were tried by the Court of session sitting with a jury for rioting and causing fatal injuries to certain persons. The jury brought a unanimous verdict of guilty against the appellants. The Sessions Judge accepted the verdict and sentenced them subject to confirmation by the High Court to suffer the penalty of death. The reference for confirmation of death sentence and the appeal filed by the appellants against the order of conviction and sentence were heard by the High Court which held that the verdict of the Jury was vitiated on account of misdirection on material questions by the Sessions Judge, and thus disregarded the verdict and proceeded to consider the evidence independently of the verdict and after an elaborate examination of the evidence found the appellants guilty of the offences punishable under section 302 read with 8. 34 of the Indian Penal Code and confirmed the sentence of death. It was contended that (I) the High Court was not competent to appraise the evidence after discarding the verdict of the jury and to confirm the sentence of death after modifying the order of conviction, (2) where the High Court had held that the verdict was vitiated, on account of misdirection or misunderstanding of law and had set the verdict aside, then with the disappearance of the verdict the order of sentence also dissppeared and it was not open to the High Court to confirm the sentence and the High Court was bound to order a re trial and (3) that the accused were prejudiced when under section 342 of the Code of Criminal Procedure, they were asked complex questions which could not be understood by them. ^ Held, that section 423 of the Code of Criminal Procedure applies to all appeals before the High Court whether from a trial by jury or otherwise and when the High Court finds that the verdict of the jury is vitiated on account of some error of law or misdirection it has full power to deal with the appeal in the manner specified in section 423 of the Code and for that purpose it may appraise the evidence to decide what course it 50 will follow, and was not bound in exercising powers under section 423 to order a retrial; it could exercise any of the powers under section 423(1)(h). Held further, that the powers under sections 374(1) and 376 of the Code are manifestly of wide amplitude and exercise thereof is not restricted by the provisions of section 418(1) and section 423 of the Code. Irrespective of whether the accused who is sentenced to death prefers an appeal, the High Court is bound to consider the evidence and arrive at an independent conclusion as to the guilt or innocence of the accused and this the High Court must do even if the trial of the accused was held by jury. In a case where the death sentence is imposed no sanctity attaches to the verdict of the jury. The verdict is not binding if the High Court holds on the evidence that the order of conviction is not warranted. On a reference under section 374 duty is imposed upon the High Court to satisfy itself that the conviction of the accused is justified on the evidence, and that the sentence of death in the circumstances of the case is the only appropriate sentence. When dealing with a reference under section 374 of the Code the High Court was competent to order a retrial but is not bound to do so in every case tried with jury when the verdict of the jury is found to be vitiated because of error of law or misdirection. The right of trial by jury is an important right conferred upon accused persons in the trial of certain serious offences. The question whether the accused having had the benefit of a trial by jury should because of misdirection be ordered to be retried, or his case be considered on the evidence by the appellate could, is one of discretion and not of right. Held, also, that the failure to comply with the provisions of section 342 of the Code is an irregularity and unless injustice is shown to have resulted therefrom a mere irregularity is by itself not sufficient to justify an order of retrial. The appellate court must always consider whether by reason of failure to comply with a procedural provision, which does not affect the jurisdiction of the court, the accused have been materially prejudiced. Abdul Rahim v, King Emperor (1946) L. R. 73 I. A. 77 and Ajmer Singh vs State of Punjab ; , referred to.

The appellant in this appeal was convicted by the Presidency Magistrate, Bombay, of an offence under section 66(b) of the Bombay Prohibition Act (Act XXV of 1949) and sentenced to undergo imprisonment till the rising of the court and to pay a fine of Rs., 250 or in default to undergo rigorous imprisonment for one month. He preferred an appeal to the High Court at Bombay, which was summarily dismissed. After the dismissal of that appeal, the State of Bombay made a revision application to the High Court praying for enhancement of the sentence. Notice was issued to the appellant under section 439(2) of the Code of Criminal Procedure to show cause against enhancement. 95 Held that the summary dismissal of the appeal preferred by the appellant did not preclude him from taking advantage of the provisions of section 439(6) of the Code of Criminal Procedure and showing cause against his conviction when he was subsequently called upon to show cause why the sentence imposed on him should not be enhanced. Per DAS J. Sub section (6) of section 439 of the Code of Criminal Procedure confers a new and a valuable right on the accused. The language used in sub section (6) does not, in terms, place any fetter on the right conferred by it on the accused. This new right is not expressed to be conditioned or controlled by anything that may have happened prior to the revision application under sub section (1) for enhancement of sentence. Therefore, whenever there is an application for enhancement of sentence, a notice must issue under sub section (2) to the accused person to show cause and whenever such notice is issued, the accused person must, under sub section (6), be given an opportunity, in showing cause against enhancement, also to show cause against his conviction. It is not correct to say that sections 421, 435 & 439 of the Code give the court a discretion not to decide the appeal or revision brought before it. The discretion conferred on the High Court does not authorise it to say that it will not look at the appeal or revision. The Court 's bounden duty is to look into the appeal or revision and decide it, although in the process of arriving at its decision it has a very wide discretion. There is no reason for holding that there is a merger or replacement of the Judgment of the trial Court into or by the Judgment of the High Court only when the appeal or revision is heard on notice to the respondent and either allowed wholly or partially or dismissed but not when it is heard without notice to the respondent and dismissed summarily; for this purpose it makes no difference whether the dismissal is summary or otherwise, and there is a judgment of the High Court in all the three cases. The only difference in substance is that in the first two cases the judgment is final qua both parties while in the third case, i.e., when an appeal or revision by the accused is summarily dismissed without issuing notice to the State, the judgment is final only qua the accused who preferred the appeal or revision. This is based not on any technical doctrine of res judicata, for there is none in criminal cases, but on the general principle of finality of judgment. In the first two cases there can, after the judgment, be no further application by the State for enhancement of sentence and therefore no question of the application of section 439(6) can arise. In the last case, i.e., in case of summary dismissal the Judgment not being final qua the State, the State may apply for enhancement of sentence and if it does the accused becomes entitled again to show cause against his conviction also by reason of the special provisions of section 439(6). Per BHAGWATI and IMAM JJ. A Judgment pronounced by the High Court in the exercise of its appellate or revisional 96 jurisdiction after issue of a notice and a full hearing in the presence of both the parties would certainly be arrived at after due consideration of the evidence and all arguments and would therefore be a final judgment and such judgment when pronounced would replace the judgment of the lower court, thus constituting the only final judgment to be executed in accordance with law by the court below. When however a petition of appeal presented by a convicted person from jail is summarily dismissed under section 421 or a revision application made by him is dismissed summarily or in limine without hearing him or his pleader what the High Court does in such a case is to refuse to entertain the petition of appeal or the revision application and the order passed by the High Court dismissed or rejected" cannot be said to be an expression of the opinion of the court arrived at after due consideration of the evidence and all the arguments. No notice for enhancement of sentence can be issued by the High Court when a judgment is pronounced by it after a full hearing in the presence of both the parties either in exercise of its appellate or its revisional jurisdiction. Such notice for enhancement of sentence can be issued by it either suo motu or at the instance of an interested party when the judgment of the lower court subsists and is not replaced by its own judgment given in the exercise of its appellate or revisional jurisdiction. When the Judgment of the lower court has been under its scrutiny on notice being issued to the opposite party and on a full hearing accorded to both the parties notice for enhancement of sentence can only be issued by it before it pronounces its judgment replacing that of the lower court. When such hearing is in progress it is incumbent upon the High Court or the opposite party to make up its mind before the judgment is pronounced whether a notice for enhancement of sentence should issue to the accused. Case law discussed.

The six appellants were convicted under section 304 Part II with section 34 of the Indian Penal Code by the Sessions Judge add their appeal was summarily dismissed by the High Court. On appeal by special leave, it was contended that section 304, Part 11 could not be read with section 34 Indian Penal Code because the second part of section 304 excluded intention and was concerned with knowledge and the conviction was illegal. Held:(i) Section 34 when it speaks of a criminal act done by several persons in furtherance of the common intention of all, has regard not to the offence as a whole, but to the criminal act, that is to say, the totality of the series of acts which result in the offence. In the case of a person assaulted by many accused, the criminal act is the offence which finally results, though the achievement of that criminal act may be the result of the action of several persons. (ii)Knowledge in section 304 Part 11 is the knowledge of likelihood of death and the common intention is with regard to the criminal act. If the result of the criminal act is the death of the victim and if each of the assailants possesses the knowledge that death is the likely consequence of the criminal act, there is no reason why section 34 should not be read with the second part of section 304 to make each liable individually. lbra Akanda vs Emperor, I.L.R. and Saidu Khan vs State, I.L.R. [1952] 1 All, 639, approved. Ramnath vs Emperor, A.I.R. 1943 All. 271, Shahibzada V. The Crown A.I.R. 1950 Peshawar 24, Debi Chand Haldar vs Emperor, and Barendra Kumar Ghosh vs Emperor, Cal. referred to.

The appellants, were alleged to have entered the house of one with the common intention of killing him. One of the appellants injured E with a dagger while the other three held him. E 's injury did not prove fatal. The Sessions Judge convicted them under sections 449 and 307 with section 34 of the Indian Penal Code. which on appeal was upheld by the High Court. On appeal by certificate, it was contended that there can 979 be no conviction under section 449 of the Indian Penal Code unless murder had actually been committed; and that a charge under section 307 read with section 34 of the Indian Penal Code was not Sustainable in law. Held: There was no substance in either of these contentions. An act can be said to be committed "in order to the committing of an offence" even though the offence may not be completed. The words "in order to" have been used in section 449 I.P.C. to mean "with the purpose of '. Whether or not the purpose was actually accomplished is quite irrelevant. Once it is decided that the act is so done by a number of persons in furtherance of the common intention of all, the legal position that results is each person shall be held to have committed the entire criminal act.

The appellants were charged with offences under section 143/402, 186 and 353, Indian Penal Code for having obstructed and assaulted two public servant in the discharge of their public duty of executing the decree of a Civil Court. They were acquitted by the trial Court, but on appeal, the High Court convicted them under section 353, acquitted them under sections 143/402 and held that the prosecution under section 186 was barred by a. 195, Criminal Procedure Code, which requires a complaint in writing by the public servant before a court could take cognizance of the offence. In appeal to this Court, it was contended that the prosecution under section 353, Indian Penal Code, was also barred by section 195 Criminal Procedure Code. HELD : Sections 186 and 353, Indian Penal Code, relate to two distinct offences and section 353 is not referred to in section 195 Cr. P.C. Section 195, Criminal Procedure Code, does not bar the trial of an accused person for a distinct offence disclosed by the same set of facts, but which is not within the ambit of that section, when there is no camouflage or evasion to circumvent the Section. Therefore the trial of the appellants for the distinct offence under section 353 was not barred though it was based practically on the same facts as for the prosecution under section 186, and the High Court was justified, on the evidence, in interfering with the order of acquittal passed by the trial Court in regard to that charge. [640 E, G; 641 E] Sanwat Singh vs State of Rajasthan ; and Agarwal and Kulkarni vs State of Maharashtra, ; , followed. Basir ul Huk V. State of West Bengal ; and Hori Ram Singh vs The Crown, , referred to.

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.

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

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.

Appeals Nos. 220, 221, 349 and 497 of 58. Appeals from the judgment and decrees dated 1955 March 24,1956 September 15 and 1956 April 12 of the former Saurashtra High Court at Rajkot in Civil Second Appeals Nos. 123 of 1953 & 104 of 1955 and Civil Appeals Nos. 42 of 1953 and 50 of 1954. M. C. Setalvad, Attorney General for India, C. K.Daphtary, Solicitor General of India, B. Sen and R. H. Dhebar, for the Appellant (In all the Appeals). I. N. Shroff for the Respondents (In C. As. Nos. 220 and 221 of 1958). G.S. Pathak, N. P. Nathnwni and K. L. Hathi for the Respondents (In C.A. No. 349 of 1958). J.P. Mehta, J. B. Dadachanji, Onkar Chand Mathur and Ravinder Narain, for the Respondents C.A. No. 497 of 1958). October 3. The Judgment of Sinha, C.J., section K. Das and N. Rajagopala Ayyangar,, JJ. was, delivered by section K. Das, J. The Judgment of Sarkar and J. R. Mudholkar, JJ., was delivered by J. R. Mudholkar, J. section K. DAs, J. These four appeals which have been brought to this Court on certificates granted by the then High Court of Saurashtra under article 133 of the Constitution fall into three groups, and have been heard together. The essential facts relating to these appeals are the same, and 'a common question of law now falls for determination on those facts. 973 The State of Gujarat., within whose territories the disputed properties are now situate, is the appellant in the appeals. The respondents and in some cases their. ancestors, obtained grants from the then Nawab of Junagadh, which was then a ruling State, in respect of lands and, in one case, of a building known as "Datar Manzil '. These grants were repudiated or cancelled and the property, subject of the grant, was resumed by the Administrator who took over charge of the administration of Junagadh on behalf of the Dominion of India in 1947 in circumstances which we shall presently state. The respondents brought suits challenging the validity of the orders made by the Administrator. These suits were decreed by the lower court and the decrees were substantially upheld by the High Court of Saurashtra. The principal point for decision in these appeals is whether the impugned orders made by the Administrator arose out of and during an act of State which was not justiciable in the municipal courts. This is the only point which has been agitated before us on behalf of the, appellant State and very strong reliance has been placed on the decision of this Court in the State of Saurashtra vs Memon Haji Ismail Haji (1) where, in circumstances same as those of the appeals before us, it was held that the act of the Dominion of India in assuming the administration of Junagadh was an act of State pure and simple and the resumption of the grant in question therein having been made by the Administrator before that act was completed and at a time when the people of Junagadh were aliens outside the State, the act of resumption, however arbitrary, was an act of State on behalf of the Government of India and was not, therefore, justiciable in the municipal courts. It may be here noted that by that decision this Court over ruled the earlier decision of the Saurashtra High Court in State of Saurashtra vs Memon Haji Ismail Haji Valimamad(2), (1) ; (2) A.I.R. 1953 Saurashtra 180. 974 a decision on the basis of which the High Court decided the cases under consideration in these appeals. The learned Attorney General has submitted that the decision of this Court in the State of Saurshtra vs Memon, Haji Ismail Haji completely covers and concludes the present appeals. On behalf of respondents it has been, contended that the decision aforesaid proceeded on a finding that the, act of State,. was not completed before the impugned orders were made and that finding being a finding of fact does, not bind the respondents who were not parties to the case in which the decision was rendered. In the appeals before us the main contention on behalf of the respondents has been that the impugned orders were made after the assumption of sovereignty by the Dominion of India was completed, and therefore the decision of this Court in the State of Saurashtra vs Memon Haji Ismail Haji(1) is not determinative of the problem which arise,% in these, appeals. It has been further argued that, after full sovereignty, had, been assumed by the Dominion of India, the petition of the people of Junagadh, including the respondents was not that of. aliens outside the State, but their position on such assumption of sovereignty was that of citizens of India against whom there could be no act of State and they had rights as such citizens in respect of which they could ask for relief in the municipal courts. We have set out above, in brief outline, the principal point which falls for decision in these appeals and the respective contentions of. the parties relating thereto in order to highlight the main problem presented for solution in these appeals. But we must first set out the essential facts which are relevant for the solution of the problem ' We have already stated that the essential facts , are the same in these appeals, though the facts relating (1) [1960] I section C R. 537. 975 to each ' of the grants made in favour of the respondents are, different We shall state the essential facts bearing upon. the main problem and then briefly refer to the grants made in each of the India attained independence in 1947. As from the 15th day of August, 1947, two independent Dominions were set up known respectively as India and Pakistan under the Indian Independence Act, 1947 (10 & 11 Geo. C. 30). Under section 7 of the said Act, the suzerainty of Iris Majesty over the Indian States including Junagadh lapsed. It released those States from all their obligations to the Crown. The White Paper on Indian States said (at page 32) : "It was evident that if in consequence the Indian States became separate independent entities, there would be a serious vacuum not only with regard to the political relationship between the Central Government and the States, but also in respect of the co ordination of all India policies in the economic and other fields. All that the Dominion Government inherited from the Paramount Power was the proviso to section 7 of the Indian Indepen dence Act, which provided for the continuance, until denounced by either of the parties, of agreements between the Indian States and the Central and Provincial Governments in regard to specified matters, such as Customs, Posts and Telegraphs, etc. (Appendix IV). " A process of accession was therefore begun and by August 15, 1947 all the States in the geographical limits of India barring Hyderabad, Kashmir and Junagadh had acceded to the Indian Dominion. The Nawab of Junagadh however, did not accede to the new Dominion of India by executing an Instrument of Accession as did the other Rulers in Saurashtra. He fled the country and the affairs of Junagadh State fell into disorder and chaos. At the request 976 of the Nawab 's Council, the Government of India decided to take over the administration of the State. On November 9, 1947, the Regional Commissioner, Western India and Gujarat States Region, assumed charge of the administration of the State on behalf of the Government of India. A proclamation was issued on that date which. said that the Regional Commissioner had assumed charge of the administration of the Junagadh State at 18 00 hours on November 9, 1947. On November 14, 1947 the Regional Commissioner appointed Shri section W. Shiveshwarkar as Administrator of Junagadh State. The Administrator passed certain orders which are the orders impugned in these appeals and to which we shall presently refer, but we must first complete the general picture of political changes that took place in Junagadh. In February, 1948 the Government of India held a referendum in Junagadh State to ascertain the choice of the people in regard to accession and the people voted by a large majority in favour of accession to the Dominion of India. The Administrator then decided with the approval of the Government of India to appoint an Executive Council with himself as President and three other persons as members thereof. In December, 1948 the elected representatives of the people of Junagadh resolved that the administration of the State be made over to the Government of Saurashtra and that the representatives of Junagadh be enabled to participate in the Constituent Assembly of Saurashtra ' State with a view to framing a, common Constitution for Saurashtra and the Junagadh State. It is necessary to state now how this integration took place. On January 23, 1948, thirty rulers of the principal States of Kathiawar signed a covenant bringing into existence the United State of Kathiawar (later I known as the ' United State of Saurashtra) comprising the territories of their States for the welfare of the people and entrusted to a Constituent, Assembly the. task 977 of drawing up a democratic Constitution for that State within the frame work, of the Constitution of India, to which they had already acceded. On that date Junagadh State had no Ruler nor was any Covenant signed on behalf of the Junagadh State. Later, in December, 1948, the elected representatives of the people of Junagadh, Manavadar, Mangrol, Bantwa, Babariawad and Sardargarh recommended to the Government of India and the Government of the United State of Saurashtra, as it was then called, that the administration of the States mentioned above be integrated with the United State of Saurashtra. The Rulers of the Covenanting States thereupon entered into a Supplementary Covenant with the concurrence of the Government of India to provide for such integration and for the participation of the elected representatives of the people of these States into the Saurashtra Constituent Assembly. Article 3 of the, Supplementary Covenant was in these terms (See White Paper on Indian States, page 249) : "From a date to be agreed upon between the Government of the said States and the Government of the United State of Saurashtra, with the concurrence of the Government of India, the administration of the said States shall be integrated with that of the United State of Saurashtra and thereafter the legislative and executive authority, powers and jurisdiction of the United State of Saurashtra shall extend to the said States to the same extent as it extends to the territory of any Covenanting State. . . " The administration of the Junagadh State was thereafter integrated with that of the United State of Saurashtra on January 20, 1949. Therefore, as from that date the legislative and executive authority and jurisdiction of the United State of Saurashtra extended to the Junagadh State to the same extent as it extended to the rest of the territories of the Covenanting States. 978 Further political changes took place after January 20, 1949, but with those changes we are not concerned in the present appeals. The two dates which are important for our purpose are November 91 1947, when the Regional Commissioner first took over charge of the administration of Junagadh and January 20, 1949 when Junagadh merged into the United State of Saurshtra. Now, as to the impugned orders made by the, Administrator. In Civil Appeal No. 349 of 1958 the ancestor of the respondents, had obtained grants from the then Nawab of Junagadh of two villages called Handla and Venderwad some time between the years 1865 and 1868. A detailed history of the grants so made is not necessary for our purpose. On December 6, 1947, the Administrator made the following order "It has come to the Administrator 's notice that Aba Salem Bin Abs Mahmed Hindi the alienee of Handla village, (i) was maintaining many Arab employees of Timbdi it his house in Junagadh, (ii) was uttering threats to massacre all Hindus of Handla village,. (iii) was keeping in Hendla fifty animals at the expense of the poor village people, (iv) did not pay any remuneration to Dhedh employees of his garden and was exacting Veth from them, (V) was buying exhorbitant cesses from the village people, (vi) had converted into Islam three Hindus, and (vii) had taken the, following arms from Hand to Junagadh about a month ago,: 979 (a) 12 bore guns and (b) one M. I. gun. It is, therefore, ordered that. the village J. of Handla should be taken under the State manager. The Revenue Commissioner should mak e necessary managements for the same and report compliance. By that order the management of Kandla was taken over by the State, Though there is no reference to the other village Venderwad in the order the admitted position is that the management of both the villages was taken over. Then on January 8, 1949, the Administrator passed the following order: "The Junagadh State Government is pleased to order that the land and villages comprising the Handla estate which is an Inam grant be resumed by the State forthwith. " This order also refers only to the Handla estate, but the admitted position is that both the villages were resumed by the order of the Administrator. It is the order dated January 8, 1949, which is impugned by the respondents in this appeal. In Civil Appeal No 497 of 1958 the grant was in respect of a bungalow or building known as 'Datar Manzil '. On 1 March 9, 1948 the Administrator made the following order: " The State building situated near Gadhrup Wada at Junagadb, was granted to Khan Shri Abdullkanmiyan Mahomedkhanmiyan hereditarily by Way of gift, under Dewan "Daftar Tharay No. 3379 dated lot August, The said Tharay is hereby cancelled and it is hereby ordered in the interest of the State that the said building along with all the superstructures thereon should be resumed and managed by the State as State property. " 980 In Civil Appeals Nos. 220 and 221 of 1958 a the impugned order is dated July 27, 1948, and is in these terms: "Twenty five Santis of land from the village of Khokhardea under Vanthali, Mahal was granted as a gift 'hereditarily to Mr. Mohamed Abdulla, son of late. Jamadar Abdulla Moosa under Hazur Farman No. 279 dated 30th April, 1943. In view of the principles of Alienation settlement of 1897 no grant can be wantonly favoured to anybody in contravention of the well established principles of resumption attaching to such grants. It is hereby ordered that Hazur Farman No. 279 dated 30th April, 1943, is cancelled and the land in question should be resumed by the State forthwith by setting aside the settlement made thereon. " It will be noticed, from what has been stated above that the impugned orders ' were all made after November 9, 1947, but, before January 20, 1949. The question before us is whether the orders were made in pursuance of acts of State not justiciable in the municipal courts. There can, be no doubt that if the decision of this Court in State of Saurashtra vs Memon Haji Ismail Haji (1) applies, then these appeals must be allowed. Learned counsel for the respondents has however sought to distinguish that decision on the ground that the decision proceeded on the footing that the Dominion of India assumed sovereignty over Junagadh on January 20, 1949. His contention is that when the Dominion of India assumed charge of the administration of Junagadh State on November 9, 1947, through the Regional Commissioner, Western India and Gujarat States Region, there was a complete changeover of sovereignty, the act of State was complete, and the. Dominion of India became the new sovereign; thereafter, (1) [1960] I.S.C.R. 537. 981 the people of Junagadh including the respondents, so the argument proceeded, became citizens of the Dominion of India and had rights as. such citizens it in respect of which they could ask for relief in the municipal courts. It would be apparent that this argument consists of two steps: the first step in the argument is that there was a complete changeover of sovereignty on November 9, 1947 and the act of State was complete; the second step in the argument which is really based on the correctness of the first step is that on such a change over of 'sovereignty the people of Junagadh, including the respondents, became citizens of the Dominion of India and were no longer aliens outside the Dominion. , We shall now consider the validity of the first step in the argument. In doing so we must make it clear that we must not be understood to have assented to the submission of learned counsel for the respondents that a finding as to change over of sovereignty or completion of an of State, is a finding of fact pure and simple. In our view, the question essentially is what inference in law should be drawn from the fact proved or admitted relating to the change over of sovereignty. As the matter was not argued from this stand point in the State of Saurashtra vs Memon Haji Ismail Haji(1), we have allowed learned counsel for the respondents to address us on this question. Learned counsel for the respondents has made a two fold submission: firstly, he has submitted that the question as to when the change over of ,sovereignty took place is a political question, and must or should be referred to the Government of India for opinion and the Court should abide by that opinion; secondly,he has submitted that on the facts admitted in this case, it should be hold that there. was a complete change over of sovereignty on November 9, 1947, and the act of State was complete. We do not think that either of these two submissions of learned counsel for the respon dents is correct. On the first snbmission he has (1) ; 982 drawn our attention to para. 603 at pages 285 286, Vol. 7 of Halsbury 's Laws. of England, 3rd 'Ed. That paragraph is in these terms : .lm15 " There is a class of facts which are conveniently termed "facts of State". It consists of matters and questions the, determination of which is solely in the hands of the Crown or the government, of which the following are examples (1) Whether a state of war exists between the British Government and any other State, and if so, When it began; the municipal courts have no power of inquiring into the validity of a declaration by the Crown whether a state of war exists or whether it has ended: (2) whether a particular territory is hostile, or foreign, or within the boundaries of a particular state; (3) whether and when a particular government is to be recognised as the, government of an independent state,, (4) The status of a person claiming, immunity from judicial process on the ground of diplomatic privilege. The court takes judicial notice of such facts of state, and for this purpose in any case of uncertainty, seeks information from a Secretary of State; and the information so received is conclusive. Learned counsel has also referred us to some of the English decisions on which the statements in the paragraph quoted above axe based. We consider it unnecessary to examine those decisions. , It appears to us that the question with which we are concerned in the present appeals is not a question on which it is necessary to seek information from to relevant department of the Government of India; for ' one thing, it does not appear to us that there is any uncertainty in the matter; secondly, as we shall 983 presently show, the Government of India in the relevant department has already spoken with sufficient clarity in the: White Paper on Indian States with regard to the political changes in Junagadh and what the Government of India has stated therein shows clearly enough that there was no changeover of assumption of sovereignty on 'November 9, 1947 in the sense 'which learned counsel for the respondents has contended for; lastly, it appears to us that the question with which we are concerned in these appeals is not essentially a question as to any disputed ""facts of State" the determination of which is solely in the hands of government; rather it is a question which must be determined by the court. What we have to determine in these appeals is not; the status or boundaries of a particular State territory, but the validity or otherwise of the plea taken on behalf of the appellant State that the impugned orders made by the administrator were acts "of State not justiciable in the municipal courts. There is a long line of decisions in which such a plea has been determined by courts ' of law without the necessity of obtaining the opinion of Government. The plea is really a plea with regard to the maintainability of the suits brought by the respondents and must be determined by the courts concerned. At one stage of the arguments learned counsel for the respondents referred us to s.6 of the Extra Provincial Jurisdiction Act, 1947 (XLVII of 1947) and contended that under that section it was obligatory on this court to refer the question to the Ventral Government. When however it was brought to his notice that section 6 in terms did not apply to the proceedings out of which these appeals have arisen he submitted that even if, it be not obligatory to refer the question to the Central Government, it is expedient that it should be so referred inasmuch as the answer to the question depends on "the extent of the jurisdiction" which the Dominion of India, assumed in Junagadh on November 9, 1947. This according to learned counsel, is a " 'fact of State" which only; Government can determine. 984 We have already stated there is no uncertainty about. the facts on which the plea of the appellant State is based, and Government has already spoken about them with sufficient clarity. What are these facts and how has Government spoken? We refer to para. 223 at pages 113 and 114 of the White Paper on Indian States issued by the Government of India, Ministry of States, a publication to which this Court has referred in several earlier decisions as containing the authentic opinion of Government on the political questions involved. "The position of Junagadh and certain other adjoining States in Kathiawar may also be briefly stated here. After the Nawab of Junagadh had left the State for Pakistan, the administration of the State was taken over by the Government of India on November 9, 1647, at the request of the Nawab 's Council. Obviously, the action taken by the Govern. ment of India had the fullest approval of the people of Junagadh in that the results of the referendum held in Junagadh and the adjoining smaller States in February 1948, showed that voting in favour of accession to India was virtually unanimous. During the period the Government of India held charge of the State an Administrator appointed by the Government of India assisted by three popular rep resentatives conducted the administration of the State. In December 1948, the elected representatives of the people of Junagadh resolved that the administration of the Stat e be made over to the Government of Saurashtra and that the representatives of Junagadh be enabled to participate in the Constituent Assembly of Saurashtra State with a view to framing a common Constitution for Saurashtra and the Junagadh State. Similar resolutions were adopted by the representatives of Manavadar, Mangrol,. Bantwa, Babariawad and Sardargarh. Accordingly a Supplement Covenant (Appendix XXXVI) was 985 executed by the Rulers of Kathiawar States with a view to giving effect to the aforemen tioned resolutions. The administration of Junagadh was taken over by the Saurashtra Government on January 20, 1949, and of the other States some time calling. Accordingly the Constitution treats Junagadh and these States as part of Saurashtra. " It would be clear from the aforesaid paragraph that the various steps in the assumption of sovereignty over Junagadh by the Dominion of India, between the dates November 9, 1947, and January 20, 1949, were these: (1) The administration of Junagadh was taken over by the Government of India on November 9, 1947 at the request of the Nawab 's Council; (2) during the period the Government of India held charge of the State, an Administrator appointed by the Government of India assisted by three popular representatives conducted the administration of the State; (3) in February, 1948 there was a referendum and the people of Junagadh voted in favour of accession to India; but no actual accession took place by the execution of any Instrument of Accession; (4) in December, 1948 the elected representatives of the people of Junagadh resolved that the Administration of the State be made over to the Government of Saurashtra and the representatives of Junagadh be enabled to participate in the Constituent Assembly of Saurashtra State; (5) a Supplementary Covenant (Appendix XXXVI of the White Paper) was executed by the Rulers of Kathiawar States with a: view to giving effect to the resolutions aforesaid; and (6) lastly, the administration of Junagadh was taken over by the Government of Saurashtra on January 20, 1949. 986 In M/s. Dalmia Dadri Cement Co., Ltd. vs The Commissioner of Income tax (1) this Court observed. .lm15 "In law, therefore, the process of acquisition of new territories is one continuous act of State terminating on the assumption of sovereign powers de jure over 'them by the new sovereign, and it is only thereafter that rights accrue to the residents of those territories as subjects of that sovereign. In other words under the dominion of a new sovereign, the right of citizenship commences when the act of. State terminates and the two therefore cannot co exist. " There may be cases where by a treaty or an agreement there is a change, over of de lure sovereignty at one and the same time and in such a circumstance the change over may not be a process, but that is not what happened in the case of Junagadh. The administration of Junagadh fell into chaos and disorder and the Government of. India stepped in at the request of the Nawab 's Council and took charge of the administration through an Administrator, on November 9, 1947, the Ruler having fled the country before that date. It is clear to us that there was no change over of de jure sovereignty on that date. Junagadh State still continued as such and did not cease to exist; otherwise there would be no meaning in the referendum held in February, 1948 or the resolutions passed in December, 1948, by the elected representatives of the people of Junagadh. Nor, would there be any meaning in the Supplementary Covenant executed by the Rulers of Kathiawar States. It is also worthy of note that there was no accession to India by the Junagadh State by the execution 'of any Instrument of Accession. We may in this connection refer to sections 5 and 6 of the Government of India Act, 1935, as they stood at the relevant time. Section stated inter alia that the Dominion of India shall, (1) [1959] section C. R. 729, 741. 987 as from the 15th day of August, 1947, be a Union, comprising (a) the, Governor is ' Provinces, (b) the; Chief Commissioners ' Provinces,(c) the Indian States acceding. to the, Dominion in the manner provided by section 6, and (d) any other areas that, may with the consent of the Dominion be included, in the Dominion. Junagadh was neither a Governor 's nor a Chief Commissioner 's Province. It did not accede in the manner laid down in section 6. It was not, therefore, a State acceding to, the Dominion. Nor do we think that the territory of, Junagadh State was included within the territory of the Dominion in the sense of el. (d) of section 5 as from November 9, 1917. The process of assumption of sovereignty was not yet complete and the Dominion of India did not treat the territory of Junagadh, as part of its own territory. The Dominion Government gave its concurrence to the Supplementary Covenant executed by the Rulers of Kathiawar by which the States of Junagadh, Manavadar, Mangrol, Bantwa, Babariawad and Sardargarh were to be integrated with Saurashtra. It is significant that in this Supplementary, Covenant Junagadh was mentioned as a separate State, the administration of which was to be integrated with the United State of Saurashtra. It was only when, this. integration took place that Junagadh ceased to be a separate State. This position appears to us to be beyond any doubt and has been made sufficiently clear by the statements made in, par&. 223 of the White Paper on Indian States. Learned Counsel for the respondents has relied on certain observations made in well known text books on International law and has contented that State sovereignty and. , State jurisdiction are complementary and co extensive; and a right of property and control exercised by the State is really a right of territorial severeignty and therefore the acquisition of territory by a State can mean nothing else than the acquisition of sovereignty over such territory. (See Sohwarzenberger: International , Vol. 1, page 79: Charles Cheney Hyde: International Law, 2nd revised edition, Vol. I, page 319; Oppenheim 's International Law, 8th Edn. I, page 545). He has contended that in view of the aforesaid observations, it must be, held that the Dominion of India assumed sovereignty over Junagadh on November 9, 1947; because, so learned counsel contends, exercising control over a parti cular territory is exercising sovereignty over it. We do not think that the observations to which learned counsel has referred help in the solution of the problem before us. In cases where the acquisition of new territory is a continuous process, a distinction must be made between de,facto exercise of control and de jure assumption of sovereignty. The problem before us is, as was stated in M/s. Dalmia Dadri Cement Co., Ltd. V. The Commissioner of Income tax (1), as to when the act of State was complete; in other words, when did the assumption of sovereign powers de jure, by the new sovereign over territories acquired by it take place? The problem is really one of State succession; namely succession to International Persons as understood in International law. Such a succession takes place when one or more International Persons take the place of another International Person in consequence of certain changes in the latter 's condition; there may be universal succession or partial succession. In the case before us, as long as Junagadh State ' continued as such, there was no such succession and even though the Dominion of India took over the administration of Junagadh and exercised control therein, it did not assume de jure sovereignty over it. Therefore, the act of State did not terminate till January 20, 1949, when the Dominion of India assumed de, jure sovereignty over Junagadh by its integration into the United State of Saurashtra. It is perhaps necessary here to refer to two decisions on which learned counsel for the (1) [1959] section C. R. 729, 741. 989 respondents has relied: In re: Southern Rhodesia(1) and Sammut vs Strickland (2). In the first decision it was observed in connection with the conquest of certain territories in Southern Rhodesia, that a proclamation of annexation is not essential to constitute the Crown owner of the territory as completely as any sovereign can be owner of lands publici juris; a manifestation of the Crown 's intention to that effect by Orders in Council dealing with the lands and their administration, is sufficient for the purpose. These observations were made in the context of a question not between State and State but between sovereign and subject. Lord Sumner said: " No doubt a Proclamation annexing a conquered territory is a well understood mode in which a conquering Power announces its will urbi et orbi. It has all the advantages (and the disadvantages) of publicity and precision. But it is only declaratory of a state of fact. In itself it is no more indispensable than is a declaration of war at the commencement of hostilities. As between State and State special authority may attach to this formal manner of announcing the exercise of sovereign rights, but the present question does not &rise between State and State. It is one between sovereign and subject. The Crown has not assented to any legislative act by which the declaration of its will has been restricted to one definite form or confined within particular limits of ceremonial or occasion. The Crown has not bound itself towards its subjects to determine its choice upon a conquest either out of hand or once and for all. If her 'Majesty Queen Victoria was pleased to exercise her rights, when Lobengula was defeated by her and her subjects, as to one part of the dominions in 1894 and as to another. part not until 1898, (1) (2) 990 if she was pleased to do so by Public acts of State which indicate the same election and confer the same supreme rights of disposition over his conquered realm as annexation would have done it is not for one of her subjects to challenge her policy or to dispute her, manner of giving effect to it. , We do not think that these observations help to establish the contention of learned counsel for the respondents that any exercise of administrative control in acquired territory must mean at once that there is an assumption of sovereignty ' by the incoming State so as to terminate the act of State. The observations made by Lord Sumner merely show that with regard to territory which the 'Crown has Conquered the Crown 's intention can be manifested in more than one way, and not necessarily by a proclamation. In the case before us a proclamation was issued by the Administrator, but that merely announced that he had assumed charge of the administration of Junagadh State under orders of the Government of India. It made no announcement as to assumption of sovereignty. In the second decision one of the questions raised was the true nature of the title of the Crown to the sovereignty of Malta, and a distinction was sought to be drawn between ceded territories those acquired by an act of cession from some sovereign power, and those ceded by the general consent or desire of the inhabitants. It was held that so far as concerned the prerogative right of the crown to legislate by Letters Patent or Orders in Council for the ' ceded colony, the distinction was of no materiality '. It is difficult to see how this decision affords any assistance to the respondents. It is indeed true that the people of Junagadh voted for accession to the Dominion of India , but no Accession actually took place and later there was a merger in ' the United State of Saurashtra with the consent of the people of, Junagadh and the Government of 991 India Till, such merger there was,, no "cession" of territory in the I sense either with or without the Consent of the people. In view, the only conclusions which follows from the facts which we have earlier stated is that there was no assumption of sovereignty by the Dominion of India over Junagadh before January 20, 1949. This disposes of the main argument advanced on, behalf of the respondents, and it is unnecessary in these appeals to consider the further argument to what rights the subjects of the ex sovereign in the acquired territory carried with them as against the new; sovereign. At one stage of his argument learned counsel for, the respondents commended for our acceptances the view of Chief Justice John Marshall in United States vs Percheman (1) that when 'the inhabitants of the acquired territory change their allegiance and their relation to the old sovereign is dissolved, their rights of property, remain undisturbed, and, he suggested that this view was consistent with modern usage of nations and was accepted by the Permanent Court of Inter. national Justice. (See the Advisory Opinion of the Permanent Court on the Settlers of German Origin in Territory ceded by Germany to Poland, Series B, No. 6, particularly pp. 35 36). He conceded, however that this Court has accepted the view expressed by the English Courts in Cook vs Sprigg(2) and the decisions which followed it. That view proceeds on the doctrine that acquisition of territory by conquest, cession or; annexation being an act of State ', municipal tribunals have no authority to give a remedy in respect of any actions arising therefrom (See M/s. Dalmia Dadri Cement Co., Ltd.,V. The Commissioner of Income tax(3) and State of Saurashtra vs Memon Haji Ismail Haji(4) Therefore learned counsel,was at great pains establish that the act of State was complete on November 9, 1947, (1) ; , 86 87. (2) (3) [1959] section C. R. 729, 741 (4) 7. 992 and he argued that thereafter the respondents be came citizens of the Dominion of India and under section 299 of the Government of India Act, 1935, they could not be deprived of property, save by authority of law. He relied on two decisions of this Court: Thacker vs State of Saurashtra (1) and Virendra Singh vs State of Uttar Pradesh (2). In view of our finding that the act of State did not terminate till the process of acquisition was complete on January 20, 1949, it becomes unnecessary to consider this second step in the argument of learned counsel. But per haps it is necessary to add that the decision in Virendra Singh vs State of Uttar Pradehe (2) was based on the special circumstances mentioned there in which led to the making of the Constitution of India. The learned Attorney General appearing for the appellant State has submitted that the principle of Virendra Singh 's case (2) cannot be extended to the entirely different set of circumstances in which the Government of India Act, 1935, was made and a. 299 thereof did not affect the doctrine that municipal tribunals have no authority to give a remedy in respect of actions arising from an act of State. He also drew our attention to a decision of this Court in Jagannath Agarwala vs The State of Orissa (a) in which in respect of some claims made against the State before the coming into force of the Constitution but enquired into and rejected by Government after the coming into force. of the Constitution, it was held that unless the now sovereign had expressly or impliedly admitted the claims, the municipal courts bad no jurisdiction in the matter. We consider it unnecessary to give our decision on these 'submissions, because it is obvious that before the Dominion of India assumed de jure sovereignty over Junagadh, the respondents were not in a position to call to their aid the provisions of section 299 of the Government of India Act, 1935. (1) A.I.R. 1954 S.C.680. (2) (3) ; 993 In the appeals before us we are dealing with orders made the Administrator before the act of ,State was complete. The action taken by the impugned orders &rose out of and during an act of State. That being the position, it is clear that the municipal, tribunals had no authority to give a remedy in respect of such action. It remains now to consider the last argument advanced on behalf of the respondents. As was observed in State of Saurashtra vs Memon Haji Ismail Haji (1) an act of State is an exercise of sovereign power against an alien and is neither intended nor purports to be legally founded. On behalf of the respondents it has been contended that the Administrator purported to cancel or :resume the grants under consideration in these appeals in pursuance of law; therefore, it was not open to the appellant State to take up the plea of an act of State. We 'do not think that there is any substance in this argument. Learned counsel for the respondents in Civil Appeal No. 349 of 1958 has drawn our attention to the pleadings, particularly to par&. 8 of the written statement filed on behalf of the appellant State. In that paragraph it was stated the order of resumption dated January 8, 1949 was legal and the Administrator had authority to resume such inam grant. On the basis of this paragraph 'it has been contended that inasmuch as the Administrator purported to act under authority of law it was not open to the appellant State to raise the plea of an act of State. In this connection we must also refer to para. 17 of the written statement where the appellant State specifically pleaded that the plaintiff respondent had no right to bring the suit against Government. In the trial court a specific issue was ;struck on the question as to whether the court had jurisdiction to hear and determine the suit. and under this issue the argument advanced was that the order of resumption was an act od State not justiciable in the municipal. courts. It appears, however, that the appellant State (1) [1960] 1 S.C.R.537. 994 also took a plea in the alternative that the order of resumption was justified under the rules in force in the Junagadh State. The trial, court, held that the order of resumption was not an act of State It further held that the order of resumption was not justified by the rules in: force in the Junagadh State. In these circumstances it cannot be said that the appellant State did not plead an act of State; nor can it be said that it was not open to the appellant State to raise, that plea ' , In the High Court also the same plea of: act of State was urged on behalf of the appellant State but was rejected by the High Court on the basis of its decision in State of Saurashtra vs Memon Haji Ismail Haji Valimamad(1). That decision, we have stated earlier, was overruled by this Court in State of Saurashtra vs, Memon Haji Ismail Haii Learned counsel for the respondents then, referred us to an order dated February 9, 1949, 'in which it was stated that inam grants were resumable at the pleasure of Government and therefore the orders passed on January, 8, 1949, could not be cancelled. Apparently the orders dated February. , 9, 1949 was passed on some representation made, at the instance of the plaintiffs respondents. We have to read the two orders, one dated January 8, 1949, and the other dated February 9, 1949, together. If so read, it is clear that the order dated January 8, 1949, was, made by the Administrator not under the authority of any law but as an act of State. Learned counsel for the respondents relied on the decision in Forester vs The Secretary. of State for India(3). In that case, the Privy Council, upon a construction of the treaty, or agreement made by the British. Government in August, 1805, with Begum Sumroo, held that the Begum was not a sovereign princess but a mere Jagirdar under obligation to keep up a body, of troops to be employed when called upon in, the (1) All. R. 1953 Saurashtra 180. (2) (1960) I section C. R. 537. (3) 995 service of the sovereign. On that finding it was held that the resumption of the lands by the British Government upon the death of the Begum was not an act of State but an act done under legal title. We do not think that the principle of that decision applies to the facts of these cases. In Vejesingji ji Joravarsingji vs Secretary of State for India (1) Lord Dunedin said that no plea specifically using the words " 'act of State" was required and the moment cession of territory was admitted. , the onus was on the plaintiffs respondents to prove that the right which they claim had been expressly or tacitly recognised by the new sovereign. If there was ,no such recognition and none was pleaded in these cases the municipal courts would have, no jurisdiction to give any relief. In this view of the matter it was not open to the courts below to enquire into the powers of the Nawab to resume or derogate from the grants made and whether similar powers were inherited by the Dominion Government or its agents. The action being an act of State was not ;justiciable in the municipal courts, even if the same were arbitrary. We have, therefore, come to the conclusion that the courts below were wrong in holding that the suits were maintainable and in enquiring into the merits of the cases. The appellant State is entitled to succeed on the plea that the orders of resumption made by the Administrator arose out of and during, an act of State and were not, therefore, justiciable in the municipal courts. We would accordingly allow these appeals and the suits will stand dismissed with costs throughout. There will be one hearing fee for the hearing in this court. MUDHOLKAR, J. We also agree that the appeals be allowed. but we wish to I say a few words. To appreciate the points which arise in these cases certain broad facts common to all appeals may well (1) (1924) L. R. 511 A. 357. 996 be stated. The respondents held certain properties in that part of the present State of Gujarat which was formerly the ruling State of Junagadh, by virtue of grants from its Ruler. After India attained independence on August 15, 1947, the suzerainty which the British Crown held over the State of Junagadh lapsed and that State became completely sovereign. That was the effect of the Indian Independence Act. Shortly thereafter, the Ruler of Junagadh went to Pakistan leaving the State to its fate, with the result that the affairs of that State fell into disorder. At the invitation of the people of the State the Government of India decided to step in and accordingly took over its administration through the Regional Commissioner, Western India and Gujarat States Region on November 9, 1917. A proclamation was issued by him to the effect that he had assumed the administration of Junagadh as from that date. On November 14, 1947, he appointed an Administrator for administering the territory. The Administrator passed orders on different dates resuming the grants in favour of the respondents and dispossessed them. Thereafter on January 20, 1949, the territory of Junagadh was with the approval of the Government of India integrated with the United States of Saurashtra and the Administrator ceased to exercise any functions as from that date. The resumption of the grants and the validity of their dispossession were challenged by the respondents by instituting, suits for possession of the property after the integration of Junagadh with the United State of Saurashtra upon the ground that they could not be deprived of their properties by executive action. According to them the act of the Dominion of India in taking over the administration of Junagadh territory on November 9, 1947, amounts to assumption of sovereignty over it, that ' thereby its residents became citizens of the Dominion of India as from that date and, therefore, no not of state 997 such as resumption of their properties could be committed against them by the Indian Dominion. According to the appellants no municipal court could grant the relief claimed by the respondents because the act complained of was an act of state. The plea of the respondents was accepted by the High Court of Saurashtra following the decision in the State of Saurashtra vs Memon Haji Ismail Haji Valimamd(1). The present appeals are, from its judgment. The Attorney General who appeared for the appellants stated that this Court has reversed that decision in State of Saurashtra vs Memon Haji Ismail Haji (2) and that, therefore, these appeals should be allowed. In that case this Court held that the Indian Dominion merely assumed the administration of Junagadh State on November 9, 1947 at the request of the Ruler 's Council but did not formally annex it till January 20, 1949. Mr. Pathak 's contention is that as the respondents were not parties to the decision in Memon Haji 's case (2) they are not bound by the finding of this Court that the Junagadh State was annexed by the Indian Dominion on January 20, 1949. It seems to us, however, that the question whether Junagadh was annexed on January 20, 1949, or. earlier would make little, difference to the result of the appeals before us. Nor again would the question whether the, I Extra Provincial Jurisdiction Act was applicable to the orders made by the Administrator and this was a display of sovereignty, as contended for by Mr. Pathak, would make any difference. In along catena of cases beginning from Cook vs Spriggs (3) and going upto Asrar Ahmed vs Durgah Committee, Ajmer(4) the Privy Council has stated the legal position of the subject of a displaced sovereign vis a vis the now sovereign. In the words (1) A. I. R. 1953 Saurashtra 180. (2) ; (3) (4) A. I. R. 1947 P.C I. 998 of Lord Dunedin in Vajesinghji vs Secretary of State for India(1), it is as follows When a territory is acquired by,& sovereign State for the first time that is an act of State. It matters not how the acquisition has been brought about. It may be by conquest, it may be by cession following on treaty, 'it may be by occupation of territory hitherto unoccupied by a recognised ruler. In all cases the result is the same. 'Any inhabitant of the territory can make good in municipal courts established by the new sovereign only such rights as that sovereign has, through his officers, recognized. Such rights as he had tinder the rule of predecessors avail him nothing. Nay more, even if in a treaty of cession it is stipulated that certain inhabitants should enjoy certain rights, that does not give a title to those inhabitants to enforce those stipulations in the municipal courts. The right to enforce remains only with the high contracting parties. " This statement of the law has ' been accepted by this Court in M/s. Dalmia Dadri Cement Co., Ltd. vs Commissioner of Income tax (2) upon which ;reliance has been placed in State of Saurashtra V. Memon Haji Ismail Haji (3) and recently also in Jagannath Aggarwala vs The State of Orissa (4). Thus even if on the respondents ' own showing that the Junagadh territory must be deemed to have been annexed by the Indian Dominion by assuming administration over it and thereupon its residents became citizens of India, they could assert and establish in the municipal courts of the new sovereign only such rights as were recognized by the. Indian Dominion. The respondents claim to be grantees from the Ruler of Junagadh but their grants avail them nothing in the courts of the now sovereign unless they were recognized by that sovereign. The burden of showing that they were so recognized lay on the respondents. (1) (1921) L.R. 51 I. A. 357. (2) (3) ; (4) ; 999 A perusal of the orders passed by the administrator would clearly show that, far from recognizing those grants 'they Were in effect repudiated by him. The administrator in fact resumed the grants but whatever the form his orders took in truth and in substance they were no" more than a clear arid unequivocal declaration of the fact that the right ' claimed by the respondents to the 'properties in question by virtue of the grants made in their favour by the former Ruler. were not, recognized by the new sovereign. Recognition or refusal of recognition of rights of erstwhile aliens who had no legal enforceable , rights cannot be said to be an act of state because in the Indian Dominion other had already vested in the Indian Dominion at the moment it occupied Junagadh territory The right to retain Possession was also dependent, upon recognition by the Dominion of India and by dispossessing the respondents the former exercised its choice and refused to recognise their rights. On the principle accepted by this Court in the decisions already referred to, the res pondents "were disentitled from obtaining any redress from 'a court in the Indian Dominion, and after the commit into force 'of the constitution, from a court in the union of India, in the absence of recognition of their rights by it or by the Union of India. We may now ' advert to another point, urged by Mr. Pathak, According to him, if we understood him correctly, the Extra Provincial Jurisdiction Act was applied to Junagadh, that thereunder the local laws prevailing therein were continued and that the Alienation Settlement Act which was one of such laws, conferred on the granted of rights against the Ruler. By continuing this law the Dominion of India, accordant, to him,. must be deemed to have recognized the respondents rights under the grants. For enabling us to consider, the point it was necessary for the respondents to place before us the Order of the Dominion of India under 1000 section 4 of the Extra Provincial Jurisdiction Act, 1947 Which alone empowered it to prescribe the laws which of the Indian Dominion, over which it had assumed sovereignty or administrative control. Similarly they had to place the Alienation Settlement Act of Jungadh before us. the absence of this material we cannot consider the argument at all. Mr. Pathak, however contended that if sovereignty was assumed on November 9, 1947, the residents of Junagadh became the citizens of the Indian Dominion and were therefore, entitled for the protection of section 299(1) of the constitution Act, 1935. ` This provision runs thus: "No person shall be deprived of his property save by authority of law". What section 299(1) protects are the rights of a person to property which he had when section 299(1) cases into force or applied to him. It does not add to any property right of any person, though it contains an admonition to the State against deprive in any person of his property by mere executive action. For ascertaining whether the provision has been violated we must first examine the existance and the nature of.the rights possessed by the respondents on November 9, 1947, that is, at the moment of assumption of administration by the Dominion of India over Junagadh territory assuming of,courge that this amounted to assump tion of sovereignty over Junagadh). Their rights were as grantees from the former ruler and although it thay be that according to the principles of international law their rights as grantees ought not to be affected, no municipal court has their right to enforce the obligation of the new sovereign to respect them. For, as oitited out by Venkatarama Iyer J., who delivered he judgment of this Court in Dalmia Dadri Cement Co., Ltd. vs Commissioner of Income tax(1): (1) [1959] S.C.R. 729, 741. 1001 "It is also well established that in the new set up these residents do not carry with them the rights which they possessed as subjects of the ex sovereign, and that as subjects of the new sovereign, they have only such rights as are granted or recognised by him One of the decisions relied on by this Court in that case is that of the Privy Council in Secretary of State for India vs Bai Rajbai(1) in which they have observed "The relation in which they stood to their native sovereign before this cession and the legal rights they enjoyed under them, are, save in one respect, entirely irrelevant matters. They could not carry on under the new regime the legal rights, if any, which they might have enjoyed under the old. The only legal enforceable rights they could have as against their new sovereign, were those, and only those, which that new sovereign by agreement express or implied, or by legislation, chose to confer upon them." Thus, before the respondents could claim the 'benefit of section 299(1) of the Constitution Act, 1935 they had to establish that on November 9, 1947, or thereafter they possessed legally enforceable rights with respect to the properties in question as against the Dominion of India. They could establish this only by showing that their pre existing rights, such .as they were, were recognized by the Dominion of India. If they could not establish this fact, then it must be held that they did not possess any legally enforceable rights against the Dominion of India and, therefore, section 299(1) of the Constitution Act, 1935 avails them nothing. As already stated a. 299(1) did not enlarge anyone 's right to property but only protected the one which a person already had. Any right to property which in its very (1) (1915) L. R: 42 I.A. 229.

The Nawab of junagadh State made grants of properties in favour of the respondents before 1947. After India attained independence the Nawab fled the country. At the request of the Nawab 's Council the Government of India took over the administration of the State and on November 9, 1947 the Regional Commissioner assumed charge of the administration on behalf of the Government of India. The Regional Commis sioner appointed an Administrator of junagadh State. In December 1948, the elected representatives of Junagadh and certain other neighbouring States recommended to the Govern ment of India and to the United State that of Saurashtra that the States be integrated. Thereafter, the administration of junagadh State was integrated with the United State of Saurashtra on January 20, 1949. On different dates between November 9, 1947, and january 20, 1949, the Administrator passed orders cancelling the grants in favour of the respondents and took possession of the properties. The respondents filed civil suits for the recovery of the properties on the ground that 971 they had been taken away without the authority of law. The appellant contended that the orders made by the Administrator arose out of and during an act of State and were not justiciable in the municipal courts. The respondent contended that the ,question as to when the change over of sovereignty took place was a political question which should be referred to the Government of India for its Opinion and the Court should abide by that opinion and that the facts of this case showed that there was complete change over of sovereignty on November 9, 1947, and the act of State was complete. I Held, (per C. J., Das and Ayyangar, jj.) that the impug ned orders arose out of and during an act of State and they could not be questioned before municipal tribunals. There was no change over of de jure sovereignty on November 9,1947 when the administration was taken over and junagadh continued to exist as such even after this date. junagadh was not a State which acceded to the Dominion nor was its territory included within the territory of the Dominion as from November 9, 1947. It was only on January 20, 1949, that the Dominion of India assumed de jure sovereignty over junagadh by its integration into the United State of Saurashtra and the act of State came to an end. It was not necessary to seek information from the Government of India as to the date of the change over as there was no uncertainty about it and also as the Government of India had spoken with sufficient clarity in the White Paper on Indian States. State of Saurashtra vs Memon Haji Ismail Haji, ; and M/s. Dalmia Dadri Cement Co. Ltd. vs The Commissioner of lncome tax, (1959) S.C.R. 729, followed. In re: Southern Rhodesia, and Samaut vs Strickland , referred to. Per Sarkar and Mudholkar JJ. Even if it be accepted that junagadh was annexed on November 9, 1947, and the respondents became citizens of India they could assert and establish, in the municipal courts of the new sovereign only such rights as were recognised by the Indian Dominion. The burden of showing that they were so recognised lay on the respondents. The orders passed by the Administrator show that far from recognizing the grants in favour of the respondents they were repudiated. The respondents could not claims the benefit of section 299 (1) of the Government of India Act; 1935, as they had to establish that on or after November 9, 1947, they possessed legally enforceable right against the Dominion of India, which they could only do by showing that their pre existing rights had been recognized by the Dominion of India; s.299(1) did rut enlarge any rights to property but only protected those which a person already had. 972 M/s Dalmia Dadri Cement Co., Ltd. vs The Gommissioner of Income tax, (1959) S.C.R. 729, In Re,. Southern Rhodesia, Samaut vs Strickland, , United States vs Percheman, ; , Cook vs Sprigg, , Phacker vs State of Saurashtra, A.I.R. 1954 S.C. 680 and Virendra Singh vs State of Uttar Pradesh, ;

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 expression "systematic" has been deleted from sub section (3) of section 123 of the Representation of the People Act 1951 by the Amending Act by a candidate or his agent or by any other person with the consent of the candidate or his election agent or by any other person on the ground of his religion, race, caste, community or language etc. would be a corrupt practice. 160 The appellant challenged the election of respondent No. 3 to the Punjab Legislative Assembly on the allegations of corrupt practice. It was contended that section 123(3) of the Representation of the People Act had been violated for three reasons, namely, (a) Sponsorship of respondent No. 3 and distribution of election ticket to him for the Assembly elections by the Akal Takht, "the supreme religious authority of the Sikhs", (b) Issue of Hukumnama (Ex.p 4) by the Jathedar of the Akal Takht in the matter of Assembly elections having regard to the circumstances in which it was issued, indicated that the approval of the Akal Takhat was obtained in order to give his decision a colour of religious authority and (c) Appeal to the voters at election meetings by referring to the Hukamnama, to the writings in the Akali Times and exhorting them to vote for respondent No. 3 by applying to the religious sentiments and warning them of the consequences of not doing so. It was further alleged that an ex Chief Minister of the State as well as the respondent No. 3 himself had represented to the voters at different election meetings that respondent No. 3 had been sponsored by the Akal Takht. Respondent No.3 denied the aforesaid allegations and contended that the alleged Hukamnamas were not Hukamnamas of Akal Takht. The High Court held that Akal Takht was a symbol of political and religious powers and the documents alleged to be the Hukumnamas of Akal Takhat, but contained decision of the leaders of the Akali Party written on the letter head of the Akal Takhat and announced by a Jathedar, and the appellant had not succeeded in proving the charges of corrupt practice. The election petition was accordingly dismissed. The contentions raised in the High Court were reiterated by the appellant before this Court. In addition, it was contended (i) The documents shown at the meetings were Hukumnamas and having regard to the background it cannot be said that it did not have the effect of Hukumnama on the community at large of inducing them to believe 158 ignoring the claim of the candidate nominated by Shri Akal Takht and represented to be supported by Hukamnama would be an act of sacrilege on the part of a good Sikh; and (ii) Respondent No. 3 being a Sikh and a member of the Akali Dal and having known of the conditions precedent which were required to be fulfilled before a proper Hukumnama could be issued had not chosen to raise these contentions in his written statement. It was also urged that the concept of secular democracy is the basis of the Indian Constitution and that the paramount and basic purpose under lying section 123 (3) of the Act is the concept of secular democracy. Section 123 (3) was enacted to eliminate from the electoral process, appeals to divisive factors such as religion, caste, etc. which give vent to irrational passions. It is essential that powerful emotions generated by religion should not be permitted to be exhibited during election and that decision and choice of the people are not coloured in any way. Condemnation of electoral campaigns on lines of religion. caste, etc. is necessarily implicit in the language of section 123 (3) of the Act. Consequently the section must be so construed as to suppress the mischief and advance the remedy. 161 Respondent No. 3 contested the appeal, and it was urged: (i) in order to constitute a Hukumnama proper there were certain conditions precedent, A which were required to be fulfilled, namely, there should be a meeting of Sarbat Khalsa, that is, a meeting of all the Sikhs and secondly anunanimous decision must be arrived at which should be followed by the approval of Shiromani Gurdwara Prabandhak Committee and the decision should be announced from Shri A kal Takht and that in the instant case no such Hukamnama held been issued; (ii) the constituency was a mixed constituency equally B divided into Hindu votes and Sikh votes and an appeal in the name of the Sikh religion in such a situation was unlikely; and (iii) the Akali Party was in alliance with CPI (M) and it was most improbable that when one of the allied parties was a Marxist Party, a candidate of Akali Dal would appeal in the name of religion. Allowing the appeal, C ^ HELD :1. Respondent No. 3 was guilty of corrupt practice under section 123 (3) of the Representation of the People Act, 1951. [189D] 2. As a result of amendment of sub section (3) of section 123 of the Act even a single appeal by a candidate or his agent or by any other person with the consent of the candidate or his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language would be corrupt practice. [1656] 3. Section 123 (2), (3) and (3A) of the Act were enacted to eliminate from the electoral process appeals to those divisive factors which arouse irrational passions that run counter to the basic tenets of the Constitution. Due respect for the religious beliefs and practices, race, creed, culture and language of other citizens is one of the basic postulates of our democratic system. The line has to be drawn by the court between what is permissible and what is prohibited after taking into account the facts and circumstances of each case interpreted in the context in which the statements or acts complained of might have been made. The court has to examine the effect of statements made by the candidate upon the minds and feelings of the ordinary average voter. [171B D] F Ambika Sharan Singh vs Mahant Mahadev and Giri and others, and Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra and Ors. [1975] Suppl. S.C.R. 281, relied upon. With a view to curb communal and separatist tendencies, section 123 (3) of the Act has been amended in 1961. In order to determine whether certain activities come within the mischief of section 123 (3), regard must be had to the substance of the matter rather than to the mere form or phraseology. The inhibition of section 123 (3) should not be permitted to be circumvented indirectly or by circuitous or subtle devices. The court should attach importance to the effect and impact of the acts complained of and always keep in mind the paramount purpose, namely, to prevent religious influence from entering the electoral field. The nature and consequence of an act may not appear n its very face but the same can be implied having regard to the language, H 162 the context, the status and position of the person issuing the statement, the appearance and known religion of the candidate, the class of persons to whom the statement of act is directed, etc. [176C F] 5. It would not be an appeal to religion if a candidate is put up be saying vote for him because he is a good Sikh or he is a good Christian or he is a good Muslim, but it would be an appeal to religion if it is publicised that not to vote for him would be against Sikh religion or against Christian religion or against Hindu religion or to vote for the other candidate would be an act against a particular religion. It is the total effect of such an appeal that has to be borne in mind in deciding whether there was all appeal to religion as such or not. In each case, therefore, the substance of the matter has to be judged. [182E G] This question, however, has to be kept in view within proper limit and religious leaders have right freely to express their opinion on the comparative merits of the contesting candidates and to canvass for such of them as he considered worthy of the confidence of the electorates. [183B] Shubnath Deograrm vs Ram Narain Prasnd an(l others, , Ram Dial vs Sant Lal and others, [1959] Supp. 2 S.C.R., 748 and Kultar Shingh vs Mukhtiyar Singh; , , followed. Whether the documents said to be Hukamnamas were actually Hunkamnamas or not should not be decided in a technical manner. in these matter the Court has to examine the effect or the statements made by the candidate on his behalf upon the minds and the feelings of the ordinary voters of the country. It is undisputed that Shri Akal Takht enjoys a unique position amongst the Sikhs. It is indubitable that any communication from Shri Akal Takht which is represented by eminent members of the Sikh community as Hukamnama would have great religious persuasive value even though strictly speaking it might or might not be a Hukamnama. [182A D] Zyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra Glory of the Akal Takht, p. 97 by Harjinder Singh Dilgeer, Singh The Sikh Religion Vol. IV, p. 3 by M. A. Macauliff and a A History of the Sikhs by Khuswant Singh Vo. 1: 1469 1839, p. 63, referred to. From the evidence on record, in the background of the fact that some communications from Akal Takht call it Hukamnama or any other name were issued and the issues of editorials of Akali Times were pointed out by the ex Chief Minister at the meetings, and the same had not been denied by him, it is apparant that appeal in the name of religion was made on behalf of the respondent No. 3. Though some facts stated in the oral evidence about the meetings had not been stated in the petition, but when evidence was tendered and was not shaken in cross examination and the versions have a ring of truth in the background of other facts, the factum of appeal to religion by the respondent No. 3 has been proved. This conclusion becomes irresistible in view of absence of any express denial by the ex Chief minister and in the absence of any explanation for not calling him as a witness on this point, [188 E to 189A] 163 8. It is not a question of merely proving a fact by adverse presumption. A In cases where there is positive evidence to prove a fact and there is no denial by the person who is most competent to deny that fact and no reason was given for his not giving evidence the conclusion is that the evidence advanced must be accepted. In the instant case, in the background of his eminence and his position, as the ex Chief Minister, his relationship with respondent No. 3 and especially in view of the fact that respondent No. 3 had in fact been nominated by the same group on behalf of the Sikh community with which the ex. Chief Minister was so intimately connected leads to the conclusion that the evidence advanced on behalf of the appellant must be accepted. It is clear that the ex Chief Minister as well as the elected candidate himself represented to the electorate that respondent No. 3 was a nominee of the Akal Takht and that an appeal to vote for respondent No. 3 in the name of Akal Takht with all the consequences of Hukamnama of Akal Takht was highlighted before the electorate [185H; 186A D1 C 9. In matters of this nature, the evidence naturally is mostly oral. Especially where the charge is a grave one, namely, corrupt practice which if proved would disentitle the candidate to contest the election for sometime to come, the Court must proceed with caution. [188C] Rahim Khan vs Khurshid Ahmed & ors., [1975] I S.C.R. 643 and Ch. Razik Ram vs Ch. I.S. Chauhan & ors., A.I R. 1975 S.C. 667, relied upon. Kanhaiyalal vs Mannalal & ors. ; , and M. Narayama Rao vs G. Venkata Reddy & ors., [1977]1 S.C.R. 493, referred to, 10 While insisting on standard of strict proof, the Court should not extend or stretch this doctrine to such an extreme extent as to make it well nigh impossible to prove an allegation of corrupt practice. Such an approach would defeat and frustrate the very laudable and sacrosanct object of the Act in maintaining Purity of the electoral process. [189B] Ram Saran Yadav vs Thakur MIJneshawar Nath Singh & ors. (Civil Appeal No. 892 (NCE) of 1980), relied upon. The contentions of the respondent No. 3 that since it was a mixed constituency and his party was in alliance with CPI (M), it was unlikely and improbable to make an appeal in the name of religion, are rejected for the reason that if there is conclusive evidence to that effect then such a theory would not outweigh the facts proved. These are only probabilities of a situation but if there is direct evidence of propaganda or campaign by candidate in the election in the name of religion, the probabilities of such a campaign not being made in view of other surrounding circumstances, cannot outweigh the direct evidence if the Court is otherwise inclined to accept such direct evidence. [170B.C] Ambika Sharan Singh vs Mahant Mahadev and Giri and others, , followed. For a proper verification of an affidavit or a petition based on certain informations, the source should be indicated. But in the instant case? 164 this question was not examined further because no objection at any stage was taken. [189 Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra & ors Padmabati Dasi vs Rasik Lal Dhar. I.L.R. XXXVII Calcutta 259 at 260 and Hardwari Lal vs Kanwal Singh, followed.

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.

The appellant Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949. The assessments were challenged in the High Court but the petitions were dismissed. While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents. The respondents challenged the attachment proceedings but their petitions were again dismissed. In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded. This Court thereafter allowed the appeals by the respondents. Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court. However, when. the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again. Those petitions were allowed and the appellant appealed to this Court. While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section (3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law. But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968. Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected. [293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court. It markes a direct inroad into the judicial powers of the State. The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively. By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective. But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts. Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution. 1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr. No. 75/69 dt. 289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed. The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution. State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.

The petitioners in these three writ petitions challenged the operative provisions of the Orissa Private Lands of Rulers (Assessment of Rent) Act, 1958 and the, Rules framed thereunder. These petitioners possess 302 private lands in the State of Orissa, which before the impugned Act were not subjected to the payment of rent, but which were assessed by the Revenue Officers in conformity with the Rules framed under the Act. The petitioners claims a writ in the nature of certiorari quashing the said orders of assessment. The Act was passed by the Orissa Legislature because it was thought expedient to provide for assessment of rent with respert to the private lands of Rulers in the State of Orissa. The main object of the Act is to authorise the levy of rent in respect of the private lands of persons included in the definition of the word "Ruler" prescribed by section 2(h) of the Act. Section 2(h) defines a "Ruler" as meaning the Ruler of a merged territory in the State of Orissa and includes his relatives and dependants. The petitioners attacked the pro visions of the Act mainly on the ground that they contravened article 14 of the Constitution. Held:(i) that section 6 of the Act does not contravene article 14 of the Constitution for the reason that fair and equitable tests have been laid down under section 6 of the Act for determining the rent which should be assessed in respect of the private lands of the Rulers. In the present case the legislature had prescribed the method of determining the rent payable on the private lands; and the relevant factors specified by section 6 appear to be just and substantially similar to the considerations which are generally taken into account at the time of survey settlement for determining the proper revenue assessment on ryotwari lands. The problem posed by the requirement to levy assessment on these private lands had to be dealt with by the legislature on an ad hoc basis. The settlement of rent and assessment introduced by the Act had been made applicable to these lands for the first time, and so, these lands could not be treated as comparable in every respect with the lands which were governed by the rates prescribed under the previous settlement. (ii)In considering the validity of a statute under article 14 the wellestablished principle is that the legislature can make class legislation, provided the classification on which it purports to be based is rational and has a reasonable nexus with the object intended to be achieved by it. If the party fails to show that the said classification is irrational, or has no nexus with the object intended to be achieved by the impugned Act, the initial presumption of constitutionality would help the State to urge that the failure of the party challenging the validity to rebut the initial presumption goes against his claim that the Act is invalid. In all cases where the material adduced before the court in matters relating to article 14 is unsatisfactory, the court may have to allow the State to lean on the initial presumption of constitutionality. (iii)There is no substance in the contention that the impugned Act is void because the definition of the word "Ruler" is inconsistent with Art, 366(22) of the Constitution. There is no doubt that the definition of the word "Ruler" prescribed by section 2(h) of the Act is wider than that prescribed by article 366(22) of the Constitution. 303 The definitions prescribed by article 366 are intended for the purpose of interpreting the articles in the Constitution itself, unless the context otherwise requires. The whole object of defining the word "Ruler" in the Act is to specify and describe the lands in respect of which the operative provisions of the Act would come into play. It is in that connection that the word "Ruler" has been broadly defined in an inclusive manner. (iv) The impugned Act is entirely outside the purview of article 31 of the Constitution as it has not purported either to deprive the Rulers of their property, or to acquire or requisition the said property. It is a simple measure authorising the levy of a tax in respect of agricultural lands. Pratap Kesari Deo vs The State of Orissa, A.I.R. 1961 Orissa 131, relied on.

As the reversioner of a Hindu widow 's estate one 'R ' instituted suit No. 4 of 1950 in the court of the Civil Judge Jaunpur, for a declaration that he was the 'owner in possession ' of the said estate. 'B ' who claimed to be an heir of the widow was impleaded as a party defendant. The suit was decreed ex parte. 'B ' then filed suit No. 14 of 1956 in the same court against the heirs of 'R ' who died after the, passing of the decree in his suit. In suit No., 14 of 1956 'B ' claimed that as heir of the said widow he was entitled to her stridhuna properties. He averred that in suit No. 4 of 1950 'R ' had arrived at an oral compromise with him promising him 5/16th share in the, whole estate.; that the oral compromise was later reduced into a memorandum; that 'R ' had represented to him that a compromise decree would be obtained in the suit; and that taking advantage of his ignorance 'R ' had obtained an ex parte decree against him. On these allegations 'B ' prayed that he be declared the owner of all the properties left by the widow, and in the alternative he be declared owner of her stridhan properties, the decree in suit No. 4 of 1950 having no adverse effect on his rights. On the footing that he had claimed a mere declaration 'B ' paid Rs. 18/12/ as court fees as in a claim under Sch. II cl. 17(iii) of the Court Fees Act. The Inspector of Stamps, however, reported to the Civil Judge that in his view the case fell within section 7(iv A) of the Act as incorporated therein by the U.P. State Legislature and court fee was payable on the value of the subject matter of the suit. The Civil Judge ordered the plaintiff to amend the plaint and pay the court fee remaining due. In appeal the High Court decided in favour of the respondent. The State of U.P. appealed. It was contended on behalf of the appellant: (i) that the plaintiff sought a declaration adjudging void the decree in suit No. 4 of 1950 which was a decree "for money or other property" within the meaning of section 7(iv A) since that expression must include a decree concerning or relating to money or other property, (ii) that in any case the decree in suit No. 4 was an 'instrument ' securing money or other property having market value and section 7(iv A) was therefore attracted; (iii) that the relief for declaration was a mere device intended to conceal the true purport of the claim. HELD: The appeal must be dismissed. (X) A decree for declaration of title to money or other property is not a decree for money or property. The expression "decree for money or other property" means only a decree for recovery of money or other property. It does not include a decree concerning title to money or other property. [592 E F] (ii) A decree ad invitum is not an instrument securing money or other property: such a decree is a record of the formal adjudication of the 589 court relating to a right claimed by a party to the suit. It does not by its own force secure money or property. [592 G] (iii) The relief for declaration was not a mere device or subterfuge intended to conceal the true purport of the claim for the property in dispute was in the possession of the District Magistrate, and if the Civil Court declared the plaintiff 's title he would be entitled to secure recognition of his rights by the District Magistrate. [593 A B]

The appellant was tried for an offence under section 302 Indian Penal Code for the murder of his wife. The evidence consisted mainly of the uncorroborated dying declaration of the wife. The Sessions judge accepted the evidence but convicted the appellant under section 304 Part 1 Indian Penal Code. On appeal by the State the High Court convicted the appellant of an offence under section 302 Indian Penal Code and sentenced him to death. The appellant contended that he had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution and that his conviction was bad. Held, that the appellant had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution. The conviction of the appellant under section 304 Part 1 of the Indian Penal Code by the Sessions judge amounted to an acquittal of the offence under section 302 and the High Court had reversed this order of acquittal and sentenced the appellant to death. The word "acquittal" in article 134 (1) (a) did not mean that the trial must have ended in a complete acquittal of the charge, but acquittal of the offence charged and conviction for a minor offence was included in the word "acquittal". Kishan Singh vs The King Emperor, (1928) L. R. 55, I.A. 390 relied on. Per Kapur, Subba Rao and Shah, JJ. The appellant was rightly convicted and sentenced by the High Court. it was legal to found a conviction on the uncorroborated dying declaration. The dying declarations had been accepted both by the Sessions judge and by the High Court and there was nothing in the evidence on the record which detracted from the findings of those courts in regard to the correctness or the propriety of this dying declaration. 776 Khushal Rao vs The State of Bombay, ; , referred to. Per Hidayatullah and Dayal, JJ. In an appeal under article 134 (1) (a) of ' the Constitution the Supreme Court assessed afresh the evidence on record and did not follow the practice in appeals by special Leave under article 136 that concurrent findings of the Courts below could be interfered with. only when special circumstances existed. In the circumstances of the present case it was not safe to rely on the dying declaration and the appellant was entitled to be acquitted.

Civil Appeal No. 282 of 1960. Appeal from the judgment and order dated February 15, 1956, of the Madras High Court in Writ Petition No. 404 of 1952. K. N. Rajagopala Sastri and P. D. Menon, for the appellant. R. Gopalakrishnan, for the respondent. October 20. The Judgment of the Court was delivered by HIDAYATULLAH, J. Whether the legal representative of a deceased person, who is assessed in respect of the total income of the latter person, as if he were the assessee, can be ordered to pay a penalty under section 46(1) of the India Income tax Act, is the short question that arises in this appeal. One Ebenezer died intestate on November, 22, 1945, during his year of account which ended on March 31, 1946. He left behind him the respondent, E. Alfred, his son, and eight daughters. For the assessment year, 1946 47, the respondent was assessed under section 24B(2) of the Income tax Act, after a notice was issued to him under s.22(2), ibid. The assessment was completed on March 26, 1951, and a notice of demand was issued under section 29 of the Act. The respondent appealed against the order of assessment to the Appellate Assistant Commissioner, but during the pendency of the appeal, a penalty of Rs. 250/ was imposed upon 145 him under s 46(1) of the Act by the Income tax officer, as he had defaulted in payment of tax on the due date. After the appeal was disposed of with very minor modifications, a notice of demand was again issued to him to pay the tax on or before December 15, 1951. On his default, a second penalty of Rs. 10,000/ was imposed upon him on March 8, 1952. The respondent then filed a petition under article 226 of the Constitution in the High Court of Madras challenging the imposition and levy of penalty imposed upon him. The High Court held in his favour, and quashed the, two orders imposing penalty but granted a certificate of fitness to appeal to this Court. This appeal was then filed. In reaching the conclusion that section 46(1) of the Act did not apply to a legal representative, the learned Judges of the High Court held that a legal representative could not be said to be included within the words of that section. "when an assessee is in default in making a payment of Income tax" because of the scheme of the Act, particularly B. 29, where a distinction is made between "an assessee" and "other person". According to the learned Judges, a legal representative is assessed as an assessee under a fiction in section 24B(2), and that fiction comes to an end when the computation of the tax Or, in other words, the assessment is made. The learned Judges drew distinction between the three subsections of 8. 24B, and pointed out that sub section (1) only created a liability on the legal representative for collection of tax but did not refer to him for that purpose as an assessee and sub s.(3) which did not concern itself with collection, did not refer to the legal representative as an assessee, and held that the fiction in sub section (2) was created for the limited purpose of assessment, and since that subsection also did not concern itself with collection, the fiction could not be carried beyond assessment resulting in the determination of the tax. 146 Thereafter, according to the High Court, the legal representative is not an assessee within the meaning of section 29, but can only be brought under tho words "other person", and inasmuch as sections 45 and 46 refer to "an assessee in default", the legal 3. representative cannot be treated as such and no penalty can either be imposed upon him or recovered. We are concerned with the definition of "assessee" before its amendment in 1953. That definition read as follows: "assessee" means a person by whom income tax is payable" The generality of this definition is sufficient to include even a legal representative who is to pay the tax, though out of the assets of the deceased person. Section 24B, which makes it legal representative liable, is as follows: 24B. (1) Where a person dies, his executor, administrator, or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge the tax assessed as payable by such person, or any tax which would have been payable by him under this Act if he had not died. (2) where a person dies before the publication of the notice referred to in subsection (1) of section 22 or before he is served with a notice under sub section (2) of section 22 or section 34, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under subsection (2) of section 22 or under section 34, as the case may be comply therewith, and the Income tax officer may proceed to assess the total income of the deceased person as if such executor, administrator or other legal representative were the assessee. 147 (3) where a person dies, without having furnished a return which he has been required to furnish under the provisions of section 22, or having furnished a return which the income tax officer has reason to believe to be incorrect, or incomplete, the Income tax officer may make an assessment of the total income of such person and determine the tax payable by him on the basis of such assessment and for this purpose may, by the issue, of the appropriate notice which would have had to be served upon the deceased person had he survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which he might under the provisions of sections 22 and 23 have required from the deceased person". The scheme of the section, which was inserted by the Second Amendment Act of 1933 and modified further by the Amendment Act of 1939 is as follows: Subsection (1) of a 24B makes, inter alia the legal representative liable to pay out of the estate of deceased person to the extent to which the estate is capable of meeting the charge, the tax assessed as payable by such person or any tax which would have been payable by him under the Act, if he had not died. By this sub section, a legal representative is made liable to pay the tax which might have been assessed but not paid by the deceased person or which might be assessed after his death. It covers all situations and contingencies and makes the liability absolute, limited, however, to the extent to which the estate of the deceased is capable of meeting the charge. The subsection does not provide for issue of notices, assessment collection or anything connected with the imposition, levy and collection of the tax, Subsection (2) and (3) next provide for different contingencies. Subsection (2) provides that where a person dies 148 before the publication of a general notice or before he is served with a special notice under s.22 or s.34 his legal representative shall, on the service of the special notices comply with these notices, and the Income tax officer may proceed to assess the total income of the deceased person as if the legal representative were the assessee. Sub section (3) provides that where a person dies after he has been required to furnish a return but without having furnished such return, or where he has furnished the return but the Income tax officer has reason to believe it to be incorrect, the Income tax officer may make the assessment of the total income of such deceased person, and determine, the tax after serving such notices, as may be required under s.22 or 23, upon the legal representative of the deceased person to produce the accounts, documents or other evidence. In the present case, the matter fell to be governed by the second sub section, because Ebenezer died before the end of his year of account. The service of the notice upon the respondent and his assessment, as if he were the assessee, were made under the second sub section. By reason of this assessment, the respondent became liable under the first sub section to pay out of the estate of Ebenezer the tax assessed, to the extent to which Ebenezer 's estate was capable of meeting the charge but he himself was deemed to be the assessee. No doubt, the fiction made the respondent an assessee for the purpose of assessing the total income of Ebenezer. But the question is whether the fiction came to an end after the assessment, so that he remained a mere debtor thereafter to the Department. The answer to this question would determine the further application of the other sections of the Act. When a thing is deemed to be something else it is to be treated as if it is that thing, though, in fact, it is not. The original assessee being dead before the notice, either general or 149 special, to him, he could not be treated as all assessee, and the process of the Act is, by the fiction made available against a different person like a legal representative, who is fictionally deemed to be an assessee for purposes of assessment. The word "assessment" bears different meanings, and in one sense, it comprehends the entire process of computation and levy of the tax. It is in this sense that the legal representative becomes an assessee by the fiction, and it is this fiction which has to be fully worked out, without allowing the mind "to boggle" as was said in Commissioner of Income Tax vs Teja Singh(1) applying the dictum of Lord Asquith in East End Dwellings Co., Ltd. vs Finsbury Borough Council(2). If we turn to the definition of "assessee", it says that an assessee means a person by whom income tax is payable. A legal representative who by fiction, is decreed to be an assessee therefore, comes within this definition, because he is a person by whom income tax is payable, though out of the assets left by a deceased person. The assessment of the legal representative is then made under section 23 of the Act, and he has the right to appeal under B. 30, which he would not have, if he ceased to be an assessee after the determination of the tax. We are not concerned in this case with the position of the legal representative under the third sub section of s.24 B, and are not required to consider what his position would be, if he made a default in the payment of the tax. The fiction is enacted at least for the purpose of sub section (2), and it is to that subsection that we are confined in this case. Nor can the fiction in that sub section be limited by provisions of law for a totally different situation. Under s.45, if a notice of demand is issued under s.29 on an assessee and has not been complied with the assessee is deemed to be in default, and under section 46 (1), if the assessee is in default, a penalty, can be imposed. All these stages the respondent (1) (1959) Supp. 1 S.C.R. 394. (2) , 132. 150 went through in this case. He was himself an assessee qua the assets and liability to tax, of Ebenezer he was, therefore, an assessee in default and liable to the imposition of penalty for this default. The question is whether s.29, which makes a distinction between an assessee and "other person", makes any difference. The High Court as well as the learned counsel for the respondent (who pressed upon us the reasons of the High Court) referred to the words of s.29 where in addition to an "assessee" liable to pay the tax occur the words "other person" liable to pay such tax, and observed that the respondent would fall to be governed by the words "other person" liable to pay such tax and not by the words "the assessee" liable to pay such tax. The High Court reasoned, therefore, that the words "an assessee" in sections 45 and 46 in their application are limited to an assessee, who is assessed on his own behalf and not "other person", who is not an assessee. This distinction, it observed, must be borne in mind in interpreting the word "assessee" used in sections 45 and 46, and so construing, limited the word "assessee" in those two sections to an assessee proper. The words "other Person" cannot apply to a legal representative, if he is an assessee by fiction, and the section has to be worked out to its logical conclusion. If he falls within the word "assessee ', as has been shown above, he does not fall within the words "other person" and it is not necessary to find in this case what persons are there meant to be included. In our opinion, the penalty could be imposed on respondent as an assessee. The appeal thus succeeds, and is allowed with costs here and in the High Court. Appeal allowed.

One died intestate during his year of account Leaving g behind him his son A the respondent and eight daughters. After notice under section 22 (2) of the Income Tax Act was issued, A was assessed under section 24 (2) of the Act and notice of demand was issued under section 29. The respondent appealed to the Appellate Assistant Commissioner, but during the pendency of the appeal a penalty was imposed upon him under section 46 (1) of the Act by the Income tax officer as the respondent had defaulted in payment of tax on the due date. After the appeal was disposed of a notice of demand was again issued to the respondent to pay the tax. On respondent 's default, a second penalty was imposed upon him. Respondent challenged this order by writ. The High Court quashed the order inter alia holding that section 46 (1) did not apply to a legal representative as he was assessed as an assessee under a fiction in section 24B (2) and that fiction came to an end when the assessment was made, for the fiction was created for the limited purpose of assessment, and since that subsection was not concerned with collection, the fiction could not be carried, beyond assessment resulting in the determination of tax. The question was whether the fiction came to an end after the assessment, so that the Legal representative remained a mere debtor to the department or could he be ordered to pay penalty under section 46 (1) of the Act. ^ Held, that the fiction made the respondent an assessee for the purpose of assessing the total income of E. That fiction did not come to an end after the assessment. When a thing is deemed to be something else, it is to be treated as if it is that thing, though, in fact it is not E being dead before the notice, either general or special, to his, could not be treated as an assessee, and the process of the Act, was, by fiction, made available against the legal representative who was the assessee for purpose of assessment which meant the entire process of computation and law of the tax and the fiction had to be worked out to its logical conclusion. The definition of 144 the word assessee being defined in the Act as a person by whom income tax is payable, the legal representative came within the definition and his assessment being made under section 23, he had also a right of appeal under section 30 since he did not cease to be an assessee after the determination of the tax at least for the purpose of sub section (2) of section 24 B, and section 29 applied to the legal representative in his position as the assessee. Commissioner of Income tax vs Teja Singh, [1959] Supp. 1 S.C.R. 394 and East End Dwellings Co. Ltd. vs Finsbury Borough Council,[1952] A.C. 109, referred to.

The appellant company in Civil Appeal No.642 of 1974 was doing the business as ship chandler. It imported the goods from foreign countries and after receipt of the goods, kept them in a bonded warehouse under the relevant provisions of the . The ware house was under dual control of the Customs Department and the importers like the appellant so that it could not be opened by one without the presence of the other. On receipt of order from the Captain of the Ship requiring ship stores, the appellant supplied the goods on board after observing certain formalities imposed by the , the rules and regulations made thereunder. For the Assessment year 1964 65 a question arose whether Rs.3,51,438.08 which was the taxable turnover, determined by the assessing authority, was subject to the tax under the Tamil Nadu General Sales Tax Act, 1959. The appellant objected to the assessment on such turnover on the ground that the goods relating to such turnover were imported from abroad, stored in the customs ware house and were not brought to the country across the customs frontiers. The Sales Tax Officer assessed the turnover and the Appellate Assistant Commissioner confirmed the assessment on the basis that sales were effected 237 within the State of Tamil Nadu. However, the Tribunal, in appeal by the appellant, held that the sales did not take place within the State of Tamil Nadu since the import of goods in question had not become complete and as the goods were sold to the foreign going vessels, the sales in question could not be deemed to be within the State of Madras. On revision, the High Court relying on the decision of the Supreme Court in the State of Madras vs Davar and Co., 24 STC 481, held that the sales took place in the State of Madras and assessment to tax was valid. The facts in all the other connected appeals, writ petitions and the special leave petitions being identical, a similar question of law also arose in them. In appeal to the Supreme Court by the appellant/petitioners, it was contended on their behalf: (i) that the property in the goods, did not pass in the territory of Tamil Nadu and the sales were therefore, in the course of export because goods were to be on board the ship and were exported outside the country and could not be consumed before they reached the high seas; (ii) that the sale of goods took place in the territorial water of India and not within the State of Tamil Nadu; (iii) that the legislative competence of the State of Tamil Nadu as regards levying of the sales tax was confined to the territories of the State as specified in item No. 7 of the First Schedule to the Constitution. That legislative competence did not extend to any territorial waters simply because these were abutting the land mass of the State of Tamil Nadu; (iv) that the Sovereignty over the limits of territorial waters extended and always extended to the entire territorial waters of India. The limits and extent of the said territorial waters had not been altered by any notification of the Central Government. The territorial waters extended to a distance of 12 nautical miles from the sea shore adjacent to the land mass of the State; and (v) that there was no definition at all of "Customs Frontiers" in the . The definition inserted in the Act in section 2(ab) by the Amending Act 103 of 1976 must be read as declaratory or explanatory and no questions of prospective operations would arise. On the other hand, it was argued on behalf of the respondent State that the appellant 's godowns and bonded ware houses were within the State of Tamil Nadu. When orders were received, the appellants/petitioners supplied the required quantity from the stock either in the godown or in the bonded ware houses and delivered these or set these apart in fulfilment of the orders placed by the concerned officer of the foreign bond ship and that at that time only appropriation was made towards the contract of sale and such appropriation took place within the State of Tamil Nadu. It was, therefore, on such ap 238 propriation that the sale took place; and (ii) that it was not correct to say that the transactions of sale were completed only when the masters of the vessels acknowledged delivery of the goods on board the vessels. Dismissing the Appeals and the Petitions, ^ Held: 1.1 The concept of export in Article 286(1)(b) of the Constitution postulates the existence of two termini as those between which the goods were intended to move or between which they were intended to be transported and not a mere movement of goods out of the country without any intention of their being landed in specie in some foreign port. Goods might be consumed within the meaning of the Explanation to Article 286(1) (a) either by destruction or by way of use depending on the nature of the goods. Therefore, the sales were not sales "in the course of export" within the meaning of Article 286(1) (b) and were not exempt under that Article but they fell within the Explanation to Article 286(1) (a). [247C D; G] 1.2 Mere movement of goods out of the country following a sale would not render the sale, one in the course of export within Article 286(1) (b) of the Constitution of India. Before a sale can be said to be a sale in the course of export, the existence of two termini between which the goods are intended to move or to be transported is necessary. [249F G] In the instant case the appropriation of goods took place in the State of Tamil Nadu when the goods were segregated in the bonded ware house to be delivered to the foreign going vessels. Therefore, under sub section (2), sub cl. (a) and (b) of section 4 of the , the sale of goods in question shall be deemed to have taken place inside the State because the contract of sale of ascertained goods was made within the territory of Tamil Nadu and furthermore in case of unascertained goods approrpriation had taken palce in that State in terms of cl. (b) of sub section (2) of section 4 of the . There is no question of sale taking place in course of export or import under section 5. From that point of view, the amendment introduced by Act 103 of 1976 by incorporating in cl. (ab) of section 2 of the does not affect the position. It was not a case of export as there was no destination for the goods to a foreign country. The sale was for the purpose of consumption on board the ship. It was not as if only on delivery on board, the vessel that the sale took place. The mere fact that shipping bill was prepared for sending it for custom formalities which were designed to effectively control smuggling activities could not 239 determine the nature of the transaction for the purpose of sales tax nor does the circumstances that delivery was to the captain on board the ship within the territorial waters make it a sale outside the State of Tamil Nadu.[252E H; 247A B] Burmah Shell Oil Storage and Distributing Co. of India Ltd., and Anr. vs Commercial Tax Officer & Ors., 11 STC 764; Deputy Commissioner of Commercial Taxes vs Caltex India Ltd., Madras, 13 STC 163; The State of Madras vs Davar & Co., 24 STC 481; Fairmacs Trading Co. vs The State of Tamil Nadu, 41 STC 157; Tata Iron and Steel Co. Ltd. Bombay vs S.R. Sarkar & Ors., 11 STC 655; and The State of Kerala & Ors. vs The Cochin Coal Co., Ltd., 12 STC 1 relied upon. Fairmacs Trading Co. vs The State of Tamil Nadu, 41 STC 157 and Fairmacs Trading Co. vs The State of Andhra Pradesh, 36 STC 260 approved. Customs barrier does not set a terminal limit to the territory of the State for sales tax purposes. Sale, therefore, beyond the customs barrier is still a sale within the State. The amendment introduced in s.2 by the Act 103 of 1976 does not affect the position because the custom station is within the State of Tamil Nadu. [253A B] 4. In the facts and circumstances of the case, it is not necessary to express any opinion on the arguments whether introduction of cl.(ab) of s.2 of the by Act 103 of 1976 is prospective or not. [253C D] Deputy Commissioner of Commercial Taxes vs Caltx India Ltd., Madras, 13 STC 163; Tata Iron and Steel Co. Ltd. Bombay vs S.R. Sarkar & Ors., 11 STC 655; Furby vs Hoey [1947] 1 All England Report 236; The Central Bank of India vs Their Workmen ; ; and Chanan Singh & Anr. vs Jai Kaur; , at 804 807 referred to. Kent Justices Ex Parte LYE & Ors., [1967] 1 All England Report 560 at 564 65 held inapplicable.

The appellant Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949. The assessments were challenged in the High Court but the petitions were dismissed. While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents. The respondents challenged the attachment proceedings but their petitions were again dismissed. In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded. This Court thereafter allowed the appeals by the respondents. Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court. However, when. the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again. Those petitions were allowed and the appellant appealed to this Court. While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section (3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law. But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968. Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected. [293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court. It markes a direct inroad into the judicial powers of the State. The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively. By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective. But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts. Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution. 1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr. No. 75/69 dt. 289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed. The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution. State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.

The respondent 's husband was a partner in a firm carrying on business as bankers. He issued a cheque for Rs.3,00,000 in favour of the firm on 4th October, 1952 with a view to give Rs. 1,00,000 to each of his three minor grand nephews. This amount was debited to his account in the firm and credited in the accounts of the three minors in equal proportion. He died on 21st February 1956. The said sum continued to stand in the respective accounts of the three minors in the books of the firm till its dissolution on 4th July, 1960 whereafter some assets were allotted to each one of them in lieu of the amounts standing to their credit. The respondent, as the accountable person, filed an account declaring the value of the assessee 's estate without including the aforesaid sum of Rs. 3,00,000 transferred by the deceased to his three grand nephews. The respondent assessee contended before the Deputy Controller (i) that these transfers were not gifts but amounted to transfer of actionable claims made in conformity with section 130 of the transfer of Property Act by effecting entries in the books of account; and (2) that the transfer amounted to a novation which did not require an instrument signed by the transferor. The Deputy Controller negatived both the contentions and held that the sum of Rs. 3 lakhs was includible in the estate of the deceased that passed on his death. The Appellate Controller confirmed the aforesaid order in appeal. In the further appeal preferred by the respondent, the Appellate Tribunal, held (i) that the plain reading of section 130 showed that the transfer 349 of an actionable claim became complete and effective only upon the execution of an instrument in writing signed by the transferor or by his duly authorised agent; (ii) that the cheque issued by the deceased in favour of the firm only authorised the firm to pay to itself the sum of Rs. 3 lakhs from out of the amount lying at the credit of the deceased but it did not by itself authorise the firm to transfer this amount to anyone else and that such a transfer could be authorised by a separate letter of instructions from the deceased but no such instrument obtained and the oral instructions given could not take the place of such an instrument in writing and, therefore the transfer of Rs. 3 lakhs done in favour of the donees was not in accordance with the requirements of section 130; (iii) that the amount of Rs.3 lakhs was also includible in the estate of the deceased under section 10 of the even if it were assumed that the transfer became complete and effective on the date of the transfer inasmuch as on the facts, it could not be said that the donees retained possession and enjoyment of the gifted amounts to the entire exclusion of the donor or of any benefit to him and that this position continued to exist till the death of the deceased. The High Court in a reference at the instance of the assessee, set aside the order of the Tribunal on the grounds (i) that it was a gratuitous transfer of an actionable claim and the inter position of a cheque issued by the deceased in favour of the firm made all the difference inasmuch as the transfer of an actionable claim represented by a negotiable instrument like a cheque was governed by section 137 in preference to section 130 of the Transfer of Property Act and that the cheque together with the oral instructions (which even the Tribunal presumed were given by the deceased) would constitute the firm a trustee or an agent holding the moneys for the benefit of the minors and, as such, the transfer to minors was valid, complete and effectual; (ii) that the donor had been completely excluded from the subject matter of the gift and, as such, section 10 was not applicable. Dismissing the appeal, ^ HELD: 1. The transaction in question clearly fell within the ratio of the decision in Munro 's case and the High Court 350 was right in coming to the conclusion that to such a transaction, section 10 was inapplicable. [362 F G] 2.(i) Section 10 of the prescribes two conditions, namely,: (1) that the donee must bona fide have assumed possession and enjoyment of the property which is the subject matter of the gift to the exclusion of the donor immediately upon the gift; and (2) that the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him by contract or otherwise. Both these conditions are cumulative. Unless each of the conditions is satisfied, the property would be liable to estate duty under section 10 of the Act. [357G H; 358 A] 2.(ii) The second part of section 10 has two limbs: the deceased must be entirely excluded (i) from the property; and (ii) from any benefit by contract or otherwise and that the word "otherwise" should be construed ejusdem generis and should be interpreted to mean some kind of legal obligation or some transaction enforceable in law or in equity which, though not in the form of a contract, may confer a benefit on the donor. [358 B C] 3.(i) The question whether gifted property should be regarded as a part of the estate of the deceased donor passing on his death for the purpose of section 10 of the Act would depend upon as to what precisely is the subject matter of the gift and whether the gift is of absolute nature or whether it is subject to certain rights. If the gift is made without any reservation or qualification, that is to say, where the gift carries fullest right known to law of exclusive possession and enjoyment, any subsequent enjoyment of the benefit of that property by way of possession or otherwise by the donor would bring the gift within the purview of section 10; but where the gift is subject to some reservation or qualification, that is to say, if the subject matter of the gift is property shorn of certain rights and the possession or enjoyment of some benefit in that property by the donor is referable to those rights i.e. rights shorn of which the property is gifted, then in that case the subject matter of the gift will not be deemed to pass on the death of the deceased donor. In other words, if the deceased donor limits the interest he is parting with and 351 possesses or enjoys some benefit in the property not on account of the interest parted with but because of the interest still retained by him, the interest parted with will not be deemed to be a part of the estate of the deceased donor passing on his death for the purpose of section 10 of the Act. It is these aspects which mark the distinction between the two leading cases, namely Chick 's case and Munro 's case. The decision in chicks 's case falls within the first category while Munro 's case falls within the other category. [358 E H; 359 A B] In the instant case, the donees were never admitted to the benefits of the partnership firm. The Tribunal as well as the High Court found as a fact that when the cheque was issued oral instructions must be presumed to have been given by the deceased to the firm for crediting the three accounts of the three minors without which the firm could not make such credit entries. Therefore, the transaction in question amounted to a gratuitous transfer of an actionable claim to which section 137 in preference to section 130 of the Transfer of Property Act applied and there was a valid gift thereof to the minor donees. Moreover, the amount of Rs. 3 lakhs did not go out of the firm but on being transferred from the account of the deceased to the accounts of the minor donees continued to remain with the firm for being used for the firm 's business; in fact the partnership continued to have the benefit thereof even after the death of the donor till the firm was dissolved. Obviously, the substance of the transaction was that the gift was of an actionable claim of the value of Rs. 3 lakhs out of the donor 's right, title and interest as a whole in the firm and as such was shorn of certain rights in favour of the partnership and therefore, the possession or enjoyment of the benefit retained by the donor as a partner of the firm must be regarded as referable to partnership rights and had nothing to do with the gifted property. [361 G H; 362 A F] Munro vs Commissioner of Stamp Duties, ; ; C.R. Ramachandra Gounder 's case, ; N.R. Ramarathanm case, 91 I.T.R.Controller of Estate Duty vs R.V. Vishwanathan & Ors., & Controller of Estate Duty vs Kamlava, applied. Chicks vs Commissioner of Stamp Duties of New South Wales, 37 I.T.R. (E.D.) 89; George Da Costa vs Controller of 352 Estate Duty, Mysore, ; Controller of Estate Duty, Madras vs Smt. Parvati Ammal ; Shantaben section Kapadia vs Controller of Estate Duty, Gujarat, 73 I.T.R. 171 & Controller of Estate Duty, Gujarat vs Chandravadan Amratlal Bhatt, distinguished.

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.

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 respondents filed a suit for specific performance against the appellant which was dismissed on March 12, 1954. On March 24 the respondents made an application for a certified copy of the judgment and decree. The decree was not drawn up and the respondents were supplied a certified copy of the judgment and the memo of costs. The respondents filed an appeal before the High Court without the certified copy of the decree and only with the certified copy of the judgment and the memo of costs. The appeal was admitted under 0. 41, r. 11 Code of Civil Procedure on August 30, 1954. On December 23, 1958, the appellant served a notice on the respondents that he would raise a preliminary objection at the hearing that the appeal was incompetent as a certified copy of the decree was not filed as required by 0. 41, r. 1. On December 24, 1958, the respondents moved the trial Court for drawing up of the decree, but since the record was in the High Court this could not be done. At the hearing of the appeal, the appellant raised the preliminary objection, but the High Court passed an order on December 15, 1959, allowing the respondents one month 's time for getting a decree drawn up and obtaining. a copy and directed the record to be sent to the trial Court. Against this order the appellant preferred an appeal to the Supreme Court contending that the High Court was bound to dismiss the appeal as it was manifestly incompetent under 0. 41, r. 1. Subsequently, on December 23, 1959, the respondents obtained a certified copy of the decree and filed it before the High Court the same day. The appellant contended that the appeal was to be deemed to be filed on this date and was time barred. Held, that in the circumstances of this case the order passed by the High Court was right. ' There was no doubt that 0. 41, r. 1 was mandatory and in the absence of or the decree the filing of the appeal was incomplete, defective and incompetent. The office of the trial Court was negligent in not drawing up a decree and the office of the High Court was also not as careful as it should have been in examining the appeal and these have contributed substantially to the unfortunate position. In such a case, the respondents deserved to be protected. Besides the, 919 question had become academic and technical in view of subse quent events. The certified copy of the decree was filed on December 23, 1959, and even if the appeal was considered to have been filed on that date, it was within time. Under section 12(2) of the Limitation Act the respondents could treat the time taken in the drawing up of the decree after the application for a certified copy thereof had been made as part of the time taken in obtaining the certified copy of the decree. Tarabati Koer vs Lala jagdeo Narain, , Bani Madhub Mitter vs Matungini Desai, Cal. 104 (F.B.), Gabriel Christian vs 'Chandra Mohan Missir, Pat. 284(F.B.), Jayashankar Mulshankar Mehta vs Mayabhai Lalbhai Shah, , Gokul Prasad vs Kunwar Bahadur, Luck. 250 and Umda vs Rupchand, , referred to. Rodger vs Comptoir d 'Escompte de Paris, (1871) L.R. 3 P.C. 465, relied on.

The appellant owned a cardamom plantation. For the assessment year 1957 58, he submitted a return under the Madras Plantations Agricultural Income tax Act, 1955. The Agricultural Income tax Officer did not accept the return, and 'added to the income the value of stocks of cardamom sold in the accounting year. The High Court in revision, confirmed the assessment made by the Department. In appeal to this Court, it was contended that: (1) the agricultural produce itself was income and became charged to tax under the Act when it was received and not when it was sold, used or consumed, and therefore, the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of account and ought to have brought to tax only that quantity and excluded the value of the rest of the produce received in earlier years, from taxation; and (2) from the fact that the appellant applied to compound the tax for the earlier years, it must be inferred that the produce which was sold by him in the year of account had already suffered tax in the earlier years. HELD : (1) Merely because the produce of the plantation was received in the earlier years, income derived from sale of that produce in the year of account was not exempt from tax under the Act in that year. [953 B] Section 3 of the Act read with the definition of "agricultural income" charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation. The expression "income" in its normal con notation does not mean mere production or receipt of a commodity which may be converted into money. Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity. It is not necessary, however, for income to accrue that there must be a sale of a commodity : consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income. [952 G H; 953 A B] Dooars Tea Co. Ltd. vs Commissioner of Agricultural Income tax, West Bengal; , , referred to. (2) It had to be proved by evidence that the crop sold related to the years in respect of which the assessee had applied to compound the tax, but there was no such evidence. [954 F]

Civil Appeal No. 60 of 1961. 2 Appeal from the judgment and order dated September 15, 1958, of the Mysore High Court at Bangalore in Writ Petition No. 144 of 1957. K. N. Rajagopal Sastri and P. D. Menon, for for the appellant. Rameshwar Nath, section N. Andley and P. L. Vohra, for the respondent. October 5. The Judgment of the Court was delivered by KAPUR, J. This is an appeal on a certificate of the High Court under article 133 (1)(c) of the Constitution against the judgment and order of the High Court of Mysore passed in a petition under article 226 of the Constitution of India. The appellant before us is the 1st Additional Income tax officer and the respondent is the assessee, and the matter relates to the assessment year 1948 49 the accounting year being 1947 48. The facts of this appeal are as follows. On November 27, 1956, a notice was issued to the respondent under B. 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 assessment year ending 31st March, 1949. This notice was served on the respondent on November 29, 1956. The respondent objected that no notice under B. 34 of the Income tax Act could be issued to him because of the lapse of eight years from the end of the accounting year. This objection was overruled and the respondent filed on June 12, 1957, in the High Court of Mysore, a petition under article 226 of the Constitution for a writ of certiorari quashing the order made by the Income tax officer. The High Court held on a construction of s 34 of the India Income tax Act, that the words 'any year" as used in section 31(1)(a) mean not the assessment year but the accounting year. It is that question which is required to be decided in this appeal. Section 34(1 )(a) reads: 3 section 34(1) "If (a) the Income tax officer has reason to believe that by reason of the omission or failure on the part of an assessee to make, a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed, or assessed at too low a date, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) . . . . . . he may in cases falling under clause (a) at any time within eight years serve on the assessee, or if the assessee is a company on the principal officer thereof, a notice containing all or any of the requirement which may be included in a notice under sub section (2) of section 22 and may proceed to assess or re assess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so for as may be, apply accordingly as if the notice were a notice issued under that sub section;". The argument is that the words "any year" in cl.(a) refer to the assessment year because under the Income tax Act the income of the previous year is assessed for the assessment year. For this purpose reference was made to some of the other provisions of the Income tax Act. In section 3 of that Act, which is the charging section, it is provided: section 3 "Where any (Central Act) enacts that income tax shall be charged for any year at any rate or rates tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions 4 of, this Act in respect of (the total income) of the previous year of every (individual, Hindu undivided family, (company and other local authority, and of every firm and other ar association of persons or the partners of the firm or the members of the association individually)` ' . This shows that income tax is charged for "any year" at the rate or rates set out in a Central Act and the reference is to the Indian Finance Act in this case to that of 1948, (Act XX of 1948): Section 9 of that Act reads as follows: section 9(1) "Subject to the provisions of sub sections (3),(4), (5) and (6), for the year beginning on the 1st day of April, 1948, (a) income tax shall be charged at the rates specified in Part I of the Second Schedule to this Act, and (b). . . . . . (2) In making any assessment for the year ending on the 31st day of March, 1949,. . . (3) In making any assessment for the year ending on the 31st day of March, 1949, (a) . . . . . (b) . . . . . It is quite clear from this section that according in to the Finance Act 1948, the income tax was to be charged at the rates specified in the Schedule attached thereto for the year beginning on the 1st day of April, 1918, and the assessment was for the year ending on March 31, 1949 under sub sections (2) and (3). Thus according to the Indian Finance Act assessment was to be made for the year ending March 31, 1949 at rates specified for the year beginning April 1, 1948. Coming now to 8. 22(1) it is there (1) provided that section 22(1) "The Income tax officer 5 shall, can or before the 1st day of May in each year give notice by publication in the press and publication in the prescribed manner, requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income tax to furnish, within such period less than sixty days as may be specified in the notice, a return, in the prescribed manner, setting forth (along with such other particulars as may be required by the notice) his total income and total world income during that year: . . " It shows, therefore, that a return has to be made for the year of assessment in regard to the total income during the previous year which is the accounting year; in other words income tax is assessed for the assessment year on total income of the previous year. When under section 34 (1) (a) a return is required the return has to be made under section 22 for any year, and when the reference is to omission to make a return of the income under section 22 for any year, the year is the assessment year, although the income which is declared relates to the previous year. The reference in cl. (a) of sub section (1) to B. 22 of the Act therefore makes the meaning of the phrase for any year" referable to an assessment year. The clause makes it clear that an assessee can be called upon to make a full and true disclosure of all materials necessary for his assessment of that year which necessarily must mean an assessment year and it is, in our opinion, erroneous to say that a return under section 22 of the assessees income for any year would have a different meaning in the first part from that dealing with the full and true disclosure of all material facts necessary for the assessment for that year. With due respect to the learned Judges of the High Court who gave the decision, the view 6 taken by them as to the meaning of "any year" was erroneous, and the correct way of interpreting section 34 (1) (a) is that the words "for any year" mean for any assessment year and not for any accounting year because as we have said above, the assessment is for the assessment year although of the income which accrued in the previous year. It may be added that the previous year for different heads of income falling under different sections of the Indian Income tax Act may vary and it could not have been the intention of the Legislature to give different starting points of limitation for different sources of income. Reading the various sections of the Indian Income Tax Act, which are set out above and the provisions of Indian Finance Act 1948, it is clear that the words "that year." in section 31(1) (a) have reference to the assessment year and not the accounting year. Our attention was drawn to a, judgment of this court in Pannalal Nandlal Bhandari vs Commissioner of Income tax, Bombay City(1). In that case it was held that once a notice is given in the prescribed manner under section '22 (1) of the Income tax Act every person whose income exceeds the maximum amount, exempt from tax, is obliged to submit a return, and, if he does not do so it will be deemed that there was an omission on his part within section 34 (1) (a). The question now debated was not raised there but it was observed that the notices had been issued within eight years from the end of the years of assessment and if cl. (1) (a) of section 34 was applied the assessment was not barred by the law of Limitation. It was also observed at page 79 that "the appellant not having submitted a return in pursuance of the notice issued under section 22 (1 ) the Income tax officer was competent under section 34 (1) (a) to issue notice at any time within eight years of the end of the year of assessment for assessing him to tax". (1)[1961] 2 section C. R. 35. 7 The appellant also relied upon C.W. Spencer vs Income tax officer, Madras(1). It was there observed: The period of limitation, whether it is eight years for cases falling under section 34 (1) (a) or four years falling under section 34 (1) (b), has to be computed from the end of that year. Though the expression "year" has not been further defined by section 34 itself, it should be clear from the context to the section itself that the year referred to is the assessment year and has no reference to the accounting year, which is elsewhere specified by the Act itself as the previous year. " In our opinion therefore, the view taken by the Madras High Court in C. W. Spencer 's (1) case is the correct view and the view taken by the learned judges of the Mysore High Court is erroneous. We therefore allow this appeal, set aside the judgment and order of the High Court by which the proceedings taken against the respondent were quashed. The respondent will pay the costs of the appeal in this court and in the High Court.

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.

The respondent assessee an existing company under the had neither any share capital nor distributed any dividend to its members and its entire income was expended for fulfilment of its objects, which were the promotion, protection and development of trade, commerce and industry in India. During the assessment year 1962 63, the relevant accounting year for which the year ended December 31, 1961 the assessee submitted a return showing its total income as 'nil ' claiming that all its income was exempt under section 11(1)(a) read with Section 2(15) of the Income Tax Act. During the assessment year, the assessee held the Indian Trade Fair at New Delhi and derived receipts from rent for space allotted, temporary stalls and storage and realised deposit and advances from the participants for hotel accommodation. In the relevant accounting year, the Conference of the Afro Asian Organisation for Economic Cooperation, was sponsored by the assessee and for organising the Conference, the assessee received from the Government Rs. 3 lakhs as grant in aid and after meeting the expenses, was left with a balance of Rs. 2 lakhs. It also received income by sale of books, fee for arbitration etc. The balance sheet for the accounting year indicated that it had an excess of income over expenditure under the head 'income '. The contention of the assessee before the Income Tax Officer was that the activities carried on by the Federation were not were not motive of earning profits, but that they were carried on with the object of promotion, protection and development of trade, commerce and industry in India and abroad, and therefore the income derived by the assessee was exempt under section 11(1)(a). The Income Tax Officer, held that the decision of this Court in the Andhra Chamber of Commerce 's case [1965] I.S.C.R. 565 was no longer good law due to the addition of the words 'not involving the carrying on any activity for profit ' in the definition of 'charitable purpose ' in Section 2(15) of the Act which qualify the fourth head of charity viz. 'any other object of general public utility ' and, therefore, must be read subject to the additional statutory requirement that the 490 object of general public utility should not involve the carrying on of any activity for profit, and accordingly raised a demand. On appeal by the assessee, the Appellate Assistant Commissioner disagreed with the view of the Income Tax Officer and held that the activities carried on by the assessee were not profit oriented and, therefore, its income was exempt. The Department appealed to the Appellate Tribunal, and the Appellate Tribunal upheld the view of the Appellate Assistant Commissioner and held that the dominant object with which the Federation was constituted being a charitable purpose viz., promotion, protection and development of trade, commerce and industry, there being no motive to earn profits, it was not engaged in any activity in the nature of business or trade, and, if, any income arose from such activity, it was only incidental or ancillary to the dominant object for the welfare and common good of the country 's trade, commerce and industry. The Commissioner of Income Tax applied to the Appellate Tribunal to make a reference to the High Court under sub section (1) of section 256 of the Act, but in view of the conflict in the decisions of the High Courts on the construction of the expression 'charitable purpose ' as defined in section 2(15) of the Act the Tribunal made a reference to this Court under Section 257 . On the question whether the words 'not involving the carrying on of any activity for profit ' in the definition of 'charitable purpose ' contained in section 2(15) of the Act, govern the word 'advancement ' and not the words 'object of general public utility '. ^ HELD: [By the Court] The reference must be answered against the Revenue and in favour of the assessee, in the view of the majority opinion in Addl. Commissioner of Income Tax vs Surat Art Silk Cloth Manufactures, [1980] I S.C.R. 77. [492 F] [Per A.P. Sen, J.] 1. The majority view in the Surat Art Silk case was that the condition that the purpose should not involve the carrying on of any activity for profit would be satisfied if profit making is not the real object. The theory of dominant or primary object of the trust, has, therefore, been treated to be the determining factor, even in regard to the fourth head of charity, viz. advancement of any other object of general public utility, so as to make the carrying on of business activity merely ancillary or incidental to the main object. This doctrine of dominant or primary object holds the field till there is a change of law. [496 C D, 497 F] 2. The majority decision had the effect of neutralising the radical changes brought about by Parliament in the system of taxation of income and profits of charities, with particular reference to "object of general public utility" to prevent tax evasion, by diversion of business profits to charities. It is the vagueness of the fourth head of charity "any other object of general public utility" that impelled 491 Parliament to insert the restrictive words "not involving the carrying on of any activity for profit". [496 G 497 A] 3. It was clearly inconsistent with the settled principles to hold that if the dominant or primary object of a trust was 'charity ' under the fourth head 'any other object of general public utility ', it was permissible for such an object of general public utility to augment its income by engaging in trading or commercial activities.[497 B] 4. When the Government did not accept the recommendation of the Direct Taxes Laws Committee in Chapter 2 for the deletion of the words "not involving the carrying on of any activity for profit" occurring in Section 2(15) of the Act, it was impermissible for the Court by a process of judicial construction to achieve the same result. [496 F] 5. In the instant case, activities of the assessee in regard to holding of the Indian Trade Fair and sponsoring of the Conference of the Afro Asian organisation in the relevant accounting year were for the advancement of the dominant object and purpose of the trust, viz. promotion, protection and development of trade, commerce and industry in India. The income derived from such activities was therefore exempt under section 11(1)(a) read with section 2(15) of the Act. [498 G 499 A] 6. There is a distinction between the "purpose" of a trust and the "power conferred upon the trustees" as incidental to the carrying out of the purpose. If the primary or dominant purpose of a trust or institute is charitable, any other object which is merely ancillary or incidental to the primary or dominant purpose, would not prevent the trust or the institution being a valid charity. [498 G, 499 A] [Per Venkataramiah, J.] 1. It is open to the Legislature to give encouragement to objects which it considers to be laudable by means of fiscal exemptions. At the same time, it takes care to enact fresh provisions from time to time to suppress any mischief which may have resulted from the misuse of existing law. Parliament deliberately stepped in by adding the words "not involving the carrying on of any activity for profit" in the definition of 'charitable purpose ' in section 2(15) of the Act, when the tax exemptions available to charitable and religious trusts came to be misused by some for the unworthy purposes of tax avoidance. The law had been so restructured to prevent allergy to taxation masquerading as charity. The law was thus designed by Parliament to prevent this misuse of tax exemption in the name of charity. [500 F H] 2. This Court has enlarged the meaning "charitable purpose" in Section 2(15) beyond what it legitimately should mean in the Surat Art Silk Cloth Manufacturers Association 's case. It has virtually wiped off the restrictive words "not involving the carrying on or any activity for profit" occurring in section 2(15), thereby defeating the very object and purpose of the legislation. It is not the function of a court of law to give the words a strained and unnatural meaning. Judicial attitudes cannot be formed in isolation from legislative processes, particularly, in connection with tax avoidance provisions. [500 D, 501A, 500E] 492 3. Modern legislation has changed in pattern re casting provisions of taxation with very wide language, while at the same time dealing in much more detail with some areas of law. Judges while responding to general trends of law, but also reacting to the form of modern tax legislation, must be prepared to take account of the context and purposes of the change brought about.[501 E] Greenberg vs Inland Revenue Commissioners [1972] A.C. 109 (HL) referred to. When the Government had not accepted the recommendation of the Direct Taxes Laws Committee in Chapter 2 for the deletion of the words "not involving the carrying on of any activity for profit", by suitable legislation, it was impermissible by a process of judicial construction to achieve the same result. [501 B] 5. People who are truly charitable do not think of the tax benefits while making charities. Even the poor who do not pay income tax can be charitable and their charities are made at great personal inconvenience. Charitable persons are not amongst the tax payers only. [502 H 503 A]

The Income tax Officer found that the assessee, an unregis tered firm, had made a profit in the assessment year 1940 41. He treated it as registered under section 23(5)(b) of the Act, assessed the partners and carried the profit to their individual returns, making no demand on the firm. For the next two assessment years, however, the firm was assessed as unregistered firm. For all the three assessment years, the Income tax Officer treated the firm as " resident and ordinarily resident ". The firm appealed against all these assessments. The appeals were all consolidated and heard together by the Appellate Assistant Commissioner. He found that the firm was non resident, the computation of income made by the Income tax Officer was erroneous, that in the assessment year 1940 41 there was a loss and during the subsequent years the firm had made profits. He, therefore, directed the Income tax Officer to modify the assessments accordingly. Thereupon the Income tax Officer gave relief to the partners for the year 1940 41 and directed certain refunds to be made to them. The firm was not satisfied and moved both the Income tax Officer and the Appellate Assistant Commissioner 987 found to have incurred a loss in the first of the three assessment years, it could not for that year be treated as a registered firm and was entitled to carry forward the loss to the subsequent years. They declined to interfere on the ground that the direction of the Income tax Officer under section 23(5)(b), not being appealable, had become final and the time within which the original order of the Income tax Officer could be rectified had also run out. The firm went up to the Commissioner and the Central Board of Revenue, but to no effect. Thereafter it moved the High Court under article 226 of the Constitution. The single Judge who heard the matter declined to interfere. The Division Bench on appeal agreed with the single judge. The firm appealed to this Court. The question for decision was whether after the finding of profit made by the Income tax Officer had been turned to one of loss by the Appellate Assistant Commissioner on appeal, the original decision of the Income tax Officer to treat the firm as a registered one under section 23(5)(b) could remain intact. Held, that since the Income tax Officer could treat an un registered firm as a registered one under section 23(5)(b) of the Indian Income tax Act only if there was a profit, the reversal of the finding of profit made by him by the Appellate Assistant Commissioner must automatically take away the jurisdiction of the Income tax Officer to act under that section and his order made thereunder must fall through. It made no difference in the instant case, whether the Appellate Assistant Commissioner 's order was one under cl. (a) Of section 31(3) or under cl. (b) of that section, for the effect of the order in law in either case would be the same, namely, the annulment of the assessment resulting in the restoration of the case back to its original position. It was not correct to suggest that under proviso (d) to section 24(2) Of the Act the losses of an unregistered firm could be carried to the partners ' account as if the firm was registered. That proviso was not intended to enable the Income tax Officer to forego the obligation laid on him by cl. (b) Of section 23(5), i.e., to find out the interest of the Revenue, and thus to render the words 'during any year in proviso redundant. The effect of the provisions of section 23(5)(b) and the proviso (d) to section 24(2), which must be read together, was that the proviso was to be invoked subject to the conditions under section 23(5)(b) to obtain more revenue for the State by applying section 23(5)(a). Although the Appellate Assistant Commissioner could not have interfered with the order made by the Income tax Officer under section 23(5)(b) of the Act in an appeal against that order, the position must be different when the assessment itself was subject to appeal under section 31 Of the Act, and the Appellate Assistant Commissioner under section 31(4) authorised the Income tax Officer to modify the assessment in the light of his direction. It would, therefore, be the duty of the Income tax Officer to consider de 988 novo whether in the altered circumstances the provisions of section 23(5)(b) of the Act could at all be applied. Commissioner of Income tax vs Tribune Trust, Lahore, , Commissioner of Income tax vs McMillan & Co., ; and Commissioner of Income tax vs Amritlal Bhogilal & CO., , considered.

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]

Sub section (1) of section SO of the Karnataka Rent Control Act, 1961 confers revisional jurisdiction on the High Court in respect of orders passed or proceedings taken by the Court of Small Causes or the Court of Civil Judge under the Act while sub section (2) empowers the District Judge to revise the orders passed or proceedings taken by the Court of Munsif and makes his order final. A Full Bench of the Karnataka High Court in Krishnaji Venkatesh Shriodkar vs Gurupad Shivaram Kavalekar & ORS. , (ILR , following the decisions of this Court in Chhagan Lal vs The Municipal Corporation. Indore, ; and Krishnadas Bhatija vs A.S. Venkatachala Shetty, (SLP No. 913 of 1978 decided on 13th Feb., 1978) held that the fact that the order of the District Judge under section SO(2) of the Karnataka Rent Control Act, 1961 is made final, does not affect the jurisdiction of the High Court under section 115 of the Code of Civil Procedure to revise such orders of the District Judge, in the absence of any express words in the statute taking away such jurisdiction. Later this Court, in Vishesh Kumar vs Shanti Prasad, ; while interpreting section 25 of the Provincial Small Causes Courts Act, as amended by the U.P. Amendment Act, 1978, under which the revisional jurisdiction was shared between the District Court and the High Court, took the view that the High Court was not vested with revisional jurisdiction under section 115 CPC in respect of a revisional order made by the District Court under that section. A similar view was also 341 taken in Aundal Ammal vs Sadasivan Pillai, ; while construing section 20 of the Kerala Buildings (Lease and Rent Control) Act, 1965 . Relying on the aforesaid two decision a Full Bench of the High Court of Karnataka in M.M. Yaragatti vs Vasant, (ILR took a contrary view to Krishnaji 's case. The appellant 's revision petition having been dismissed by a Single Judge of the High Court following the Full Bench decision in Yaragatti 's case, he preferred an appeal to this Court by special leave. Allowing the appeal, ^ HELD: 1. A revision application is maintainable under section 115 of the Code of Civil Procedure read with section 50(1) of the Karnataka Rent Control Act, 1961 when a District Judge has made an order in his revisional jurisdiction under section 50(2) of the Act. Chhagan Lal vs The Municipal Corporation, Indore, ; and Krishnadas Bhatija vs A.S. Venkatachala Shetty, (S.L.P. No. 913 of 1978 decided on 13th of February, 1978, referred to. Vishesh Kumar vs Shanti Prasad, ; ; Aundal Ammal vs Sadasivan Pillai, ; ; South Asia Industries Private Ltd. vs S.B. Sarup Singh & ors. J and National Sewing Thread Co. Ltd. vs James Chadwick & Bros. Ltd., ; distinguished. Krishnaji Venkatesh Shirodkar vs Gurupad Shivaram Kavalekar & ors. ILR approved. M.M. Yaragatti vs Vasant, ILR overruled. The decision of a Full Bench of the High Court consisting of three Judges rendered in Krishnaji 's Case was binding on a bench of equal strength unless that decision had directly been overruled by this Court or by necessary implication became unsustainable. There is no such overruling of Krishnaji 's decision by this Court. It cannot also be said that by necessary implication the ratio therein supported by the direct authority of this Court stood superseded. [349B C] 3. Judicial propriety warrants that decisions of the Supreme 342 Court must be taken wholly binding on the High Courts. That is the necessary outcome of the tier system. Article 141 of the Costitution unequivocally states that the law declared by this Court shall be binding on all courts within the territory of India. A coordinate Bench of the High Court, therefore, should not have chosen to overrule an earlier judgment of that Court based upon a decision of this Court.[349C F] Broom vs Cassell & Co., [19721 1 AER 801, referred to. It is one of the essential requirements of the administration of justice that judgments rendered by superior courts and particularly with the approval of the apex court should not be frequently changed so as to unsettle settled positions. The fact that the State Legislature has not thought it necessary to amend the law and set at naught the decisions in Krishnaji 's case or Bhatija 's case is indicative or the position that this Court had not taken a wrong view of the legislative intention [349H: 350A]

% 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.

There was a cash credit in November 13, 1947, in the capital, account of the Appellant assessee whose accounting period was from November 13, 1947 to November 1, 1948. The Income tax Officer assessed the said credit as income from undisclosed sources in the assessment for the assessment year 1949 50. The Appellate, Assistant Commissioner relying on C.I.T. vs Darolia & Sons. held that the amount was not taxable in the assessment year 1949 50. The Income tax Officer thereupon assessed the amount in 1948 49 after having issued in November 1958 a notice under section 34(1) (a) of the Indian Income ' tax Act, 1922. He rejected the appellant 's contention that notice under the said section was timebarred. In appeal the Appellate Assistant Commissioner held that in the earlier appeal there was no finding that the credit represented the assessee 's income or that it should be assessed in the year 1948 49 and that consequently the notice under section 34 issued in November 1958, was not saved by the second proviso to section 34(3) of the Act. The appeal filed by the Revenue was allowed by the Tribunal and in reference the Madras High Court relying on its own ruling in A.S. Khader Ismail vs Income tax Officer, upheld the order of the Tribunal. The appellant came to this Court and relied on this Court 's decision in Income Tax Officer A Ward Sitapur vs Murlidhar Bhagwandas in which the aforesaid Madras decision had been overruled. The Revenue urged that in answering the reference the effect of section 2 of the Income tax (Amendment) Act 1959 must be taken into consideration. To this the appellant objected that the point was outside the scope of the questions of law referred by the Appellate Tribunal to the High Court. HELD:(i) The view taken by the Madras High Court as to the scope of the word 'finding ' in A. section Khader Ismail 's case and followed by it in the present case had been overruled, by this Court. Accordingly the department could not take advantage of the second proviso to section 34(3). [20E F] Income Tax Officer, A Ward Sitapur vs Murlidhar Bhagwan Das, , applied (ii)However, the impact of section 2 of the Amending Act of 1959 had to be considered before the reference could be properly answered. Although the question had not been raised before the Tribunal or the High Court it was only an aspect of the question of limitation which had been referred. All that section 66(1) requires is that the question of law which is referred to the High Court and which the High Court is to decide must be the question which was in issue before 18 the Tribunal. When the question itself was under issue there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal and it will be an over refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66(1) of the Act. [22B D] C.I.T. Bombay vs Scindia Steam Navigation Co. Ltd. 42 I.T.R. 589, applied. Onkarmal Mehraj vs C.I.T., Bombay 1, , and section C. Prashar vs Vasantsen Dwarkadas, ; , referred to. [On the above view the case was remanded to the High Court for examining the question of law referred to it after considering the impact of the Amendment Act of 1959.]

The Income tax officer took into account the respond ent 's entire dividend income of the year ending December 30, 1957, while calculating the super tax payable by it for the assessment year 1958 59. In appeal against the computation the respondent contended before the Appellate Assistant Commissioner that the dividend income included profits earned during the previous years, and that rebate should be reduced only with reference to the proportionate part of the dividend declared during 1957 which had come out of the other income assessed to income tax. and super tax in the assessment year 1957 58. The respondent 's contention was accepted in principle. The Department 's appeal was dis missed by the Appellate Tribunal. The matter was then referred to the High Court under section 66(1) of the Indian Income Tax Act, 1922, and decided in favour of the assessee. Allowing the appeals the Court, HELD: For computing the reduction in rebate under para graph D of Part II of the First Schedule to the Finance Act, 1958, the position of profits and gains as it existed in the previous year should be taken into account and not in the years prior to that Clause (iii) introduces a fiction with regard to the amount of dividends which shall be deemed to have been distributed. The taxing authorities have to take into account the company 's total income and the profits and gains other than capital receipts reduced by certain allow ances only in the previous year, i.e., the year in which the dividend was distributed. The fact that those profits and gains accrued in years prior to the previous year and in cluded ' portions which were exempt from tax under the provi sions of the Income tax Act would not be of much relevance. [85 A D]

Civil Appeal No. 494 of 1960. Appeal by special leave from the judgment and under dated April 21, 1958 of the Orissa, High Court in O.J.C. No. 107 of 1954. G. C. Mathur, for the appellants. H. N. Sanyal, Additional Solicitor General of India, R. N. Rajagopal Sastri, G. K. Mishra and T. M. Sen, for the respondents. October 26. The Judgment of the Court was delivered by SHAH, J. Messrs. Buarmah Construction Company a firm carrying on business as building and works contractors executed several contracts in the State of Orissa for construction of buildings roads, bridges etc. Messrs. Burmah Construction Company, who are hereinafter referred to as the appellants, were registered as dealer in Orissa under the Orissa Sales Tax Act, 1947 from the quarters ending June 30, 1949. The Sales Tax officers treating the transfer of the materials used in the construction of the buildings, roads and bridges, as sale of goods, assessed the appellants to tax under the Orissa Sales Tax Act. The tax so assessed under the diverse orders of assessment was paid from time to time. For the quarters ending June 30, 1949, to March 31, 1954, the appellant paid Rs. 1,17,869 80 as tax and Rs. 2,917 11 0 as penalty. The following table sets out the tax and penalty paid to the Sales Tax Authorities for the twenty quarters: Srl. Circle Regist Tax Penalty Total No. Name. ration paid. amount No paid Rs. A.P.Rs. A.P. Rs. A.P. 1. PU II 1755 35636 7 0 350 00 35686 70 53990 6 6 310 00 54300 66 244 2719 30 . 2719 30 4. MB 806 3376 60 1352 40 4728 100 5 BP 1560 5349 10 . . .5349 10 6. CU III 1375 10913 120 905 70 11819 30 7. CU I 3940 6184 60 . 6184 60 1178869 86 2917 110 120787 36 Relying upon the judgment, of the Madras High Court in Gannon Dunkerly & Co. Ltd . vs State of Madras(1), the appellant applied on August 9, 1954, to the High Court of Judicature, Orissa for (a) a declaration that the provision of the Orissa Sales Tax Act, 1947 authorising imposition of the sales tax on a turnover of works contracts and repair works were ultra vires the State Legislature; (b) a declaration that the assessment made by the State Sales Tax Authorities on the appellant 's works contracts which had resulted in payment of Rs. 1,20,787 3 6 by was of sales tax and penalties for different quarters were without jurisdiction and illegal and liable to be quashed and that the appellant was entitled to get refund of the said amount; (c) a direction restraining the State and its Sales Tax officers from taking any steps in making any further assessment or complete the assessments pending before them in respect of the appellant 's works contracts with the State Government and levying and collecting any sales tax from the appellant on works contracts; and (d) issue of appropriate writ or directions direting the State of Orissa and its Sales Tax Officers to refund the amount of sales tax and penalties realised from the appellant. (1)A.I.R. (1954)Mad.1130 245 Following the judgment of this Court in the State of Madras vs Gannon Dunkerly &, Co., Ltd.(1) which confirmed the decision of the Madras High Court in 5 S.T.C. 216, the High Court declared that the assessment of sales tax was not in accordance with law and directed that no steps, either by certificate proceedings or otherwise should be taken to realise the arrears of sales tax in respect of those contracts. The High Court also directed refund of tax paid, if recovery thereof was not barred under 8.14 of the Orissa Sales Tax Act 1947 on the date of the filing of the application. The High Court also directed the Sales Tax; Authorities to revise the assessments made in the light of the decision of this Court in respect of assessments made after the date of the petition. The appellants have appealed to this Court with special leave challenging the order in so far as their claim for refund is partially declared to be barred by the rule of limitation prescribed by ff. 14 of the Orissa Sales Tax Act. The appellants challenge the correctness of the Order declaring that the portion of the tax paid refund whereof is beyond the period of limitation under B. 14 of the. Orissa Sales Tax Act, 1947 on the date of the filing of the application under article 226, as not refundable on two grounds: (1) that section 14 of the Act is ultra vires the State Legislature; (2) that an application under B. 14 which imposes a statutory obligation upon the Collector to refund the tax unlawfully recovered subject to certain conditions is not the only remedy open to the tax payer from whom tax has been unlawfully recovered and the power of the High Court to direct refund of tax illegally recovered is not restricted by section 14 of the Act. To the enforcement of other remedies the bar prescribed by the proviso to section 14 does not apply. [1959] S.C.R. 246 Section 14 of the Orissa Sales Tax Act, 1947, provides: "14. The Collector shall, in the prescribed manner, refund to a dealer applying in this behalf any amount of tax paid by such dealer in excess of the amount from him under this Act, either by cash payment or, at the option of the dealer, by deduction of such excess from the amount of tax due in respect of any other period: Provided that no claim to refund of any tax paid under this Act shall be allowed unless it is made within twenty four months from the date on which the order of assessment was passed or within twelve months of the final order passed on appeal, revision, review or reference in respect of the order of assessment, whichever period is later. " By the first paragraph, 8. 14 imposes an obligation upon the Collector to refund to a dealer any amount paid by such dealer in excess of the amount due from him under the Act. But the obligation is restricted; refund is not to be made unless an application is made within 24 months of the date on which the order of assessment was passed or within 12 months of the final order passed on appeal, revision, review or reference in respect of the order of assessment, whichever period is later. 'the orissa Sales Tax Act was enacted by the Orissa legislature in exercise of the Legislative authority conferred upon it by item 48 of List II of the Seventh Schedule of the Government of India Act, 1935. in dealing with the vires of 8. 14A of the orissa Sales Tax Act, which was incorporated in the amended Act 28 of 1958 and which sought to confer a right to claim refund by an application to the collector upon the person from whom tax was collected by the dealer, this Court observed in The State of Orissa vs The Orient Paper Mills Ltd" that 'The power to legislate with respect to a tax. 247 comprehends the power to impose the tax, to prescribe machinery for collecting the tax, to designate the officers by whom the liability may be enforced and to prescribe the authority, obligations and indemnity of those officers. The diverse heads of legislation in the Schedule to the constitution demarcate the periphery of legislative competence and include all matters which are ancillary or subsidiary to the primary head. The Legislature of the Orissa State was therefore competent to exercise power in respect of the subsidiary or ancillary matters of granting refund of tax improperly or illegally collected '. If the power to legislate in respect of tax comprehends the power to legislate in respect of refund of tax improperly or illegally collected, imposition of restrictions on the exercise of the right to claim refund will not be beyond the competence of the Legislature. Granting refund of tax improperly or illegally collected and the restriction on the exercise of that right are both ancillary or subsidiary matters relating to the primary head of tax on sale of goods. The provisions of s.14 of the Act are therefore not ultra vires the State Legislature. It is not necessary to consider in this case whether section 14 prescribes the only remedy for refund of tax unlawfully collected by the State. The appellants have not filed any civil suit for a decree for refund of tax unlawfully collected from them. This appeal arises out of a proceeding filed in the High Court substantially to compel the Collector to carry out his statutory obligations under section 14 of the Act. The High Court normally does not entertain a petition under article 226 of the constitution to enforce a civil liability arising out of a breach of contract or a tort to pay and amount of money due to the claimant and leaves it to the aggrieved party to agitate the question in a civil suit filed for that purpose. But an order for payment of money may sometimes be made in a petition under article 226 of the constitution against the State or against an 248 officer of the State to enforce a statutory obligation. The petition in the present case is for enforcement of the liability of the Collector imposed by statute to refund a tax illegally collected and it was maintainable: but it can only be allowed subject to the restrictions which have been imposed by the Legislature. It is not open to the claimant to rely upon the statutory right and to ignore the restrictions subject to which the right is made enforceable. We are therefore of the opinion that the High Court was right in restricting the order of refund in the petition under article 226 of the constitution. The order of refund passed by the High Court, however, requires to be slightly modified and we direct that it shall run as follows: "That part of the sales tax which has been paid by Messrs. Burmah Construction Co. shall be refunded by the State of Orissa to the Burmah Construction company if the order of assessment pursuant to which payment was made was within 24 months of the date on which the petition was filed in the High Court, namely, 9th of August, 1954. Without deciding whether the Burmah Construction Co. has the right to recover the balance of the amount of ' the tax paid by other appropriate proceedings, the claim to recover the balance of the tax paid is dismissed. The appeal substantially fails and is dismissed with costs. Appeal dismissed.

The appellant who executed works contracts was assessed to sales tax for quarters ending June 30, 1949, to March 31, 1954, and paid the tax. On August 9, 1954, the appellant filed a writ petition before the High court for a declaration that the provisions of the orissa Sales Tax Act, 1947, permitting levy of sales tax on works contracts were ultra vires, for a declaration that the assessments were illegal and for a refund of the amount paid as tax the High court declared that the assessments were not in accordance with the law and directed refund of the tax paid, if recovery thereof was not barred under section 14 of the Act on the date of the filing of the writ petition. Section 14 provided that no claim for a refund shall be allowed by the Collector unless it was made within 24 months from the date of the assessment order or within 12 months of that order passed on appeal, revision, review or reference. The appellant contended that section 14 was ultra vires and that the bar of limitation in section 14 was not applicable to the writ petition before the High Court for refund of tax illegally recovered. ^ Held, that provisions of section 14 of the orissa Sales Tax Act, 1947, were not ultra vires the State Legislature. The power to legislate in respect of refund of tax improperly or illegally collected, and imposition of restrictions on the exercise of the right to claim refund which was an ancillary or subsidiary matter was not beyond the competence of the legislature. State of Orissa vs The orient Paper Mills Ltd., A. 1. R. , relied on. Held, further, that the bar of limitation in section 14 of the Act was applicable to the case. The proceedings before the High Court were substantially to compel the Collector to carry out his statutory obligations under section 14, and it could only be allowed subject to the restrictions imposed by the statute. it was not open to the appellant to rely upon the statutory right and to ignore the restrictions subject to which the right was made enforceable.

The respondent filed suits against the Collector of Customs and the Union of India claiming refund of excess customs duty levied on spindle oil imported into India. The trial court granted decrees against the Union of India for the amounts charged in excess. As the respondent had large outstandings of tax, the Income Tax Officer issued a notice under section 46(5A) of the Income Tax Act, 1922 calling upon the Collector of Customs to pay the amount of the decree to him. The Collector paid the amount into the Reserve Bank, who issued receipts crediting the amount against super tax due from the respondent. He then applied to the High Court under O. 21 r. 2 C.P.C. for the adjustment of the decree by this amount. This was refused by a single Judge as well as in appeal by a division bench. It was held that the decrees were against the Union of India and not the Collector of Customs and that payment by the Collector was not a payment by the judgment debtor. Furthermore the amounts were held by the Collector on behalf of the Union of India and not on behalf of the Firm. The High Court also found the notice to be defective inasmuch as it asked for payment towards income tax and penalty, while the receipts which were granted to the Firm stated that the amount paid was against super tax due. On appeal to this Court, HELD : The Union of India operates through different Departments and a notice to the Collector of Customs in the circumstances was a proper notice to issue because it was the Collector of Customs who had in the first instance recovered the amount and held it from the respondent. Collector paid the amount on behalf of the Union of India. [126 A] A notice under section 46(5A) is no more than a kind of garnishee order issued to the person holding money and the money is due to an assessee. The amount which was held. by the Collector of Customs could properly be asked to be deposited with the income tax authorities under section 46(5A). [127 B D] Super tax is also a kind of income tax and therefore, the notice could issue in the form it did. There was no force in the contention that the amount, which could be adjusted under O. 21, r. 2, is a voluntary payment by the judgment debtor to the decree holder and the present case was not one of voluntary payment at all. Order No. 21, r. 2 merely contemplates payment out of court and says nothing about voluntary payment. A garnishee order can never by its nature lead to a voluntary payment and it is not to be thought that a garnishee order does not lead to the adjustment of the decree 124 sufficient for being certified by the Court. Payment by virtue of section 46(5A) is in the nature of a garnishee payment and must, therefore, be subject to the same rule. [127 G 128 B] In re Beckitt, [1933].T.R. 1, Bidhoo Beebee vs Keshub Chunder Baboo & Ors. , Mahiganj Loan Office Ltd. vs Behari Lal Chaki, I.L.R. , A. P. Bagchi vs Mrs. F. Morgan A.I.R. 1935, AU 513, Thomas Skinner vs Ram Rachpal I.L.R. [1938] All 294, distinguished.

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 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.

section 4(a) of the Central Provinces and Berar Sales Tax Act; 1947, provided that every dealer whose turnover exceeded certain limits shall be liable to pay tax in accordance with the provisions of the Act on all sales effected after the commencement 428 of the Act ; and by section 2(g) Of the Act, " sale . means any transfer of property in goods . including a transfer of property in goods made in course of the execution of a contract. Under section 6(1) of the Act no tax was payable on the sale of goods specified in Sch. 11 to the Act and section 6(2) enabled the State Government by notification to amend the schedule. Item 33 in Sch. 11 as amended by Act XVl of 1949 and as adapted by the Adaptation Order of 195o, was " Goods sold to or by the State Government ". In exercise of the power conferred by section 6(2) of the Act, the Government issued a notification on September 18, 1950, amending item 33 by substituting the words " Goods sold by the State Government ". The appellant, a contractor doing business in the construction of buildings and roads for the Military and Public Works Department in the State of Madhya Pradesh, challenged the validity of the assessment which the respondent proposed to make on the appellant under the provisions of the Central Provinces and Berar Sales Tax Act, 1947, on the grounds (1) that the Provincial Legislature had no authority under Entry 48 Of List II, Sch. VII of the Government of India Act, 1935, to impose a tax on the supply of materials in works contracts and that the provisions of that Central Provinces and Berar Sales Tax Act which sought to impose a tax thereon treating it as a sale were ultra vires, and (2) that he was entitled to exemption under item 33 in Sch. 11, to tile Act and that the notification of the Government dated September 18, 1950, withdrawing that exemption was bad as being an unconstitutional delegation of legislative authority : Held, that the expression "sales of goods" in Entry 48 has the same meaning which it had in the Indian , that in a building contract there is no sale of materials as such, and that it is therefore ultra vires the powers of the Provincial Legislature to impose tax on the supply of materials. The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., ; , followed. Per Das C. J., Venkatarama Aiyar, section K. Das and A. K. Sarkar JJ It is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like. The power conferred on the State Government by section 6(2) of the Act to amend the Schedule relating to exemption is in consonance with the accepted legislative practice relating to the topic, and is not unconstitutional. Sub sections (1) and (2) of section 6 together form integral part of a single enactment the object of which is to grant exemption from taxation in respect of such goods and to such extent as may from time to time be determined by the State Government, and an 429 exemption granted under section 6(1) is conditional and subject to any notification that might be issued under section 6(2). The notification dated September 18, 1950, is therefore intra vires.

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.

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 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

CIVIL Appeal No. 582 of 1960. Appeal from the judgment and order dated February 5, 1959, of the Madhya Pradesh High Court (Gwalior Bench) at Indore in Civil Misc. Case No. 11 of 1959. A. V. Viswanatha Sastri, Rameshwar Nath," section N. Andley and P. L. Vohra, for the appellant. B. Sen, B. K. B.Naidu and I. N. Shroff, for the respondent. 284 1961. October 31. The Judgment of the Court was delivered by MUDHOLKAR, J. This is an appeal on a certificate of fitness granted by the High Court of Madhya Pradesh under article 133 (1) (a) of the constitution. The appellant is a textile mill at Gwalior in Madhya Pradesh. It generates electricity for the purpose of running its mills and for other purpose connected therewith. It does not sell electrical energy to any person. Under the provisions of the Central Provinces and Berar Electricity Duty Act, 1949 (No. 10 of 1949)as amended by the Madhya Pradesh Taxation Laws Amendment Act, 1956 (Act No. 7 of 1956) the Government of Madhya Pradesh levied upon the appellant electricity duty amounting to Rs. 2,78,417/ for a certain period. The appellant paid it under compulsion and thereafter preferred a writ petition to the High Court of Madhya Pradesh under article 226 of the Constitution in which it challenged the validity of the levy on two grounds. The first ground was that upon a proper construction of section 3 of the C. P. & Berar Electricity Duty Act, 1949 as amended by the Madhya Pradesh Taxation Laws amendment Act, 1966 the appellant would not be liable to pay any duty at all. The second ground was that if the Act permitted the levy of duty on electricity consumed by the producer himself it was ultra vires the Constitution because in substance it would be a duty of excise which can be levied only by Parliament under Entry 84 of List I and that oven if it was not excise duty it was beyond the competence of the Madhya Pradesh legislature to levy it in the absence of any appropriate entry in List II. The petition was summarily rejected by the High Court, but upon an application made by the appellant it granted to it certificate of fitness, as already stated. 285 Mr. Viswanatha Sastri has reiterated before us the same grounds which were urged in the High Court. For the purpose of appreciating the first ground it would be useful to reproduce the terms of B. 3 of the Act. The section runs thus: "Levy of duty on sale or consumption of electrical energy Subject to the exceptions specified in Section 3 A every distributor of electrical energy and every producer shall pay every month to the State Government at the prescribed time and in the prescribed manner a duty calculated at the rates specified in the Table below on the units of electrical energy sold or supplied to a consumer or consumed by himself or his employees during the preceding month. Table Rates of Duty (i) Electrical energy supplied for consumption for lights, fans of any other appliances normally connected to a lighting circuit. 6 nP. per unit of energy. (ii) Electrical energy supplied for purposes other than those specified in item (i) above. 1 nP. per unit of energy. This is the charging section. It is not disputed by Mr. Sastri that under this provision a producer of electrical energy is made liable to pay duty for the units of electrical energy consumed by himself. He, however, contends that rates of duty have been prescribed in the Table below section 3 only with respect to electrical energy "supplied for consumption" to others and that no rates have been prescribed with 286 respect to electrical energy consumed by the producer himself. Section 2(a) of the Act defines "consumer". The definition, so far as relevant, runs thus: " `Consumer ' means any person who consumes electrical energy sold or supplied by a distributor of electrical energy or a producer. . . " `Producer ' as defined section 2(d 1) of the Act means "a person who generates electrical energy at a voltage exceeding hundred volts for his own consumption or for supplying to others". If we read the two definitions together, omitting the non essentials, 'consumer ' would include " 'any person who consumes electrical energy supplied by a person who generates electrical energy for his own consumption". under section 3 a person who generates electrical energy over hundred volts for his own consumption is liable to pay duty on the units of electrical energy consumed by himself. A producer consuming the electrical energy generated by him is also a consumer, that is to say, he is a person who consumes electrical energy supplied by himself. The Table prescribes rates of duty payable with respect to electrical energy supplied for consumption and, therefore, the levy on the appellant falls squarely within the Table under section 3 of the Act and M/s. Viswanatha Sastri 's argument is devoid of substance. It is difficult to see how the levy of duty upon consumption of electrical energy can be regarded as duty of excise falling within Entry 84 of List I. Under that Entry what is permitted to Parliament is levy of duty of excise on manufacture or production of goods (other than those excepted expressly by that entry). The taxable event with respect to a duty of excise is "manufacture" or "production". Here the taxable event is not production or generation of electrical energy but 287 its consumption. If producer generates electrical energy and stores it up, he would not be required to pay any duty under the Act. It is only when he sells, it or consumes it that he would be rendered liable to pay any duty prescribed by the Act. The Central Provinces and Berar Electricity Act was enacted under Entry 48B of List II of the Government of India act, 1935. The relevant portion of that Entry read thus: "Taxes on the consumption or sale of electricity. . " Entry 53 of List II of the Constitution is to the same effect. The argument of Mr. Sastri is that the word "consumption" should be accorded the meaning which it had under the various Act, including the Indian Electricity Act, 1980. Under that Act and under the various Provincial and Act, consumption of electricity mean, according to him, consumption by persons other than producers and that both in the Government of India Act any under the Constitution the word 'consumption ' must be deemed to have been used in the Fame sense. The Acts in question deal only with a certain aspect of the topic " 'electricity", and not with all of them. Therefore, in those Acts the word "consumption" they have a limited meaning, as pointed out by learned counsel. But the word "consumption" has a wider meaning. It means also "use up" "spend" etc. The mere fact that a series of laws were concerned only with a certain kind of use of electricity, that is consumption of electricity by persons other than the producer cannot justify the conclusion that the British Parliament in using the word "consumption" in Entry 48B and the Constituent Assembly in Entry 53 of List he wanted to limit the meaning of "consumption" in the same way. The language used in the legislative entries in the Constitution must be interpreted in a broad way so as to give the widest amplitude of power to the legislature to legislate and not in a narrow and pedantic sense. we 288 cannot, therefore, accept either of the two grounds urged by or. Viswanatha Sastri challenging the vires of the Act. The appeal fails and is dismissed with costs.

The appellant mill produced electricity over 100 volts exclusively for its own consumption. It challenged the levy of the electricity duty by the Government of Madhya Pradesh (1) ; 283 under the C. P. and Berar Electricity Act as 1949, by the Madhya Pradesh Act 7 of 1956, on the grounds, firstly that on proper construction of section 3 of the Act it was not liable to pay any duty at all as the Table of rates did not prescribe any rate for electricity consumed by producers and, secondly, the levy of duty on electricity consumed by producer himself being in substance an excise duty could be levied only by the Parliament under Entry 84 List I. If it was not an excise duty the levying of it was beyond the competence of the State Legislature in the absence of any appropriate Entry in the List. ^ Held, that on a combined reading of the definition of 'consumer ' in section 2(a) and 'producer ' in section 2(d 1) of the C. P. & Berar Act, 10 of 1949, a producer, consuming the electrical energy generated by him is also a consumer as he consumes electrical energy supplied by himself, falls squarely within the Table under section 3 of the Act prescribing rates of duty payable by a consumer and is therefore liable to pay duty thereunder. Held, further, that the present Act for levy of duty upon consumption of electric energy was enacted under Entry 45B of the List II of the Government of India Act, 1935, corresponding to Entry 53 of List II of the Constitution where as the levy of duty of excise on manufacturer production of goods by Parliament is under Entry 84 of List I. The taxable event with respect to a duty of excise is 'manufacture ' or 'production '; and not 'consumption '; the levy upon consumption of electric energy cannot be regarded as duty of excise falling within Entry 84 of List I. Held, also, the language used in the Legislative Entries in the Constitution must be interpreted in a broad way so as to give the widest amplitude of power to the Legislature to legislate and not in a narrow and pendantic sense.

Electricity was supplied to the appellants by the respon dent state for many years past, and several individual agreements were passed between them prescribing the terms and conditions for the supply. One of these terms stipulated the rate at which the supply had to be charged. These agreements did not contain any provision authorising the State to increase the rates during their operation. The respondent state issued two notified orders enhancing the agreed rates. The orders indicated that the main reason which inspired the increase was that the existing electricity tariffs which were formulated several years before, had become completely uneconomic and meant continuously growing loss to the State. A large number of consumers challenged the validity of the two orders in the High Court under article 226. The writ petitions were allowed and the respondent was restrained from enforcing the revised rates. These decisions were challenged by the respondent by appeals in the High Court, which took a different view and dismissed the writ petitions. On appeals to this Court, it was contended, inter alia that the respondent had no authority to increase the rate changing this important term of the contract by taking recourse to section 3(1) of the Madras Essential Articles Control and Requisitioning (Temporary) Powers Act, that the power to regulate the supply of essential articles had to be applied in regard to transactions between citizens and citizens and could not be applied to an essential article which the State itself supplied; that the power to regulate conferred on the respondent by section 3(1) could not include the power to increase the tariff rate, that the notified orders were invalid as they contravened the provisions of article 19(1)(f) and (g) and that of article 14 of the Constitution. Held: (i) The challenge to the validity of the notified orders on the ground that they were outside the purview of section 3(1) of the Act could not be sustained. The State is not bound by a statute unless it is so provided in express terms or by necessary implication. In applying this rule, the court must attempt to ascertain the intention of the Legislature by considering all the relevant provisions of the statute together and not concentrating its attention on a particular provision which may be in dispute. Where the question is not so much as to whether the State is bound by the statute, but whether it can claim the benefit of the provision of a statute, the same rule of construction 457 may have to be applied ' Where the statute may be for the public good and by claiming the benefit conferred on it by its provisions the State may allege that it is serving the public good, it would still be necessary to ascertain whether the intention of the legislature Was to make the relevant provisions applicable. Director of Rationing and Distribution vs Corporation of Calcutta, ; and Province of Bombay vs Municipal Corporation of the City of Bombay, [1945 46] L.R. 73 I.A. 271, applied. (ii) In construing section 3 of the Act of the usual rule of con struction must be adopted, section 3 must not be read in isolation, but must be considered in its proper setting and due regard must be had for the other provisions of the Act and its general scheme and purpose. (iii) The purpose of the Act is to secure the supply of essential articles at fair prices, it would be irrelevant as to who makes the supply; what is relevant is to regulate the supply at a fair price. (iv) It is well settled that the function of a clause like cl. (2) of section 3 is merely illustrative. In other words the proper approach to adopt in construing cls. (1), and (2) of section 3 is to assume that whatever is included in cl. (2) is also included in cl. King Emperor vs Sibnath Banerjee, 72 I.A. 241 and Santosh Kumar Jain vs State, ; , applied. (v) The word 'regulate ' is wide enough to confer power on the State to regulate either by increasing the rate or de creasing the rate, the test being what is it that is necessary or expedient to be done to maintain, increase or secure supply of the essential articles in question and to arrange for its equitable distribution and its availability at fair prices. (vi) Having regard to all the circumstances in this case, the change made in the tariff were reasonable and in the in terests of the general public. (vii) There was absolute no material on the record of the appeals on which a plea under article 14 of the Constitution could even be raised.

The appellant is a Municipal Board governed by the provisions of the U.P. Municipalities Act, 1916. Section 128 of the Act provides for imposition of taxes by the Board. In exercise of the powers under Sections 131 to 135 and 296 of the Act, the Government of the United Provinces framed octroi rules. The said rules were included in the Municipal Account Code (Chapter X rules 131 to 231). The proviso to Rule 131 provided that octroi shall not be levied on certain articles which included mineral oil. The rule was amended vide notification dated the 2nd November 1953 and for the words "the mineral oil" in the proviso, the words "mineral oils classified as motor spirit, kerosene or diesel oil" were substituted. Separate rules for the assessment and collection of octroi in the Bareily Municipality were framed by the Govt. of U.P. The draft rules were notified vide notification dated the 16th February 1963. Final rules were notified vide notification dated the 7th May 1963 and published in U.P. Gazette dated the 11th May 1963. By a notification dated the 24th July 1963, published in U.P. Gazette dated the 3rd August, 1963, the appellant Board imposed octroi duty on goods and animals brought within the octroi limits of Barei ly Municipality for consumption, use and sale at the rates shown in the Schedule subject to certain exceptions men tioned therein. The said notification came into operation from November 16, 1963 and thereafter the levy of octroi in Bareily Municipality was governed by 1963 rules. The amend ments were made in the octroi schedule both in the rates as well as in the exemption and as a result whereof motor spirit, kerosene and diesel oil were removed from the exemp tion clause and were subjected to the octroi duty @ 1 paisa per liter vide notification dated August 27, 1969. The respondents challenged the validity of the notification dated 377 the 27th August 1969 by means of a writ petition before the High Court on the ground that 1925 rules took away the power from all Municipal Boards to impose octroi duty on mineral oils and until such power is restored under a contrary notification issued under section 128 of the Act, the Board did not have any justification to assess or collect octroi duty on mineral ohs. The appellant Board contended that Rule 131 was superseded by the 1963 rules which now governed the imposition of octroi by the appellant Board. The single Judge of the High Court who heard the petition came to the conclusion that Rule 131 restricted the power of the Board to impose the octroi and the subject matter of the rule was not covered by the 1963 rules. The appellant 's appeals preferred before the Division Bench were dismissed which took the view that the bar under Rule 131 regarding the imposition of octroi duty on mineral oils continued notwith standing the 1963 Rules. Hence these appeals by the Munici pal Board. Allowing the appeals, this Court, HELD: The rule making power under section 296 read with Section 300(2) of the Act enables the State Government to except any one municipality from the operation of the gener al rule by express provision in that behalf. When the iden tical authority in exercise of its rule making power duly frames the rules in respect of the same matter expressly providing that the new rules shah apply to a particular municipality in supersession of the existing rules, it must be deemed that existing rules are repealed to that extent. [384C D] The 1963 rules had been framed under Section 296 of the Act in supersession of the existing rules after the publica tion by the State Government, in the Gazette as provided under Section 300 and therefore rule 131 in the 1925 rules ceased to have any operation in respect of the matters dealt with therein so far as the Bareilly municipality is con cerned. [384D] M/s Central Distillery Chemicals Works Ltd. & Anr. vs State of U.P. & Ors., [1980] All L.J. 62, approved. Municipality of Anand vs State of Bombay, ; ; Municipal Board, Hapur vs Raghuvendra Kripal & Ors., ; ; Mool Chand vs Municipal Board, Banda, AIR 1926 All. 517; Zaverbhai Amaidas vs The State of Bombay, [1955] 1 SCR 799 and The Municipality or Anand vs State of Bombay, [1962] 2 Supp. SCR 366, referred to

The Appellant, a company registered under the Companies Act, had its registered office at Eloor in the erstwhile State of Travancore. On October 21, 1948 the company entered into an agreement (Exhibit P1) with the erstwhile princely State of Travancore for the supply of electrical energy under the terms and conditions particularised in the agreement. The price was fixed at Rs. 110 per K.W. per annum. Subsequently, the State of Tranvancore merged in, and became part of, the Kerala State, and the Electricity Board was constituted for the State. On May 10, 1965 a supplementary agreement was entered into between the appellant and the Electricity Board for supply of additional power for a period of 10 years at the rate of Rs.140 per K.W. per year. On October 28, 1966 the Electricity Board in exercise of the powers under Section 79(j) of the Electricity Supply Act, 1948 framed and promulgated the Kerala State Electricity Board (General Tariff) Regulations, 1966 by which the Board empowered itself to prescribe higher tariffs for different classes of consumers. Regulation 11 thereof empowered the Board to amend the terms and conditions of supply from time to time. 926 The Board issued a Notification dated July 16, 1968 (Exhibit P 2) providing that the rates for supply of power at 66 K.V. to the appellant company availed of by them as per the agreement dated October 21, 1948 be revised to Rs.200 per K.W. per year. The supplemental agreement with the appellant dated May 10, 1965 which pertained to the additional supply of power for a period of ten years at Rs.140 per K.W. per year was, however, left undisturbed. The appellant in a writ petition before the High Court assailed the enhancement in the electricity tariff, contending that the terms for the supply of electricity to the appellant 's industrial unit were governed by the agreement dated October 21, 1948 entered into by the company with the erstwhile Travancore State; that the agreement, in terms of Section 60 of the Electricity Supply Act, should be deemed to have been entered into by the Electricity Board and that during the subsistence of the said agreement the rates fixed therein were immune from any unilateral upward revision even if the purported enhancement was pursuant to the statutory regulations made under Section 49(2). It was further contended that the enhancement being selective and discriminatory, was violative of Article 14 of the Constitution. The writ petition having been dismissed by a Single Judge of the High Court, and the Division Bench having confirmed the order of dismissal in appeal, the appellant appealed to this Court by Special Leave. In the appeal it was contended on behalf of the appellant that the agreement, Exhibit P I, though one entered into prior to the constitution of the 'Board ' was, by virtue of Section 60 of the Act, one which should be deemed to have been entered into by or with the Board, and must also be held to be referable to Section 49(3) of the Act. Relying on the decision of this Court in Indian Aluminium Co. vs Kerala Electricity Board, , it was contended that the agreement must be regarded as having been entered into by the Board in exercise of its statutory powers under Section 49(3) of the Act, and therefore, immune from the operation of the Kerala State Electricity Board (General Tariffs) Regulations, 1966. It was also submitted that power under Section 49(1) would be available to the statutory authority enabling an unilateral upward revision of the tariff only if the agreement itself enabled such revision, that as long as the agreement did subsist and was not terminated a unilateral change was impermissible and that the appellant was subjected to a steep revision in the tariffs while other similarly circumstanced high tension consumers were left unaffected. 927 On behalf of the respondent Board it was urged that Exhibit P 1 could not be held to fall under, and be protected by, Section 49(3) of the Act; that the agreement having been anterior to the commencement of the 'Act ' itself could not be held to have been entered into for "purposes of the Act" within the meaning of Section 60; that the agreement could not be deemed to be one entered into by the Board under Section 60(1), because it did not satisfy the essential requirement of having been entered into by the State Government; that the Board had not done anything with reference to the agreement which could attract Section 60 to it and though the obligations of the State Government became the obligations of the Board, the agreement itself did not qualify for recognition under Section 60 of the Act; that there was not fixity of tenure with reference to and in the context of which alone any immunity from unilateral alteration under Section 49(1) and (2) could be conceived and measured. It was further contended that the additional agreement dated May 10, 1965 was for an independent purpose and that the action of the Board in entering into this agreement did not constitute any such Act in relation to the original agreement as would constitute a conscious adoption by the Board of the original agreement, so as to attract Section 60(1); that the essential quality of the agreement which qualified for recognition and protection as one made in exercise of the Board 's power under Section 49(3) was its distinctiveness as to the period of operation and that the protection and immunity from unilateral increase of tariff could only be with reference to the period of the agreement. Two questions arose for consideration: (1) Whether the agreement datecd October 21, 1948 (Exhibit P 1) should be held to be one which was deemed to have been entered into by the Board under Section 60 of the Act and whether it is required to be considered as one entered into by the Board in exercise of its powers under Section 49(3) of the Act, and (2) Whether the enhancement under the Notification dated July 16, 1968 (Exhibit P 2) brings about a hostile discrimination against the appellant, because for similarly situated and circumstanced High Tension Consumers there was no such revision of the tariff. Dismissing the Appeal, ^ HELD:1(i) The Board 's power to enter into an agreement fixing a special tariff for a 'specified period ' is relatable to Section 49(3). [938H] (ii)One of the tests whether an agreement is entered into in exercise of the power under Section 49(3) is that such agreement has the effect of excluding the other statutory power under Section 49(1). [939A] 928 (iii) The main consideration for protection from unilateral increase under Section 49(1) is the 'period factor ' in an agreement. [939A B] (iv) A contract which does not provide for, an obligation to supply electricity at a specific rate for a specific period and does not, therefore, have the effect of excluding Section 49(1) cannot be said to fall under Section 49(3). [939G] (v) If by an unilateral, volitional act on the part of the Board the assurance of a fixed rate to the consumer could be denuded that circumstances, in itself, would be such as to detract from the agreement being considered as one entered into in exercise of power under Section 49(3). [939G H] In the instant case, the agreement was precarious in regard to the period of its operation and was susceptible to termination at the volition of the Board. It cannot, therefore, be construed as one which was intended to give a statutory protection for the tariff by means of a special agreement by the exercise of the statutory power of the Board under Section 49(3). [940D] Indian Aluminium Co. vs Kerala Electricity Board, ; and Delhi Cloth & General Mills Co. Ltd. vs Rajasthan State Electricity Board, , referred to. (vi) In a long term contract of indefinite duration it is not unusual to find provisions for cancellation with reasonable notice and for payment of compensation in the event of termination. It is also not unusual to infer, under certain circumstances, terminability by notice even in the absence of an express provision in that behalf, upon a construction of the contract. A contract which contains no express provision for its termination may well be terminated by reasonable notice by one or the other party depending upon the implication of a term or upon a true construction of the agreement. This principle has no application in the instant case. [941C D] Staffordshire Area Health Authority vs South Staffordshire Water Works Co., [1978] 3 AII E.R. p. 769, referred to. (vii) The agreement dated October 21, 1948 Exhibit P I, therefore, does not qualify to be recognised and protected under Section 49(3) of the Act. [941E] 929 2(i) The Board while denying that there was any hostile discrimination, averred that no similarly situate consumer had been left out of the tariff revision and only cases that had been left out were those where the Board, owing to the subsistence of the agreements protected under Section 49(3), was under the legal inhibition from making an unilateral enhancement. [943E F] 2(ii) The charge of discrimination against the respondent Board could not be said to have been established. Indeed the appellant had not laid a proper foundation for examination of a case of discrimination under Article 14. [944C] (iii) The allegations of discrimination ought to be specific. Action of Governmental authorities must be presumed to be reasonable and in public interest. It is for the person assailing that presumption to plead and prove the contrary. But in the instant case the allegations are in general terms. [944D] State of Maharashtra and Anr. vs Basantilal Mohanlal Khetan and Ors., ; para 12 and Kasturi Lal Lakshmi Reddy vs State of J & K, ; at 1357, referred to. In the instant case, the respondent Board while denying that there was any hostile discrimination, averred that no similarly situate consumer had been left out of the tariff revision, and only cases where the consumer had the protection of an agreement under Section 49(3) which prevented the unilateral increase, had been left out. [944D E] Bisra Stone Lime Co, vs Orissa State Electricity Board, ; , referred to.

In the State of Madhya Pradesh vs V. P. Sharma, ; this Court held that once a declaration under section 6 of the Land Acquisition Act 1894 was made the notification under section 4(1) of the Act was exhausted and there could be no successive notifications under section 6 with respect to land in a locality specified in one notification under section 4(1). Relying on the above judgment the present writ petitions were filed in order to challenge successive notifications under section 6 following a single notification under section 4(1) in respect of land belonging to them. Meanwhile in order to meet the situation created by the judgment in V. P. Sharma 's case the President of India promulgated the Land Acquisition (Amendment and Validation) Ordinance (1 of 1967). The Ordinance was later followed by the Land Acquisition (Amendment and Validation) Act 1967. Section 2 of this Act purported to amend section 5 A of the principal Act by allowing the making of more than one report in respect of land which had been notified under section 4(1). Section 3 purported to amend section 6 of the principal Act by empowering different declarations to be made from time to time in respect of different parcels of land covered by the same notification under section 4(1) irrespective of whether one report or different reports had been made under section 5 A sub section Section 4 of the Act purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the ordinance namely January 10, 1967, notwithstanding that more than one declaration under section 6 had been made in pursuance of the same notification under section 4(1), and notwithstanding any judgment, decree or order of any court to the contrary. The Amending Act also laid down time limits for declarations under section 6 of the principal Act after the notification under s 4(1), had been issued in respect of notifications made after January 20. 1967 the time limit was three years; in respect of notification made before that date the time limit was to be two years after that date. Provision was also made for payment of interest on compensation due to persons in respect of whose land declarations under section 6 had been delayed beyond a specified period; no interest was however, to be paid to those to whom compensation had already been paid. The petitioners by leave of Court amended their petitions to attack the validity of the. aforesaid Validating Act on the following main grounds : (1) By seeking to validate past transactions of a kind which had been declared invalid by this Court without retrospectively changing the substantive law under which the past transactions had been effected the legislature was encroaching over the domain of the judicial power vested by the Constitution in the judiciary exclusively; (ii) The Validating Act did not L4Sup. C.I.1684 42 revive the notification under section 4 which had become exhausted after the first declaration under section 6 and no acquisition following thereafter could be made without a fresh notification under section 4; (iii) The Validating Act violated article 31(2) of the Constitution inasmuch as it purported to authorise acquisitions without fresh notifications under section 4 thereby allowing compensation to be paid on the basis of the said . notification under section 4 without allowing for increase in the value of land thereafter; (iv) The Validating Act violated article 14 of the Constitution in various ways. HELD: Per Wanchoo C.J., Bachawat & Mitter, JJ. (i) The American doctrine of well defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions ' is bad if the invalidity has already been pronounced upon by a court of law. A.K. Gopalan vs State, ; , referred to. (ii) The absence of a provision in the amending Act to give retrospective operation to section 3 of the Act does not affect the validity of section 4. It was open to Parliament to adopt either course e.g. (a) to provide expressly for the retrospective operation of section 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or even to have become invalid because, inter alia, of the making of more than one declaration under section 6 of the Land Acquisition Act, notwithstanding any judgment decree or order to the contrary. Parliament was competent to validate such actions and transactions, its power in that behalf being only circumscribed by appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set forth in Part III of the Constitution. Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in the past. [67 C F] Case law referred to. (iii) The impugned Act does not violate article 31(2). The Act does not in express terms enact any law which directly affects compensation payable in respect of property acquired nor does it lay down any principles different from those which were already in the Land Acquisition Act of 1894. After the amendment of the Constitution in 1955 the question of compensation is not justiciable and it is enough if the law provides that a person expropriated must be given compensation for his property or lays down the principles therefor. [67 G H] The Legislature might well have provided in the Act of 1894 that it would be open to the appropriate Government after issuing a notification under section 4 to consider objections raised under section 5 with regard to the different localities from time to time enabling different reports to fie made under section 5 A with consequent adjustments in section 6 providing for declarations to be made as and when each report under section 5A was considered. By the validation of action taken under section 6 more than once in respect of a single notification under section 4, the original scheme of acquisition is not altered. The public purpose behind the notification remains the same. It is not as if a different public purpose and acquisition of land for such purpose were being interploated by means of the Validating Act. Only the shortcoming in the Act as to want to provision to enable more than one decla ration under section 6 are being removed. [68 D F] 43 The date of valuation under the Validation Act is that of the issue of notification under section 4(1), a principle which has held the field since 1923 Legislative competence to acquire land under the provisions of the Land Acquisition Act cannot be challenged because of constant appreciation of land values all over the country due to the prevalent abnormal inflation. There must be some time lag between the commencement and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said commencement as the date of valuation. Sections 4 and 23 of the Land Acquisition Act are protected by article 31(5) (a) of the Constitution. Only sections 5 A and 6 of the Act have been amended. The amendment does not alter the principle of compensation fixed by the Act nor contravene article 31 of the Constitution in any way. [69 G 70 B] It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acquisition proceedings. The population in Indian cities especially in the capital is ever increasing. The State has to plan the development of cities and it is not possible to take up all schemes in all directions at the same time. The resources of the State may not be sufficient to acquire all the area required by a scheme at the same time. Of necessity the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at a time could only be taken up in consonance with the resources available. Even contiguous blocks could be developed gradually and systematically. In view of such factors it cannot be said that the principle of fixing compensation on the basis of the price prevailing on the date of the notification under section 4(1) of the Land Acquisition Act was not a relevant principle which satisfied the requirements of article 31(2).[70 C 71 H] The State of West Bengal vs Mrs. Bela Banerjee, ; , State of Madras vs D. Namasivaya Mudaliar, ; and, P.V. Mudaliar vs Deputy Collector, ; , considered. (iv) The validating Act was not violative of article 14. Whenever an Amending Act is passed there is bound to be some difference in treatment between transactions which have already taken place and those which are to take place in the future. That by itself will not attract the operation of article 14. Again, even with respect to transactions which may be completed in the future, a reasonable classification will not be struck down. [72 C] Jalan Trading Co. vs Mazdoor Union, ; , relied on. It is not possible to say that because the Legislature thought of improving upon the Act of 1894 by prescribing certain limits of time as from 20th January 1967 the difference in treatment in cases covered by the notification before the said date and after the said date denies equal protection of laws because the transactions are not similarly circumstanced. Some of the notifications issued under section 4 must have been made even more than 3 years before 20th January, 1967 and such cases obviously could not be treated in the same manner 'as notifications issued after that date. article 14 does not strike at differentiation caused by the enactment of a law between transactions governed thereby and those which are not so governed. [73 H 74 B] Hatisingh Manufacturing Co., Ltd. vs Union of India, ; No grievance can be made because interest is denied to persons who have already taken the compensation. Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act. [74 E F] 44 Per Shelat and Vaidialingam, JJ. (dissenting) By validating the acquisition orders and declarations made on the basis of an exhausted notification under section 4 the impugned Act saves government from having to issue a fresh notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner of the benefit of the appreciated value in the meantime. The real object of section 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validating all that is done under an exhausted section 4 notification and thus in reality fixing an anterior date i.e. the date of such a dead section 4 notification for fixing the compensation. The impugned Act thus suffers from a two fold vice : (i) that it purports to validate acquisitions orders and notifications without resuscicating the notification under section 4 by any legislative provision on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (ii) that its provisions are in derogation of article 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under section 4 which had become exhausted and for keeping them alive no legislative provision is to be found in the impugned Act. It is therefore not possible to agree with the view that the purpose of section 4 is to fill the lacuna pointed out in Sharma 's case nor with the view that it raises a question of adequacy of compensation. The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under s 4 which by part acquisitions thereunder had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notifications. The fact that neither section 4 nor section 23 of the principal Act are altered does not make any difference. [89 D H, 85 H] Section 4 of the Amending Act must therefore be struck down as invalid. [90 A]

The appellant was owner of immovable property situate within the limits of the municipal corporation, Ahmedabad City. Under the power reserved to it by section 127 of the Act the Corporation served on the appellant as also on the other rate payers, bills and demand notices for payment ,of property tax in respect of the assessment year 1962 63. These were challenged by the appellant and also certain other rate payers in writ petitions before the High Court. The High Court inter alia held (i) that section 129 of the Act did not suffer from the vice of excessive delegation by reason ,of the fact that no maximum rate of tax was laid down; (ii) that it was permissible under r. 10 to maintain only one assessment book and the levy could not be held invalid on the ground that ward wise assessment books as contemplated by rr. 13, 15 and 19 were not maintained. In appeal to this Court by certificate, HELD : The High Court rightly held that the charging sections of the Act were not without guidelines. The assessment and levy of the property taxes have to be in conformity with the Act and the rules. These rules contain inter alia Taxation Rules which are part of the Act. Section 454, no doubt, empowers the corporation to amend, alter and add to those rules but such power is made under section 455 subject to sanction of the State Government. Under section 456 the State Government can at any time require the Corporation to make rules under section 454 in respect of any purpose or matter specified in section 457 which includes item "Municipal Taxes The assessment and recovery of Municipal Taxes. " Although the Act did not during the relevant period prescribe the maximum rate at which the property taxes could be raised, the ultimate control for raising them was with the councillors responsible to the people, It was difficult therefore to sustain the plea that the power to levy the property tax was so unbridled as to make it possible for the Corporation to levy it in an arbitrary manner or extent. [951 G 852 B] The proposition that when a provision requiring sanction of the Government to the maximum rate fixed by the Corporation is absent, the rest of the factors which exist in the Act lose their efficacy and cease to be guidelines cannot be accepted. Further, if the Corporation has the flexibility of power given to it in fixing the rates, the State Legislature can at any moment withdraw that flexibility by fixing the maximum limit up to which the Corporation can tax. Indeed the State Legislature had done so by section 4 of the Gujarat Act, 8 of 1968. In view of the decisions of this Court it is not possible to agree with the contention that the Act conferred on the Corporation such arbitrary and uncontrolled power as to render such conferment an excessive delegation. [954 F G] 943 Corporation of Calcutta vs Liberty Cinema, [1965] 2 S.C.R. 477, Municipal Corporation of the City of Ahmedanwd vs Zaveri Keshavia, , Western India Theatres Ltd. vs Municipal Corporation of the City Poona, [1959] Supp. 2 S.C.R. 71, Pandit Banarsi Das Bhanot vs Madhya Pradesh, ; and Devi Das vs Punjab ; referred to. Municipal Corporation of Delhi vs Birla Mills, ; followed. (2) The tax levied on the basis of one assessment book was not invalid, Rule 10 differs from section 157 of the Bombay Municipal Corporation Act, 1888, in that, whereas, it gives an option to the Commissioner either to maintain one assessment book for the entire city or separate assessment books, Sec. 157 gave no such option and provided only for ward assessment book which collectively constituted, as in r. 10(2), "the assessment book '. The legislature deliberately made a departure from section 157 by leaving it to the discretion of the Commissioner either to maintain one book or several books ward wise. Such a departure was presumably made because the Act was to apply not to one city only, as did the Bombay Act of 1888, but to an unknown number of cities where Municipal Corporations might in future be set up, each having different conditions from the other and not being certain whether one assessment book or separate ward assessment books would be suitable for each of them. [955 G; 956 A] The contention that r. 10 should be, construed as mandatory ignores (1) the permissive language of the rule and (2) the deliberate departure made by the legislature from section 1 57 of the Bombay Corporation Act, 1888. If it intended that assessment books for each ward shoud be kept, there was no necessity for it to depart from the language of section 157 of that Act. The fact that it made such departure is a sure indication that it did not. Unless compelled by the context and content of the other rules, there would be no justification not to give to r. 10 the plain meaning of its language, particularly in view of the fact that the Act intended to apply not to one but to an indefinite number of cities, each differing in conditions from the other a factor which, as aforesaid, led the legislature to make a departure from the said section 157. [958 H 959 B] Certain anomalies would arise from the High Court 's interpretation that rr. 13, 15 and 19 would not apply in the case of one assessment book. Rule 19 was intended to enable the Corporation to proceed to makedemands so soon as entries were made as provided by cl. (e) of r. 9 and the Commissioner had given thereafter his authentication that there existed no valid objection to the ratable values entered under the said cl. Since the object of r. 19 was to make the entry as to the amount of tax conclusive evidence so as to enable the Commissioner to issue the bills, the legislature could not have intended to apply the rule only when ward assessment books were kept and not when, one assessment book was maintained, especially when in r. 10 it had deliberately given discretion to the Commissioner to maintain either one assessment book or several ward assessment books. Further if r. 19 were to be so construed, rr. 13, and 15 also would have on the same reasoning to be likewise construed. That would mean that the notice to enable the rate payers to take inspection under r. 13 and the notice under r. 15 fixing the date on or before which complaints against 'ratable value can be made, would have to be given only where ward assessment books are kept and not where one L1100 SupCI/71 944 assessment book is kept. it goes without saying that the right to inspect provided under r. 13 and the right to file a complaint under r. 15 are vital matters. That being so it is hardly conceivable that the legislature intended these rules to apply only where the Commissioner kept ward assessment books. Since r. 10 has to be construed as permissive and not mandatory, and the construction adopted by the High Court in regard to rr. 13, 15 and 19 is bound to create anomalies, the conclusion must be that it was through inadvertence that the old language used in sections 157 to 168 of the Bombay Corporation Act was allowed to be retained without carrying out the change. of language necessitated as a result of r. 10 giving discretion to the Commissioner either to maintain one book or several books ward wise. In the result the assessment book in question must be held to be valid and no objection as to the validity of the bills and demand notices can be raised on the ground that only one assessment book and not warding books were kept. [959 C 960 E]

The appellant was appointed an Assistant Engineer on June 10, 1963 in the Punjab State Electricity Board on probation for two years which ended on June 10, 1965. On bifurcation of Punjab Electricity Board, the service of the appellant was allocated to Haryana State Electricity Board. As a result of a disciplinary proceeding held against him in 1968, a minor penalty of stoppage of one increment without any future effect was imposed on the appellant. After expiry of one year, the appellant was, however, given the increment. By virtue of an order dated March 30, 1970, the appellant and respondents 2 to 19 were confirmed as Assistant Engineers, class II on satisfactorily completing the probation period of two years. Though the others were confirmed with effect from April 1, 1969, the appellant was confirmed with effect from December 1, 1969. Consequently, the appellant 's name was placed last of all the confirmed officers. The appellant challenged the said order by way of a writ petition before the High Court which dismissed the petition. This appeal by special leave is against the judgment of the High Court. G Allowing the appeal, ^ HELD: 1. The penalty by way of stoppage of one increment for one year was without any future effect. In other words, the appellant 's increment for one year was stopped and such stoppage of increment will H 622 have no effect whatsoever on his seniority. Accordingly, the Electricity Board acted illegally and most arbitrarily in placing the juniors of the appellant above him in the seniority list and/or confirming the appellant in the post with effect from December 1, 1969 instead of April 1, 1969. The question of seniority has nothing to do with the penalty that was imposed upon the appellant. It is apparent that for the same act of misconduct, the appellant has been punished twice, that is, first, by the stoppage of one increment for one year and, second, by placing him below his juniors in the seniority list. [624G H; 625A] 2. There is no explanation why the confirmation of the appellant was deferred till December 1, 1969. The explanation that after some substantive posts had fallen vacant on April 1, 1969, the question of confirmation was taken into consideration is not supported by. any material on record inasmuch as there is nothing to show when these posts had fallen vacant. It is difficult to accept that all these posts had fallen vacant on the same day, that is, on April 1, 1969. Though the vacancies had occurred before that day, the Board did not care to take up the question of confirmation for reasons best known to it. While there is some necessity for appointing a person in government service on probation for a particular period, there may not be any need for confirmation of that officer after the completion of the probationary period. The archaic rule of confirmation, still in force, gives a scope to the executive authorities to act arbitrarily or malafide giving rise to unnecessary litigations. It is high time that the Government and other authorities should think over the matter and relieve the government servants of becoming victims of arbitrary actions. [625H; 626B; 625C; D] S.B. Patwardhan & others vs State of Maharashtra & others; , , referred to. [Setting aside the High Court judgment and the seniority list, this Court directed that a fresh seniority list be prepared within six months on the basis of this judgment and maintain the appellant 's seniority in the post to which he has been promoted in the meantime.] [626D]

The Delhi Electricity Supply Undertaking disconnected the supply of electricity to the respondent company during the pendency of the suit for a prohibitory injunction with out serving notice on the consumer. The trial court dis missed the amended suit for mandatory injunction to restore the supply. The First Appellate Court decreed the suit on the sole ground of non service of notice as required under condition No. 36 in regard to supply of electricity by the appellant. It did not go into the allegation of theft of electricity by the plaintiff. The High Court dismissed the appeal. Dismissing the appeal by special leave, this Court, HELD: 1. The licensee undertaking is performing a public duty and is governed by a special statute. The law also contemplates service of a notice before disconnection of supply of electricity. The appellant cannot also be allowed to go back upon its words and refuse the consumer the bene fit of notice as contemplated by the agreement. The suit was, therefore, rightly decreed by the First Appellate Court. [735B C, A B] 2. The plaintiff is seriously denying the allegation of theft. It is not possible to assume the accusation as cor rect without a full fledged trial on this issue. The courts below have not examined the case on merits. The question whether the allegations are true or not has to be examined and decided in an appropriate proceeding. The appellant will not, therefore, be prejudiced in its claim by dismissal of the appeal. [734G H, 735C] Jagarnath Singh vs B.S. Ramaswamy; , , distinguished.

Civil Appeal No. 592 of 1960. Appeal by special leave from the judgment and order dated June 17, 1959, of the Commercial Tax officer, Calcutta, in case No. 54(c) of 1969 60. 277 N. a. Chatterjee and section a. Mazumdar, for the appellants. B. Sen and P. E. Bose, for respondents Nos. 1 and 2. K. N. Rajagopal Sastri and T. M. Sen, for respondent No. 3. 1961. October 31. The Judgment of the Court was delivered by SINHA, a. J. This is a direct appeal by special leave granted by this court on September 7, 1969, against the order, dated July 17, 1959, passed by the first respondent the Commercial Tax officer assessing the appellant to central sales tax amounting to Rs. 42,647 odd, for the period July 30, 1957 to March 31, 1958, under the (LXXIV of 1956) which hereinafter will be referred to as the Act. The second respondent is the State of West Bengal, and the third respondent is the Union of India. In view of the order we propose to make in this ease, it is not necessary to state in any detail the facts and circumstances leading up to this appeal. The appellant is a partnership firm, under the Indian Partnership Act, with its principal place of business at 18, Netaji Subhas Road, Calcutta, within the jurisdiction of the first respondent. The appellant alleges that he carries on business of two kinds, namely, (1) of a dealer in coal and coke, and (2) of a middleman bringing about sales of coal and coke between colliery owners and consumers. In respect of its business as a dealer, the appellant is a registered dealer under the Bengal Finance (Sales Tax) Act (Bengal Act VI of 1941). Its second business as a middleman relates mainly to sales of coal and coke in the course of interstate trade or commerce, and the tax in question relates to this second branch of its business. The Act came into operation in the State of West Bengal on July 1, 1957, when the appellant 278 applied for and obtained a certificate of registration under the Act on July 30, 1957. In May 1958, the appellant made its return under the Act in respect of the period aforesaid, showing the turnover as nil. But in spite of its showing cause against the proposed assessment, the first respondent determined Rs.9,17,196 as the appellant 's turnover in respect of the period aforesaid and assessed central sales tax thereon at Rs. 42,617.82nP. under section 8(2) of the Act, and issued Demand Notice. The appellant moved this Court and obtained the special leave to appeal from the order of the first respondent making assessment and later a demand on the basis of the assessment. From the statement of facts given above, it is clear that the appellant did not exhaust all his remedies under the Act itself; and came directly to this Court as if the order of Assessment passed by the first respondent was final. The question, therefore, arises whether this court should entertain the appeal, when even the facts have not been finally determined by the final fact finding authority under the Act, nor has the jurisdiction of the High Court been involved to exercise its power under the Act. But Mr. Chatterjee, on behalf of the appellant, has contended in the first instance that the powers of this Court are wide enough to enable him to approach this Court direct, when according to him, there had been an assessment of tax without the authority of law. There is no doubt that the powers of this Court under article 136 of the Constitution are as wide as they could be, because, unlike the preceding articles of the constitution, there is no limitation that the Judgment, decree or order should be final in the sense that the appellant in this Court has exhausted all the remedies provided by law before invoking the jurisdiction of this Court to grant "special leave to appeal from any judgment, decree determination sentence or order in any case or matter passed or 279 made by any Court or Tribunal in the territory of India. " In spite of the wide amplitude of the jurisdiction of this Court to entertain appeals by special leave, this Court has imposed certain limitations on its own powers for very good reasons, and has refused ordinarily to entertain such appeals when the litigant has not availed himself of the ordinary remedies available to him at law. But Mr. Chatterjee, on behalf of the appellant, invited our attention to the decision of this Court in Mahadayal Premchandra vs Commercial Tax officer, Calcutta (1) in which this Court interfered with the order of assessment passed by the Commercial Tax officer of Calcutta, and this Court had been moved by way of special leave to appeal against the original order of the Taxing officer. It is claimed on behalf of the appellant that decision completely covers the points in controversy in the present case also. It is contended that was also a case, like the present one of commission agents who had been charged sales tax. There are several reasons why the authority of that decision cannot be invoked in favour of the appellant on the preliminary question whether this Court should at all entertain the appeal. In that case, in the reported decision, of this Court, no such question, as we have to determine, had been raised. Apparently, counsel for both the parties were anxious to have the final determination of the controversy by this Court. Secondly, there were special circumstances in that case, which are not present in the instant case. The most outstanding feature of that case was, as pointed out by this Court, that the Assessing Authority had not exercised its own judgment in the matter of the assessment in question. The Assessing Authority had, contrary to its own judgment, taken instructions from the Assistant Commissioner and followed those directions This Court had also pointed out that even (1) 280 though the Assessing Authority was satisfied on the materials placed by the assessee that he was not liable to pay sales tax, he carried out the directions of a superior officer. This Court further pointed out that there had been complete failure of justice on account of the, fact that the assessee had been given no opportunity to meet the points made by the Assistant Commissioner, and the assessment order was made behind his back. The Court was led to make the following very significant observations: "The procedure adopted was, to say that least, unfair and was calculated to undermine the confidence of the public in the impartial and fair administration of the sales tax Department concerned. We would have, simply on this ground, set aside the assessment order made by the first respondent and remanded the matter back to him for his due consideration in accordance with law, but as the matter is old and a remand would lead to unnecessary harassment of the appellants, we have preferred to deal with the appeal on merits." (p. 560). It was in those circumstances that this Court went into the whole controversy on its merits and determined the appeal in favour of the assessee. That case, therefore, in no precedent in favour of the appellant. The next case relied upon by the counsel for the appellant is The State of Bombay vs M/s. Ratikal Vadilal(1). That was a case in which the State of Bombay had appealed to this Court on special leave against the order of the Sales Tax Tribunal, Bombay, by which the Tribunal had allowed the appeal before it and set aside the order of the Collector of Sales Tax, under the Bombay Sales Tax Act. The respondents in that case were commission agents doing business as clearing and (1) ; 281 transport contractors. They had applied to the Collector of Sales Tax, Bombay, for the determination of the question if they could be called "dealers" within the meaning of the Act after giving the facts and circumstances of their case. In that case also no steps had been taken to have a reference made to the High Court, and this Court observed that it has been frequently noticed that appeals had been filed to this court without exhausting all the remedies open to appellants and that ordinarily this Court would not allow the High Courts to be bypassed and the appropriate course for an appellant was to exhaust all his remedies before invoking the jurisdiction of this Court under article 136 of the constitution. But this Court went into the merits of this case because both the parties invited the Court to do so and did not insist upon the preliminary is an being decided. It is clear, therefore, that neither of the two cases relied upon by counsel for the appellant is an authority for the proposition that he can come up to this Court on special leave directly against the judgment of the Assessing Authority, without exhausting all his remedies under the Act. There are cases in which this Court was moved directly against the order of assessment, after ignoring the orders of the High Court refusing to have a reference made, or decision the point referred, against the assessee. In those circumstances, this Court refused to entertain the appeal and held that the appellant was not entitled to invoke the jurisdiction of this Court under article 136, without coming up in appeal from the final decision inter parties given by the High Court. The latest decision of this Court on that question is the case of Chandi Prasad Chokhani vs The State of Bihar (1). In that case, the previous decisions of the Court have all been considered on extenso. We are in entire agreement with what has been laid down by this Court in that batch of cases. other decision of a Division Bench of (1) ; 282 this Court is the case of Kanhaiyalal Lohia vs Commissioner of Income tax, West Bengal (1). In that case, this Court has taken the same view and dismissed the appeal as 'incompetent. ' The present case in a much simpler one, in which there are no special circumstances and in which the facts have not yet been finally deter mined. It may also be noted that the appellant has not challenged the vires of the Act or of any other law. We, therefore, think that we should dismiss this appeal as 'incompetent ', without expressing any opinion on the merits of the controversy. It will be open to the appellant to take such steps as it may be advised, in pursuing such remedies as may be available to it under the law. The appeal is accordingly dismissed, but in the circumstances without Costs. Appeal dismissed.

In respect of its business as a middleman relating mainly to sales of coal and coke in the course of inter State trade, the appellant firm was assessed to Central sales tax under section 8(2) of the , by the Commercial Tax officer. The appellant without availing itself of the remedies under the Act, applied for and obtained special leave to appeal under article 136 of the Constitution of India directly against the order of assessment When the appeal was taken up for hearing, the question was raised as to whether it should be entertained, when even the facts had not been finally determined by the final fact finding authority under the Act, nor had the jurisdiction of the High Court been invoked to exercise its powers under the Act. Held, that an assessee is not entitled ordinarily to come up to the Supreme Court directly against the judgment of the Assessing Authority and invoke the Court 's jurisdiction under article 136 of the Constitution without first exhausting the remedies provided by the taxing statutes. Mahadayal Premchandras vs Commercial Tax Officer Calcutta, and The State of Bombay vs M/s. Ratilal Vedilal, [1961] 2 section C. R. 367, explained. Chandi Prasad Chokhani vs The State of Bihar, [1962] 2 section G. R. 276 and Kanhaiyalal Lohia v, Commissioner of Income Tax Bengal, [1962] 2 section C. R. 839, followed. ^ Held, further, that in the present case, in which there, were no special circumstances and in which the facts had not yet been finally determined, the appeal must be considered to be incompetent.

The appellant firm was allotted contracts for manufac ture and sale of liquor for the year 1959 and for the subse quent periods from 1.1. 1960 to 31.3.1961 for Rs.2,56,200 and Rs.4,71,900 respectively by the M.P. Govt. who also charged 7 1/2% over the auction money as mahua and fuel cess. As writ petitions challenging the government 's right to charge this 7 1/2% were pending in the M.P. High Court, the Govt. announced that it would continue to charge it and the question of stopping it was under consideration of Govt. whose decision would be binding on the contractors. The appellant firm paid for the above contracts a total extra sum of Rs.54,606.00. On 24.4.1959 the M.P. High Court in Surajdin vs State of M.P., declared the collection of 7 1/2% as illegal. Even after this decision the Govt. continue to charge 7 1/2% extra money. Again on 31.8.1961, the High Court of Madhya Pradesh in N.K. Doongaji vs Collector, Surguja, decided that charg ing of 7 1/2% by the Govt. above the auction money was illegal. Appellants came to know of this decision only in or about September, 1962. On 17.10.1964 the appellants gave a notice under section 80 C.P.C. to the Govt. of Madhya Pradesh requesting for the refund of Rs.54,606.00. failing which a suit for recovery would be filed and later they instituted a civil suit in the court of additional District Judge, Jabalpur on 24.12.1964. The Govt. resisted the suit inter alia on the ground of limitation. The Trial Court held that the suit was barred by 597 limitation and dismissed it. The High Court also dismissed the appeal. The appellants then came up in appeal by special leave. While allowing the appeal and remanding the suit to the Trial Court for decision on merits. This Court, HELD: 'Nul ne doit senrichir aux depens des autres ' No one ought to enrich himself at the expense of others. This doctrine at one stage of English common Law was remedied by 'indebitatus assumpsit ' which action lay for money ' had and received to the use of the plaintiff '. It lay to recover money paid under a mistake or extorted from the plaintiff by duress of his goods, or paid to the defendant on a consider ation which totally failed. On abolition of 'indebitatus assumpsit ', courts used to imply a promise to pay which, however, in course of time was held to be purely fictitious. [601G 602A] Courts is England have since been trying to formulate a juridical basis of this obligation. Idealistic formulations as 'aequum et bonum ' and 'natural justice ' were considered to be inadequate and the more legalistic basis of unjust enrichment is formulated. The doctrine of 'unjust enrich ment ' is that in certain situations it would be 'unjust ' to allow the defendant to retain a benefit at the plaintiff 's expense. The relatively modern principle of restitution is of the nature of quasi contract. But the English law has not yet recognised any generalised right to restriction in every case of unjust enrichment. [602H 603B] The principle of unjust enrichment requires; first, that the defendant has been 'enriched ' by the receipt of a "benefit"; secondly. that this enrichment is "at the expense of the plaintiff" and thirdly, that the retention of the enrichment be unjust. This justified restitution. Enrichment may take the form of direct advantage to the recipient wealth such as by the receipt of money or indirect one for instance where inevitable expense has been saved. [603C 603D] There is no doubt that the suit in the instant case, is for refund of money paid by mistake and refusal to refund may result in unjust enrichment depending on the facts and circumstances of the case. [604D] Though there is no constitutionally provided period of limitation for petitions under Article 226, the limitation prescribed for such suits has been accepted as the guide line, though little more latitude is available in the for mer. [604F] For filing a writ petition to recover the money paid under a mis 598 take of law the starting point of limitation is three years is prescribed by Article 113 of the Schedule to the Indian and the provisions of section 17(1)(c) of the Act will be applicable so that the period will begin to run from the date of knowledge of the particular law, where under the money was paid, being declared void and this could be the date of the judgment of a competent court declaring that law void. [609B] Moses vs Macferlan, ; at 1012; Sin clair vs Brougham, ; Fibrosa Spolka vs Fair bairn Lawson; , = ; ; Sales Tax Officer vs Kanhaiya Lal, ; M/s Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur, ; Kiriri Cotton Co. Ltd. vs Ranchhoddas Keshavji Dewani, ; D. Cawasji & Co. vs The State of Mysore & Anr., ; ; Madras Port 7rust vs Hymanshu Inter national, ; Shri Vallabh Glass Works Lid. vs Union of India; , ; Commissioner of Sales Tax, U.P.v. M/s. Auriaya Chamber of Commerce Allahabad; , ; Sales Tax Officer vs Budh Prakash Jai Prakash, [1954] 5 STC 193; Salonah Tea Co. Ltd. & Ors. vs Superin tendent of Taxes, Nowgong & Ors. , ; ; Atiabari Tea Co. Ltd. vs State of Assam, ; ; Khyerbari Tea Co. Ltd. vs State of Assam, ; ; Loong Soong Tea Estate 's, case decided on July 10, 1973; Suganmal vs State of M.P., AIR 1965 SC 1740; Tilokchand Motichand vs H.B. Munshi, , referred to.

The appellant filed its returns for the assessment years 1954 55 to 1964 65. The Income tax Officer passed orders of assessment for the years 1954 55 to 1959 60. While the appeals to the Appellate Assistant Commissioner for those years, and the, assessment proceedings before the Income tax Officer for the years 1960 61 to 1962 63, were still pending, for the assessment year 1963 64 (the return for which was flied under section 139 of the Income tax Act, 1961), the Income tax Officer made a provisional assessment under section 141. He held that the appellant was not entitled to deduct the aggregate amount of losses as claimed by it during the previous years and allowed only a much smaller sum as loss which could be carried forward from the earlier years. For the assessment year 1964 65, the Income tax Officer made a provisional assessment without allowing any deduction of loss claimed by the appellant; and for the assessment year 1965 66 the Income tax Officer called upon the appellant to pay a certain sum as advance tax under section 210(3). The appellant filed writ petitions in the High Court for quashing the orders of the Income tax Officer for each of the three years, but the petitions were dismissed. The High Court held: (1) that under section 141 the provisional assessment of tax must also be made in accordance with and subject to the provisions of the Act, and that the combined effect of sections 72 and 80 was that a business loss can be carried forward to subsequent assessment years only when it has been determined in pursuance of a return flied under section 139; and (2) that under section 210(3) as inserted by Act 13 of 1963 and modified by Act 31 of 1964, the Income tax Officer was entitled to make an order for payment of advance tax for 1965 66 on the provisional assessment for the year 1964 65. In appeal to this Court, HELD: (1) Section 141 bars an enquiry, at the stage of making a provisional assessment, into disputed questions of law and fact: it is immaterial that the dispute raised is complicated or easy. Therefore the Income tax Officer was not justified. in ignoring the appellant 's claim. [198 D F] Under section 80 loss of a previous year under the head of income from profits and gains may be carried forward only if it has been determined in pursuance of a return filed under section 139; that is, if it is not so determined it cannot be carried forward and set off against the profit of the subsequent year or years. But the section applies only to a regular assessment. In the case of 'a provisional assessment under section 141, if there has been such a determination of the allowances mentioned in sub section 2 in a regular assessment for an earlier year, then under section 141(2) 194 the income tax officer must whether the assessee has claimed or not give effect to the allowances so determined. But he has no power to adjudicate upon a claim for deduction made by the assessee when making a provisional assessment. [196 G; 197 A 198 B; 199 B C] The section has been enacted with the object of expediting collection of tax on the basis of the return made by the assessee. The assessment so made is summary and is based only on the return and the accounts and documents filed by the assessee. If there be discrepancy between the return made and the accounts and documents accompanying the return the Income tax Officer may ask the assessee to explain the discrepancy but he must make a provisional assessment on the basis of the return initially filed or clarified, but cannot hold that certain claims made by the assessee are in law unjustified. The provisional assessment does not bind the assessee nor the department and the tax paid pursuant to such provisional assessment is liable to be adjusted in the light of the final order in the regular assessment, and it is open to the Income tax Officer to impose a penalty in appropriate cases after the regular assessment is completed. If it is held that the Income tax Officer has jurisdiction to hold an enquiry into disputed matters, the expression 'provisional assessment ' loses all significance: the Income tax Officer. may, under such a summary assessment, without giving an opportunity to the assessee to explain his claim negative it and the assessee has no redress under the Act against any erroneous or arbitrary action because, the Income tax OffiCer is not bound to give notice to the assessee or hear witnesses and an appeal against a provisional assessment is expressly barred. [196 D E; 198 B C; B C;199 (2) Under section 210(3) the Income tax Officer is entitled to make an order for payment of advance tax on the basis of provisional assessment under section 141, but it predicates a valid provisional assessment. Since the provisional assessment in the present case, for the year 1964 65 is invalid, an order for payment of advance tax or the year 1965 66 could not be made. [200 A C]

The appellant a public limited company was manufacturing Rosin, Turpentine and Rosin Derivatives and was carrying on business at Bari Brahmana and Jammu Tawi. On 20.1.1981, the Assessing Authority assessed the appellant company under the , for the year ending 30.6.80. On 22.2.1981 an assessment order under section 10 of the Act was made. A penalty order was also made. The appellants challenged the order of the Assessing Authority before the High Court filing Writ Petition No. 87 of 1987, contending that they were exempt from payment of sales tax under the and the Jammu & Kashmir General Sales Tax Act, 1962, on the finished goods produced by them for a period of five years commencing from 8th November, 1979, in terms of the Government Orders No. 159 Ind. dated 26.3.1971 as amended by Government Order No. 414 Ind. dated 25th August, 1971 read with Section 8(2A) of the ; that the Government represented and announced a package of incentives for large and medium scale industries grant of exemption from sales tax both on the raw materials purchased by the industries and the sale of their finished products; and that the Government was estopped from charging sales tax. The High Court dismissed the Writ Petition holding that the two Government Orders were only declarations of an intention to exempt 181 from payment of sales tax and that they were not exemption notifications under section 5 of the General Sales Tax Act and that the appellants failed to prove the factual foundation for invoking the principle of promissory estoppel. Against the High Court 's decision by special leave C.A. No. 2309 of 1989 was filed by the appellant company. C.A. No. 2310 of 1989 The appellant company had filed a miscellaneous petition, after the judgement in the W.P.No. 87 of 1987 (the writ petition of the High Court against which C.A.No. 2309 of 1989 was filed) for permission to file reply affidavit on the ground of that the documents produced at the time of hearing needed explanation. The High Court dismissed the Misc. Petition as it was belated and the judgement in the writ petition was delivered relying on the materials placed on record. C.C.No. 3148 50 of 1989 The appellant partnership firm was manufacturing Vanaspati Ghee. It was assessed for the period from 2.9.1981 till 30.9.1981 under the Jammu & Kashmir General Sales Tax Act. The appellants moved the High Court in a writ petition (W.P.No. 52 of 1982) to quash the assessment order, contending that the Government order 159 Ind. dated 26.3.1971 as amended by Government Order 414 Ind. dated 25.8.1971 exempted the sales of the finished product of Vanaspati Ghee from sales tax and that the Government was estopped from collecting tax. When the Writ Petition (W.P.No. 52 of 1982) was pending an assessment order was made on 14.11.1984 for the assessment year ending 30th September, 1982, including the period 2nd September to 30th September, 1981 (which was questioned in W.P.No. 52 of 1982). The assessment order dated 14.11.1984 was challenged by the assessees appellants in the writ Petition No. 822 of 1984. During the pendency of the writ petitions certain other Government Orders were passed and certain assessment orders for the subse 182 quent periods were passed and those were questioned in the Writ Petition No. 711 of 1987. The assessees contended that Government Order No. 159 Ind. dated 26.3.1971 and Government Order 414 Ind. dated 25.8.1971 were exemption orders referable to section 5 of the Jammu & Kashmir General Sales Tax Act. The respondents contended that the said Government orders were not exemption orders section 5 of the General Sales Tax Act and that there was not factual foundation for the plea of promissory estoppel. The High Court dismissed all the three writ petitions by a common order, against which Civil Appeals 3148 50 of 1989 were filed. C.A.No. 3151 of 1989 : The appellant assessee filed a writ petition praying to quash certain notices issued under section 14 of the and for a declaration that the Vanaspati Ghee manufactured by them was exempt from payment of tax upto January, 1992, i.e., for a period of 10 years from the date from which they started their commercial production as per the Government Order 159 Ind. dated 26.3.1971 and Government Order No. 414 Ind. dated 25th August 1971 as orders exempting their goods from sales tax under Section 5 of the Jammu & Kashmir General Sales Tax Act. The Writ Petition was also dismissed against which C.A.No. 3151 of 1989 was filed by special leave. The assessee contended that the exemption from payment of tax was extended from 5 years to 10 years and the Government was bound to give the exemption for 10 years on the ground of promissory estoppel; that SRO 448 which superseded the exemption granted under the Govt. Orders was ultra vires and that the SRO 448 had no effect of superseding exemption granted under the G.O. 159 and 414; and that the exemption for 5 years granted under the Government Orders could not be withdrawn on the ground that SRO 80/82 was prospective in operation and also on the ground of promissory estoppel. The State contended that even if the sale of a particular commod 183 ity was exempted from payment of tax under the local Act, the dealer selling the same in inter state trade or commerce would be liable to pay Central Sales Tax under the provisions of Section 6(1A) of the ; that if Section 6(1A) of the was applicable to a particular transaction of sale, Section 8(2 A) of the General Sales Tax Act would not be applicable to that transaction; that the conditions that the industry should have been set up and commissioned subsequent to the Government Orders 159 and 414 and the commodity sold in order to claim the exemption under the Government Orders, should be those manufactured by that industry were the conditions or specified circumstances within the meaning of the Explanation and, therefore, the appellants in C.A.Nos. 2309, 2310/89 were not entitled to any exemption under Section 8(2 A) of the ; that the Government Orders were superseded by SRO 80/82 and Vanaspati Ghee was made liable to tax at the rate of 8 per cent; that the goods manufactured by the appellants in C.A.Nos. 2309, 2310/89 were also made taxable as falling under the residuary item at the rate of 8 per cent; that in the assessment order relating to Assessment Year 1981 82 for the period from 1.9.1981 to 30.8.1982 in the case of appellants in C.A. Nos. 3148 3150 of 1989 there was a finding that the assesses collected sales tax in respect of their sales turnover for which the exemption was now claimed and that under Section 8 B of the J&K General Sales Tax Act the said amount was refundable to the Government. As the questions, arose in these appeals were common, appeals were heard together and allowing the appeals of the assessees by a common judgment, this court, HELD :1. If power to do an act or act or pass an order can be traced to an enabling statutory provision, then often if that provisions is not specifically referred to, the act or order shall be deemed to have been done or made under the enabling provision. [194D] 2.1 Normally in the case of grant of tax exemption as an incentive to industry the exemption orders have generally taken the form of Government Order rather than a notification. But in the case of other exemptions though they are also under section 5 of the local Act (J&K General Sales Tax Act, 1962) they have taken the form of notification. [194G H] 2.2 The pattern followed in Jammu & Kashmir is that in respect 184 of exemptions from payment of taxes following Cabinet decision on Policy matters and incentive they have taken the form of a Government order. [194H 195A] 2.3 The Jammu & Kashmir General Sales Tax Act, 1962 itself makes a distinction requiring a notification to be made for certain purposes and the making of a Government order in respect of certain other purposes. Since there is no form prescribed in this behalf, if the particular order in effect is an exemption order, whether it takes the form of an order or notification makes no difference. [194F G] 2.4 From the publicity given to the Government Orders 159 and 414 by the Government, while inviting entrepreneurs to establish industries in Jammu & Kashmir and certain other communications to the parties, it is be understood that the Government orders 159 and 414 were treated as exemption orders satisfy all the requirements of the provisions of section 5 of the local Act. [195B C, 194E] 2.5 Even as an order of exemption the appellant will have to show that he had set up the industry in conformity with the intent of 1971 order and entitled in terms thereof to the exemption in respect of the goods manufactured by him. But that is not to say that after he establishes those facts the Government will have to make a separate order of exemption in relation to him. [201C D] 2.6 There is no prescribed form for granting exemption under section 5 of the Jammu & Kashmir General Sales Tax Act. There is also no prohibition against reference to any other matter or matters in exemption orders under section 5 of the General Sales Tax Act. If the incentives related also to other benefits or rights merely because they are included in the same Government Order does not make it any the less an exemption order so far as the exemption related to payment of sales tax. [202C D] 2.7 The High Court was in error in thinking that the exemption order should be specific in favour of the appellant. The exemption as can be seen from the provisions of section 5 of the Jammu & Kashmir General Sales Tax Act could be in respect of any class of dealers or any goods or class or description of goods. There could be an exemption to an individual also but the power of exemption is not restricted to such cases alone. It may refer to transactions of sale of a particular type of goods or class or description of goods or in respect of any class of 185 dealers or a combination of both. [201B] 3.1 `Will be granted exemption ' has the same meaning as `will be exempted ' and does not in any way show that it requires a further follow up action. [201G H] 3.2 The exemption is with reference to an industry which is to be established subsequent to the Government order. Therefore in that sense both expressions mean the same. [202A] 4. The notification issued on the 3rd of June 1971 in SRO 214 under section 23 of the Jammu & Kashmir Urban Immovable Property Tax Act, 1962, amending the Immovable Property Tax Rules, 1962 by inserting Rules 20 A was subsequent to GO 159 Ind. dated 26.3.1971. It was published on 25.3.1971 in the Government Gazette under section 23(1) for information of all persons likely to be affected thereby and any objection or suggestion which may be received in the Finance Department from any person with respect to the said draft before the said date will be considered by the Government. It is by reason of the fact that this draft rule has been published calling for objection the GO 159 Ind. itself stated that the grant of immovable property tax exemption would be available "as admissible under the Urban Immovable Property Taxation Rules". Thus on the day when the Government Order was made there was already the draft amendment rules, and, therefore, it could not be stated that the amendment was a follow up action in pursuance of the Government order. The Government order refers to the draft and says as per the amendment they will be entitled to the exemption. [202E 203B] 5.1 The only reference to 10 years was in the Finance Minister 's speech and in the Brochure dated September 1978. The Brochure only lists the concession and incentives available generally. It does not refer to any Government decision or Cabinet decision or any order of the Government. [203G H] 5.2 The Finance Minister 's statement made in March 1978 only refers to a proposal to continue the grant of exemption from payment of sales tax for a period of 10 years. This statement also is not unambiguous. It may mean that the benefits under the Government Orders 159 and 414 may be continued for another 10 years without withdrawing the same. This is merely a budget proposal which could 186 give rise to no right to the appellants. As no decision order or notifications is produced extending the period of exemption in relation to sales tax it is not possible to consider the claim of the appellants for exemption for 10 years on the ground of promissory estoppel. [204 B C] 6.1 The SRO No. 195 dated 31.3.1978 did not and could not supersede the exemption granted under the Government orders 159, 414. [205D] 6.2 When it stated in the amending notification SRO 448 dated 22nd October, 1982 that vanaspati and edible oils are taxable at the point specified therein it only means that those vanaspati and edible oils which are not exempted are taxable at the points specified in the Schedule. The Government order gave exemption only for five years from the date of commencement of the industry and those industries who had been manufacturing for more than that period and also those industries who were not entitled to the benefit of the said Government order would be liable to pay sales tax on the vanaspati manufactured by them and the said goods were liable to tax at the point specified in the Schedule. [205F G] 7.1 In the scheme of levy of single point taxation, the Government could fix any point in the series of sales for the Government have fixed the sale by the dealer, that if the second sale, as the taxable point no exception can be taken. In that sense no question of vires on the ground of lack of power would arise. [205H 206A] 7.2 Under section 4(1) of Jammu & Kashmir General Sales Tax Act the goods are taxable only once, that is it could be taxed only at one point of sale. The government orders 159 and 414 are exemption orders and exempt the sale by appellants of their manufactured products. The exemption would not arise unless the goods are taxable at the point of their sale. Thus the effect of exempting their sale is that the said goods manufactured by them could not be taxed at the second or subsequent sales also as that would offend section 4(1) which provides for single point levy. In cases where there are no exemption orders and the State fixed the second or subsequnt sale as point of taxation the first or prior or subsequent sales are not exempted sales but are not taxable sales. Therefore SRO 448 fixing he sale of vanaspati ghee by a dealer would not be applicable to vanaspati ghee manufactured by the appellants which are exempt under the Government orders. [206B D] 187 7.3 The goods manufactured by the Appellants are exempt under Government Orders 159 and 414 and that exemption covers entire series of sales of that very goods. [206D] 8.1 Under section 6(1) of the every dealer who sells goods in the course or inter state trade or commerce shall be liable to pay tax under that Act. A sale of goods shall be deemed to take place in the course of inter state trade or commerce if the sale occasions the movement of goods from one state to another or if effected by a transfer of documents of title to the goods during their movement from one State to another. [207D E] 8.2 In view of the provisions of Section 15 the State Law can impose tax on sale of declared goods only at a rate not exceeding four per cent of the sale price and such tax also shall not be levied at more than one stage. If the tax has been levied under the State Law on declared goods and such goods are sold in the course of inter state trade and tax has been paid under the Central Sales Tax the Law levied under the State law shall be reimbursed to the person making such sale in the course of inter state trade. [208C E] 8.3 Section 8(2 A) of the does not have any over riding effect on the scheme of taxation relating to inter State sale of declared goods. There is also scope for the applicability of section 6(1 A) of the when the inter state sale takes place when the goods are in transit and is effected by transfer of documents of title to the goods during their movement from one State to another. [209B C] 8.4 Only certain cases which would have been covered by section 6(1 A) of the have been carved out for the purpose of exemption subject to the applicability of section 8(2 A) of the . Section 6(1 A) of the has not become otiose by reason of inclusion of that section in the non obstante clause in section 8(2 A). Both provisions, therefore, operate and they should not be read so as to nullify the effect of one another. [209C E] 9. The facts which the dealer had to prove to get the benefit of the Government orders are intended only to identify the dealer and the goods in respect of which the exemption is sought and they are not conditions or specifications of circumstances relating to the turnover sought 188 to be exempted from payment of tax within the meaning of those provisions. The specified circumstances and the specified conditions referred to in the explanation should relate to the transaction of sale of the commodity and not identification of the dealer or the commodity in respect of which the exemption is claimed. The conditions relating to identity of the goods and the dealer are always there in every exemption and that cannot be put as a condition of sale. [210D F] 10.1. SRO 80/82 was prospective in operation. The Government seems to have been following as a pattern that is in the case of incentives to industries the exemption orders had taken the form of a Government order. Government orders 159 and 414 were also in pursuance of a Cabinet decision. SRO 80/82 though a Government notification under the Business Rules it is issued by the Ministry concerned. In the circumstances there is also a serious doubt whether the said incentives could have been superseded by the SRO 80/82. [213H 214B] 10.2. In the case of a grant of exemption without specifying any period for which the exemption is available the Government could withdraw the same at any time. The appellants acting on the representations of the Government had set up their industries. Therefore they are entitled to claim the benefit of the exemption for the entire period of five years calculated as per the terms of the Government orders, even if it were to be held that SRO 80/82 superseded the earlier exemption orders. [216D E, 216G 217A] 11. Since the assessment orders were regular assessment orders on the ground that their sales are taxable sales the question of applicability of Section 8B of the local Act does not arise. That question arises in view of the finding that their sales turnover are exempt but still under section 8B of the Local Act, they are liable to refund any money collected "by way of tax". [217G H] Pournami Oil Mills & Ors. vs State of Kerala & Anr. , [1986] Supp. SCC 728; Bakul Oil Industries & Anr. vs State of Gujrat & Anr. , ; ; Assistant Commissioner of Commercial Taxes (Asstt), Dharwar & Ors. vs Dharmendra Trading Company and Ors., ; ; Indian Aluminium Cables Ltd. & Anr. vs State of Haryana, 38 STC 108; Industrial Cables India Ltd. vs Assessing Authority, [1986] Supp. SCC 695; International Cotton Corporation (P) Ltd. vs Commercial Tax Officer & Ors., 35 STC 1; referred to. 189

The appellant assessee a company manufactured cement which was sold partly in the State of Rajasthan and partly outside the State. The sales tax returns relating to the sales were filed by the assessee under the Rajasthan Sales Tax Act, 1954 and under the before the Assessing Authority for the period August 1, 1973 to July 31, 1974 i.e. for the assessment year 1974 75. In those returns the assessee did not include in the taxable turnover the freight charges paid in respect of the goods sold under the bonafide impression that freight charges were not to be so includible in the taxable turnover in view of certain decisions rendered by the High Courts and the Supreme Court. The Supreme Court on August 29, 1978 In Sugar Mills Limited vs State of Rajasthan and others held that freight charges formed part of the sale price and were includible in the taxable turn over of an assessee and that sales tax was payable thereon. Coming to know of the aforesaid decision the assessee prepared and filed the revised returns in respect of the assessment year 1974 75 before the Commercial Tax officer on October 20, 1978 including freight charges in the turn over and also deposited along with the revised returns, challans showing payment of the balance of the tax payable under the State Act as well as under the Central Act. The assessing authority passed two orders of assessment one under section 10(3) of the State Act and the other under section 9 of the Central Act. The former order of assessment levied a penalty of Rs. 53,353 under section 7AA of the State Act on account of the delay in depositing the sales tax payable in respect of the amount of freight charges and also levied interest of Rs. 85910/under section 11B of the State Act. In the latter order of assessment a penalty of Rs. 1,34,205/ was levied under section 7AA of the State Act read with section 9(2) of the Central Act for the delay in depositing the tax payable in respect of the freight charges, and interest of Rs. 2,07,174/ was levied under section 11 of the State Act read with section 9(2) of the Central Act, 564 In the appeals to this Court on the question whether: (A) the Assessing Authority was right in imposing penalty on the assessee under the two assessment orders for not depositing the tax in respect of the amount of freight at the time of filing of the original returns under the State Act and the Central Act, and (B) the assessee was liable under section 11B of the State Act to pay interest on the tax in respect of the amount of freight for the period between the date of filing of the original return and the date when such tax was actually paid while filing the revised return. ^ HELD: [By The Court] (A) The levy of penalties for not including the freight charges in the taxable turnover in the original returns and for not paying the tax in respect of such freight charges is unsustainable and the two orders of assessment in so far as they levy penalty are liable to be quashed and set aside. [571 B, 589 B] Cement Marketing Company of India Limited vs Commissioner of Sales Tax Indore ; referred to. [per Bhagwati J. dissenting] B(1) So long as the assessee pays the amount of tax which according to him is due on the basis of the return filed by him, there would be no default on his part in complying with the obligation under sub section (2) of section 7 and there would be no liability on him to pay interest under section 11B clause (a), because he would have paid the amount of tax quantified by him through the process of self assessment. The actual amount of tax payable by the assessee would be determined only when it is assessed by the Assessing Authority under section 10 and that would not be payable until the expiration of the period specified in the notice of demand or thirty days from the date of service of such notice, as the case may be. [584 D E] (2) Since the assessee deposited the amounts of tax which according to him were due on the basis of the returns actually filed by him and the returns were accompanied by receipts showing deposit of such amounts of tax, there was no default on the part of the assessee in paying the amounts of tax payable under sub section (2) of section 7 within the actual period allowed and in the circumstances no interest was payable by the assessee under section 11B clause (a). [586 F G] State of Rajasthan vs Ghasi Lal ; relied on. When the assessment, is made and the tax payable by an assessee is determined, the tax so determined does not become payable until after a notice of demand is served by the Assessing Authority under section 11 sub section (2) read with Rule 31 of the Rajasthan Sales Tax Rules 1955. The assessee is allowed time to make payment up to the date specified in the notice of demand and if no such date is specified, then within thirty days from the date of service of the notice. So long the assessee pays up the amount of the tax assessed within the time specified in the notice of demand or within thirty days from the date of service of the notice, as the case may be, he would not be in default and hence 565 section 11B clause (b) provides that the assessee would be liable to pay interest on the tax assessed only if the amount of such tax is not paid within the period specified in the notice of demand or in the absence of such specification, within thirty days from the date Of service of such notice and then too, the liability to pay interest would commence not from the date of the assessment, but from the day commencing after the end of the said period, that is, the period specified in the notice of demand or thirty days from the date of service of such notice, as the case may be. Thus even after the assessment is made and the tax payable by an assessee is determined, the assessee is not liable to pay interest on the amount of such tax until after the period specified in the notice of demand or in the absence such specification, thirty days From the date of service of such notice, have expired. [574 D H] 4. The language used in sub section (2) of section 7 is "full amount of tax due on the basis of return". The "return" is the return Sled by the assessee under sub section (1) of section 7. When sub section (1) of section 7 requires an assessee to file a return, the return filed must be correct and proper. If the return is not correct and proper, the Assessing Authority may not give credence to the return and may refuse to assess the tax on the basis of the return and if the Assessing Authority finds that the assessee has concealed any particulars from the return furnished by him or has deliberately furnished inadequate particulars in the return the Assessing Authority may levy penalty on the assessee under section 16, sub section (1) clause (e) and the assessee may also be liable to be punished for an offence under Section 16, sub section (3) clause (d) for making a false statement in the return. Whether the return filed be correct or not, the tax payable by the assessee under sub section (2) of section 7 would be the full amount of tax due on the basis of the return. The return actually filed by the assessee must be looked into in order to see what is the full amount of tax duo on the basis of such return. It is not the assessed tax nor is it the tax due on the basis of a return which ought to have been filed by the assessee but it is the tax due according to the return actually filed that is payable under sub section (2) of section 7. This provision is really in the nature of self assessment and what it requires is that whatever be the amount of tax due on the basis of self assessment must be paid up along with the filing of the return which constitutes self assessment. The plain words of sub section (2) of section 7 cannot be tortured to mean full amount of tax due on the basis of return which ought to have been filed but which has not been filed. [576 B F] 5. The legislature could never have intended that the assessee should be liable on pain of imposition of penalty, to deposit an amount which is yet to be ascertained through assessment. How would the assessee know in advance what view the Assessing Authority would take in regard to the taxability of any particular category of sales or the rate of tax applicable to them and deposit the amount of tax on that basis ? Even in regard to the liability to pay interest, it does not stand to reason that the legislature should have subjected the assessee to such liability for non payment of an amount of which the liability for payment is still to be ascertained. [577 F G] 6. The tax payable under sub section (2) of section 7 dealt with in clause (a) of section 11B cannot, be equated with the amount of the tax assessed forming the subject matter of clause (b) of section 11B and hence it must 566 be tax due on the basis of the return actually filed by the assessee and not on the basis of a correct and proper return which ought to have been filed by him. [578 G H] 7. The scheme of taxation envisaged in the State Act clearly shows that it is only when the assessment is made and the period specified in the notice of demand or in the absence of such specification, thirty days from the date of service of such notice expires, that the amount of tax as assessed becomes payable by the assessee and its payment can be enforced by the Revenue. What becomes payable by the assessee under sub section (2) of section 7 is merely the tax due on the basis of the return actually filed by the assessee that is, on the basis of self assessment. [579 F G] 8. On a true construction of the provisions of the State Act tax becomes due from the assessee and is payable by him only when it is ascertained by the Assessing Authority under section 10 or by the assessee under section 7(2). Till then there is only the liability of the assessee to be assessed to tax and no tax can be said to be payable by the assessee. The tax payable is ascertained when the assessment is made by the Assessing Authority under section 10 or when the assessee himself quantifies it through the process of self assessment under subsection (2) of section 7. These two amounts of tax may and in quite a number of cases would be different because one is ascertained by the Assessing Authority through the process of assessment and that is why sub section (4) of section 7 provides that every deposit of tax made under sub section (2) shall be deemed to be provisional subject to necessary adjustments in pursuance of final assessment of tax made under section 10. This provision clearly contemplates that the tax payable under sub section (2) of section 7 may be different from the tax assessed under section 10 and it cannot, therefore, obviously be the tax due on the basis of a correct and proper return but must be the tax due on the basis of the return actually filed. [580 D G] 9(i) it is clear from the language of subsection (2) of section 7 that it is only on the filing of the return that the liability to pay the tax due on the basis of the return arises. If no return is filed within the prescribed time, it would undoubtedly constitute a default attracting penalty under section 16, sub section (1) clause (n) but there would be no liability on the assessee to pay interest on the amount of the tax, because the liability to pay the tax due on the basis of the return under sub section (2) of section 7 can arise only when the return is filed There is no liability on the assessee to pay any amount by way of tax until the return is filed or the assessment is made. [581 H 582 B] (ii) It can neither be held that section 7 sub section (2) is attracted even when no return has been filed. It is clear that until the assessee files a return or assessment is made, no tax is payable by the assessee, because till then there is only a liability to be assessed to tax. The conclusion that a registered dealer who does not file any return at all as required by sub section (1) of section 7 would still be liable to pay the amount of tax and if he does not pay the same before the due date for filing the return, he would be liable to pay interest under section 11(b) clause (a) cannot be accepted. This would be contrary to the decision of this Court in State of Rajasthan vs Ghasi Lal [ ; [582 C F] 567 [per A.P. Sen and Venkataramiah, JJ] B(1). The statutory liability under section 11B arises wherever there is default in payment of the tax within the period allowed by law irrespective of any doubt which an assessee may be entertaining about the liability to pay the tax. [604 D E] State of Rajasthan vs Ghasi Lal ; distinguished. Tax, interest and penalty are three different concepts. Tax becomes payable by an assessee by virtue of the charging provision in a taxing statute. Penalty ordinarily becomes payable when it is found that an assessee has willfully violated any of the provisions of the taxing statute. Interest is ordinarily claimed from an assessee who has withheld payment of any tax payable by him and it is always calculated at the prescribed rate on the basis of the actual amount of tax withheld and the extent of delay in paying it. It may not be wrong to say that such interest is compensatory In character and not penal. [594 D F] 3. Registered dealers can be classified into the following different classes: (1) A registered dealer who files his return showing a higher taxable turnover than the actual turnover which is ultimately found to be taxable at the time of regular assessment and who pays tax under section 7(2) of the Act on the basis of the return. (2) A registered dealer who files a true and proper return and pays tax on the basis of such return within the time allowed. A registered dealer who does not file any return at all as required by section 7(1) and pays no tax under section 7(2) of the Act. A registered dealer who files a true return but does not pay the full amount of tax as required by section 7(2), and; (5) A registered dealer who files a return but wrongly claims either the whole or any part of the turnover as not taxable and pays under section 7(2) of the Act that amount of tax, which according to him is payable, on the basis of the return. In the case of a registered dealer falling under class (1) no question of payment of interest would arise as the amount of tax paid by him at the time of filing the return is much more than what is actually due and payable by him under the Act. The extra tax paid by him becomes refundable after the regular assessment is completed in view of section 7(4) of the Act. In the case of a registered dealer falling under clause (2) also no question of payment of interest arises as there is no shortfall in payment of the tax. [594 F 595D] 4. A fair reading of section 11 of the Act suggests that the Act expects that all assessees who are liable to pay sales tax should file a true return within the period prescribed under sub section (1) of section 7 and should produce a treasury receipt or a receipt of any bank authorised to receive money on behalf of the State Government showing that full amount of tax due from them has been paid. [595 H 596 A ] 5. It is settled law that a distinction has to be made by court while interpreting the provisions of a taxing statute between charging provisions which impose the charge to tax and machinery provisions which provide the machinery for the quantification of the tax and the levying and collection of the tax so imposed. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The courts are 568 expected to construe the machinery sections in such a manner that a charge to tax is not defeated. [596 C D] India United Mills Ltd. vs Commissioner of Excess Profits Tax, Bombay ; , Gursahai Saigal vs Commissioner of Income tax Punjab ; Commissioner of Income tax vs Mahaliram Ramjidas, A.I.R. and Whitney vs Commissioners of Inland Revenue , referred to. If the words 'on the basis of return ' occurring in sub section (2) of section 7 of the Act are construed as on The basis of a true and proper return which ought to have been filed under sub section (1) of section 7 then all the three classes of persons viz (i) those who have not filed any return at all and who are later on found to be liable to be assessed, (ii) those who have filed a true return but have not deposited the full amount of tax which they are liable to pay and (iii) those who filed a return making a wrong claim that either the whole or any part of the turnover is not taxable and who are subsequently found to have made a wrong claim, would be placed in the same position and they would all be liable to pay interest on the amount of tax which they are liable to pay but have not paid as required by sub section (2) of section 7 of the Act. This view is in conformity with the legislative intention in enacting section 11B of the Act [599 A C] 7. In cases to which section 7(2) of the Act applies interest has to be paid on the tax payable but which has not been paid from the last date on which the return has to be filed for the assessment year in question and in cases to which sub section (2A) is applicable, from the last date on which the advance tax has to be paid. The amount of interest has however to be calculated after the actual amount of tax payable is assessed and necessary adjustments are made. [609 B C] 8. Either by delaying the filing of the return or not filing it all or by filing a return wrongly claiming that a certain part of the turnover is not taxable or by not disclosing a part of the taxable turnover in the return an assessee cannot escape the liability to pay interest under section 11B on the amount of tax with held, as a consequence of his own action or inaction, from the last date on which it had to be paid as per sub section (2) or sub section (2A) of section 7, as the case may be, read with the Rules. An assessee cannot contend that interest does not accrue under section 11B on the tax payable by him where the time to file the return has elapsed until the actually files a return admitting the liability to pay such talc or until assessment is made. [604 B D]

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 appellant who carried on the business of export and import applied for an import licence to import certain goods. The licence was issued in 1959 for only a part of the value applied for. He filed appeals and exhausted all the remedies under para 85 of the order relating to the Export Promotion Scheme, as a result of which finally in March 1962 he was granted a supplementary licence to import a small part of the goods. In April 1964, the appellant approached the Minister, and he was informed that no further licence would be issued to him. Thereupon, the appellant filed a petition under article 226 of the Constitution seeking a mandamus for the issue of the import licence. The High Court dismissed the petition in limine but granted certificate Under article 133(1)(a) of the Constitution. ' HELD: The appeal must fail. The petition under article 226 of the Constitution was filed after great delay. No explanation was given in the petition for the delay in filing the petition and it was not explained what the appellant was doing between March 6, 1962, when the supplementary licence was issued, and April 1964. The exchange position of this country and the policy of the Government regarding international trade, varies from year to year and it would be rather odd for this Court to direct that an import licence be granted in the year 1968 in respect of alleged default committed by the Government in 1959 or 1962. In these matters it was essential that persons who were aggrieved by orders of the Government should approach the High Court after exhausting the remedies provided by law, rule or order with utmost expedition. Even in the case of alleged breach of fundamental rights the matter must be left to the discretion of the High Court. [864 G, 865 B] Smt. Narayani Debi Khaitan vs State of Bihar, C.A. No. 140 of 1964 judgment dated, September 22, 1964, Maharashtra State Road Transport Corporation vs Shri Balwant Regular Motor Service, Amravati, ; and Moon Mills vs Industrial Court, A.I.R., , 1453, 1454, referred to.

The appellant was a mining company with its head office at Nagpur. The business of the head office was to look after the sale of coal extracted from the collieries. An employee of the company working in the head office made applications under section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, to the Assistant Commissioner of Labour, Nagpur. The company objected that by virtue of the notification under section 1(3) of the Act the mining industry had been exempted from the operation of the Act including section 16 and therefore the Assistant Labour Commissioner had no jurisdiction. The authorities under the Act as well as the High Court under articles 226 and 227, re jected the company 's contention. The High Court took the view that what was exempted by the third item in the notification was not the head office of a mine but the mine itself and consequently the employees of the head office were governed by the Act. The company appealed to the Supreme Court by special leave. HELD : The notification in question said that the Act would come into force on 21st November, 1947 "in all the industries except the following" and then went on to name four industries the third one being 'Mines '. After the word 'following ' the, word industries must be read and thus read the notification in effect said the Act would come into effect on the given date in all industries except the industries mentioned. Therefore it was not only mines but the mining industry itself that was exempted from the operation of the Act. [593 A B, D E] If the notification exempted the industry of mines or the mining industry it could not be said that it merely exempted that part of the said industry of mines or mining industry which consisted of raising coat at the colliery and did not include the head office thereof. As the High Court said, the head office was part of the integrated activity of the company. Therefore when the mining industry was exempted from the operation of the Act the exemption applied not only to that part of the industry which consisted of raising coal at the colliery but also to that part of it which consisted in the sale of coal and its supply to the customers and would thus include the head office also. [593 E G] M/s. Godavari Sugar Mills Ltd. vs D. K. Worlikar, A.I.R. and M/s. Serajuddin and Co. vs Their Workmen, [1962] 3. S.C.R. 934, distinguished. On the above view the Assistant Labour Commissioner had no jurisdiction under the Act to deal with the matter in question. [595 E]

ION: Criminal Appeal No. 63 of 1960. Appeal by special leave from the judgment and order dated October 9, 1959, of the Bombay High Court in Criminal Reference No. 94 of 1959. A. V. Viswanatha Sastri, section N. Andley and Rameshwar Nath, for the appellant. R. Ganapathy Iyer and R. H. Dhebar, for respondent. October 27. The Judgment of Kanpur an Dayal, JJ., was delivered by Dayal J. Subba Rao, J., delivered a separate Judgment. RAGHUBAR DAYAL, J. This appeal, by special leave, is directed against the order of the High Court of Bombay, rejecting, the reference made by the additional Sessions Judge, Nasik, and confirming the conviction of the appellant under section 92 of the factories Act, 1948 (Act LXIII of 1948), hereinafter called the Act. The appellant is the owner and occupier of "Jay Parkash Sudhir Private Ltd., a factory which manufactures bidis. Pandurang Trimbak Londhe, hereinafter called Pandurang, rolled bidis in that factory for a number of days in 1957. He ceased to do that work from August 17, 1957. It was alleged by the prosecution that the appellant terminated Pandurang 's services by a notice put up on August 12, 1957. The appellant, however, admitted the putting up of such a notice, but denied that Pandurang, the labourer, had left his service of his own accord. 252 Inspector Shinde, P.W.I, visited this factory August on 22, 1957. He found from the weekly register and the wages register of the Factory that Pandurang worked for 70 days and earned 4 days T. leave. Pandurang, however, did not enjoy that leave and was therefore entitled to be paid wages for that period i.e., for 4 days ' leave. He was not paid those wages, and therefore, the appellant contravened the provisions of section 79(11) of the Act. He consequently submitted a complaint against the appellant to the Judicial Magistrate, First Class, Sinnar. It was contended for the accused before the Magistrate that Pandurang was not a worker within the meaning of that expression, according to s.2(1) of the Act and that therefore no leave could be due to him and the appellant could not have committed the offence of contravening the provisions of s.79(11). The learned Magistrate did not agree with the defence contention and held Pandurang to be a worker and convicted the appellant of the offence under 8. 92 read with section 79(11) of the Act and sentenced him to a fine of Rs. 10. It may be mentioned that this case was a test case. Similar cases against the appellant with respect to the non payment of leave wages to other workers were pending in the Court. The appellant went in revision to the Court of the learned Additional Sessions Judge, Nasik. The Sessions Judge was of the opinion that Pandurang was not a worker and that the conviction of the appellant was bad. He accordingly referred the case to the High Court. The High Court, however did not agree with the view of the Sessions Judge and, holding that Pandurang was a worker, rejected the revision and confirmed the conviction and sentence. It is against this order that this appeal has been filed. Two points have been raised on behalf of the appellant. One is that Pandurang was not a 253 worker within the meaning of that expression in the Act. The other is that even if Pandurang was a worker, he was not entitled to any leave wages under section 80 of the Act. The first contention is based on the established facts of the case which, it is submitted, do not make out the relationship of master and servant between the appellant and Pandurang, inasmuch as they indicate that the appellant had no supervision and control over the details of the work Pandurang did in the factory. The following are the established facts: (1) There was no agreement or contract of service between the appellant and Pandurang. (2) Pandurang was not bound to attend the factory for the work of rolling bidis for any fixed hours of work or for any filed period. He was free to go to the factory at any time he liked and was equally free to leave the factory whenever he liked. Of course, he could be in the factory during the hours of working of the factory. (3) Pandurang could be absent from work on any day he liked. He could be absent up to ten days without even informing the appellant. If he was to be absent for more than ten days he had to inform the appellant, not for the purpose of taking his permission or leave, but for the purpose of assuring the appellant that he had no intention to give up work at the factory. (4) There was no actual supervision of the work Pandurang did in the factory. (5) Pandurang was paid at filed rates on the quantity of bidis turned out. There was however no stipulation that he had to turn out any minimum quantity of bidis in a day. (6) Leaves used to be supplied to Panduarng for being taken home and cut there. 254 Tobacco to fill the bidis used to be supplied at the factory. Pandurang was not bound to roll the bidis at the factory. He could do so at his place, on taking permission from the appellant for taking tobacco homes. The permission was necessary in view of Excise Rules and not on account of any condition of alleged service. (7) At the close of the day, the bidis used to be delivered to the appellant and bidis not up to the standard, used to be rejected. The second contention is based on the inapplicability of the provisions of sections 79 and 80 of the Act to the case of the appellant, inasmuch as it is not possible to calculate the number of days he worked or the total full time earnings for the days on which he worked during the relevant period mentioned in section 80. On behalf of the respondent State, it is submitted that the appellant had the right to exercise such supervision and control over the work of Pandurang as was possible with respect to the nature of Pandurang 's work which was of a very simple kind and that therefore Pandurang was a worker. It is further urged that there is no difficulty in calculating the number of working days or the total full time earnings contemplated by section 80 of the Act. We have given very anxious consideration to this case, as the view taken by the Court below in this case had been stated to be the right view in the decision of this Court in Shri Birdhichand Sharma. The first Civil Judge, Nagpur (1), on which reliance is placed by the respondent. The fact of that case are distinguished and only some of the facts of that case are similar to some of the facts of this class. The similar facts are only these: Pandurang as well as the workers in that case could go to the factory (1) ; 255 at any time and leave it at and time, within the filed hours of work and they were paid at piece rates and the bidis below the standard were rejected. It is to be noticed that the decision in that case is based on facts which do not exist in the present case. That decision, therefore, is distinguishable and the opinion about the view of the High Court in the present case to be correct, appears to have been expressed without noticing that the facts of this case are different in material respects from the facts of the case this court was deciding. The decision of that case it based really on the following facts: (1) The alleged workers had to work at the factory. (2) Their attendance was notes. (3) If they came to the factory after mid day, they were not given any work and they thus lost wages. (4) The management had the right to remove them if them stayed away for a continuous period of eight days. In the present case, Pandurang could work at the house if the appellant permitted tobacco to be taken home. There is nothing on record to show the attendance is noted. Of course, the days Pandurang worked could be found out from the work register. It is not the case here that no work was to be given to Pandurang if he want to the factory after mid day. There is no allegation that the appellant had the power to remove him, as a result of continued absence for a fixed number of days. We are therefore of opinion that the decision in Birdhichand 's Case (1) is distinguishable on facts and cannot be applicable to the facts of this (1)[1961] 3 section C.K. 161. 256 The one essential ingredient which should exist to make a person come within the definition of 'worker ' in cl. (1) of section 2 of the Act is that he be employed in one of the processes mentioned in that Clause. There is no dispute that the work which Pandurang did came within one of such processes. The sole question for determination then is whether Pandurang can be said to be employed by the appellant. This Court, in Shri Chintaman Rao vs The State of Madhya Pradesh (1), said: "The concept of employment involves three ingredients: (1) employer (2) employee and (3) the contract of employment,. The employs is one who employs, i.e., one who engaged the services of other persons. The employee is one who works for another for hire. The employment is the contract of service between the employer and the employee whereunder the employee agrees to serve the employer subject to his control and supervision. " Employment brings in the contrast of service between the employer and the employed. We have mentioned already that in this case there was no agreement or contract of service between the appellant and Pandurang. What can be said at the most is that whenever Pandurang went to work, the appellant agreed to supply him tobacco for rolling bidis and that Pandurang agreed to roll bidis on being paid at a certain rate for the bidis turned out. The appellant exercised no control and supervision over Pandurang. Further section 85 empowers the State Government to declare that certain provisions of the Act would apply to certain places where a manufacturing process is carried on, notwithstanding the persons therein are not employed by the owner (1) ; , 1346,1349,1350, 1351. 257 thereof but are working with the permission of or under agreement with such owner. This provision draws a distinction between the person working being employed by the owner and a person working, with the permission of the owner or under agreement with him. We are of opinion that the foots of this case strongly point to Pandurang 's working with the permission of or under agreement with the owner and not on any term of employment by the owner. Further, the facts of the case indicate that the appellant had no control and supervision over the details of Pandurang 's work. He could not control his hours of work. He could not control his days of work. Pandurang was free to absent himself and was free to go to the factory at any time and to have it at any time according to his will. The appellant could not insist on any particular minimum quantity of bidis to be turned out per day. He could not control the time spent by Pandurang on the rolling of a bidi or a number of bidis. The work of rolling bidis may be a simple work and may require no particular supervision and direction During the process of manufacture. But there is nothing on record to show that any such direction could be given. In this connection reference may again be made to the observation at page 1349 in Shri Chintaman Rao 's Case. The Court was considering whether the Sattedars were workers or were independent contractors Sattedars used to receive tobacco from the management and supply them rolled bidis. They could manufacture bidis outside the factory and should also employ other labour. It was in these facts, that it was said: "The management cannot regulate the manner of discharge of his work. " In the present case too, Pandurang used to be supplied tobacco. He could turn out as many bidis (1)[1958] section C. R. 1340, 1346, 1349, 1350, 1351. 258 as he liked and could deliver them to the factory when he wanted to cease working. During his period of work, the management could not regulate the manner in which he discharged his work. He could take his own time and could roll in as many bidis as he liked. His liability under the daily agreement was discharged by his delivering the bidis prepared and the tobacco remaining with him unused. The appellant could only order or require Pandurang to roll the bidis, using the tobacco and leaves supplied to him, but could not order him as to how it was to be done. We are therefore of opinion that the mere fact that the person rolling bidis has to roll them in a particular manner can hardly be said to give rise to such a right in the management as can be said to be a right to control the manner of work. Every worker will have to turn out the work in accordance with the specifications. The control of the management, which is a necessary element of the relationship of master and servant, is not directed towards providing or dictating the nature of the article to be produced or the work to be done, but refers to the other incidents having a bearing on the process of work the person carries out in the execution of the work. The manner of work is to be distinguish. ed from the type of work to be performed. In the present case, the management simply says that the labourer is to produce bidis rolled in a certain form. How the labourer carries out the work is his own concern and is not controlled by the management, which is concerned only with getting bidis rolled in a particular style with certain contents. Further, this Court, in Shri Chintaman Rao 's Case (1)examined the various provisions of the Act and then said: "The scheme of the aforesaid provisions indicates that the workmen in the factory are under the direct supervision and control of the management. The conditions of service (1) , 1346, 1349, 1350, 1951. 259 are statutorily regulated and the management is to conform to the rules laid down at the risk of being penalised for dereliction of any of the statutory duties. The management obviously cannot fix the working hours, weekly holidays, arrange for night shifts and comply with other statutory requirements, if the persons like the Sattedars, working in their factories and getting their work done by others or through coolies, are workers within the meaning of the Act. It is well high impossible for the management of the factory to regulate their work or to comply with the mandatory provisions of the Act. The said provisions, therefore, give a clear indication that a worker under the definition of the Act is a person who enters into a contract of service under the management and does not include an independent contractor or his coolies or servants who are not under the control and supervision of the employer. " It can be said, in the present case too, that the appellant could not fix the working hours or weekly holidays or asked arrangements for night shifts and comply with other statutory requirements, if Pandurang be held to be a worker within the meaning of the Act. We are therefore of opinion that Pandurang was not a worker. It is true, as contended for the State, that persons engaged to roll his on job work basis could be workers, but only such persons would be workers who work regularly at the factory and are paid for the work turned out during their regular employment on the basis of the work done. Piecerate workers can be workers within the definition of 'worker ' in the Act, but they must be regular workers and not workers who come and work according to their sweet will. It is also true, as urged for the State that a worker, within the 260 definition of that expression in the Act, need not be a whole time worker. But, even then, the worker must have, under his contract of service, an obligation to work either for a fixed period or J. between fixed hours. The whole conception of service does not fit in well with a servant who has full liberty to attend to his work according to his pleasure and not according to the orders of his master. We may say that this opinion further finds support from with we hold on the second contention. If Pandurang was a worker, the provisions about leave and leave wages should apply to him. We are of opinion that they do not and what we may in that connection reinforces our view that Pandurang was not a worker as the three criteria and conditions laid down in Shri Chintaman Rao 's Case (1) for constituting him as such are not fulfilled in the present case. Before discussing the provisions of ss.79 and 80 of the Act. which deal with leave and wages for leave, we would like to state that the terms on which Pandurang worked, did not contemplate any leave. He was not in regular employ. He was given work and paid according to the work he turned out. It was not incumbent on him to attend to the work daily or to take permission for absence before absenting himself. It was only when he, had to absent himself for a period longer than ten days that he had to inform the management for administrative convenience, but not with a view to take leave of absence. Section 79 provides for annual leave with wages and section 80 provides for wages during leave period. It is on the proper construction of the provision of these sections that it can be said whether the appellant contravened the provisions of sub section (11) of 8. 79 of the Act and committed the offence under s.92 of the Act. (1) ; , 1346, 1349,1350, 1351. 261 Sub section (1) of section 79 reads: "(1) Every worker who has worked for a period of 240 days or more in 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 (1) 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 has worked a factory for the purpose of computation of the period of 240 days or more, but shall not earn leave for these days. Explanation 2. The leave admissible under this sub section shall be exclusive of all holidays whether occurring during or at either end of the period of leave. " It is clear that this applies to every worker. If it does not apply to any type of person working in the factory, it may lead to the conclusion that the person does not come within the definition of the word 'worker '. 262 The worker is to get leave in a subsequent year when he has worked for a period of 240 days or more in the factory during the previous calendar year. Who can be said to work for a period of J. 240 days? According to cl. (e) of 8. 2, 'day ' means a period of twenty fore hours beginning at mid night. Section 51 lays down that no adult worker shall be required or allowed to work in a factory for more than forty eight hours in any week, and, according to section 54, for not more than nine hours in any day. Section 61 provides that there shall be displayed and correctly maintained in every factory a notice of periods of work for adults showing clearly for every day the periods during which adult worker may be required to work and that such periods shall be fixed beforehand and shall be such that workers working for those periods would not be working in contravention of any of the provisions of sections 51, 52, 54, 55, 56 and 58. Section 63 lays down that no adult worker shall be required or allowed to work in any factory otherwise than in accordance with the notice of periods of work for adults displayed in the factory. A 'day ', in this context, would mean a period of work mentioned in the notice displayed. Only that worker can therefore be said to work for a period of 240 days, whose work is controlled by the hours of work he is required to put in, according to the notice displayed under section 61. Pandurang was not bound to work for the period of work displayed in the factory and therefore his days of work for the purpose of section 79 could not be calculated. It is urged for the State that each day on which Pandurang worked, whatever be the period of time that he worked, would count as one day of work for the purpose of this section. We do not agree with this contention. When the section provides for leave on the basis of 263 the period of working days, it must contemplate a definite period of work per working day and not any indefinite period for which a person may like to work on any particular day. Section 80 provides for the wages to be paid during the leave period and its sub s.(1)reads: "For the leave allowed to him under section 79, a worker shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the confessional sale to the worker of foodgrains, and other articles. " The question is how the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave is to be calculated. It is necessary for the calculation of the rate of wages on leave, to know his, total 'full time earnings, ' for the days he had worked during the relevant month. What does the expression 'total full time earnings ' mean? This expression is not defined in the Act. It can only mean the earnings he earns in a day by working full time of that day, full time to be in accordance with the period of time given in notice displayed in the factory for a particular day. This, is further apparent from the fact that any payment for overtime or for bonus is not included in computing the total full time earnings Full time ', according to Webster 's International Dictionary, means the amount of time considered the normal or standard amount or working during a given period, as a day? week or month '. 264 In Words & Phrases, Permanent Edition, published by West Publishing Co., Vol. 17, with regard to the expression 'Full time ' it is stated: In an industrial community, term 'full time ' has acquired definite significance recognized by popular usage. Like terms 'part time ' and 'over time ' it refers to customary period of work; and all these terms assume that a certain number of hours per day or days per week constitute respectively a days or week 's work within a given industry or factory. " It is also stated at page 791: " 'Full time ' as basis for determination of average weekly wages of injured employee means time during which employee is offered employment, excluding time during which he has no opportunity to work. " We are therefore of opinion that there can be no basis for calculating the daily. average of the worker 's total full time earnings when the terms of work be as they are in the present case and that therefore the wages to be paid for the leave period cannot be calculated nor the number of days for which leave with wages can be allowed be calculated in such a case. It does not appear from the record, and it is not likely, that any period of work is mentioned in the notice displayed under section 61, with respect to such workers who can come at any time they like and go at any time they like and turn out as much work as they like. For the reasons stated above, we are of opinion that the conviction of the appellant for an offense under section 92; read with section 79(11) of the Act is wrong. We accordingly set aside the order of the Court below and acquit the appellant. Fine, if paid, will be refunded. 265 SUBBA RAO, J. I have had the advantage of perusing the judgment Prepared by my learned brother day, J. I regret my inability to agree. The question raced in this appeal is directly covered by the judgment of this Court in Birdhi Chand, Sharma vs First Civil Judge, Nagpur (1). As my learned brother has taken a different view, I propose to give reasons for my conclusion. This appeal by special leave is directed against the judgment of the High Court of Bombay in Criminal Reference No. 94 of 1955 made by the Additional Sessions Judge. Nasik, under section 438 of the Code of Criminal Procedure, and it raises the question of interpretation of some of the provisions of the (63 of 1948), (hereinafter referred to as the Act). The appellant is the owner of a factory named ' 'Jay Parkash Sudhir Private Ltd." engaged ill the manufacture of bidis. He engaged 60 persons for the work of rolling bidis in his factory. On August 12, 1267, the appellant issued a notice to the said persons terminating their services with effect from August 17, 1957. On August 22, 1957, the Inspector of Factories paid a visit to the factory found that one of the said persons by name Pandurang Trimbak had worked for 70 days in the factory and had earned leave for 4 days which he had not enjoyed nor was he paid wages in lieu of the leave before his discharge. It is not disputed that the position in regard to the other 59 persons is also similar. The Inspector of Factories filed 60 complaints against the appellant in the Court of the Judicial Magistrate, First Class, Sinnar, For infringing the provisions of section 79(2) of the Act. The Magistrate found to appellant guilty and convicted and sentenced him to pay a fine of Rs. 10 On revision, the learned Additional Sessions Judge, Nasik, taking the view that the convection should be quashed. referred the matter (1) ; 266 to the High Court under section 438 of the Code of Criminal Procedure. A division bench of the a High Court, on a consideration of the facts found the material provisions of the Act and the relevant decisions cited, come to the conclusion that a person rolling bidis in a factory is a "worker" within the meaning of B. 2(1) of the Act and on that basis upheld the order of conviction and sentence passed by the learned Magistrate. Hence this appeal. Learned counsel for the appellant contends that the persons rolling bidis in the factory are not "workers" within the meaning of the Act, as the said persons can come any day they like, work as they like and, therefore, they cannot be said to by employed by the manufacturer under the Act. Alternatively he argues that even if they were ' 'workers", section 79 of the Act, which deals with the question of leave with wages, cannot apply to a worker who is paid wages according to the quantity of work done by him and not per day or par week. At the outset it would be convenient to ascertain exactly how these persons rolling bidis are engaged by the appellant and how they work ill the factory. Admittedly, Pandurang Trimbak and other 59 persons were engaged by the appellant for rolling bidis in his factory. The registers maintained by the factory, namely, weekly register and wages register, had on their rolls the names of the said persons as labourers for doing the said work. It is also common case that the said persons attend the factory and roll bidis in the premises of the factory during the working hours of the factory. Leaves are supplied to the labourers on the previous day, which they cut in their houses after dipping them in water, and on the neat day, when they go to the factory, tobacco is given to them. After they make the bidis the matter verifies whether they are according to the sample. Those that are not according to the sample are rejected. Thereafter the quantity of 267 bidis rolled by each labourer is entered in the bidi map register maintained by the factory. D. W. 1 is a gumasta and general supervisor in the factory. He supervises the work of the man who supplies tobacco. He enters the quantity of bidis rolled by each labourer against his name in the register and if a labourer is absent, his absence is noted against his name in the said register. The labourers are paid at the rate of Rs. 2 2 O, or such other rate as agreed by them, per thousand bidis rolled. So far there is no difference between a labourer working in the appellant 's factory and a labourer working in any other factory. Just like any other manufacturer, the appellant engages the labour, allots work for them and extracts work from them and pays them wages for the work so done. Now let us look at the differences between the labourers in a bidi factory and those in other factories on which much emphasis is laid by learned counsel for the appellant. P. W. 1, the Inspector of Notified Factories, says that during their working in the factory, there, is no supervision over them. P. W. 2, Pandurang Trimbak, admits in the cross examination that during the factory hours he used to work in the factory of the appellant at any time and go at any time. He further states that they can sit at any compartment of the factory and there is no compulsion on the labourer to do a minimum quantity of work every day and that the permission of the master is required only if a labourer wants to absent for more than ten days or when he wants to bind bidis in his house. D. W. 1, the gumasta and supervisor in the factory, also says that a labourer can leave the factory in the midst of work after giving the finished product and after returning the tobacco. He says that at the time of receiving the finished goods, he verifies whether the goods are according to sample and then makes the requisite entries in 268 the register. What emerges from this evidence is that there in no supervision in the sense that nobody regulary watches their work from start to finish giving directions, if and when required. But the labourers understand that the bidis to be rolled in by them shall accord with the sample and, therefore, they roll the bidis to accord with that sample. The names of persons that are absent, the quantity of tobacco issued to each of the labourer, and the number of bidis rolled by each of them are entered in the appropriate registers. The rejected bidis are given way to the labourers; it cannot obviously mean that dereliction of duty is rewarded but it only shows that the rejected bidis are insignificant in number. In short, the appellant engages a labourer, extracts work from him, pays him wages in accordance with the quantity of bidis rolled by him, and exercises a right of supervision as the nature of the work requires. With this background let us look at the definition of "worker ' in section 2(1) of the act ' 'Worker" is defined to mean ' 'a person employed, directly or through agency, whether for wages or not in any manufacturing process. "Under this definition, a person employed in a manufacturing process in a worker. The question raised in this case turns upon the interpretation of the word 'employed" in the definition. This Court in Chintaman Rao vs State of Madhya Pradesh ( '1A) defined the word ' 'employed" thus: "The concept of employment involves three ingredients: (1) employer (2) employee and (3) the contract of employment. The employer is one who employs, i.e., one who engages the services of other persons. The employee is one who works for another for hire. The employment is the contract of (1A) ; , 1346. 269 service between the employer and the employee whereunder the employee agrees to s serve the employer subject to his control and supervision. " In making out the distinction between an employer and an independent contractor, this court in the above case quoted the following observations of Bhagwati J, in Dharangadhara Chemical Works Ltd . vs State of Saurashtra (1): "The test which is uniformly applied in order to determine the relationship is the existence of a right of control in respect of the manner in which the work is to be done. " The some view was reiterated. by this Court in The State of Kerala vs V.M. Patel (2). That was a case where 23 persons were employed in the process of garbling pepper and packing them in bags. Hidayatullah, J."speaking for the Court stated: "It was observed that, to determine whether a person was a '"worker", the proper test was to see whether or not the "employer" has control and supervision over the manner in which the work was to be done". Adverting to the distinction between an independent contractor and a servant, the learned Judge proceeded to state: "An independent contractor is charged with a work and has to produce a particular result; but the manner in which the result is to he achieved left to him. A servant, on the other hand may also be charged with the work and asked to produce a particular result, but is subject to the directions of the matter as to the manner in which tho result is to be achieved." (1) [1957] S.C.R.152,157. (2) Criminal Appeal No. 42 of 1959 decided on 12 10 60. 270 This decision also emphasized that a right to control or supervise is one of the tests for determining the relationship of master and servant. In this context a judgment of the Madras High Court in Palaniappa vs Court of Additional First Class Magistrate, Kulitalai (1) is strongly relied upon on behalf of the appellant. There, the petitioner was the owner of a weaving concern at Karur. He had put up a thatched shed where he had installed a certain number of handlooms and where towels and bed sheets were manufactured. His office consisted of only two clerks, who were this permanent members of his establishment. Some of the residents of the village, most of whom were agriculturists, but who knew waving used to go to the petitioner 's shed when they had e, and when they felt inclined to do to and they were supplied with yarn. These, they wove into bed sheets and towels and they were paid at certain rates for the articles they wove. These persons came in and went out when they liked. On those facts, Balakrishna Ayyar, J., held that they were not "workers" within the definition of the word '"worker" in the . After considering the relevant decisions cited and after distinguishing the cases arising under the Industrial Disputes Act, the learned Judge proceeded to state thus: "An examination of these decision confirms what one was inclined to suspect at the outset, viz., that "employed" is a word with a varying content of meaning and that it signifies different things in different places . . . On the other hand, when we say that X is employed by Y we ordinarily imply that Y remunerates X for his services and that he has a certain measure of control over his time and skill and labour. But the degree and extent of conrlto may be nominal or extensive . . . . (1) I.L.R. , 1009, 1010. 271 In between lie infinite grades of control and supervision. But a certain amount of supervision or control is necessarily implied in the connotation of the word `employed '. " Having said that, the learned Judge graphically describes the relationship between the parties thus: "The worker can come any day he likes, work as long as he likes or as short as he likes and go away. He may work fact or he may work slow. The petitioner cannot tell him that he should work on towels and not on bed sheets or vice versa. . . . And, more important of all the petitioner cannot prevent anybody from working for a competing manufacturer. Come when you like, go when you like, work when you like, stop when you like, work as fast as you like, work as slow as you like, work on what you like or not at all, that the position of the workers vis a vis the petitioner. Such persons cannot, in my opinion, be said to be 'employed ' by the petitioner within the meaning of clause (1) of section 2 of the . " It is not necessary to express our opinion whether the conclusion of the learned Judge on the facts of that case is correct or not. But the principle accepted by him, namely, that a certain amount of supervision or control is necessarily implied in the connotation of the word "employed", has been accepted by this Court in earlier decisions and this decision is only an application of that principle to a different set of facts. The present case falls to be decided on its peculiar facts. As we have pointed out, though there is some laxity in the matter of attendance, it cannot be said that the appellant has no right of supervision or control over the labourers working in the factory or does not supervise to the extent required having regard to the nature of the 272 work done in the factory. All the necessary 'ingredients of the word "employed" are found in the case. The appellant engages the labourers, he entrusts them with work of rolling bidis in accordance with the sample, insists upon their working in the factory, maintains registers giving the particulars of the labours absent, amount of tobacco supplied and the number of bidis rolled by each one of them, empowers the gumasta and supervisor, who regularly attends the factory, to supervise the supply of tobacco and leaves and the receipt of the bidis rolled. The nature and pattern of bidis to be rolled is obviously well understood, for it in implicit in requirement that the rolled in bidis shall accord with the sample. The rejection of bidis found not in accord with the sample is a clear indication of the right of the employer to dictate the manner in which the labourers shall manufacture the bidis. Supposing a worker uses more quantity of tobacco than a bidis is, expected to contain, it cannot be suggested that the supervisor cannot tell him that he shall not do to. If he spoils the leaves, which he in not expected to do, it cannot be said that the labourer cannot be pulled up in the direction. So too, the supervisor can certainly compel the labourers to work in a specified portion of the factory or direct them to keep order a rid discipline in the course of the discharge of their duties. The fact that they cannot take the tobacco outside the factory without the leave of the management shows that they are subject to the supervision of the management. The circumstance that they cannot absent them selves for more than 10 days without the permission of the appellant also is a pointer in that direction. That a labourer is not compelled to work throughout the working hours is not of much relevance, because, for all practical purpose, a labourer will not do so since his wage depends upon the bidis he rolls, and, as he cannot roll them outside the factory, necessarily 273 he will have to do so in the factory. If he absents himself, it is only at his own risk. For all the aforesaid reasons I hold that all the ingredients of the word " 'employed", as laid down by this Court are present in this case, and therefore the labourers are workers within the meaning of section 2(1) of the Act. The next contention of learned counsel for the appellant was that even if the labourers in the factory were workers within the meaning of the Act, section 79 thereof would not apply to them and, therefore, there could not have been any contravention of that section. The material part of section 79 of the Act reads: "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 (1) if an adult, one day for every twenty days of work performed by him during the previous calendar year;. ". Section 80 says, (1) "For the leave allowed to him under section 79,a worker shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles " The argument is that SS. 79 and 80 have to be read together and that 8. 79 cannot be applied to a worker to whom section 80 does not apply. Section 80, the argument proceeds, entitles a worker for 274 leave allowed to him under section 79 to be paid at a rate equal to the daily average of his total full time earnings for the days for which he worked during the month immediately preceding his leave and that as the workers in question had the option to work for the full day or part of the day, the words "full time earnings" would not apply to them. This argument, though at first blush appears to be plausible, on a deeper scrutiny reveals that it is unsound. The following words stand out in section 80(1) full time earning and (ii) days. "Day" has been defined in section 2(e) to mean '"a period of twenty four hours beginning at midnight". It cannot be suggested, and it is not suggested, that " 'full time earnings" for a day means earnings made during all the twenty four hours. Such a contention cannot be raised for the reason that the provision of the restrict the number of hours of work during the day of twenty four hours. Under section 51 of the Act, '"No adult worker shall be required or allowed to work in a factory for more than forty eight hours in one week", and under a 54, "Subject to the provisions of section 51, no adult worker shall be required or allowed to work in a factory for more than nine hours in any day". A combined reading of these two sections indicates that subject to the maximum period of working hours fixed for a week, no worker shall be allowed to work for more than a hours a day. For the purpose of calculation of wages during the leave period under section 80, the full time earnings for a day can be taken to mean the amount earned be a worker for the daily hours of work field for a factory. In the instant case it is admitted that the working hour for the factory are filed and the workers are entitled to work throughout the working hours, though they can leave the factory during those hours if they choose to do so. But they cannot be prevented from working for all the hours fixed for the factory and they are entitled 275 to be paid their wages on the basis of the number of bidis rolled by them. The wages earned by them during the working hours of the factory would be their full time earnings for the day. If so, there cannot be any difficulty for the management to ascertain the rate under B. 80 of the Act for the payment of wages during the leave period, for under that section the management would have to pay at a rate equal to the daily average of their total full time earnings for the days they worked. The factory registers would show the total full time earnings of each worker for the days during the month immediately preceding his leave. The average shall be taken of the earnings of those days and the daily average of those earnings would be the criterion for fixing the wages during the leave period. I cannot, therefore, say that section 79 of the Act by its impact on section 80 thereof makes it inapplicable to a worker of the category with which we are now concerned. This argument, therefore, is rejected. No other question was raised before us. In the result, the appeal fails and is dismissed. By Court. In accordance with the opinion of the majority the appeal is allowed, the order of the Court below set aside and the appellant acquitted. Fine, if paid, will be refunded. Appeal allowed.

The appellant was the owner of a factory manufacturing bidis and one P along with other labourers used to roll bidis in the factory with tobacco and leaves supplied to him by the factory. The following were established facts: (1) There was no contract of service between the appellant and P.(2) He was not bound to and the factory for rolling biding for any fixed hours or period; he was free to go to the factory at any time during working hours and leave the factory at any time he liked. (3) He could be absent from the work any day he liked and for ten days without even informing the appellant. He had to take the permission of the appellant if he was to be absent for more than I O days. (4) He was not bound to roll the bidies at the factory. He could do so at home with the permission of the appellant for taking home the tobacco supplied to him. (5) There was no actual supervision of the work done by him in the factory and at the close of the day rolled bidis were delivered to the appellant. Bidis not up to the standard were rejected. (6) He was paid at fixed rates on the quantity of bidis turned out and there was no stipulating for turning out any minimum quantity of bidis. The Inspector of Factories found that he was not paid the wages for 4 days ' leave which he had earned after having worked for a certain period. The appellant was fined Rs. 101 for contravening the provisions of section 79(11) of the . The questions which arose for decision were whether P was a worker within the meaning of that expression under the Act and whether he was entitled to any leave wages under section 80 of the Act. ^ Held (per Kapur and Raghubar Dayal, JJ.), that the decision of this Court in Birdhi Chand 's Case was distinguishable on facts and could not be applicable to the facts of the present case. The appellant exercised no control and supervision over P. He was not a worker as the three criteria and conditions laid down by this Court in Chintaman Rao 's 250 case for constituting him as such were not fulfilled in the present case. Biardhi Chand Sharma vs The First Civil Judge, Nagpur ; , distinguished. Chintaman Rao vs The State of Madhya Pradesh, ; , applied. Whether the appellant contravened the provisions of sub .(1) of section 79 depended on the proper construction of sections 79 and 80 of the Act. With the terms of the work as they were in the present case there could be no basis for calculating the daily average of the worker 's "total full time earnings" which means the earnings he earns in a day by working full time on that day, the full time to be in accordance with the period of time given in the notice displayed in the factory for a particular day and. therefore the wages to be paid for the leave period could not be calculated nor the number of days for which leave with wages could be allowed be calculated in such a case. The conviction of the appellant under section 92 read with section 79(1) of the Act was wrong. Per Subba Rao, J., dissenting, The question raised in the appeal was directly covered by the judgment of this Court in Birdhi, Chand Sharma case. It could not be said that the appellant had no right of supervision or control over the labourers ill the factory or did not supervise to the extent required having regard to the nature of the work done in the factory. Under section 2(1) of the Act "worker" meant a person employed, directly through any agency whether for wages or not in any manufacturing process. All the ingredients of the word "employed" as laid down by this court were present in this case and therefore the labourers were workers within the meaning of section 2(1) of the Act. Birdhi Chand Sharma vs First Civil Judge, Nagpur. ; , Chaintaman Rao vs State of M.P.[1958] section C. R. 1340, Dharangadhara Chemical Works vs State of Saurashtra, ; , State of Kerala vs V. M. Patel, and palaiappa vs Court of Additional First Class Magistrate, Kulitalai I. L. R. , considered. For the purpose of calculation of wages during the leave period under section 80, the full time earnings for a day could be taken to mean the amount earned by a worker for the daily hours of work fixed for a factory. In the instant case the workers were entitled to work throughout the fixed working hours of the factors though they could leave the factory at any time during those hours and hey 251 were entitled to be paid their wages on the basis of the number of the bidis rolled by them. The wages earned by them during the working hours of the factory would be no their full time earning for the day. There could, therefore, be no difficulty in ascertaining the rate under section 80 of their wages during, the leave period, for under that section the workers would have to be paid at a rate equal to the daily average of their total full time earnings for the days they worked.

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.

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.

Each of these appeals by special leave was directed against the award made by the Labour Court. The appellant in Civil Appeal No. 5415 of 1985, a foreman in the Mechanical Construction Division under the Irrigation Department, had filed an application under Section 33C 2 of the ( 'the ') before the Labour Court for the recovery of arrears of annual increments. The appellant in Civil Appeal No. 2168 of 1987 was a T. Mate in the P.W.D. Drainage Division. When his services were terminated without complying with the requirements of the law, he challenged the termination before the Labour Court. The appellant in the remaining appeal was an operator in the Mechanical Division, under the Irrigation Department of Haryana State. His services were terminated and thereupon he approached the Labour Court challenging the order of termination. In each of these cases, challenge was advanced by the Governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an 'industry ' and the did not apply. The Labour Court upheld the objection and declined relief to the appellants. Allowing the appeals with observations, the Court, ^ HELD: The common question in these appeals was whether the Irrigation Department was an 'industry '. The definition of 'industry ' is given in Section 2(j) of the . By Section 2(c) of the Amending (46 of 1982) this definition had been amended but the amendment has not 617 yet been brought into force. Since the amended statutory definition was not yet in force, the parent definition and the judicial pronouncements thereon had to be referred to for finding the law. The field is covered by pronouncements of this Court and is not necessary to go beyond the precedents such as decisions in D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay and Ors. vs The Hospital Mazdoor Sabha & Ors ; ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; and the decision of a seven Judge Bench in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; [621F G] In case the Irrigation Department was accepted to be an "industry", there was no dispute that each of the appellants would be a 'workman ' and each of the claims would constitute an "industrial dispute" as defined in Section 2(s) and (k) of the , respectively . [621G] Judicial notice could be taken of the position that Haryana and Punjab originally constituted one State and Haryana became separate from 1966. The Irrigation Department of the erstwhile Punjab State was discharging the State 's obligations created under the . The Administration Report of the year 1981 82 of the Public Works Department, Irrigation Branch, which really deals with the Irrigation Department, was produced before the Court. [634B C] Counsel for the appellants placed before the Court some cases of different High Courts in support of his stand that the Irrigation Department should be considered as an industry, i.e. Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharma & Ors. vs State of Bihar & Ors. , [1983] Bihar L.J.R. 207 and Chief Engineer, Irrigations Orissa vs Harihar Patra & Anr., [638E F] On the tests, as already laid down in the judgments, the Court did not think the facts found in this case could take the Irrigation Department outside the purview of the definition of 'Industry '. The main functions of the Irrigation Department where subjected to the Dominant Nature test evolved by Krishna Iyer J. in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; , decided by a seven Judges Bench, clearly come within the ambit of industry. 618 Perhaps keeping in view the observations of the learned Judges of the seven Judges Bench, the definition of industry as occurring in section 2(j) of the was amended by 46 of 1982. However, the Court could not gather as to why even six years after the amendment to the definition of industry in section 2(j) of the came on the statute book, the same had not been brought into force. The court on more than one occasion had indicated that the position should be clarified by an appropriate amendment, and, when keeping in view the opinion of this Court, the law was sought to be amended, it was appropriate that the same should be brought into force as such or with such further alterations as might be considered necessary and the legislative view of the matter, made known and the confusion in the field, cleared up. Bare Acts and Commentaries on the had brought in the new definition, deleting the old one with a note that the new provision had yet to come into force. This situation had further added to the confusion. [639F H; 640A B] The appeals succeeded. It was made clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation. [640B C] D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay & Ors. vs The Hospital Mazdoor Sabha & Ors., ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors. , ; ; om Prakash vs M/s Executive Engineer, SYL, Kurukshetra & Ors. [1984] Current L.J. 349; State of Punjab vs Kuldip Singh & Anr., ; Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharrna & Ors. vs State of Bihar & Ors. , [1983] Bihar L.J.R. 207 and Chief Engineer, lrrigation, Orissa vs Harihar Patra & Anr., , referred to.

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 three respondents, who were the General Manager, the Assistant Manager and the Secretary of the Laxmi Devi Sugar Mills Ltd., were charged under sections 12, 13 and 26 of the United Provinces Shop and Commercial Establishment Act, 1947, for contravening the provisions of the Act relating to holidays, leave and maintenance of certain registers regarding a class of field workers employed by the company to guide, supervise and control growth and supply of sugar cane for use in the factory. It was contended on their behalf that those employees were workers within the meaning of the and the United Provinces Shop and Establishment Act did not apply to them. The Judicial Magistrate rejected that contention and convicted the respondents under section 26 of the Act and sentenced them to pay a fine of Rs. 30 each. On a reference by the Sessions judge recommending that the said convictions and sentences may be set aside, the High Court acquitted the respondents. The State Government appealed to this Court by Special Leave. Held, that the order of acquittal passed by the High Court was erroneous. The provisions of the were intended to benefit only workers employed in a factory and since field workers guiding, supervising and controlling growth and supply of sugar cane for use in the factory were not employed in the factory, the did not apply to them and they fell within the definition of " Commercial Establishment " under the United Provinces Shop and Commercial Establishment Act, 1947.

On 8th December 1956, the appellant served on the respondent three months ' notice in writing under section 14(1) (b) of the Bombay Tenancy and Agricultural Lands Act, 1948, terminating the tenancy on the ground of default in payment of rent. On 24th June 1957 the appellant filed an application under section 29(2) for possession. The Tahsildar allowed he application and the order was confirmed on appeal. But in revision, the Revenue Tribunal set aside the order on the ground, that the application was barred by limitation, because, it was filed more than two years, after 20th May 1955, which was the date of default. A petition ay the appellant under article 227, was rejected by the High Court. In the appeal to the Supreme Court, on the question whether the application was filed within the two yea& period of limitation prescribed by section 29 (2). HELD : Limitation for the application began to run from the date of the termination of the tenancy and not from the antecedent date of default in payment of rent and so, the application, filed within two years of the termination of the tenancy was not barred by limitation. 220 G] The legislature could not have intended that limitation would commence to run before the right to apply under section 29(2) accrues. The right to apply accrues to the landlord when the tenancy is terminated by notice under section 14(1)(b). But in spite of the termination of the tenancy the landlord has no right to obtain possession without an order under section 29(2). On the termination of the tenancy, the right to obtain possession, though in reality not accrued to the landlord, is, by a legal fiction, deemed to have accrued to him. Consequently, the date of termination of the tenancy is also the date when the right to obtain possession is deemed to have accrued to the landlord. Since the limitation for, the application under section 29(2) commences to run from the date when the right to obtain possession is deemed to have accrued to the landlord, it would follow that limitation begins to run from the date when the tenancy is terminated by the notice under section 14(1) (b). [218 A B, C D, F G] The history of the legislation also shows that both before and after the Amendment Act, 1951 which provided the two years ' period of limitation the date of the termination of the tenancy is the starting point of limitation. [218 H] Ramachandra Anant vs Janardan, approved. Chimanbai Rama vs Ganpat Jagannath, I.L.R. [1958] Dom. 917 (F.B.) overruled.

In May, 1959, the appellant was sent to Ambala Jail as an undertrial prisoner. On account of certain jail offences alleged to have been committed by him the Superintendent of Jail segregated him from other prisoners and kept him in a separate cell. He was convicted in June, 1960. Though he was 296 not alleged to be guilty of any jail offence or indiscipline after this date he was still confined in a separate cell without being allowed to communicate with other prisoners; he was only allowed to come out in the compound attached to the cell for one hour in the morning and for one hour in the evening. In December, 1960, the Governor ordered that the appellant be treated as a B" class prisoner. Even after this he was still kept in a separate cell with this difference that he locked up only at night and was allowed to move in the compound attached to the cell during the day. But he was still not allowed to communicate with others. The Prisons Act provided for the separation of prisoners and s.28 thereof permitted convicted criminal prisoners to be confined in cells either in association or individually. Paragraph 571 of the Punjab Jail Manual provided that so far as possible all convicts shall be kept separate both by day and by night. Paragraph 575 provided that a convict who could not be confined in a cell by day by reason that he was required for some jail service shall be confined in a cell by night. The appellant contended that his confinement was under para 575, that para 575 offended article 14 of the Constitution and that the Superintendent of Jail acted mala fide and discriminated against him by keeping him in solitary confinement. ^ Held, that para 575 of the Punjab Jail Manual did not offend article 14 of the Constitution. This paragraph was a part of an integrated scheme for the maintenance of discipline of prisoners by providing for their separation. The classification was made on the basis of sex and the nature of the prisoners and depended on the availability of cells; is had a reasonable relation to the object sought to be achieved. The power to separate was entrusted to the highest officer in the jail who was ordinarily expected to act reasonably, objectively and without bias. Held, further (per Sinha, C. J., Subba Rao, Shah and Mudholkar, JJ.) that the confinement of the appellant in a separate cell in the manner it was being done was illegal. The separation of the appellant so as to seclude him from communicating with or from the sight of other prisoners certainly amounted to cellular confinement if not to solitary confinement. This could only be done as a measure of punishment, and even then the prisoner was entitled to have one hour 's exercise every day and to have his meals in association with one or more prisoners. The appellant was discriminated from other prisoners and, under the colour of the rules for separation, was illegally confined in a manner of authorised by law. Per Dayal,J. There was no discrimination or illegality in keeping the petitioner in a separate cell. The mere fact 297 that a person was kept in a separate cell did not make his confinement solitary, cellular or separate. Paragraph 571 of the Jail Manual provided that subject to cell accommodation and requirement of labour all convicts be kept separate both by day and by night. Paragraph 575 provided an exception that where the convict could not be kept separate by day he could be kept separate by night. The entire scheme of the Prisons Act and the rules was that ordinarily a prisoner was to be kept separate and that only in cases of limitation of providing separate cells were prisoners to be kept together. There was no provision that a prisoner kept in a cell was to be specially. allowed to associate or mix with other prisoners.

Civil Appeal No. 34 of 1954. Appeal from the judgment and decree dated July 2, 1951, of the Punjab High Court in Regular First Appeal No. 269 of 1945. N. section Bindra, and Harbans Singh, for the appellant. Gopal Singh, for the respondents. November 3. The Judgment of the Court was delivered by WANCHOO, J. The suit out of which the present appeal arises has had a chequered history. It was filed as far back as June 1943, the plaintiff being section Balwant Singh (hereinafter referred to as the respondent). The main defendants were Kesar Singh and Jaswant Singh, of whom Kesar Singh will be referred to as the appellant hereinafter. The suit was with respect to a house known as bunga Maharaja Sher Singh which is situate outside the tank around Sri Harmandir Saheb (hereinafter referred to as the Golden Temple) in Amritsar. The case of the respondent was that he and his uncle who was made a defendant to the suit were managers of this bunga which was wakf property and that they and their ancestors had been in possession of it throughout. There were proceedings before the Sikh Gurdwaras Tribunal established under the Sikh Gurdwaras Act, No. VIII of 1925, (hereinafter referred to as the Act) in 1933 with respect to this bunga. The proceedings arose because a claim was put forward that the bunga was the property of the Golden Temple. In those proceedings the appellant and the other defendant claimed the bunga. The respondent also made a 327 claim to the bunga. The proceedings were all consolidated and it was decided that the bunga was not the property of the Golden Temple; the claims of the appellant and the other defendant were also dismissed and the Tribunal held that the respondent and his uncle had the right to manage and supervise the bunga and were its managers. There were appeals to the High court from that decision by the appellant and the other defendant which were dismissed with the result that the status of the respondent and his uncle as determined by the Tribunal was upheld. Thereafter the respondent along with his uncle filed a declaratory suit against the appellant and the other defendant. In that suit they were ordered to file a suit for possession. Consequently the present suit was filed for possession and ejectment of the appellant and the other defendant. The case for ejectment was based on the ground that the appellant and the other defendant were in possession of the bunga without any right. They had been asked to deliver possession to the respondent but refused to do so and continued to treat the bunga, which was wakf property as their personal property. The respondent therefore did not desire to keep the appellant and the other defendant as servitors to look after the bunga as they were claiming rights adverse to the wakf and consequently prayed for their ejectment and delivery of possession of the bunga to him and his uncle. The suit was resisted by the appellant and the other defendant and it was contended that the respondent was not a descendant of Maharaja Sher Singh and was therefore not entitled to the management of the bunga. It was denied that the bunga was wakf property. It was also denied that the respondent and his uncle had ever anything to do with the bunga or were ever in possession of it as 328 managers. It was further alleged that any decision of the tribunal against the appellant had no effect as the tribunal had no jurisdiction to give an decision and in any case the tribunal had given no decision in favour of the respondent and his uncle. Further even if any decision was given in favour of the respondent and his uncle by the tribunal, it was not binding on the appellant as he was no party to those proceedings. It was also claimed that the appellant was the owner of the bunga and in any case even if the bunga was wakf property the appellant was its hereditary manager and was entitled to its possession and could not be ejected by the respondent. Finally, adverse possession was claimed against the respondent who was alleged to have never been in possession within 12 years before the suit was filed and in any case as the respondent 's application under section 25A of the Act had been dismissed in July 1935 he had no right to file a suit for possession thereafter. On these pleadings, eight issues were framed by the trial court, which are as below: 1. Whether the bunga in dispute is a wakf property founded by Maharaja Sher Singh, or any descendant of Maharaja Sher Singh? 2. Is the plaintiff a descendant of Maharaja Sher Singh, and is therefore entitled to get possession of the bunga in dispute as a manager? 3. Is the plaintiff entitled to bring this suit alone? 4. Is the suit within time? 5. Is the suit barred under section 92 Civil Procedure Code? 6. Are the defendants debarred from denying the plaintiff 's title in view of the judgments. 329 of the Lahore High Court and the decision of the Sikh Gurdwaras Tribunal? 7. Has the plaintiff relinquished his right and what is its effect? 8. Relief? In the trial court, the parties agreed that the decision might be given only on issues 3 to 7 and issues Nos. 1 and " might be left undecided. Consequently, the trial court Proceeded to decide issues 3 to 7 only. It held on issue No. 3 that the respondent was entitled to bring the suit alone. On issue No. 4, the trial court held that the suit was barred by time. Issue No. 5 was not pressed and was therefore decided against the appellant. On issue No. 6 the trial court was of the view that it was not necessary to give any finding on it in view of the finding on the question of limitation; even so it held that the defendants were debarred from denying the plaintiff 's title in view of the judgment of the Lahore High Court and the decision of the Tribunal. On issue No. 7 it held that in view of the decision of the tribunal and judgment of the High Court it could not be said that the respondent had relinquished his rights. In the result, the suit was dismissed on the ground of limitation. The respondent then went in appeal to the Punjab High Court. The High Court held on the question of limitation that the suit was not barred by time. It then referred to the decision of the tribunal which had held that the bunga was wakf property founded by Maharaja Sher Singh and held that this decision of the tribunal was binding and conclusive. It was of the view that the question whether the respondent was the descendant of Maharaja Sher Singh and therefore entitled to obtain possession of the bunga which was the subject matter of issue No. 2 should have been decided. It therefore accepted the appeal and set aside the order of the trial court on the question of limitation 330 and remanded the case for the decision of issue No. 2 as framed by the trial court and further framed two additional issues and directed the trial court to decide them also. These additional issues were: 1. Was Jaswant Singh a bungai or a servitor of the plaintiff and defendant No. 3 or their ancetors? 2. Can the plaintiff dispossess the defendants on any of the grounds specified in paragraph 4 of the plaint? On remand the trial court held against the respondent on issue No. 2. Its finding was that it had not been proved that the respondent was the eescendant of Maharaja Sher Singh and therefore entitled to get possession of the bunga in dispute as manager. On the first additional issue, the trial court found that the appellant and the other defendant were servitors or bungais. On the second additional issue it was found that a bungai or servitor if he denies the title of the rightful owner on whose behalf he manages the property forfeits his rights to retain the property or to continue as servitor, and as the appellant and the other defendant had set up a title adverse to the respondent, they would be liable to ejectment on the ground specified in para 4 of the plaint, if the respondent is the rightful owner, whether as trustee or otherwise, of the bunga. On receipt of these findings, the appeal was heard again, this time by another Bench of the High Court, The High Court pointed out that issue No. 6 had not been decided on the earlier occasion and took the view that if issue No. 6 were decided in favour of the respondent it would not be necessary to go into the question whether the respondent was the descendant of Maharaja Sher Singh and therefore entitled to sue for ejectment. The High Court therefore addressed itself to the decision of 331 issue No. 6 and held that in view of the judgment of the Lahore High Court and the decision of the tribunal, the appellant and the other defendant were debarred from denying the respondent 's title as a descendant of Maharaja Sher Singh. In that view of the matter it held that the suit must succeed as the question of limitation had been decided against the appellant and the other defendant and it was not open to go into the question whether the respondent was a descendant of Maharaja Sher Singh and therefore entitled to maintain the suit. The appeal was therefore allowed and the suit was decreed. The appellant then applied for leave to appeal to this Court, which was granted; and that is how the matter has come up before us. The appeal came up for hearing before this Court in 1958. This Court then took the view that it was difficult to decide the appeal satisfactorily without having a finding on the essential issue, namely, whether the plaintiff was a descendant of Maharaja Sher Singh and therefore entitled to get possession of the bunga in dispute as a manager. This Court therefore directed the High Court to record a finding on issue No. 2 and also on the two additional issues framed by the High Court when the remand was made on an earlier occasion. The appeal has now come up for hearing again after the findings of the High Court, which are that the respondent has not been proved to be the descendant of Maharaja Sher Singh and that the appellant and the other defendant were in possession of the bunga as bungais or sewadars and that they were liable to ejectment because they had denied the title of the rightful owner on whose behalf they were managing the property. In effect the High Court confirmed the findings of the trial court on remand. Before we go into the effect of the findings now submitted by the High Court on the direction of this court, it is in our opinion necessary to decide issue No. 6, for if that issue is decided in favour of 332 the respondent it will not be open to the appellant or the other defendant to question that the respondent was the descendant of Maharaja Sher Singh and consequently had the right to maintain the suit. That brings us to the consideration of the effect of the decision of the tribunal and the judgment of the Lahore High Court in appeal therefrom, which in its turn requires a consideration of the provisions of the Act. The Act was passed to provide for the better administration of certain Sikh Gurdwaras and for inquiries into matters and settlement of disputes connected therewith. Section 3 (1) of the Act provides for forwarding by any Sikh or any present office holder of a Gurdwara, specified in Sch. I, of a list of all rights, titles or interests in immovable properties situate in Punjab and in all monetary endowments yielding recurring income or profit received in Punjab which he claims to belong, within his knowledge, to the gurdwara along with the name of the person in possession of any such right, title or interest. On receiving such lists, the State Government has to publish, inter alia, under section 3 (2) a consolidated list in which all rights, titles and interests in such properties as are described in sub s.(1) are included and also to send by registered post a notice of the claim to each of the persons named therein as being in possession of such right, title or interest. Section 5 (1) then provides that any person may forward to the State Government a petition claiming a right, title or interest in any such property included in such consolidated list within a certain time of its publication. Sub section (3) then lays down that if no claim is made under section 5 (1) within the time limited thereby, the State Government shall publish a notification declaring that no such claim has been made with respect to the property notified under section 3 (1). Sections 7 and 10 make similar provisions with respect to gurdwaras which are not included in Sch. I to the Act; but we 333 are not concerned with them in the present appeal for the Golden Temple is included in Sch. I and sections 3 and 5 apply to it. Section 12 then provides for setting up of a tribunal. Section 14 gives power to the State Government to forward to the tribunal all petitions received by it under the provisions of section 5 and other sections and the tribunal has to dispose of such petitions in accordance with the provisions of the Act. Section 15 is important and may be read in extenso "(1) In disposing of any matter in which it has jurisdiction a tribunal may order any dispute arising therefrom to be dealt within one proceeding separately or more such disputes than one to be dealt with in one proceeding, and may, by public advertisement or otherwise, enquire if any person desires to be made a party to any proceeding, and may join in any proceeding any person who it considers ought to be made a party thereto. (2) The tribunal may order any person to submit within a fixed time a statement in writing setting forth the nature of his claim or objection and the grounds thereof. (3) If any person fails to comply with an order passed under the provisions of subsection (2) and duly notified to him, the tribunal may decide the matter in dispute against him, provided that the tribunal may at any time extend the time fixed by its order for the submission of the statement if the person satisfies it that he had sufficient cause for not submitting the statement within the time fixed. (4) A tribunal may pass any such order as to costs of a proceeding as a court might pass under the provisions of the Code of Civil Procedure, 1908. " 334 Then comes section 25A which lays down that when it has been decided under the provisions of the Act that a right, title or interest in immovable property belongs to a notified Sikh Gurdwara, or any person, the Committee of the Gurdwara concerned or the person in whose favour a declaration has been made may, within a period of one year from the date of the decision or the date of the constitution of the Committee, whichever is later, institute a suit before a tribunal claiming to be awarded possession of the right, title or interest in the immovable property in question as against the parties to the previous petition, and the tribunal shall, if satisfied that the claim relates to the right, title or interest in the immovable property which has been held to belong to the Gurdwara, or to the person in whose favour the declaration has been made, pass a decree for possession accordingly. Section 26 then inter alia lays down that when it has been decided, under the provisions of the Act, that a right, title or interest in immovable property belongs to a Notified Sikh Gurdwara or when a right, title or interest in such property has been included in a list published under the provisions of section 5 (3), the Collector of the district in which the property is situated shall, on application being made to him on this behalf and after making such enquiry as he may deem proper into the fact of such decision or inclusion, cause an entry to be made in the records of rights, if any, of the estate in which the property is situated recording the gurdwara as the owner of the right, title or interest in accordance with the provisions of the Punjab Land Revenue Act, 1887. Section 28 then provides for a suit for possession in respect of properties in which no claim has been made under section 5 or section 10. Section 34 (1) gives a right of appeal to the High Court to any party aggrieved by a final order passed by the tribunal determining any matter decided by it under the provisions of the Act. Section 36 and 37 are important and may be read in extenso. 335 "36. No suit shall lie in any court to question anything purporting to be done by the State Government or by a tribunal in exercise of any powers vested in it by or under this Act." "37. Except as provided in this Act no court shall pass any order or grant any decree or execute wholly or partly, any order or decree, if the effect of such order, decree or execution would be inconsistent with any decision of a tribunal, or any order passed on appeal therefrom, under the provisions of this Part. " It is clear therefore from the scheme of the Act that it gives jurisdiction to the tribunal to decide all claims to properties which are claimed to be the properties of a Sikh Gurdwara mentioned in Sch. I to the Act. It is true that where a property in notified in the list under section 3 each person who has a claim to that property has to make a separate claim on his own behalf which is forwarded to the tribunal for decision. It is clear however from the provisions of section 15 that where a tribunal is dealing with a property which is claimed to belong to a Sikh Gurdwara and in respect of which counter claims have been made by other persons, it has jurisdiction to decide to whom that property belongs, whether to the Sikh Gurdwara or to any other person claiming it and for that purpose it can consolidate the proceedings resulting from different claims to the same property so that all dispute with regard to that property can be decided in one consolidated proceeding. Further it has the power under section 15 to inquire by public advertisement or otherwise if any person desires to be made a party to any proceeding and may join in any proceeding any person who it considers ought to be made a party there to. Where therefore a number of claims have been made under section 5 to the same property which is claimed under section 3 336 to belong to a Sikh Gurdwara the tribunal can consolidate all such claims under section 15 and treat all the claims as one proceeding. Where therefore the tribunal consolidates the claims in one proceeding each claimant even though he had made a claim for himself as against the Sikh Gurdwara would be entitled under section 15 to contest the claim not only of the Sikh Gurdwara but of any other person who is making a rival claim to the property as against the Sikh Gurdwara. It is also clear from section 25A that in deciding the claims made under section 5 it is open to the tribunal not only to decide whether the property to which claims have been made belongs to the Gurdwara but also to decide whether it belongs to any of the claimants. It seems therefore that the Act has given full power to the tribunal to decide between the rival claims of the Sikh Gurdwara and other claimants under section 5 and empowers it not only to give a decision as to the rights of the Sikh Gurdwara but also of other claimants. Further there is provision in section 34 of the Act for appeal to the High Court by any party aggrieved by a final order passed by a tribunal in matters decided by it under the provisions of the Act. The words in section 34 (1) are very wide and where claims are consolidated in one proceeding under section 15 and the claim of the Gurdwara and the rival claims of various claimants under section 5 with respect to one property are decided in a consolidated proceeding, it is clear that any party who was party to the consolidated proceeding would be entitled to appeal against the order of the tribunal if it went against it and was in favour of the Sikh Gurdwara or of any other claimant in the consolidated proceeding. Section 36 thereafter bars a suit in any court to question any decision of a tribunal in exercise of any powers vested in it by or under the Act. Section 37 bars any court from passing any order or granting any decree or executing wholly or partly any order or decree, if the effect of such order, or decree or execution would be 337 inconsistent with any decision of a tribunal or any order passed on appeal therefrom under the provisions of the Act. It is on this scheme of the Act that we have to see whether it is open to the appellant and the other defendant to raise the question in the present suit that Balwant Singh was not the descendant of Maharaja Sher Singh and therefore not entitled to maintain the present suit. It is necessary for this purpose to examine the order of the tribunal which was made on June 22, 1933, by a majority of two to one. It is not in dispute that this bunga was notified under section 3 of the Act as property claimed by the Golden Temple. This notification led to four claims with respect to this bunga, namely, by Jaswant Singh who was a party to the suit from which the present appeal has arisen, Darbara Singh and others with whom we are not concerned, Kesar Singh appellant and Balwant Singh respondent. The tribunal consolidated all the four claims under section 15 of the Act and dealt with the matter in one proceeding. The case of Jaswant Singh was that he was in possession of the first storey of the bunga by virtue of his perpetual rights of possession and management in the bunga as bungai. Kesar Singh 's case was that he was in possession of two rooms on the first and second floors of the bunga. He did not define what his right was but denied that the bunga was wakf. Balwant Singh 's case was that the bunga was built by his ancestors for spiritual and wordly benefit of their offspring and was in his possession and that of his ancestors and should be declared to be the property of his family. All these three claimants denied that the Golden Temple had any kind of right in the bunga. In the consolidated proceeding therefore the tribunal had to decide firstly whether the bunga was the property of the Golden Temple. If it decided that, all the claims would necessarily fall 338 through. But if it held that the bunga was not the property of the Golden Temple it had to adjudicate on the respective claims of Jaswant Singh, Kesar Singh and Balwant Singh. By majority, the tribunal held that the bunga was not the property of the Golden Temple. It therefore had to decide to which of the three claimants under section 5, if any, the bunga could be held to belong. It negatived the claims of Kesar Singh and Jaswant Singh. As to Balwant Singh 's claim it held by a majority that Balwant Singh had no personal or private right in the bunga. It further held that the bunga was wakf property dedicated to the pilgrims to the Golden Temple and that the descendants of Maharaja Sher Singh were the managers of the bunga. It is clear from the decision of the majority of the tribunal that the descent of Balwant Singh from Maharaja Sher Singh was not disputed before the tribunal either by the Golden Temple or by any other party. It is clear therefore that the tribunal had jurisdiction to decide the rights to the bunga, as it was one of the properties notified under section 3. It had also the jurisdiction to determine all claims made under section 5 and it consolidated all the claims into one proceeding and decided the rights of the claimants and the Golden Temple in that Proceeding. Now the respondent was claiming in those proceedings that he was the owner of the bunga as the descendant of Maharaja Sher Singh. Neither the Golden Temple nor the other claimants seem to have challenged the claim of the respondent before the tribunal on the ground that he was not a descendant of Maharaja Sher Singh and therefore had no right to maintain the claim. The whole proceeding before the tribunal was conducted on the basis that the respondent was a descendant of Maharaja Sher Singh and the only question was whether as such descendant he had a right to the property. The tribunal nagatived his claim of ownership of the bunga and held that it was wakf property under the management of the descendants or Maharaja Sher Singh. 339 It has been urged that the order of the tribunal does not mention in the operative part that Balwant Singh was entitled to manage the property as the descendant of Maharaja Sher Singh and this shows that though the tribunal was of opinion that the descendants of Maharaja Sher Singh were entitled to manage the bunga it was not accepting Balwant Singh 's claim as such descendant and there was thus no decision in favour of Balwant Singh. We cannot accept this contention, for if Balwant Singh was not a descendant at all of Maharaja Sher Singh and if this point was raised by anybody before the tribunal his claim would have failed on the simple ground that he was nobody to put forward the claim of the descendants of Maharaja Sher Singh. The reason why the tribunal used the words "that the descendants of Maharaja Sher Singh are managers of the bunga" appears to be that at that time the father of Balwant Singh was alive and in the presence of his father Balwant Singh could not claim a right to manage the bunga. Therefore the tribunal used neutral words, namely, "the descendants of Maharaja Sher Singh are managers of the bunga", instead of mentioning Balwant Singh as the manager of the bunga. This is clear from an earlier part of the decision of the tribunal where in dealing with the question of ownership of Balwant Singh, it has remarked that "it is hard to see that Balwant Singh has any personal or private rights over the bunga in the presence of his father Raghbir Singh". Though therefore the respondent was held by the majority of the tribunal, not to have rights in himself because his father was alive the tribunal nevertheless went into the question of the rights of Maharaja Sher Singh 's descendants at the instance of Balwant Singh treating him as a representative of the descendants. This is also clear from the form in which the issue No. 3 was framed, namely, "was the bunga in dispute built by Maharaja Sher Singh, ancestor of Balwant Singh petitioner in 1629, and has been in his possession ? What rights as he been exercising over it ?" It is 340 clear therefore that before the tribunal Balwant Singh 's claim as a descendant of Maharaja Sher Singh was not challenged by the appellant or the other defendant; and the tribunal found in favour of the descendants of Maharja Sher Singh at the instance of Balwant Singh. It was in our opinion open to the appellant and the other defendant to challenge this finding in favour of the descendants of Maharaja Sher Singh at the instance of Balwant Singh under section 34 of the Act as all the claims were consolidated under section 15 and treated as one case relating to one property. But though the appellant and the other defendant went in appeal to the High Court they do not seem to have challenged the finding of the tribunal in favour of the descendants of Maharaja Sher Singh. Further the Golden Temple also went in appeal; but it also did not challenge the decision in favour of the descendants of Maharaja Sher Singh. That decision has therefore become final and according to that decision the descendants of Maharaja Sher Singh are the managers of this bunga. That decision was given at the instance of the respondent whose claim in those proceedings based on his being a descendant of Maharaja Sher Singh was never challenged on the ground that he was not the descendant of Maharaja Sher Singh. The question therefore that arises is whether in view of sections 36 and 37 of the Act it would be open to any court now to give a decision which will go against what has been held in that decision of the Tribunal. If a court cannot give a decision which would go against the decision of the Tribunal in 1933, it would obviously be not open to a party to those proceedings to raise any question which would have the effect of questioning the decision of the Tribunal. Section 36 bars any court from questioning anything done by a Tribunal in exercise of the powers vested in it by or under the Act. Section 37 bars any court from passing any order 341 or granting any decree or executing wholly or partly any order or decree if the effect of such order, decree or execution would be inconsistent with any decision of the tribunal or any order passed on appeal therefrom under the provisions of the Act. Now the decision of the tribunal which became final as it was not appealed from either by the Golden Temple or by the appellant or the other defendant was that the bunga was wakf property under the management of the descendants of Maharaja Sher Singh and this decision was given at the instance of the respondent who claimed in those proceedings to be a descendant of Maharaja Sher Singh and this claim of his to be a descendant of Maharaja Sher Singh was never disputed. If therefore the Court now holds at the instance of the appellant or the other defendant that the respondent is not the descendant of Maharaja Sher Singh it will be questioning the decision of the tribunal and passing an order or granting a decree which would be inconsistent with the decision of the tribunal. Section 36 and 37 bar any such order or decree by the court and therefore the appellant and the other defendant are naturally debarred from raising point the decision of which is barred under sections 36 and 37 of the Act. We are therefore of opinion that the view taken by the High Court in its judgment after remand on issue No. 6 is correct and it is not open to the appellant to raise the question whether the respondent is a descendant of Maharaja Sher Singh and as such entitled to maintain the present suit. This brings us to the question of limitation, which was decided by the High Court on the earlier occasion when the remand was made. The case of the appellant in that connection is that he was in adverse possession and the respondent had been out of possession for over 12 years before the suit was filed in 1943 and therefore the suit should be dismissed as barred under article 144 as well as article 142 342 of the Limitation Act. The appellant contends that the plaint itself shows that the respondent had been dispossessed more than 12 years before the present suit was filed and therefore the suit must fail on the ground of limitation. We agree with the High Court however that a careful reading of paras. 3 and 4 of the plaint shows that the respondents case was that he and his uncle were managers of the bunga as descendants of Maharaja Sher Singh and that the appellant and the other defendant were in possession as their servants or servitors. But these servants had started denying the title of the respondent and his uncle they do not want to keep them any longer in their service. They therefore filed the suit for ejectment of these servants and for possession of the property. The High Court therefore was right in the view it took that it was a case of permissive possession arising in favour of the appellant and the other defendant. Whatever may be the position about the actual possession, it appears from the decision of the tribunal that the claim of the appellant and other defendant before the tribunal in 1933 was that they were bungais i.e. servitors; and this was also the view of the High Court in the appeal from the decision of the tribunal where the High Court said that "no doubt Kesar Singh, his father and grandfather have been Bungais of the bunga, but there is no reliable evidence of their having set up a title adverse to the institution or that the nature of this bunga is exceptional." Similarly Jaswant Singh also claimed to be a mere bungai before the tribunal by virtue of his father being adopted by Natha Singh who was undoubtedly a bungai. In these circumstances from the decision of the tribunal in favour of the respondent in 1933, it appears that no hostile title adverse to the respondent was ever set up by the appellant and the other defendant before that decision. In consequence it cannot be said that adverse possession over 12 years has been established 343 before June 1, 1943 when the present suit was filed. As originally the possession of the appellant and the other defendant was clearly permissive, there can be no question of the application of article 142 in the present case and the appellant could only succeed if he could prove adverse possession under article 144 for over 12 years. The decision of the High Court on the question of limitation is correct. Lastly, it is urged that the respondent had applied under section 25A to the tribunal but allowed that suit to be dismissed for default and therefore it was not open to him to file the present suit for possession. It is enough to say that though this point was framed in the written statement no issue was framed with respect to it by the trial court. When the matter was raised in the High Court on the first occasion it held that as no issue had been framed and no evidence had been led by the parties as to whether the cause of action was or was not the same and no copy of the plaint in the earlier proceeding had been filed the question whether the present suit was barred by virtue of O.IX. of the Code of Civil Procedure could not be gone into and it must be held that it was not barred under O. IX. In view of what the High Court has said we are of opinion that it is not open to the appellant to raise this point before us when he had failed to get an issue framed on it and no evidence was led in that behalf. As the appellant cannot challenge that the respondent is the descendant of Maharaja Sher Singh the respondent would have a right to maintain the suit. Further as the appellant and the other defendant are servitors and they have undoubtedly set up a title after the decision of the tribunal adverse to the respondents 's right as found by the tribunal, the respondent is entitled to eject the appellant and the other defendant, for servitors cannot claim to remain in possession after they set up an adverse title with respect to the property of 344 which they are servitors. In view of our decision on issue No. 6, it is unnecessary to consider issue No. 2 on which a finding was called for by this Court by its interlocutory judgment in 1958. The appeal therefore fails; there would be no order as to costs. Appeal dismissed.

In 1933 there were proceedings before the Sikh Gurdwaras Tribunal under the Sikh Gurdwaras Act, 1925, for determining whether the bunga in suit was the property of the Golden Temple. In these proceedings K and J claimed to be owners of the bunga and claimed that he was the descendant of Maharaja Sher Singh and as such was entitled to the bunga as a manager. The Tribunal rejected the claims of the Golden Temple and of K and J and held that the bunga was wakf property under the management of the descendants of Maharaja Sher Singh. Subsequently, B brought a civil suit for possession of the bunga by ejectment of K and J on the ground that they being servants or servitors of the wakf had forfeited their right of residence as they were claiming rights adverse to the wakf. K and J resisted the suit mainly on the grounds that was not competent to maintain the suit as he was not a descendant of Maharaja Sher Singh and that they had prescribed title by adverse possession. ^ Held, that sections 36 and 37 of the Act barred K and J from raising the question before the Civil Court whether B was a descendant of Maharaja Sher Singh. The Act had given full powers to the Tribunal to decide, not merely the claim of the Sikh Gurdwara, but also of all the rival claimants before it. Section 36 barred any court from questioning anything done by the Tribunal in exercise of its powers under the Act. Section 37 barred any court from passing any order or decree or executing any order or decree if the effect of doing so was inconsistent with decision of the tribunal. The decision of the Tribunal that the bunga was wakf property and that the descendants of Maharaja Sher Singh were the managers had become final. The claim of B that he was a descendant of Maharaja Sher Singh was never challenged before the Tribunal and its decision was given at the instance of B. Held, further, that the suit was not barred by limitation either under article 142 or article 144 of the Limitation Act. K and 326 J were in possession as servants or servitors and their possession was permissive. From the decision of the Tribunal it was clear that no hostile title was set up by K and J against B at any time before the proceedings of 1933, as such the suit which was filed in 1943 could not be barred by limitation.

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.

V, the father of the appellants had a brother R who died childless leaving behind him his widow, N. After R 's death a series of litigation started between V & N. V filed a suit in 1913 against R. for waste committed by her husband 's estate and was appointed a receiver in that suit. In that suit, he got a decree, V as receiver filed 3 suits on the foot of 3 mortgages in favour of R. In execution of the decrees, 3 valuable properties were purchased. These three properties are the subject matter of the present appeal. V died in 1947 and N in 1951 after executing a will bequeathing in favour of her brother S all her properties. S filed the suit out of which this appeal arises, for pos session of the properties bequeathed to him under the will and for mesne profits. The Sub judge held that the said properties became accretions to the main estate of R and therefore, the plaintiff was entitled only to an account of the income from these properties till the death of V. On appeal, the High Court allowed the appeal in part. Before this Court four points were raised by the appellants : (I) The High Court committed an err or in not hearing the whole appeal but confining the hearing merely to the points on which the finding was called for from the lower court. (2) a portion of the properties which was lost to the estate due to N 's negligence of not paying the land revenue, should be debited against her share in them. (3) the cost incurred by V in the suit and in the execution proceedings should have been taken into account in allocating the properties between the appellants and the respondents and (4) that the widow N, bad treated the properties as accretion to the husband 's estate and therefore, the appellants are entitled to the whole of the property. Allowing the appeal, HELD : (1) When a finding is called for on the basis of certain issues framed by the Appellate Court, the appeal is not disposed of either in whole or in part. Therefore the parties cannot be barred from arguing the whole appeal after the findings are received from the Court of first instance. [597 E) Gopi Nath Shukul vs Sal Narain Shukul, A.I.R. 1923 Allahabad 384, referred to. (2) A Hindu widow is entitled to the full beneficial enjoyment of the estate. So long as she is not guilty of wilful waste, she is answerable to no one. In her lifetime, the reversionary right is a mere possibility or spes successionis. It cannot be predicted who would be the nearest reversioner at the time of her death. It is, there , fore, impossible to contend that for any loss to the estate due to the negligence on the part of the widow, he should be compensated from out of the widow 's separate properties. He is entitled only to the property left on the date of the death of the widow. [599 C; FG] (3) The income received by V and the amounts spent for the suit and the execution proceeding were taken into account at the time of settlement of accounts and it was open to V to realise the excess amount from the estate of R. It is not now open to the appellants to claim that these amounts should be separated from the amount of the decree and should be added to the amount of principal and interest accrued during the lifetime of R. [600 A C] (4) From the evidence, it is clear that the widow did not show any intention to treat the income from, the husband 's estate as an accretion to that estate. [601D] Akkanna vs Venkayya, I.L.R. , referred to. The appeal was sent back to High Court for hearing afresh.

Respondent Nos. 4 to 6 sold their 3/5th share of the ancestral land to the appellant for Rs.14,000, as the ven dors left their village and wanted to settle elsewhere where they purchased 80 kanals of Nehri land. Respondents Nos. 1 to 3 filed a declaratory suit in the court of Sub Judge, Ludhiana seeking a declaration that the sale of the suit land would not affect their reversionary rights after the death of respondents 4 to 6. They pleaded that the land was ancestral and according to the custom governing the parties, it could not be alienated; they also asserted that the land was sold without any consideration and legal necessity. The appellant defendant No. 1, contended that the sale was an act of good management on the part of the alienors, and that the same was not without consideration/the vendors having decided to settle elsewhere. The trial court held that the sale was an act of prudent management and was not without consideration. As regards the custom it held that the parties were governed by custom, whereunder ancestral land could not be alienated except for legal necessity or as an act of good management. The suit was accordingly dismissed and the first appeal preferred against that decision failed. Respondents 1 to 3 thereafter preferred Regular Second Appeal before the High Court. The High Court allowed the appeal, set aside the sale holding that it was neither for any legal necessity nor could it be justified as an act of good management. The suit was accordingly decreed. Hence this appeal by the appellant defendant No. 1 by special leave. 418 Before this Court the appellant contended that the sale was or was not an act of good management having been a question of fact, the trial court as also the first appel late court having arrived at a concurrent finding that it was an act of good management, the High Court should not have interfered with that finding. On the other hand the respondents contended that the sale was not an act of good management. Allowing the appeal, this Court, HELD: The custom is that the ancestral immovable proper ty is ordinarily inalienable specially amongst Jats residing in the Central Districts of Punjab, except for necessity and the other permissible reasons. All alienation as a bona fide act of good management has been treated as one of necessity and hence valid. [233B] In the instant case, the vendee proved the ingredients of good management and the concurrent finding of the Trial Court and the first appellate court was that the impugned sale was an act of good management, and it was essentially a finding of fact. [234F] The High Court was, therefore, in error in setting aside the concurrent finding of fact in the facts and circum stances of the case in Second Appeal. Gujar vs Sham Das, 107 P.R. 1887; Mohammad Chiragh and Ors. vs Fatta & Ors., AIR 1934 Lahore 452; Abdul Rafi Khan vs P. Lakshmi Chand and Ors., AIR 1934 Lahore 998; Dial Singh vs Surain Singh, AIR 1937 Lahore 493; Gujjan Singh and Ors. vs Atma Singh, 1968 PLR Vol. 70 195.

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.

Balwant Singh was a displaced person from West Pakistan. He owned in all 67 standard acres of land distributed in various villages. On 8.11.1960 when proceedings under the Punjab Security of Land Tenures Act, 1930 were initiated, the Special Collector, Punjab, declared 29 standard acres belonging to him as surplus area. While doing so, the trans fers made by him were ignored. He had an option to choose the property which fell to his share. He opted for the entire land belonging to him and situated in village Semani as his permissible area and did not opt for any area in Mohamad Pera, District Ferozepure. The Special Collector reserved for him about 18 standard acres out of his holding in village Dhav Kharial in order to make up his permissible area of 50 standard acres. This part of the order of the Special Collector became final. On 1.11.1966, the came into force and as a result thereof, the original properties that belonged to Balwant Singh fell within the new State of Punjab and the new State of Haryana. In December 1966, Balwant Sigh, his wife and his minor son filed a writ peti tion for the issuance of necessary directions to the States of Punjab and Haryana restraining them from utillsing the surplus area declared by the Special Collector by his order dated 8.11.1960. A learned Single Judge repelled all the following three contentions; (1) that after the States Reorganisation, persons owning lands both in the State of Punjab and Haryana could claim that they should be allowed 692 permissible area in both the States separately; (2) that orders passed regarding surplus area prior to 1st November, 1966, and which area had not been utilised till then, should be deemed to have no effect; and (3) that the proceedings declaring surplus land were bad for want of notice to the transferees. When the matter was taken up in appeal, the Division Bench felt that an important question was involved and therefore referred the appeal to a Full Bench. The Full Bench considered the matter in detail and held that the order declaring the area to be surplus passed before Ist November, 1966, would continue to have effect after that date, even if that order had not been implemented and per sons owning land in the newly created States is not, in law, entitled for a separate allotment under the Act. Hence the appeal by certificate. Dismissing the appeal, the Court, HELD: 1.1 Under the scheme of the Punjab Security of Land Tenure Act, 1930, It is the entire holding of a person on 15th April, 1953, that is to be taken into consideration for determining his surplus area. The Government acquires the right to utilize the surplus area of a person against whom an order of declaration has been made for the resettle ment of tenants ejected or to be ejected. [696D E] 1.2 It is true that alongwith the order declaring the land of an owner as surplus, a corresponding right and duty accrues to the Government to utilise the surplus area for the re settlement of tenants. In other words, the rights on the land declared as surplus get vested in the Government to be distributed amongst the tenants for re settlement. This is an indefeasible right that the Government secures. There fore, the appellant cannot get back the land, if the surplus land had not been utilised. [697A C] 1.3 There is nothing in the Act which imposes any time limit for the government to utilise the land for the purpose mentioned in the Act. Nor is there any provision enabling the owner of the land to claim back the land and to get it restored to him if utilization is not made by the government within a specified period. All that the Act contains by way of exception is what is seen in section 10A(b). If at the time of the commencement of the Act, the land is acquired by the government under the relevant acquisition laws or when it is a case of inheritance, the owner could claim exclusion of such land from his land for fixation of his ceiling under the Act. The second exception itself is further lettered 693 by the provision in section lOB that where succession had opened after the surplus area or any part thereof had been utilised under section 10A(a), the saving specified in favour of an heir by inheritance would not apply in respect of the area so utilised. To put it short, the government had under the Act an unfettered right without time limit to utilise the land for re settlement of tenants subject to the two exceptions. Though it is desirable that re settlement should be done as expeditiously as possible, inaction on the part of the government to resettle the tenants will not clothe the owner with a power for restoration of the land. [697B F] 2.1 The appellant is not entitled to have the best of the two worlds; in other words to have his quota of full 50 acres in Punjab and another 50 acres in Haryana, this is so because Section 88 of the makes the provisions of the Act which was applicable to the old State of Punjab would continue to apply to the new State. In other words, the order passed before 1.11.1966, which became final, declaring the surplus area would be given effect to and the order would be implemented uninflu enced by the division of the State. [697F G; 698B] 2.2 A combined reading of clauses 10 and 11 of the Haryana Adaptation of Laws (States and Concurrent Subjects) Order, 1968 also makes it clear that any order made or anything done or any liability incurred or a right accrued before the 1st November, 1966 would not be affected by the coming into force of the order. [698G H] 2.3 Clauses 10 and 11 show unambiguously that the re spective State Governments would be entitled to give effect to orders passed before 1st November, 1966, declaring the surplus area by utilising them for the re settlement of the tenants, despite the re organisation of the State of Punjab. The orders passed will be respected by both the States. The fact that the land belonging to a particular owner, under fortuitous circumstances, fail in the two newly formed States, will not in any way affect the operation of the orders which had become final prior to 1st November, 1966. To accept the appellant 's contention would create anomalies. Persons against whom proceedings under the Act were taken and became final prior to 1st November, 1966, would be entitled to claim lands in both the States wile those whose petitions are pending on the date the States Re organisation Act came into force would be in a disadvantageous position. This is not the object of the Act. Nor the scheme behind it. The States re organisation was a historical accident. The land owners cannot take advantage of this accident, to the detriment of ejected tenants or tenants in need of re set tlement. [698H; 699A C] 694

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 appellant 's great grandfather was granted a Sanad in respect of 2 rooms in the Jagannath temple by the Superintendent of temple at the annual rent of Rs. 7/ . The Sanad provided that the grantee would be entitled to enjoy the said 2 rooms from generation to generation and in case a permanent structure was constructed thereon the rent would be enhanced to Rs. 14/ per year. After the death of great grand father of the appellant the grand father and thereafter the father of the appellant continued storing and selling dry 'Mahaprasad ' in the said property and continued to pay Rs. 14/ per year. The respondents who have the management of Jagannath temple at present under the Puri Jagannath Temple (Administration) Act, 1952, called upon the appellants ' father to close and to hand over the possession of the two rooms to the management on the ground that the storage and sale of Mahaprasad in the Bihar Bedha of the temple affected adversely the discipline and dignity of the temple. The appellant 's father was threatened with imposition of a penalty of Rs. 100/ per day in case he did not vacate the premises in question. The appellant 's father, therefore, tiled the suit in the civil court which after his death has been continued by the present appellant for permanent injunction restraining the respondents from interfering with his right of storing and selling dry Mahaprasad in the suit premises. According to the plaintiff the permanent lease was granted to him by the Raja Dibyasingha and that since he was continuing to pay the rent regularly he was entitled to continue in the suit premises from generation to generation. The respondents contested the suit on the ground that it was beyond the competence of Raja of Puri as Manager of the temple to grant a permanent lease and that, therefore, the Sanad was ineffectual, invalid and inoperative, and conferred no rights on the appellant and his ancestors which would bind the present respondents. Secondly, since the act of storing and selling Mahaprasad at the suit premises constitute a breach of order and discipline, the respondents under the above statute had right to ask the appellant to vacate. Thirdly what was granted by the Sanad was licence and not a lease. The trial court dismissed the suit. However, an appeal was allowed. The High Court accepted the second appeal and dismissed the suit. In an appeal by special leave it was contended by the appellants : (1) The suit property did not form part of the temple. (2) The Sanad granted a permanent lease of the suit property and not merely a licence and therefore the appellant had an indefeasible right of storing and selling Mahaprasad. Dismissing the appeal, ^ HELD: (1) Section 2(d) of the Puri Sri Jagannath Temple (Administration Act, 1952, defines temple as including the temple of Lord Jagannath of Puri. Other temples within its premises and all other appurtenant and subordinate shrines, other sacred places and tanks and any additions which may be 102 made there after commencement of the Act. Records of right prepared under said Act also include the suit premises within the meaning of temple. [104 H] (2) It is now well settled by a catena of decisions of the Supreme Court that it is the creation of an interest in immovable property that distinguishes a lease from a licence. The intention of the parties is the real test for ascertaining the character of a document. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises it would conclusively establish that he was a lessee. However, the result of the subsequent cases is that although a person who is let into exclusive possession in prima facie to be considered to be a tenant nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. To ascertain whether a document creates a licence or lease the substance of the document must be preferred to the form (entire English and Indian case Law reviewed). [105 D H, 106 A, D] (3) A careful perusal of the recital in the Sanad, which does not revival the identity of the plot with precision would show that the Sanad did not create any interest in the rooms in question in favour of the grantee. l he Sanad also did not confer the right of exclusive possession of the premises. It is also evident from the right of "Dakhale Khas" of the respondents in the suit property as also from the proved facts that the Sarghara was not kept open by the temple authorities from mid night to 6 a.m. during which interval the plaintiff could in no case occupy it nor could he have access to it. It proved that the employees of the Raja of Puri used to clean the refuse etc., which got accumulated in the suit premises. The Sanad, therefore, created a licence and not a lease. [107 E H] (4) Even if it is assumed that the Sanad created a lease it could not be valid lease since the Mohant or manager of a Hindu temple is prohibited from grantee a permanent lease except far legal necessity or benefit of the estate. Tn the present case no such legal necessity or benefit of estate has been proved. [108 B E]

Appeal No. 93 of 1952. Appeal from the Judgment and Decree dated the 20th January, 1950, of the High Court of Judicature at .Calcutta (Das and Gupta JJ.) in Appeal from Original Decree No. 141 of 1940 arising out of Judgment and Decree dated the 8th May, 1940, of the Court of the Subordinate Judge, 1st Court of Zillah If owrah in Title Suit No. 38 of 1948. N.C. Chatterjee (A. N. Sinha, with him) for the appellant. Panchanan Ghosh (Syama Charan Mitter and A.K. Dutt, with him) for the respondent. January 28. The Judgment of the Court was delivered by DAS J. This is an appeal by the plaintiff ' in an ejectment suit. His case was that defendant No. I Pratul Chandra Ghose was a Ticca tenant of premises Nos. 2 and 3, Watkin 's Lane, Howrah, comprising an area of I Bigha 19 Cottahs of land on a rent of Rs. 78 per annum under the landlords Kumar Sarat Kumar Roy and Bibhuti Bhusan Chatterjee, proform a defendants Nos. 2 and 3, that the plaintiff took a Mourashi Mokarari lease from these landlords on the 23rd September, 1937, and thereby became the immediate landlord of the said defendant and that the teancy was determined by a notice to quit dated the 7th October, 1937. The trial Court, amongst other 932 things, found as a fact that the tenancy of the defendant Pratul Chandra Ghose was permanent, heritable and transferable and was not liable to be determined by notice. The plaintiff preferred an appeal to the High Court but the High Court dismissed that appeal holding, amongst other things, that the finding of the trial Court as to the nature of the tenancy was correct. The plaintiff has now come up on appeal before us after getting a certificate from the High Court that it is a fit case for appeal to this Court. Relying on the decision of the Privy Council in Dhanna Mal vs Moti Sagar(1) Shri N. C. Chatterjee appearing on behalf of the plaintiff appellant contends that the present appeal is not concluded by the concurrent finding of the Courts below that the tenancy was permanent because that question was one of the proper inference in law to be deduced from the facts as found by the Courts below. The learned counsel has, therefore, taken us through. the evidence mostly documentary, as to the nature of the tenancy. The earliest document referred to is Exhibit P/11, being a conveyance executed in 1226 B.S.1819 1820 by Sheikh Manik and another in favour of Mrs. Cynthia Mills Junior. How the vendors had acquired their title is not known. By that deed of sale the vendors, for a money consideration,, conveyed their interest in the lands described as Jamai lands to the purchaser who, on payment of rent of Rs. 480 per kist, was to "go on possessing and enjoying the same with great felicity down to your sons and grandsons etc. , in succession by constructing houses and structures." Mrs. Cynthia Mills died some time before October, 1855, and her son John Henry Mills who had succeeded her sold the premises to one Mrs. Sabina Love by a conveyance Exhibit P/10 dated the 29th October, 1855. It appears from that deed that by that time a tank with masonry steps had been excavated on the lands which were described as a plot of rentpaying garden land. The consideration for the sale (1) (1927) L. R. 54 1. A. 178. 933 was Rs. 1,000. The following provisions of the sale deed are of importance: "From this date being entitled to make gift and sale of the said property, you do bring into your own possession the said lands etc., and on paying annually to the Maliks Zemindars Rs. 480 (Rupees four and annas eight) in Siccas coins as rent and on getting your name mutated in place of mine and obtaining Dakhilas in your own name, you do go on possessing and enjoying the same with great felicity down to your sons and grandsons etc. , in succession. " By a conveyance Exhibit P/9, dated the 10th October, 1856, Mrs. Sabina Love transferred the premises to one Francis Horatio Dobson. The premises were there described as "garden land held under Mourashi Patta" which Patta has since been held to be a spurious document in a subsequent litigation. It appears from this document that Mrs. Cynthia Mills had excavated a tank and constructed a pucca ghat and laid out a garden and that on her death her son and heir John Henry Mills came into possession of the land and that he had sold the premises to Mrs. Sabina Love and that after her purchase Mrs. Sabina Love had enclosed the said lands and had manufactured bricks with the earth of the land she purchased. The consideration for this conveyance was Rs. 1,200. It provided as follows : " From to day you become the owner of the said lands with powers of making gift and sale. On keeping the said lands together with the tank with all interests therein in your possession and under your control, and on paying according to the previous Patta the Mokarari annual rent of Rs. 480 in Sicca coins into the Sherista of the Zemindar and on having the previous name struck off from the landlord 's Sherista and getting your own name recorded therein, you do go on enjoying and possessing the same with great felicity down to your sons, grandsons etc. , in succession . " On 10th Jeshta 1266 B.S. corresponding to 23rd May, 1859, a notice under sections 9 and 10 of Regulation V of 1812 was issued by the then Zemindars Rani 934 Lalanmoni and Raja Purna Chandra Roy. It was ,addressed to " Mrs. Cynthia Mills Junior, Sarbarahkar Mr. Dobson, of Salkhia. " It rail as follows: " This is to inform you that you are in. possession of I Bigha 19 Cottas of lands of different kinds as per the boundaries given below as recorded in the Mal Department in the said village for which according to your own statement you are paying a yearly rental of Rs. 4126. But you have taken no settlement in respect thereof from our estate (sarkar). Now on fixing the annual Jama of the said lands according to the prevailing rate as per Jamabandi at Rs. 137 8 0 a year, fifteen days ' notice is given to you under the provisions of sections 9 and 10 of Regulation V of 1812 and you are hereby informed that within the said period you should appear before, our Zamindary Cutchery and accept a Pottah after submitting a Kabuliyat according to the practice in respect of the land and Jama. In default, after the expiry of the said period action will be taken according to law, and thereafter no plea shall be entertained. " The requisition not having been complied with, the landlords evidently filed a suit being Suit No. 590 of 1859. The pleadings in this suit are not on the record. On 21st September, 1860, the Principal Sudder Amin delivered his judgment, Exhibit 24. It appears from that judgment that the following two issues had been framed: " 1. Whether the plaintiffs have served notice on the other party for assessment of Jama ? 2. Whether a Jama can be assessed in respect of the disputed lands; if so at what rate?" The Principal Sudder Amin overruling the objection of the defendants held that the landlords had full power to assess the rent and accordingly he fixed the rent at Rs. 2 per Cotta which worked out at Rs. 78 in respect of the entire land. There was an appeal from that decision which, however, was dismissed by the judgment Exhibit Z (2) delivered on the 18th March, 1862 . The Mourashi Patta relied upon was rejected as 935 it was not registered and appeared, on examination, to have been newly written and filed. Thereafter the landlord filed a suit for rent of the disputed lands# against Dobson and Exhibits Z and Z (1) are the certified copies of the judgment and order passed thereon. On the 29th May, 1866, Dobson executed two mortgages (Exhibits P/6 and P/7) in favour of De Rozario and John Dominic Freitas for Rs. 4,000 and Rs, 2,000 respectively. The two re conveyances dated 29th February, 1874, and 12th March, 1874, are also on the record. On 6th March, 1874, Dobson sold the premises to Henry Charles Mann by a deed which is Exhibit P/5. The consideration for the sale was Rs. 9,500. It appears from this deed that by that time there were two brick built dwelling houses on the property which came to be numbered as Nos. 2 and 3, Watkin 's Lane. On 11th September, 1883, Henry Charles Mann sold the premises to George Jones for Rs. 10,000: vide Exhibit P/4. In both those sale deeds the transferee is granted a heritable right forever. In the assessment books of the Howrah Municipality (Exhibits 22 series) the interest of George Jones is described as Mourashi. In the landlord 's Sherista the nature of the tenancy is not stated and Dobson continues to be the recorded tenant (Exhibit D series). There was, however, no column. in the rent receipts to indicate the status of the tenant. It appears that on the death of George Jones the estate came into the hands of the Administrator General of Bengal representing the estate of George Jones. In the rent receipts of Dighapatia Raj the rent is said to be "received from Jones Administrator General of Bengal." In May, 1931, the plaintiff and the Administrator General of Bengal entered into an agreement for sale of premises No. 2, Watkin 's Lane, being a portion of the premises in question, for a sum of Rs. 10,001 and Rs. 1,001 was paid by the plaintiff as and by way of earnest money. The landlords having declined to subdivide the ground rent between the two portions of the premises, namely, Nos. 2 and 3, Watkin 's Lane, and a portion of the Premises No. 2, Watkin 's Lane, having fallen down the 936 agreement for sale appears to have fallen through. On the 4th June, 1932, the plaintiff suggested that a lease for 20 years should be granted which was refused by the Administrator General, Bengal. Then there was some negotiation between the plaintiff and the Administrator General of Bengal for the sale of both the premises, Nos. 2 and 3, Watkin 's Lane, to the plaintiff for a sum of Rs. 12,500. The plaintiff on 9th April, 1933, sent a draft deed of sale (Exhibit 15) for the approval of the Administrator General of Bengal describing the premises as a Mokarari Mourashi homestead. On 21st April, 1933, Dighapatia Raj Estate wrote to the Administrator General. of Bengal saying that the tenancy was a Ticca one. On 6th June, 1933, the Administrator General of Bengal declined to approve the draft as drawn. After some further proposal by the plaintiff for a long lease he declined to purchase the property on the ground that the Administrator General of Bengal had not a good marketable title. Nothing having come out of the negotiations between the plaintiff and the Administrator General of Bengal the latter in September, 1936, invited offers for sale of the lands (Exhibit B). The defendant No. I made the highest offer of Rs. 12,251. and this was accepted by the Administrator General in preference to the offer made by the plaintiff for Rs. 11,251. The Administrator General accordingly executed a conveyance in favour of the defendant Pratul Chandra Ghose (Exhibit P. X) who thereupon became the tenant of the premises. Having failed to obtain title to the premises from the Administrator General of Bengal the plaintiff approached the landlords and on 22nd September, 1937, obtained a Mokarari Mourashi Patta in respect of the disputed land on payment of a Selami of Rs. 3,205 and at an annual rent of Rs. 78 only. The defendant Pratul Chandra Ghose filed rent suits against the plaintiff in respect of the underlease held by the latter under the Administrator General of Bengal and obtained rent decrees. The plaintiff, however, on the strength of his new title derived from the superior landlords under the Mourashi Patta served 937 notice on the defendant Pratul Chandra Ghose on the 7th October, 1937, requiring him to vacate the premises on the last day of the month of Chaitra 1944 B. section The defendant Pratul Chandra Ghose, not having vacated the premises, the plaintiff filed the suit out of which the present appeal has arisen. Shri N. C. Chatterjee contends that in view of the decision in the suit of 1859 it was not open to the defendant Pratul Chandra Ghose to contend that his tenancy was a heritable permanent tenancy. This point was neither pleaded nor raised in the trial Court but was put forward for the first time before the High Court. The pleadings of the 1859 suit are not on the record but the substance of ' the written statement appears from the judgment Exhibit 24 passed in that case. The issues framed in that case have already been set out. There was no issue regarding the character of the tenancy, namely, whether it was permanent and heritable or otherwise. The only question there was whether rent could be assessed tinder the Regulation. There is nothing in that Regulation suggesting that rent could be assessed only if the tenancy was a ticca tenancy or that rent could not be assessed if the tenancy was a permanent one. The question of permanency of the tenancy was not, therefore, directly or substantially in issue. We find ourselves in agreement with the High Court that the permanency of tenure does not necessarily imply both fixity of rent and fixity of occupation. The fact of enhancement of rent in 1859 may be a circumstance to be taken into consideration but it does not necessarily militate against the tenancy being a permanent one, as held by the Privy Council in the case of an agricultural tenancy in Shankarrao vs Sambhu Wallad(l). The principle of that decision was applied also to non agricultural tenancies in Jogendra Krishna Banerji vs Sm. Subashini Dassi(2). In Probhas Chandra Mallik vs Debendra Nath Das(3) also the same view was taken. We, therefore, hold that the plea of res judicata cannot be sustained. (1) (2) (3) , 121 938 Shri N. C. Chatterjee then contends, relying on the decisions in Rasmoy Purkatt vs Srinath Moyra (1), Digbijoy Roy vs Shaikh Aya Rahman (2), Satyendra Nath vs Charu Sankar (3 ) and Kamal Kumar Datta vs Nanda Lal Dule ( 4 ) that the tenancy in this case cannot be regarded as a permanent one. The decisions in those cases have to be read in the light of the facts of those particular cases. The mere fact of rent having been received from a certain person may not, as held in Rasamoy Purkatt vs Srinath Moyra (supra) and Digbijoy Roy vs Shaikh Aya Rahman (supra), amount to a recognition of that person as a tenant. Mere possession for generations at a uniform rent or construction of permanent structure by itself may not be conclusive proof of a permanent right as held in Kamal Kumar Dutt vs Nanda Lal Dule (supra) but the cumulative effect of such fact coupled with several other facts may lead to the inference of a permanent tenancy as indicated even in the case of Satyendra Nath vs Charu Sankar (supra) on which Shri N. C. Chatterjee relies. What, then, are the salient facts before us ? It is not known how the earliest known tenant Shaik Manik acquired the tenancy or what the nature of that tenancy was. The tenancy has passed from one person to another by inheritance or by will or by transfers inter vivos. In the deeds of transfer the transferee has been given the right to enjoy the property from generation to generation for ever. A tank has been excavated and a pucca ghat built on the land. Bricks have been manufactured with the earth taken from the land and the premises have been enclosed within pucca walls. Pucca buildings have been erected and mortgages have been executed for substantial amounts. Although there was an enhancement of rent in 1860 that rent has continued to be paid ever since then. Portion of the premises, namely, No. 2, Watkin 's Lane, has been used as a factory by the plaintiffs and on the other portion, namely, No. 3, Watkin 's Lane, residential buildings were erected which indicate that the lease was for residential purposes. As already (1) (2) (3) (4) Cal. 939 indicated there have been many transfers and devolutions and the landlords have accepted rent ' from the transferees or the successors. The names of Mrs. Cynthia Mills and Dobson and, Jones were mutated in the Zamindar 's Sherista. Although in the rent receipts Dobson continued to be shown as the recorded tenant, eventually Jones 's name appears on the rent receipts as tenant. In spite of the increase in land value and the letting value the landlords through whom the plaintiff derives his title did not at any time make may attempt to eject the tenant or to get any further enhancement of rent since 1860. All these circumstances put together are explicable only on the hypothesis of permanency of the tenure and they irresistibly lead to the conclusion, as held by the lower Courts, that the tenancy in question was heritable and a permanent one. The decision of Mukherjea, J., in the case of Probhas Chandra Mallick vs Debendra Nath Das (supra) is definitely in point. In this view of the matter we hold that the Courts below were right in dismissing the plaintiff 's claim for ejectment. ' In the result this appeal must fail and we dismiss it with costs. Appeal dismissed.

Permanency of tenure does not necessarily imply both fixity of rent and fixity of occupation and the fact of enhancement of rent does not necessarily militate against the tenancy being a permanent one. When, therefore, in a previous suit the only question was whether the jama could be increased and the jama was increased: Held, that this decision did not operate as res judicata on the question of permanency of the tenure in a subsequent suit for ejectment. Shankar Rao vs Sambhu Wallad ; Jogendra Krishna Banerji vs Subashini Dassi , Probhas Chandra Mallick vs Debendra Nath Das (1939) 43 C.W.N.828, relied on. Mere possession for generations at a uniform rent, or construction of permanent structures by itself may not be conclusive proof of a permanent right but the cumulative affect of such facts coupled with other facts may lead to the inference of a permanent 931 tenancy Where it was not known how the earliest known tenant acquired the tenancy or what the nature of the tenancy was, the tenancy bad passed from one person to another by inheritance or by will or by transfer inter vivos, in the deeds of transfer the transferee was given the right to enjoy from generation to generation for ever, pucka structures and tanks had been constructed, and though there was an enhancement of rent in 1860, the rent bad not been increased since then: Held, that all these circumstances put together irresistibly led to the conclusion of a permanency of the tenure. Probhas Chandra Mallik vs Debendra Nath Das (1939) 43 O.W.N. 828 referred to.

The land in plots Nos. 6385 and 6386 had been in posses sion of Ram Dayal as mortgagee under Baijnath who was the original tenant. Respondents No. 1 3 are the descendants of Ram Dayal. They made an application under section 9 of U.P. Consolidation of Holdings Act, 1954 before the Consolidation Officer claiming tenancy rights on the basis of the deed dated July 30, 1945, stating that their names had been recorded in Khatauni of 1359 Fasli. They are in cultivatory possession and have become adhivasis and subsequently sir dars. They further contended that the appellants have no right of possession over the land and their names have been wrongly entered in the Khatauni No. 1353 Fasli. The respond ents prayed for entering their names as sirdars. This application was allowed by the Consolidation Offi cer vide order dated July 23, 1967. The Settlement Officer (Consolidation) reversed the order and the Deputy Director of Consolidation dismissed the revision filed by the re spondents. Subsequently the respondents filed a writ petition in the High Court. The High Court allowed the same and quashed the orders of the appellate and the revisional authorities, and maintained the order of the Consolidation Officer in its judgment dated 3rd October, 1972. The appellants filed a special leave on 30th November, 1972 against the judgment of the High Court dated 3rd Octo ber, 1972 under letters patent. It was not maintainable in view of the U.P. Courts (Abolition of Letters Patent Appeal Amendment) Ordinance, 1972 which came into force on 30th June, 1972. Thus Writ Petition finally culminated in favour of the respondents by High Court order dated 3rd October, 1972. 958 The appellants instead of challenging the order of the High Court by way of filing any Special Leave Petition before this Court, initiated fresh proceedings by moving an application on 6th July, 1973 before the Settlement Officer (Consolidation) which was rejected on 30th October, 1974. A revision was filed against the said order before the Deputy Director of Consolidation which was also rejected on 21st July, 1975. Thereafter the appellants moved the High Court again, and the Writ Petition filed by them was dismissed by its order dated 18th September, 1975. Since the subject matter had been finally decided by the High Court judgment of 3rd October, 1972 so to start pro ceedings afresh was not in good faith as none of the author ities of the Settlement or Consolidation could have any right or jurisdiction to set aside the order of the High Court. The second judgment of the High Court dated 18th September, 1975 was challenged in C.A. No. 1003 of 1976 in this Court. Dismissing the appeal, the Court, HELD: Both the appeals had been filed after the expiry of the period of limitation. The appellants had applied for condonation of delay on the ground that they had been prose cuting the prior proceedings in good faith and on legal advice so the period of more than three years be excluded in computing the period of limitation under section 14 ' of the . The Respondents filed counter to the application and opposed the same. [961D E] Special leave was granted by this Court on 2nd Septem ber, 1976 subject to the rights of the respondents to argue the question of limitation and applicability of section 14 of the at the hearing of the appeals. [961F] The appellants as to the question of limitation submit ted that the delay of 1198 days had occurred unwillingly though they had been prosecuting with due diligence before the appellate authorities but there is no proper affidavit either of the appellants or the Counsel in support of the application for condonation of delay. There is also no other material to indicate that the appellants had exercised due diligence in working out their remedies and sought proper advice in the matter. There was no right of appeal against the judgment of the High Court as it quashed the orders of the appellant and the revisional authorities so the proceed ings instituted by the party by restoring to the lower authorities for fresh decision are not legal or valid. Hence the appeals are liable to be dismissed as time barred. [961G H; 962A B] 959 Even on merits, the appellants cannot succeed. Admitted ly the original tenant was Baijnath but was dispossessed in execution decree obtained by the landlord in 1944. Thereaf ter the land was mortgaged in favour of Ram Dayal and the mortgagee obtained the decree against the landlord. The respondents subsequently entered into an agreement setting the claims under the decree and granting patta in favour of the Respondents in deed dated 30th July, 1945. These facts have been accepted by the Consolidation Officer and the deed and title were found to be in favour of the,respondents. The tenancy in favour of Baijnath was subsisting when the deed of 23rd November, 1943 was executed. The creation of a tenancy during the subsistence of the earlier one could not confer any right and even before the deed of 2nd August, 1945 patta was already granted in favour of the respondents. [962D G] Even the contention of the appellants that they have a case under section 43 of the Transfer of Property Act, which embodies the rule of estoppel by deed, is not applicable because the transfer under the deed of 23rd November, 1943 became inoperative because the settlement was invalid on account of the subsisting lease in respect of the Land and the landlord could not super impose a second lease in re spect of the tenanted property, so no interest could be created in favour of the appellants under that document of 2nd August, 1945 and therefore, there is no question of feeding the estoppel. [963E G]

The appellant who was residing at House No. 546 situated at Dhantoli area at Nagpur was evicted from the said prem ises on the ground of bona fide requirement of its landlord. Therefore he became an "evicted person" within the meaning of section 2(2) of the Central Province and Berar Letting of House and Rent Control Order, 1949. Being a Government employee he applied to the House Allotment Officer that he may be allotted House No. 406/1 under clause 24A of the said Control Order simultaneously indicating that he was an "evicted person" also. The premises came to his occupation on the orders passed by the House Allotment Officer in 1960. The appellant retired from service on 1.5.1978. On 10.9.1979 one Vijay Mude, one of the respondents, moved an application before the House Allotment Officer for vacating the appel lant from the premises on the ground that he has retired. The said application under clause 25 of the Rent Control Order was contested by the appellant that it was not ap plicable as he was an "evicted person" under clause 2(2) of the Control Order. Having lust before all courts, the appel lant came by way of special leave. Allowing the appeal, the Court, HELD: 1.1 On the scheme of the different clauses it was only when a person was granted an allotment as a government servant, then and then only can clause 25 be invoked for his eviction. In other cases, the clause 13 will be relevant. The summary procedure of clause 25 could only be available in case of recovery of possession given to a person as a government servant on his retirement. Indeed the provisions are peculiar. Even if a government servant goes on earned leave or is transferred even then he becomes disentitled to remain in possession of the premises in question and would be liable to be evicted by virtue of clause 25 of the said Rent Control Order. Being drastic in nature, therefore, one who seeks allotee 's eviction has to establish that the allotment to the person whose eviction is sought was made in the capacity 403 contemplated under clause 25. Clauses 23, 24A and 25 of the Rent Control Order deal with three independent categories of persons and the summary procedure on proper construction of clause 25 was applicable only where allotment is given to a tenant as a tenant. Clause 25 would not operate, if a Gov ernment servant happened to be an evictee and an allotment is made in that capacity. In the instant case, on a con struction of the various documents and the evidence adduced in this appeal under these proceedings, it is clear that allotment was given to the appellant as an evictee who happened to be at the relevant time a government servant. Therefore, on his retirement from the government service, he did not cease to be an evictee and did not come within the mischief of clause 25 of the said Control Order. [408G 409 A 409H 410B] 1.2 Even if allotment is made to a person who is both an evictee as well as a government servant then if one of the grounds of the order namely, that he was a government serv ant ceases to exist on retirement, the other reason operates i.e. he was an evictee and still continues to be an evictee then the allotment would continue. In this case even if it be held that it cannot be conclusively determined that the order of allotment was made in favour of the appellant only on the ground that the appellant was an evictee but it was made also on the ground that the appellant was a government servant, and after his retirement the other ground namely the allottee still being an evictee remained valid it can be sustained. [410 C, F] State of Maharashtra & Anr. B.K. Takkamore & Ors., ; , applied.

A decree was passed in a money suit against N and his four sons who were members of a Mitakshara Hindu joint family. In execution of that decree the shares of the four sons in the joint family properties, described altogether as 4/5 th share, were put up for auction in December, 1936 and purchased by section N 's interest was not put up for sale as it was the subject matter of insolvency proceedings. The sale to S was duty confirmed. S sold the properties to P. On November 6, 1939 an order was made under 0. 21 rr. 33(2) and 96 of the Code of Civil Procedure for delivery of joint possession of the properties purchase to P along with the members of the joint family already in possession. This order was carried out and possession was delivered to P by publishing that fact by beat of drum as prescribed in the rules. Subsequently P retransferred the properties to section On October 16, 1951 S filed a suit against the then members of the joint family and various alienees asking for a partition of the joint family properties into five equal shares and thereafter for possession of four of such shares by removing the defendants from possession. The trial court decreed the suit but held that S was not entitled to a 4/5th share but only to a 2/3rd share because before the decree a 5th son had been born to N who had not been made a party to the suit or the execution proceedings and whose share had consequently not passed under the auction sale. Some of the defendants filed an appeal to the High Court which allowed the appeal holding that the suit was barred by limitation under article 144 of Schedule 1 to the Limitation Act. S had field a coss objection in the High. Court on the ground that he should have been held entitled to a 4/5th share of the properties which was dismissed by the High Court without discussion of the merits in view of its decision on the question of limitation. S having died the appellants as his successors in interest appealed to this Court under article 133 of the Constitution. The two questions that arose for decision were (1) whether the suit was barred by limitation under article 144 or article 120 and (2) whether S was entitled to a 4/5th share. HELD : (Per Sarkar and Raghubar Dayal, JJ.) (i) (a) 'Me view that the suit was barred under article 144 of the suit presented great difficulties. The article obviously contemplates a suit for possession of property where the defendant might be in possession of it as against the plaintiff. However, the purchaser of a copartner 's undivided interest in joint family property is not entitled to possession of what he has purchased. His only right is to sue for partition of the property and ask for allotment to him of that which an partition might be found to fall to the share of the copartner whose share he has purchased. His right to possession would date from the period when a specific allotment is made in his favour.[632 H] 629 S was therefore not entitled to possession till a partition had been made. As possession of the defendants could tie adverse to him only if he was entitled to possession the difficulty in applying article 144 arose. [633 B] Sidheshwar Mukherjee vs Bhubneshwar Prasad Narain, ; , relied on. Vyapuri vs Sonamma Boi Ammani, Mad. 81, referred to. Mahant Sudarsan Das vs Mahan Ram Kirpal Das, (1949) L.R. 77 I.A 42, distinguished. (b) Even on the assumption that article 144 applied the suit was not barred. In the present case the defendants were not in uninterrupted possession for twelve years as required by the Article. By the delivery of symbolical possession under the order of November 6, 1939, the adverse possession of the defendants was interrupted. Time had therefore to commence to run from that date, and the suit having been brought within twelve years of that date, it was not bared under that article. [633 F G] Sri Radha Krishna Chanderji vs Ram Bahadur, A.I.R. (1917) P.C. 197, relied on. It could not be said that the order of delivery of possession was a nullity though S and his transferee who had purchased an undivided share in copartners property were not entitled in law to any possession at all. In making the order the learned Judge had gone wrong in law but he had acted within his jurisdiction. Such an order has full effect if it is not set aside. [634 A B] Yelumalai Chetti vs Srinivasa Chetti, Mad. 294, distinguished. Mahadev Sakharam Parkar vs janu Namji Hatle, (1912) I.L.R. and fang Bahadur Singh vs Hanwant Singh All. 520, held inapplicable. (ii) Article 120 applies to suits for which no period of limitation is provided elsewhere and prescribes a period of six years commencing from the date when the right to sue accrues. [636 D] The right to sue accrues for the purpose of article 120 when there is an accrual of the right asserted in the suit and an unequivocal threat by the respondent to infringe it. In the present case there was nothing to show that the right was ever challenged in any way by the respondents. It was impossible therefore to hold that the suit was barred under article 120. [636 F] Mst. Rukhmabai vs Lala Laxminarayan, ; and C. Mohammad Yunus vs Syed Unnissa, ; , relied on. Bai Shevantibai vs Janardan R. Warick, A.I.R. 1939 Bom. 322 disapproved in so far as it held that the right to sue accrued from the date of sale. (iii) The cross objection had no merit. What S purchased at the auction sale was the share of the sons of S then bom, in the joint family Properties. At the date of the auction sale that share which was originally 4/5th had been reduced to 2/3rd by the birth of another son to N who had not been made a party either to the suit or the execution proceedings. What was purchased at the execution sale was only the shares of the four elder sons of N and their share at the date of sale was 2/3rd. That 630 being so S was not entitled to get the 1/6th share of the fifth son also allotted to him in the partition suit. [637 B C] Per Ramaswami, J. : (i) The purchaser of a share of joint Hindu family property doe , not acquire any interest in the property he cannot claim to be put. in possession of any definite place of Property. A suit for partition filed by the alienee from a is not, in a technical sense, a suit for partition and such a suit have the necessary effect of breaking up the joint ownership of the members of the family in the joint family in the joint property nor the corporate character of the family. Such being the rights of the alienee his right to sue for partition cannot be said to be a continuing right subject to no period of limitation for enforcing it. [638 F H] Aiyyagari Venkataramayya vs Aivyagari Ramayya, I.L.R. 25 referred to. (ii) Though the alienee of an undivided interest of a Hindu is not entitled to joint possession with other copartners or to separate possession of any part of the family property he is entitled to obtain possession of that part of the family property which might full to the share of his alienor at a partition. [640 B] In the present case the alienee instituted a suit for general the prayer that he may be put in possession of that part of the family property which may be allotted to his share. It is not right to such a suit as a suit for mere partition. The main relief sought by the plaintiff is the relief of possession of that part of the property which may be allotted to the alienor 's share and a relief for partition is only a machinery for working out his right and ancillary to the main relief for possession of the property allotted to the alienor 's share. what the plaintiff seeks is actual delivery of possession. Such a suit falls within the of article 144 of the Limitation Act. [640 B D] Thani vs Dakshinamurthy. I.L.R. , appoved (iii) the possession of the non alieniting members of the family cannot be said to be possession on behalf of the alienee also because the purchaser alienee does not acquire in interest in the property sold and does not become tenant in common with the members of the family tier is he entitled to joint possession with them. In the absence of clear acknowledgement of the right of the alienee or participation in the enjoyment of the family property by the alienee the possession of his alienors share. The fact that the alienee has purchased an undivided interest is not inconsistent with the conception of adverse possession, of that interest. [640 E H] Sudarsan Das vs Ram Kirpat Das, A.I.R. 1950 P.C. 44, reliel on. According to the third column of article 144, time begins to run from the date when the possession of the defendant becomes adverse to the plaintiff. In the present case, therefore, adverb possession bengon to run from the date of purchase of the undivided share i.e. front December 21. [640 E; 641 FF] (iv) However the grant of symbolic possession bv the court in favour of P after notice to defendants 2 to 5 was tantamount in law to delivery of actual possession and therefore efficient to break up the continuity of adverse "scion in favour of the defendants. Even assuming that the grant of symbolic possible ought not to have been made and that, 631 the executing court acted illegally in making such an order, it could not be argued that the executing court had no jurisdiction to make the order or that the act of symbolic possession was a nullity in the eye of law. [642 B] Yelumalai Chetti vs Srinivasa Chetti,I.L.R. , referred Sri Radha Krishna ' Chanderii vs Ram Bahadur, A.I.R. 1917 P.C. 197, relied on. According the suit of the plaintiff was no.t barred by limitation under ' article 144 of the Limitation Act and the view taken by the High Court on this part of the case was not correct. [642 D]

The High Court allowed the writ petition and quashed the order of the Deputy Director of consolidation. The appellants filed appeal in this Court against the order of the High Court. The appeal came up for hearing on May 7, 1987, when it was dismissed for default of appearance, where after an application for restoration was filed on the ground that counsel for the appellants was busy in the High Court at the time of hearing of the appeal. This Court found no justification for recalling its order, dismissing the appeal, but in view of the fact that the appellants would suffer for no fault of theirs, decided to hear the matter, directing that this practice should not be permitted in this Court any further. Dismissing the appeal (on merits), the Court, ^ HELD: There is no merit in the appeal. The High Court was right in holding that the respondents (concerned) were in possession of the land in 1958 when the case started under section 145 of the Cr. P.C. and their date of occupation could not be later than 8.5.1958, so that the six years ' period of limitation for a suit for their eviction under section 209 of the Zamindari Abolition and Land Reforms Act would start running from July 1, 1958 and expire on June 30, 1964 i.e. before the consolidation operations commenced. The appellants contended that there was a break in the possession of the respondents concerned between 8.5.1958 and 29.1.60, but during that period the land was in the custody of the Criminal Court which must be deemed to have been holding possession of the land on behalf of the person eventually found to be entitled to possession. The respondents had matured their title by adverse possession and there could be no warrant for denying them the status of rightful owners. There was no break in the possession of the respondents and they must be held to have been in continuous occupation at least from May, 1958. 1877A F]

% Respondent No. 1, Shri P.K. Mukerjee, filed an application under the U.P. Act No. 3 of 1947 (Temporary Control of Rent and Eviction Act) (OLD Act), seeking permission to file a suit for eviction of his tenant, Harbans Lal Soni, the father of the appellant, D.K. Soni, on the grounds of his bona fide requirement for his personal need. The Rent Control and Eviction officer rejected the application, holding that the respondent 's requirement was not bona fide. A revision was filed by the respondent No. 1 before the Commissioner who allowed the same. The U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (new Act) came into effect on July 15, 1972. On August 2, 1972, the State Government rejected the representation of the tenant (father of the appellant) filed under section 7 of the old Act against the order of the Commissioner aforementioned. The tenant then moved a writ petition in the High Court. A Single Judge of the High Court allowed the petition and set aside the abovesaid orders of the Commissioner and the State Government. Upon an appeal being filed by the respondent (No. 1) against the order of the Single Judge, a Division Bench of the High Court allowed the same, setting aside the order of the Single Judge and upholding the above said orders of the commissioner and the State Government, allowing the eviction of the tenant. In September, 1978, the respondent No. 1 moved an application under section 21, read with section 43(2)(rr) of the new Act. Thereafter, the respondent executed an agreement as vendor to sell the permises in dispute in favour of the vendee, the wife of the appellant, Smt. Madhu Soni daughter in law of the tenant, Harbans Lal. The agreement was dated November 7, 1978, and it mentioned therein that the landlord, respondent No. 1 had filed an application against the tenant above 617 named. The father in law of the vendee for permission to file a suit for eviction of the tenant from the premises in dispute on account of the respondent 's personal need, and that the permission had been granted. The agreement recited that a vacant portion of the land of the disputed premises, would be in the exclusive possession of the vendor and the rest of the property the disputed premises would be sold to the vendee, Smt. Madhu Soni. The agreement stipulated that the vendee or the other members of the family had no right over the portion of the land to be kept with the vendor, and that the appellant had given up his tenancy rights in respect of the same, and also that premises would be built on the said vacant land with the money to be obtained by selling the disputed house to Smt. Madhu Soni. The price of the house was settled at Rs.1,00,000 out of which a sum of Rs.5000 was paid as earnest money, and it was stipulated that the rest of the amount would be paid at the time of registration. It was agreed that the parties would move the authorities for permission to transfer as early as possible and the saledeed would be executed within one month of the grant of permission and notice to the vendee. It was stated that if the vendee failed to get the sale deed executed within the time stipulated, the earnest money of Rs.5000 would be forfeited and the property would stand released in favour of the vendor. It was also stipulated that the need of the vendor for the premises subsisted and the agreement had been entered into to enable the vendor to get money out of the sale to construct a house for himself on the vacant piece of land. On December 12, 1978, the father of the appellant, who was the tenant, died, leaving behind a widow, two sons, including the appellant, and a daughter. On December 22, 1978, the appellant informed the Prescribed Authority before whom the application under section 21(1)(a) of the New Act, read with section 43(2)(rr), was pending, about the death of the tenant, Shri Harbans Lal Soni. On March 23, 1979, the respondent No. 1 filed an application (in Case No. 53 of 1978) for substitution of the legal heirs of the deceased tenant, along with an application under section 5 of the Limitation Act. The Prescribed Authority rejected the application for substitution on grounds of delay. On December 11, 1979, the respondent No. 1 moved a second application under section 21(1)(a), read with section 43(2)(rr) of the new Act (on the ground as in his earlier application), which was registered as Case No. 68 of 1979. On March 12, 1981, the respondent No. 1 executed two separate agreements for sale of the property in dispute, in favour of R.P. Kanodia and P.K. Kanodia, respectively. 618 The Prescribed Authority decided the Case No. 68 of 1979 abovementioned on July 7, 1981, directing the tenant to be evicted from the premises in dispute. The Additional District Judge dismissed the appeal against the order of eviction passed by the Prescribed Authority. On March 11, 1983, the appellant 's wife, Smt. Madhu Soni filed a suit for injunction, restraining the respondent No. 1 from dispossessing her from the premises in dispute on the strength of the registered agreement, asserting that she resided in the premises in part performance of the agreement under section 53A of the Transfer of Property Act. The trial Court dismissed the suit. The High Court was then moved for relief by a writ petition against the orders of the Prescribed Authority for eviction and the order of the Additional District Judge. The writ petition was dismissed, followed by the dismissal of a Review Petition too. Aggrieved thereby the appellant has appealed to this Court by special leave. Dismissing the appeal, the Court, ^ HELD: The questions involved in the appeal are: Firstly, in view of the provisions of section 43(2)(rr), was the High Court right in its decision, in the facts and circumstances of the case, specially the factum of the death of the (original) tenant being alleged, and in view of the fact that the execution of the order for eviction had become final before the new Act came into operation? Secondly, how far do the subsequent events, namely, the agreements by the respondent No. 1 with the wife of one of the sons of the tenant and with the Kanodias to sell the property in dispute, demolish or destroy the case of a bona fide need of the landlord? [622G H; 623A] In substance, the need was there of the landlord for his occupation of his premises as he wanted to reside in his house after his retirement from Government service, and for this purpose he had sought eviction and obtained the order of eviction prior to the coming into operation of the new Act. The object of the landlord was not defeated by the provisions of the New Act. [626G H] Considering the subsequent events, namely, the refusal of permission by the Urban Ceiling Authorities, the escalation of building cost (upto 1987), failure on the part of the vendee to register and execute the document, it is not possible to hold that the subsequent events have so materially altered the position as to defeat the original order for possession passed in favour of the landlord. The subsequent events do not in 619 any way affect the existence of the need of the landlord for possession of premises in question. [627C E] There was no failure on the part of the landlord to take steps for the substitution. Nothing was proved before the Court that the agreements with R.P. Kanodia and P.K. Kanodia were valid today or given effect to in view of the provision of the Land ceiling Act. It was not proved to the satisfaction of the authorities below that any agreement to sell the premises to Kanodias had been given effect to and acted upon and in that view of the matter, the need of the landlord indubitably succeeds, and any allegations made do not merit any revision of the order which had become final. Finality of the judicial decisions is one of the essential ingredients upon which the administration of justice must rest. In that view of the matter, even if the contentions advanced on behalf of the respondents are taken into consideration and a new look is taken because of the subsequent events, which cannot be done in view of the specific provisions in clause (rr) of section 43(2) of the new Act, the appellant has no case. The High Court was right in not interfering with the order of the Prescribed Authority. Finality of the decisions of the authorities under the Act has to be given due reverence and place in the judicial administration. [629A C] The appeal fails. As the appellant had been staying in the premises for quite some time, time till April 30, 1988 granted to him to deliver vacant possession of the house to the landlord, subject to his filing usual undertaking within four weeks. [629E F] Pasupuleti Venkateswarlu vs The motor and general Traders; , ; Pattersion vs State of Alabama, ; at 607; Ramji Dayawala and Sons(P) Ltd. vs Invest Import; , ; Hasmat Rai and Anr. vs Raghunath Prasad; , ; Syed Asadullah Kazmi vs The Addl. District Judge, Allahabad and Ors. , ; ; Sher Singh and Ors. vs The State of Punjab, ; ; Bansilal Sahu vs The Prescribed Authority and Anr, [1980] All L.J. 331; Smt. Sarju Devi vs Prescribed Authority, Kanpur, [1977] All L.J. 251 and Tara Chand Khandelwal vs Prescribed Authority, Agra, [1976] All L.J. 708, referred 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.

The appellant purchased in a public auction a building which was evacuee property. Before the sale certificate was made out in favour of the appellant, the possession of the building was handed over to him. He in turn let out a shop in the said building to the respondent. The appellant filed a suit for eviction in the Civil Court against the respond ent. The Civil Court passed a decree for eviction and negatived the contention of the respondent that the Delhi Rent Control Act, 1958 was applicable and, therefore, the jurisdiction of the Civil Court was barred. The Court relied on section 3 of the Delhi Rent Control Act which provides that nothing in the Act shall apply to any premises belonging to the Government. The decree for eviction was confirmed by the Appellate Court and then by the High Court in Second Appeal. Before the decree could be executed section 3 was amended by adding a proviso with retrospective effect, which provided that where any premises belonging to Government have been lawfully let out by any person, then notwithstanding any judgment, decree or order of any court the provisions of the Act would apply to the tenancy. The Executing Court held that it was not competent to it .to go into the question whether the decree was rendered d nullity on the ground that the jurisdiction of the Civil Court was ousted by the introduction of :the proviso in section 3 with retrospective effect since the decree had become final between the parties. The Appellate Court upheld the said decision. The High Court in Second Appeal reversed the decision of the two courts below and held that the decree was a nullity and could not be executed. Dismissing the appeal this Court, HELD :(1) An executing court cannot go behind the. decree nor can it question its legality or correctness but where a decree sought to be executed is a nullity for lack of inherent jurisdiction in the court passing it, its inva lidity can be set up in an execution proceeding. [64C D] Vide Kiran Singh vs Chaman Paswan and Seth Hiralal Patni vs Sri Kali Nath, ; , followed. (2) Since the proviso was introduced with retrospective effect it must be deemed to be part of section 3Since. the time the Delhi Rent Control Act was enacted. [65 D] East End Dwellings Co. Ltd. vs Finsbury Borough Council [1952] A.C. 132, approved. As a result of the fiction the proviso must be deemed to be part of section 3 from the date of enactment of the Act. The logical and inevitable Consequence of the introduction of the proviso. in section 3 with retrospective effect would be to read the proviso as if it were part of the section at the date when the Act was 'enacted, and the legal fiction created by the retrospective operation must be carried to its logical extent and all the consequences and incidents must be worked out as if the proviso forms part of the section right from the beginning. The phrase "notwithstand ing any judgment; decree or order of any court" in the proviso makes it clear that the legislature intended" that the finality of the judgment,decree etc., should not stand in the way of giving full effect to the= retrospective operation of the proviso in section 3. [66C G] 61

ION: Criminal Appeal No. 194 of 1960. Appeal by special leave from the Judgment and Order dated January 20, 1960, of the Punjab High Court in Criminal Revision No. 1485 of 1959. Porus A. Mehta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants. H. R. Khanna and P. D. Menon, for the respondent. November 13. The Judgment of the Court was delivered by AYYANGAR, J. The three appellants were convicted by the First Class Magistrate of Jullundur of an offence under section 167 (81) of the for "having acquired possession of smuggled gold and for carrying, keeping and concealing the said gold with intent to defraud the Government knowing that the gold had been smuggled into India from a foreign country and that no duty had been paid thereon," and were sentenced to terms of imprisonment. Appeals were filed by the accused to the Sessions Judge, Jullundur but the convictions were upheld though the sentence was reduced in the case of the third appellant. A revision petition preferred therefrom to the High Court of Punjab was dismissed and thereafter the appellants obtained leave from this Court under article 136 of the Constitution and filed the appeal which is now before us. A few facts are necessary to be stated to appreciate the point raised for decision. The City Inspector of Police, Jullundur is stated to have 366 received information that some smugglers were on the point of transporting gold from Amritsar into Jullundur and at about mid night on July 16, 1958, further information that some of these had actually come and were present in the house of Gian Chand the first appellant. A raid party was accordingly orgainsed and the house of the first appellant was cordoned and raided at about 3 A.M. on the early morning of July 17,1958. In the course of the search certain bars of gold were found on the person of some of the inmates of the house and in the house itself, as also a large amount of cash. Thereafter the first appellant, his wife the third appellant and her brother the second appellant were arrested, the gold found was seized and a complaint filed charging the three accused of offences under sections 411 and 414 of the Indian Penal Code. This charge of receiving stolen property preferred against the three appellants was, however, not proceeded with and the Police Inspector made a report to the Court on January 7, 1959, that no case had been made out against them, and the case was thereupon dropped. Meanwhile, the Assistant Collector of Customs contacted the City Police at Jullundur and made an application to the Court of the First Class Magistrate, Jullundur for the delivery of these gold bars to the Customs authorities obviously under section 180 of the to the terms of which we shall refer later, and they were delivered to the Customs authorities on January 7, 1959, this being the date on which the case against the appellants under sections 411 and 414 of the Indian Penal Code was dismissed. Very soon thereafter a notice was issued to the appellants to show cause why the gold in the possession of the Customs authorities should not confiscated under section 167 (8) of the , and after considering the explanations of the appellants the Collector passed an order directing the confiscation of the gold. That order has 367 become final and this appeal is not concerned with the correctness of the order of confiscation of the gold under section 167 (8). During the proceedings before the Customs authorities for confiscation, sanction was accorded to prosecute the appellants for an offence under section 167 (81) which runs in these terms: "167. The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively: Section of this Act to Offences which off Penalties ence has reference. If any person General such person knowingly, and with shall on con intent to defraud the viction before Government of any duty a Magistrate payable thereon, or to be liable to evade any prohibition or imprisonment restriction for the time for any term being in force under or not exceeding by virtue of this Act with two years, or respect thereto acquires to fine, or to possession of, or is in both. any way concerned in carrying, removing, depo siting, harbouring, keep ing or concealing or in any manner dealing with any goods which have been unlawfully removed from a ware house or which are chargeable with a duty which has not been paid or with respect 368 to the importation or exportation of which any prohibition or restriction is for the time being in force as aforesaid; or If any person is in relation to any goods in any way knowingly con cerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods," and it is the correctness of the conviction in the prosecution that followed which is the subject matter of the appeal now before us. It will be seen from the terms of section 167 (81) that there are two distinct matters which have to be established before a person could be held guilty of the offence there set out: (1) that the goods in this case (gold) were smuggled, i.e., imported into the country either without payment of duty or in contravention of any restriction or prohibition imposed as regards the entry of those goods, and (2) that the accused knowing that the goods were of that character did the acts specified in the latter part of the provision. It is clear that in the absence of any valid statutory provision in that behalf the onus of establishing the two ingredients necessary to bring home the offence to an accused is on the prosecution. In regard to the first of the above matters the position stands thus: With a view to conserve the foreign exchange resources of this country, in line with provisions framed for a like object by 369 several other Governments, the Foreign Exchange Regulation Act, 1947, was enacted which came into force on March 25, 1947. Section 8(1) of the Act enacted: "8. (1) The Central Government may, by notification in the Official Gazette, order that, subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign. Explanation. The bringing or sending into any port or place in India of any such article as aforesaid intended to be taken out of India without being removed from the ship of conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into India of that article for the purposes of this section. " On the same day on which the Act came into force a notification was issued under this section reading: "(1) Restrictions on import of gold and silver. In exercise of the powers conferred by sub section 1 of section 8 of the Foreign Exchange Regulation Act, 1947 (Act 7 of 1947) and in supersession of the notification of the Government of India in the late Finance Department No. 12 (11) FI/47, dated the 25th March, 1947, the Central Government is pleased to direct that except with the general or special permission of the Reserve Bank no person shall bring or send into India from any place outside India (a) any gold coin, gold bullion, gold sheets or gold ingot whether refined or not; " 370 Virtually therefore a ban was imposed on the import of gold into the country. This prohibition naturally resulted in the rise of the internal price of gold compared to its external price, i.e., its price in the international markets and this gave a great incentive to smuggling in the commodity. As a result Parliament enacted a provision (section 178 A of the ) reading: "178 A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. shifting the onus of proof in respect of particular commodities seized under the Act in stated circumstances that the goods were not smuggled, on the person from whose possession they were taken. Sub section (2) set out the commodities to which the section applied and gold was specified as one such. The details of the circumstances in which this provision found its place in the statute book as well as its construction have been dealt with in Collector of Customs, Madras vs Nathella Sampathu Chetty and need not here be repeated. Suffice it to say that if the terms of the section were satisfied the gold seized in the present case would be presumed to be smuggled and the burden of proving that they are not, would be on the person from whom they were seized. Without much of a discussion or a consideration of the several provisions the learned First Class Magistrate held that section 178 A of the was applicable to the case and that accordingly the onus was properly on the accused. Before considering his reasoning it is necessary to refer to a few other provisions of the 371 which have a bearing on the point now under discussion. Section 178 of the Act which empowers Customs Officers to effect a seizure of goods suspected by them to be smuggled, enacts: "178. Any thing liable to confiscation under this Act may be seized in any place in India either upon land or water, or within the Indian customs waters by any officer of Customs or other person duly employed for the prevention of smuggling. " Section 180 under the provisions of which the gold seized by the police as a result of their search on July 17, 1958, came into the possession of the Customs authorities, runs in these terms: "180. When any things liable to confiscation under this Act are seized by any Police officer on suspicion that they have been stolen, he may carry them to any police station or Court at which a complaint connected with the stealing or receiving of such things has been made, or an enquiry connected with such stealing or receiving is in progress, and there detain such things until the dismissal of such complaint or the conclusion of such enquiry or of any trial thence resulting. In every such case the Police officer seizing the things shall send written notice of their seizure and detention to the nearest custom house; and immediately after the dismissal of the complaint or the conclusion of the enquiry or trial, he shall cause such things to be conveyed to, and deposited at, the nearest custom house, to be there proceeded against according to law. " The question that now arises is whether the possession obtained by the Customs department by goods being "conveyed to and deposited at the nearest Custom house" within the last words of the second 372 paragraph of section 180 are goods which have been seized under the Act within the opening words of section 178A. In the first place, it would be seen that these three sections which have to be read together draw a distinction between seizure under the Act and a seizure under provisions of other laws. A seizure under the Act is one for which the authority to seize is conferred by the Act and in the context it could be referred to as a seizure under section 178. The seizure from the owner of the property under section 180 is not a seizure under the Act but by a police officer effecting the seizure under other provisions of the law, for instance the Criminal Procedure Code. And that is made clear by appropriate language in the first paragraph of section 180. Learned Counsel for the respondent State has urged that "the conveyance and deposit" in the office of the Customs authority under the second paragraph of section 180 also involves a seizure under the Act and for this purpose relied on the meaning of the word 'seize ' given in Ballantyne 's Law Dictionary where it is equated to "taking a thing into possession". This however might be the meaning in particular contexts when used in the sense of the cognate Latin expression "Seized" while in the context in which it is used in the Act in section 178A it means 'take possession of contrary to the wishes of the owner of the property '. No doubt, in cases where a delivery is effected by an owner of the goods in pursuance of a demand under legal right, whether oral or backed by a warrant, it would certainly be a case of seizure but the idea that it is the unilateral act of the person seizing is the very essence of the concept. There is another matter to which reference should be made which, in our opinion, conclusively establishes that the delivery of the goods to the Customs authorities under the latter part of section 180 is not seizure under the Act within the meaning of section 178A. The last part of sub section (1) of section 178A lays 373 the burden of proving that the goods are not smuggled on "the person from whose possession the goods are taken". Assuredly when the goods are delivered to the Customs authorities by the Magistrate they are not taken from the possession of the persons accused in criminal case so as to throw the burden of proof on them and it would lead to an absurdity to hold that the section contemplated "proof to the contrary" by the Magistrate under whose orders the delivery was effected. For the purpose of deciding the point arising in this case we do not think it necessary to enter into the philosophy or refinements of the law as to the nature of possession. When the goods were seized by the police they ceased to be in the possession of the accused and passed into the possession of the police and when they were with the Magistrate it is unnecessary to consider whether the Magistrate had possession or merely custody of the goods. The suggestion that the goods continued to be, at that stage, in the possession of the accused does not embody a correct appreciation of the law as regards possession. A 'seizure ' under the authority of law does not involve a deprivation of possession and not merely of custody and so when the police officer seized the goods, the accused lost possession which vested in the police. When that possession is transferred, by virtue of the provisions contained in section 180 to the Customs authorities, there is no fresh seizure under the . It would, therefore, follow that, having regard to the circumstances in which the gold came into the possession of the Customs authorities, the terms of section 178A which requires a seizure under the Act were not satisfied and consequently that provision cannot be availed of to throw the burden of proving that the gold was not smuggled, on the accused. Through the learned Magistrate held that section 178A applied to the case, he also entered into an elaborate discussion of the positive evidence in the case, so that it is not quite clear whether he would 374 have reached the same conclusion, viz., that the gold was smuggled, even without reference to the rule as to onus enacted by that section. When the matter was before the learned Sessions Judge he first held that section 178A of the Customs Act did apply to the case before him but proceeded also to deal with the case on an alternative footing that the provisions of section 178A were not applicable to the case and set out the circumstances which led him to that conclusion. The learned Single Judge who heard the revision in the High Court, however, dealt with the case solely on the footing that section 178A was applicable. The constitutional validity of that section was challenged before the High Court and figured prominently in the grounds of appeal to this Court but this point has been decided against the appellants by this Court and is therefore no longer a live issue. If, as we have pointed out earlier, the delivery to the Customs authorities under section 180 is not a seizure under the Act within section 178A it would follow that the judgment of the High Court cannot be upheld for it has proceeded on the sole basis of the provisions of that section being attracted. We have already pointed out that the learned Sessions Judge had upheld the conviction of the appellants by an independent finding that the prosecution had positively established that the goods were smuggled and that the accused had knowingly done the acts referred to in section 167(81) with which they were charged. This part of the case of the prosecution has not been considered by the learned Judge in the High Court and this would have to be done before the revision petition of the appellants could properly be disposed of. The appeal is accordingly allowed and the order of the High Court set aside. The case will be remitted to the High Court for the revision petition of the appellants being disposed of in the light of this judgment and in accordance with law.

On receipt of information that some smugglers were transporting gold from Amritsar into Jullundur, the police made a raid of the house of the first appellant in Jullundur and in the course of the search certain bars of gold were found on the person of some of the inmates of the house and in the house itself. The gold found was seized by the police and the appellants were prosecuted on a charge of receiving stolen property. The case however was not proceeded with and, in the meantime, the customs authorities contacted the police and on the order of the Magistrate on an application under section 180 of the , made by them the gold bars were delivered to them. Proceedings were taken by the Collector of Customs for confiscation of the gold under section 167 (8) of the Act, and the appellants were prosecuted for an offence under section 167 (81) of the Act on the ground that the gold was smuggled and that the appellants, did the acts specified in that section knowing that the gold was of that character. The Magistrate took the view that section 178A of the Act was applicable to the case so that the burden of proving that the gold was not smuggled could be laid on the appellants. The question was whether the possession obtained by the customs authorities under section 180 of the Act was such that the goods could be treated as that seized under the Act within the meaning of section 178A of the Act. ^ Held, that the taking possession of the goods by the customs authorities when they were delivered to them under section 180 of the , did not amount to a seizure under the Act within the meaning of section 178A of the Act. A seizure under the authority of law involved a deprivation of possession and when the police seized the goods the appellants lost possession which vested in the police so 365 that when the possession was transferred to the customs authorities by virtue of the provisions in section 180 there was no fresh seizure under the Act. Accordingly, section 178 was not applicable to the case. The term "seized" in section 178A means "taken possession of contrary to the wishes of the owner of property".

A suit was filed by the appellants in the Court of the Assistant Collector seeking ejectment of the respondent tenant from his lands, under section 77(3) proviso 2(e) of the Punjab Tenancy Act, 1887 on the ground that he had defaulted in the payment of rent, and it was decreed. In execution of the decree, the respondent was ejected from the suit land. No appeal was filed from the said decree but the respondent filed a suit in the Civil Court against the appellants alleging that he was in fact a mortgagee in possession of the suit land and not a tenant and that the decree of ejectment passed by the Revenue Court was without jurisdiction and, therefore, a nullity, and claimed restoration of the possession of the suit land from which he had been wrongly ousted by the Revenue Court. The suit was dismissed by the Subordinate Judge holding that the claim of the respondent to be a mortgagee in possession of the suit land was wrong and that the order of the Revenue Court was perfectly in order and within that court 's jurisdictional competence and that it was of a binding nature on the respondent and was not open to challenge in subsequent proceedings. The appellant asserted that the claim by the respondent in the subsequent suit was barred by the principles of res judicata. The suit was dismissed. In appeal, the Additional District Judge reversed the findings of the trial court and decreed the suit of the respondent. The appellants filed regular second appeals before the High Court. 94 A Single Judge of the High Court was of the view that, in view of the conflicting judgments on the points for determination in the case, the matter required to be referred to a larger bench. The Full Bench, by a majority view, held that the decision of the Revenue Court under section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties would not operate as res judicata and it would be open to challenge in a subsequent suit or in other collateral proceedings between the parties, and remitted the matter back to the Single Judge for disposal in accordance with the above decision. The question for consideration in the appeals by Special Leave before this Court was: as to how far an order of eviction of a person by the Revenue Court under section 77(3) of the Punjab Tenancy Act, 1887 operated as res judicata for a title suit filed by a person claiming to be a mortgagee and not a tenant of the alleged landlord. Dismissing the appeals by special leave, this Court, ^ HELD: 1. The High Court was right in holding that there was no res judicata so far as the second suit based on the assertion of the title of the respondent was concerned. [105C D] 2.1 The overall scheme of the Act is to provide speedy remedies with regard to disputes between the landlords and tenants and also under what circumstances that relationship came to an end. Sections 98 and 99 do not in any way affect the question whether the decision of the Revenue Court under the Revenue Act can operate as res judicata in certain cases. The limits of the jurisdiction would be apparent by the fact that all suits by a landlord to eject a tenant do not encompass suits to decide whether a person was a tenant or not or whether the plaintiff was a landlord or not. [98C; 99 F G] 2.2 ouster of jurisdiction of Civil Courts should not be inferred easily. It must be clearly provided for and established. If the dispute was as to the nature of the relationship of landlord and tenant between the parties, the Revenue Court under the Punjab Tenancy Act had no jurisdiction; when there was admitted position, the relationship of landlord and tenant was accepted, the remedies and rights of the parties should be worked out under the scheme of the Act. [103C D] 2.3 A salutory and simple test to apply in determining whether the previous decision operated as res judicata or on principles analogous thereto was to find out whether the first court could go into the question 95 whether the respondent was a tenant in possession or mortgagee in A possession. In view of the language of section 77 it is clear that it could not and, therefore, there was no res judicata. The subsequent civil suit was. therefore, not barred by res judicata. [105B C] Raj Lakshmi Dasi and others vs Banamali Sen and others, ; Om Prakash Gupta vs Rattan Singh and another, ; Shri Raja Durga Singh of Solan vs Tholu; , ; Magiti Sasamal vs Pandab Bissoi, ; Lal Chand (dead) by Lrs. and others vs Radha Kishan, [1977] 2 SCR 522 and State of Tamil Nadu vs Ramalinga Samigal Madam; , , referred to.

The respondent who was a former Captain of the Indian Army and was employed in the delegation in India of a French Company was prosecuted along with two others for conspiracy and passing on Official Secrets to a foreign agency under ss.3 and 5 of the Official Secrets Act. His application for bail was rejected by the Sessions judge but the High Court allowed bail on the ground inter alia that his case might fall only under s.5 which was bailable and not section 3 which was not bailable. It did not express any opinion whether the case fell under section 5 or section 3 in view of the commitment proceedings which were going on at the time. On appeal by the State. Held, that the High Court should have proceeded to deal with the application for bail on the assumption that the offence was under section 3 and therefore not bailable. It should have then taken into account the various considerations such as, nature and seriousness of the offence, the character of the evidence circumstances peculiar to the accused, possibility of his absconding, tampering with witnesses larger interests of the public. and the State and similar other considerations Which arise When bail is asked for in a non bailable offence. The fact that the applicant for bail might not abscond was not by itself a sufficient ground for granting bail.

The appellants. two brothers and their sons, constituted a firm. They were declared insolvent and the Official Receiver took possession of all their properties including the building in dispute. The appellants filed an objection petition under Sec. 60 of the Code of Civil Procedure read with Sec. 4 of the Provincial Insolvency Act in respect of taking possession of the building in dispute basing this upon cause (ccc) of the, Proviso, subsection (1). The Trial Court held that the entire building consists of two distinct units, the one being distinct business premises as a shop, while the other structure, on the back thereof, exclusively used a residential premises, and, therefore, upheld the objection petition of the appellants in respect of the residential portion and the upper storey thereon and dismissed it in respect of the rest of the building on appeal the Dist. Judge and the Single Judge of the High Court held in favour of the appellants. On a further appeal under the Letters Patent. the Division Bench purporting to follow the Full Bench Decision of that Court in Ude Bhan and Ors. vs Kapoor Chand and Ors. allowed the appeal and set aside the judgments of the learned single Judge and restored the order of the Insolvency Judge. On appeal by certificate, allowing the appeal, HELD : (1) If a portion of the residential house is occupied by the Judgment debtor himself for the. purpose of a shop that portion does not cease to be part of the residential house. In the circumstances and social conditions in this country it would be difficult to justify the conclusion that where a part of a residential house is used in connection with the business or profession of the owner of that house that portion ceases to be part of the residential house. The Punjab High Court has taken the same view at least from the year 1951. The contrary view taken by the impugned judgment does not flow form the full bench judgment or the language of the Section [201D] Ude Bhan & Ors. vs Kapoor Chand & Ors., I.L.R. 1966 (2) Punjab 400, Agha Jafar Ali Khan vs Radha Kishore, A.I.R. 1951 Punjab 433, distinguished. Firm Ganga Ram vs Firm Jia Ram, A.I.R. 1957 Punjab 293 followed. Punjab Mercantile Bank Limited (in liquidation) Jullundur City vs Messers General Typewriter Co. Jullundur City, , referred to. (2) There is no doubt that the building in question was the main residential house of the appellants and it was occupied by them. The facts of the ' case bring it squarely within the scope of the section and the whole building is, therefore, exempt from attachment. [2O3A]

"B" the appellant/Head Constable with a view to help the accused not only to get an acquittal but get back the seized coins approached "J" a constable who was in charge of an investigation of a case under section 411 I.P.C. to substitute the J seized gold coins with different markings offering a bribe of Rs. 1,000/ . J reported the matter to the D.S.P. concerned and as per the directions, the raiding party arrested 'B ' and the other accused in a hotel and also recovered from him the gold coins of different markings. The currency notes of Rs. 1,000/ in the hands of 'J ' offered by 'B ' were also recovered. The Special Judge convicted 'B ' and sentenced him to undergo R.I. for one year which was maintained by the High Court. On appeal by special leave, the appellant contended that since the prosecution case rested principally on the testimony of 'J ', the whole edifice is destroyed on that witness being declared 'hostile '. Rejecting the contention and dismissing the appeal, the Court ^ HELD: The prosecution could have even avoided requesting for permission to cross examine the witness u/s 154 evidence Act. But the fact that the court gave permission to the prosecutor to cross examine him as what is described as "hostile witness", does not completely efface his evidence. The evidence remains admissible in the trial and there is no legal bar to have a conviction upon his testimony if corroborated by other reliable evidence. [923D E]

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.

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 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.

Civil Appeals Nos. 415 418 of 1960. Appeals from the judgments and orders dated September 23, 1958, of the Bombay High Court in Special Civil Applications Nos. 205 and 214 of 1958. 383 A. V. Viswanatha Sastri, section P. Verma, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants (in C. A. No. 415 of 1960). A. section Bodde and Ganapat Rai, for the appellants (in C. A. No. 417 of 1960) and respondents (in C. A. No. 418/60). H. R. Khanna and R. H. Dhebar, for the appellants (in C. As. Nos. 416 and 418 of 1960) and respondent No. 1 (in C. As. Nos. 415 and 417 of 1960). A. G. Ratnaparkhi, for respondent No. 3 (in C. A. No. 415 of 1960). 1961 November 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These four appeals consist of two sets of cross appeals each and they arise from two petitions filed in the High Court of Bombay at Nagpur challenging the validity of the notification dated June 11, 1958, issued by the State of Bombay, now represented by the State of Maharashtra, under section 5 of the , ( 11 of 1948) (hereafter called the Act.) The petitioners in Special Civil Application No. 205 of 1958 are the Bidi, Bidi Leaves and Tobacco Merchants ' Association, Gondia and two others, whereas the petitioners in Special Civil Application No. 214 of 1958 are Haji latif Ghani Kachhi and five others. The impugned notification consists of seven clauses. By the majority decision of the High Court cls. 1 to 5 and the first part of cl. 6 are held to be intra vires, whereas the latter part of cl. 6 and cl. 7 as well as the explanation added to it are held to be ultra vires. The first part of the finding is Challenged by the petitioners in the two writ petitions by their Civil Appeals Nos. 415 and 417 respectively, while the latter part of the finding is challenged by the State of Maharashtra in its Civil Appeals Nos. 416 and 418 respectively. Thus, Civil Appeals Nos. 415 and 416 are cross 384 appeals and Civil Appeals Nos. 417 and 418 are cross appeals. These appeals have been brought to this Court with a certificate granted by the High Court under article 132(1) of the Constitution. As will presently appear the only point which calls for our decision in these appeals is one relating to the validity of the impugned notification; and so the certificate might well have been given under article 133 (1)(c) and not under article 132 (1) because the case does not involve a substantial question of law as to the interpretation of the Constitution. For convenience we will refer to the petitioners in the writ petitions as petitioners and the State of Maharashtra as the respondent in these appeals. The petitioners are bidi manufacturers in different parts of the Vidarbha region and they employ a large number of persons for the purpose of making bidis for them. It appears that the Government of the State of Madhya Pradesh within whose jurisdiction Vidarbha was then situated had fixed the minimum rates of wages in respect of employment in tobacco (including bidi making) manufactories by issuing a notification on January 11, 1951. This notification had purported to fix the minimum rates of wages per 1000 bidis by reference to different localities in the State. The rates thus fixed were inclusive of dearness allowance or compensatory cost of living allowance and they varied from place to place as specified in columns 2 to 4 of the notification respectively. An Advisory Board was thereafter constituted by the said State in exercise of the powers conferred on it by section 7 of the Act. Subsequently, in 1956 the said minimum rates of wages were revised by a notification issued on February 23, 1956. As a result of the State Reorganisation Act, 1956 (37 of 1956) the Vidarbha region became part of the State of Bombay. After Vidarbha thus became a part of the State of Bombay the Government of Bombay notified that the Advisory Board appointed by the said Government 385 under section 7 shall be the Advisory Board for Vidarbha. This notification was issued on November 1, 1956. The Government of Bombay then issued a notification publishing the draft of the notification which was proposed to be issued under section 5, sub section (2) read with cl. (b) of sub section (1) of section 5, and notice was thereby given to all the bidi manufacturers that the said draft would be taken into consideration on or after March 1, 1957. Thereafter the procedure prescribed by section 5 was followed, an enquiry was held, a report of the Advisory Board was received and finally the impugned notification was issued on June 11, 1958. It is the validity of the several clauses contained in this notification that is challenged before us in the present appeals. In their petitions the petitioners alleged that cls. 3 to 7 of the notification were invalid and ultra vires the powers of the respondent under sections 3, 4 and 5 of the Act. According to them the respondent had no power to make provision for deciding as to the extent to which "chhat" will be permitted or directing the action to be taken by the employer and employee relating to bad bidis. Their contention was that the said clauses purported to make provisions for the settlement of disputes between the employer and the employee concerning an Industrial matter and were outside the purview of the respondent 's power under the relevant sections. They urged that the different provisions of the notification were so interrelated that it was difficult to dissociate one from the other and so it was necessary that the notification as a whole should be quashed. The respondent disputed the correctness of the contentions raised by the petitioners. It urged that there were constant disputes among bidi manufacturers and bidi workers regarding the minimum wages fixed in the Vidarbha region and so the respondent thought it necessary to institute 386 an enquiry into these complaints in order to decide whether it was necessary to revise the minimum wages prescribed by the earlier notification and the mode of determining those wages. It was only after a comprehensive enquiry was held at which all parties were heard that the respondent issued the notification in question. Its case was that the minimum rates of wages had been fixed on industry cum regionwise basis and that cls. 3 to 7 were intended to make the fixation of minimum rates of wages effective. According to the respondent, the absence of any rules regarding the exercise of the right of "chhat" by the employers tends to deprive the bidi workers of their right of getting minimum rates of wages, and so cls. 3 to 7 were deliberately introduced to make the material provisions of the Act effective in their implementation. These petitions were first heard by Mudholkar and Kotval, JJ. Mudholkar, J. held that all the clauses in the impugned notification were valid for, according to him, though the Act had not conferred express powers on the respondent to prescribe the impugned clauses of the notification yet the respondent could prescribe the said rules under the doctorine of implied powers. Kotval, J., agreed that cls. 1 and 2 were valid but he thought that even under the doctrine of implied powers the remaining cls. 3 to 7 could not be sustained. According to him the said clauses were, however, severable from cls. 1 and 2 and so they should be struck down leaving cls. 1 and 2 in tact. Since there was a difference of opinion between the two learned judges the matter was referred to Tambe, J. He held that cls. 1 to 5 and the first part of cl. 6 were intra vires where as the latter part of cl. 6 and cl. 7 as well as the explanation added to it were ultra vires. After Mr. Justice Tambe pronounced his judgment the matter was again referred to a Division Bench, and the Division Bench, in accordance with the majority opinion, has upheld the validity of cls. 1 to 5 and 387 the first part of cl. 6 and has struck down the latter part of cl. 6 as well as cl. 7 and its explanation. It is against this decision that the petitioners and the respondent have come to this Court with a certificate granted by the High Court in that behalf. Before dealing with the merits of the controversy between the parties it would be relevant to refer to the material provisions of the Act. The Act was passed in 1948 in order to provide for fixing minimum rates of wages in certain employments. Its provisions apply to the scheduled employment which expression under section 2 (g) means an employment specified in the schedule, or any process or branch of work forming part of such employment. It is common ground that employment in any tobacco (including bidi making) manufactory is a scheduled employment under the schedule of the Act. Section 2(h) defines wages and it prescribes inter alia, that wages means all, remuneration capable of being expressed in terms of money which would, if the terms of the contract of employment, express or implied, were fulfilled be payable to a person employed in respect of his employment or of work done in such employment, and includes house rent allowance, but does not include the items specified by cls.(i) to (v) of the said definition. Section 3 authorises the appropriate Government to prescribe different minimum rates of wages for different scheduled employments, different classes of work in the same scheduled employments, adults, adolescents, children and apprentices and different localities. Under section 4 are prescribed the components of the minimum rates of wages. Section 5 provides for the procedure for fixing and revising minimum wages. Section 7 provides, inter alia, that minimum wages payable under the Act shall be paid in cash. Under section 12 an obligation is imposed on the employer to pay every one of his employees engaged in the scheduled employment wages at a rate 388 not less than the minimum rate of wages fixed by the notification issued in that behalf. Section 12 (2) saves the application of the provisions of the payment of wages Act. Section 20 authorises the appropriate Government to appoint an authority to hear and decide for any specified area all claims arising out of the payment of less than the minimum rates of wages and other claims specified therein. The remaining sub sections of the said section prescribe the procedure for determining such claims. Under section 21 a single application can be made in respect of a number of employees who wish to prefer a claim for the decision of the authority under section 20. Section 22 prescribes penalties for the offences therein specified. Section 22A provides that if any employer contravenes any of the provisions of the Act or any rule or order made thereunder he shall, if no other penalty is provided for such contravention, be punishable with fine which may extend to five hundred rupees. Section 22B provides, inter alia the manner in which Courts may take cognizance of a complaint against any person for an offence committed under the Act. That in brief is the scheme of the material provisions of the Act. At this stage it would be necessary to read the several clauses of the impugned notification : "No. MWA. 1557 J. In exercise of the powers conferred by sub section (2) of section 5 read with clause (b) of sub section (1) of that section of the (XI of 1948) and after consulting the Advisory Board and in supersession of the former Government of Madhya Pradesh Labour Department Notification No. 564 451 XXIII, dated 23rd February, 1956, the Government of Bombay hereby revise the minimum rates of wages in respect of the employment in any tobacco (including bidi making) manufactory in the Vidarbha region of the State of Bombay 389 as mentioned in the Schedule hereto annexed and directs that this notification shall come into force with effect from 1st July, 1958. SCHEDULE Subject to the other provisions of this Schedule, the revised minimum rates of wages payable to employees per thousand bidis (when leaves are supplied by the employer) shall be as follows: Area Revised rates in Rs. (i) Nagpur District . 1.69 (ii) Bhandara District . 1.62 (iii) Chanda, Akola, Buldana, Yeotmal, Amravati and Wardha District . 1.56 2. For all bidis in which 7 chhataks or more of tobacco mixture is used and for those bidis which are known as "Hatnakun" bidis, there shall be an increase of 12 Naye Paise per 1000 bidis in the rates mentioned above in all the areas. It shall be within the discretion of the employer to decide which are "chhat" bidis or bad bidis, up to 5 per cent of the bidis prepared by the employee. If the employer decided that any bidis are "chhat" or bad, the "chhat" or bad bidis up to 5 per cent shall be destroyed forthwith by the employee and whatever tobacco is recovered from them shall be retained by the employer. If, however the employer wants to retain these "chhat" or bad bidis, he shall pay full wages for the same to the employee. If "chhat" or bad bidis are more than 5 per cent, but less than 10 per cent, and if there is any dispute between the employer 390 and the employee as to whether the '"chhat" or bad bidis is done properly or not, equal number of representatives of the employer and the employees shall inspect the "chhat" is done properly or not. If there is any difference of opinion among the representatives of the two sides, the majority opinion shall prevail. If the opinion is equally divided and the employer wants to retain the "chhat" bidis, he shall pay wages for "chhat" bidis between 5 per cent to 10 per cent at half the rates fixed above. If the employee does not want to retain these bidis the employee shall destroy them forthwith. The employer shall nominate his representatives and the employees shall elect their representatives. In the case of "chhat" above 10 per cent., the employee shall be entitled to full wages. It shall, however, be open to the employer to take suitable action against the employee if the "chhat" is more than 10 per cent for 6 continuous working days in a calendar month. The "chhat" shall be made once in a day only, at any premises within a distance of not more than 2 miles from the premises where bidis are manufactured. Explanation: For the purpose of this Schedule the expression "employer" includes his thekedar, contractor or agent as the case may be. ' The validity of cls. 1 and 2 is not in dispute. The petitioners, however, contend that cls. 3 to 7 are outside the powers conferred on the respondent by the relevant provisions of the Act and as such are invalid. It is common ground that even if the impugned clauses are held to be ultra vires they are 391 severable from cls. 1 and 2 so that the invalidity of the impugned clauses will not affect the validity of the said two clauses and they will stand even if the other clauses are struck down. In determining the question about the validity of the impugned clauses it is necessary to refer to two material facts. The nature and scope of the terms of contract between the petitioners and their employees are really not in dispute. It is alleged by the petitioners that they employ a large number of persons for the purpose of making bidis for them, that these persons are supplied with tendu leaves, tobacco and other necessary materials, they take the said articles to their respective places where they work and brings back the bidis prepared by them to the employer. The employer then examines the bidis ' accepts such of them as are found to have been prepared according to the terms of the contract rejects such of them as are found to be of poor quality and not prepared according to the terms of the contract and pays for the bidis actually accepted. The respondent has not traversed these allegations made by the petitioners. It admitted that the workers are paid on piece rate basis and the payment is made "on the basis of bidis selected and accepted by the employer after rejecting certain portions of bidis prepared by the workers". In fact the respondent has expressly stated that "there is a recognised practice of making payment on the basis of bidis accepted by employers as coming up to a certain standard of skill". It is further admitted that the employers have insisted on their right in principle of rejecting the sub normal or sub standard bidis prepared by the employees. Thus, there is no doubt that under the terms of the contract the workers are entitled to receive payment only for the bidis accepted by the employers, and not for those 392 which are rejected. It is also not disputed that the bidis which are rejected by the employers otherwise known as "chhats" are retained by the employer though he refuses to take them into account in the matter of payment to the workers on the ground that they do not come up to the standard of skill or quality prescribed by the contract. It also appears to be true that the employees in this region have been protesting against improper rejection of the bidis by the employers. They have contended that the employers reject an unreasonably high proportion of bidis falsely dubbing them as of sub normal quality without paying anything to the workers for their labour spent in rolling such rejected bidis. In its affidavit the respondent has emphasised that as a result of to is method of discarding bidis on the ground that they are of sub standard quality bidis workers were deprived of the labour charges for bidis which are rejected by their employers; and so it was urged that the question of fixing maximum rates of wages for bidi workers necessarily involved the question as to the quantum or percentage of such rejection which should be permissible to the employer. According to the respondent the impugned notification has purported to fix the minimum rates of wages after taking into consideration the problem presented by the practice of discarding bidis and paying wages to the workers only for such bidis as are accepted. In support of the validity of the notification the respondent also relied on the fact that the formula prescribed by the notification had been evolved after taking into account the representations made both by the employers and the employees. In fact, according to the respondent, this said formula represented a substantial degree of agreement between the parties on this point. It would thus be seen that on the two material facts there is really no serious dispute between the 393 parties. The respondent agrees that under the practice which must be taken to be consistent with the implied terms of contract between the bidi manufacturer and his employee, after the bidis are prepared by the employees and brought back to the employer the employer has a right to examine the quality of the bidis, accept only such as have come up to the standard prescribed by the contract and reject the rest. The practice further justifies the payment of wages to the employees only for the bidis actually accepted and not for those which are rejected though the rejected bidis may be retained by the employer. On the other hand, it is not, and cannot be seriously disputed by the petitioners that in some cases this practice may work great hardship on the workers, and in every case the workers do not get wages for the labour put by them in rolling the rejected bidis. The main question which arises for our decision in the present appeals is whether the injustice resulting from the practice of discarding bidis and not making any payment for them to the workers can be checked, controlled and regulated by the respondent by issuing a notification under the powers conferred on it by section 5 of the Act. If the relevant provisions of the Act confer upon the respondent the power to check the evil against which the workers complain then of course the validity of the impugned clauses would be beyond challenge. If, on the other hand, the power to prescribe or revise minimum rates of wages does not either expressly or by necessary implication include the power to provide for the machinery to check the evil in question, then the impugned clauses would be ultra vires however necessary it may be to check and control the said evil in question. In this connection let us broadly examine the scope and effect of the impugned clauses. Clauses 1 and 2 prescribe the revived minimum rates districtwise and provide for the payment of higher 394 Price for the bidis known as Hatnakhun bidis in all and the said districts. These two clauses are obviously valid and the petitioners have not disputed the conclusion of the High Court in that behalf. Clauses 3 to 6 deal with the problem of the that bidis or bidis which are rejected because they are bad. Clause 3 leaves it to the discretion of the employer to decide which are chhat bidis up to 5 percent of the bidis prepared by the employees. This clause provides that the bidis to rejected would be destroyed and tobacco recovered from them retained by the employer; and it adds that if the employer wants to retain the rejected bidis he shall pay full wages for the same to the employee. In other words this, clause means that the employer may discard bidis up to 5 percent but if he does not want to pay the workers for the said bidis he must destroy them. That would show that the discretion exercised by him is honest and fair. If, on the other hand, he wants to retain the said bidis that would mean that he thinks that the bidis would find a market and in that case he must pay for them on the basis that they are good bidis. On principle this provision may perhaps not be open to any serious criticism and it is not unlikely that if the notification had not made further detailed provisions by cls. 4 to 6 the present dispute would not have been brought before the High Court. The employers probably do not have a serious grievance against cl. 3 on the merits. Clause 4 deals with cases where the rejection may be more than 5 per cent but less than 10 per cent of total work produced by the worker. In regard to this class of cases cl. 4 provides for a machinery to deal with cases falling under it. Representatives of the employers and employees have to be appointed and they have to decide whether the work have been properly done or not. The decision would be according to the opinion of the majority. If the opinion is equally divided 395 and the employer wants to retain the chhat bidis, between 5 per cent to 10 per cent he shall pay at half the rates fixed in cl. 1. If the employer does not want to retain them the employees shall destroy them, The clause does not seem to provide for 3 7 case where the majority opinion may support the rejection between 5 per cent and 10 percent; that is a lacuna in the clause. The only comment which can be legitimately made against the clause on its merits is that the setting up of the machinery for a kind of adjudication of the dispute between the employer and the employee may, instead of solving the difficulties in actual working, add to them. That takes us to cl. 6. This clause has been very severely criticised by the petitioners. It provides that in case of chhat about 10 per cent the employees shall be entitled to full wages which means that even if chhat above 10 per cent is made reasonably and for a proper cause the employer has to pay for the discarded work as therein prescribed; the only right given to the employer in such a case is to take suitable action against the employee if the chhat is more than 10 per cent and that too for six continuous working days in a calendar month. Prima facie this clause appears to be unreasonable and unjust. The explanation to cl. 7 is also criticised by the petitioners because the thekedar, contractor or agent, who is appointed by the employer would, if the explanation is valid, be liable to perform all the obligations imposed on the employer by the relevant provisions of the Act such as sections 12 and 18. We have examined the broad features of the notification and indicated the comment made on it by the petitioners for the purpose of showing that on the merits some of the clauses do not appear to be fair and just, but that is not the ground on which their validity can be or has been challenged before us. The main argument in support of the challenge 396 rests on the assumption that cls. 3 to 7 are all beyond the powers conferred on the respondent by the relevant provisions of the Act; and it is this argument which needs to be examined. It is well settled that industrial adjudication under the provisions of the Industrial Disputes Act, 1947(14 of 1947) is given wide powers and jurisdiction to make appropriate awards in determining in industrial disputes brought before it. An award made in an industrial adjudication may impose new obligations on the employer in the interest of social justice and with a view to secure peace and harmony between the employer and his workmen and full co operation between them. Such an award may even alter the terms of employment if it is thought fit and necessary to do so. In deciding industrial disputes the jurisdiction of the tribunal is not confined to the administration of justice in accordance with the law of contract. Mukherjee, J., as he then was, has observed in The Bharat Bank Ltd., Delhi vs Employees of the Bharat Bank Ltd., Delhi the tribunal "can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or given effect to the contractual rights and obligations between them which it considers essential for keeping industrial peace." since the decision of the Federal Court in Western India Automobile Association vs Industrial Tribunal, Bombay, it has been repeatedly held that the jurisdiction of industrial tribunals if much wider and can be reasonably exercised in deciding industrial disputes with the object of keeping industrial peace and progress (Vide: Rohtas Industries, Ltd., vs Brijnandan Pandey; The Patna Electric Supply Co. Ltd., Patna vs The Patna Electric Supply Workers Union. Indeed, during the last ten years and more 397 industrial adjudication in this country has made so much progress in determining industrial disputes arising between industrial of different kind and their employee that the jurisdiction and authority of industrial tribunals to deal with such disputes with the object of ensuring social justice is no longer seriously disputed. But, it is necessary to remember that no claim can be made for such broad jurisdictional power by the respondent when it purports to issue a notification under the provisions of the Act. These powers and authority would necessarily be conditioned by the relevant provisions under which it purports to act, and the validity of the impugned notification must therefore be judged not by general considerations of social justice or even considerations for introducing industrial peace; they must be judged solely and exclusively by the test prescribed by the provisions of the statute itself. It appears that in 1956 before Vidarbha became a part of the state of Bombay the State Government of Madhdya Pradesh had made a comprehensive reference for the arbitration by the State Industrial Court between the bidi manufacturers of Bhandara District and their employee. In this dispute all the material issues arising from the prevailing practice which authorised employers to reject chhat bidis had been expressly referred for adjudication. Subsequently, when the impugned notification was issued the respondent apparently took the view that what could have been achieved by reference to the arbitration of state Industrial Court may well be accomplished by issuing a notification under section 5 of the Act. It may be that there is substance in the grievance made by the employees that the practice of rejecting chhat bidis often leads to the injustice and deprives them of the wages legitimately earned by them by rolling the said bidis and there can be no doubt that if a comprehensive reference is made for the decision of 398 this industrial dispute between the bidi manufacturers and their employees an award may well be passed which will resolve this dispute; but the question which falls for our decision is whether the relevant provisions of the Act authorised the State Government to make rules for the decision of the dispute in that behalf and for the payment of minimum rate of wages on the basis of such decision? In our opinion, the answer to this question has to be in the negative. What is the extent of the authority conferred on the respondent in fixing or revising minimum rates of the wages under the relevant provisions of the Acts In dealing with this question we must necessarily bear in mind the definition of the term "wages" prescribed by section 2(h). As we have already been the term "wages" includes remuneration which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment. In other words, the terms "wages" refers to remuneration payable to the employee as a result of the terms of employment. What would be the amount to which the employee is entitled if the other terms of the contract are preferred ? That the question which has to be asked in determining what the term "wages" means under (h). No doubt sections 3, 4 and 5 authorised the appropriate Government to fix the minimum rates of wages. In other words, if the wages fixed by a contract which is either express or implied are found to be low authority is conferred on the appropriate Government to increase them so as to bring them to the level of what the said Government regards as the minimum wages in the particular scheduled employment in the particular area concerned. This means that power is conferred on the appropriate Government to modify one term of the contract express or implied between the employer and the 399 employee and that is a term which has reference to the payment of wages. If for a certain piece of work done by the employee the employer has agreed to pay him either expressly or by implication a certain amount of wages the appropriate Government can issue a notification and prescribe that for the said work done under the contract the employer must pay his employee a much higher rate of wages and the higher rate of wages thus prescribed would be deemed to be the minimum rate of wages between the parties. It would, however, be noticed that in defining "wages" cl. 2(h) postulates that they would be payable if the other terms of the contract of employment are fulfilled. That is to say, authorising the fixation of minimum rates of wages the other terms of the contract of employment have always to be fulfilled. The fulfillment of the other terms of the contract is a condition precedent for the payment of wages as defined under section 2 (h) and it continues to be such a condition precedent even for the payment of the minimum rates of wages fixed and prescribed by the appropriate Government. The significance of the definition contained in section 2(h) lies in the fact that the, rate of wage may be increased but no change can be made in the other terms of the contract. In other words, the Act operated on the other terms of the Contract on the other terms of the contract between the employer and the employee. That is the basic approach which must be adopted in determining the scope and effect of the powers conferred on the appropriate Government by the relevant provisions of the statute authorising it to prescribe fix or minimum rates of wages or to revise them. What the appropriate Government is authorised to do is to proscribe, fix or revise wages and wages are defined to be remuneration payable to the employees if the terms of the contract of employment, express or implied, were fulfilled. 400 This definition runs, as it inevitably must, through the and the material provisions of the Act and its importance cannot therefore be ignored. Bearing this fact in mind let us examine the impugned clauses of the notification. Clauses 1 and 2 clearly fall within the purview of the power conferred on the respondent because they do no more than prescribe the minimum rates of rates as therein specified; out cls. 3 to 7 clearly and unambiguously purport to deal with the terms of the contract between the parties other than that relating to the remuneration. These clause are obviously intended to deal with the dispute between the employers and their employees as to how bidis should be discarded and in that proportion and what should be the procedure to be followed in regard to the? payment for such discarded bidis. In appreciating the true effect of these clauses it is necessary to recall that the parties are agreed about the practice at present prevailing which must be taken to represent the terms of the contract either express or implied. According to the said practice the employer decides which bidis should he discarded, he retains the discarded bidis and pays only for such bidis as are accepted be him. It if plain that the impugned clauses of the notification purport to modify these terms in material particulars and that and be plainly outside the jurisdiction of the authority of the respondent. It may well form the subject matter of reference for industrial adjudication but it cannot form the subject matter of a notification prescribing minimum rates of wages under sections 3, 4 or 5. It is conceded by the respondent that there is no express provision in the act, which authorised the setting up of the machinery as prescribed by cls. 3 and 4 or for laying down the manner in which the employer should make payment for the discarded bidis. It is, however, strenuously urged that the validity of these clauses should be upheld on the ground of the 401 implied power of the respondent; and that takes us to the question as to the true scope and effect of the doctrine of implied power. "One of the first principles of law with regal to the effect of an enabling act", observes Craies, "is that if a Legislature enables something to be done, it gives power at the same time by necessary implication to do everything which is indispensable for the purpose of carrying out the purposes in view(1)". The principle on which the doctrine is based is contained in the legal maxim 'Quando lex aliquid concedit concedere videtur et illud sine quo res ibsa ease non potest '. This maxim has been thus translated by Broom thus: "whoever grants a thing is deemed also to grant that without which the grant itself would be of no effect". Dealing with this doctrine Pollock, C.B., observed in Michaely Fenton and James Fraser vs John Stephen, Hempton "It becomes therefore all important to consider the true import of this maxim, and the extent to which it has been applied. After the fullest research which I have been able to bastow, I take the matter to stand thus : Whenever anything is authorised, and especially if, as matter of duty, required to be done by law, and it is found impossible to do that thing unless something else not authorised in express terms be else done, then that something will be supplied by necessary intendment." This doctrine can be invoked in cases "where an Act confers a jurisdiction it also confers by implication the power of doing all such acts, or employing such means as are essentially necessary to its execution (3). " In other words, the doctrine of implied powers can be legitimately invoked when it is found that a duty has been imposed or a power conferred on an authority by a statute and it is further found that the duty cannot be discharged or the power cannot be exercised at all unless some 402 auxiliary or incidental power is assumed to exist. In such a case, in the absence of an implied power the statute itself would become impossible of compliance. The impossibility in question must be of a general nature as that the performance of duty or the exercise of power is rendered impossible in all cases. It really means that the statutory provision would become a dead letter and cannot be enforced unless a subsidiary power is implied. This position in regard to the scope and effect of doctrine of implied powers is not seriously in dispute before us. The parties are at issue, however, on the question as to whether the doctrine of implied powers can help to validate the impugned clauses in the notification. The respondent strenuously contends that cls. 1 and 2 of the notification which have prescribed the minimum rates of wages per 1000 bidis would become ineffective unless cls. 3 to 7 supplement them. The argument is that by improper or dishonest exercise of the power conferred on the employer by the contract of employment to discard chhat bidis the employees would be cheated of their legitimate due wages under cls. 1 and 2 and so, in order to make the provisions of cls. 1 and 2 effective some subsidiary provisions had to be made for settling the dispute between the employer and his workmen in regard to chhat bidis. As we have already observed, the grievance made by the employees on the score of improper rejection of bidis may in many cases be well founded; but the seriousness of the said grievance and the urgent necessity to meet it would hardly be a proper basis for invoking the doctrine of implied power where the provisions of the statute are quite clearly against the assumption of such implied power. The definition of the term "wheres" postulates the binding character of the other terms of the contract and brings within the purview of the Act only one 403 term and that relates to wages and no other. That being so, it is difficult to hold that by implication the very basic concept of the term "wages" can be ignored and the other terms of the contract can be dealt with by the notification issued under the relevant provisions of the Act. When the said other terms of the contract are outside the scope of the Act altogether how could they be affected by the notification under the Act under the doctrine of implied powers Besides, in this connection it is also necessary to bear in mind the provisions of sections 20 and 21 of the Act. These two sections provide for the settlement of claims made by employees in regard to the payment of minimum rates of wages. If for instance, good bidis are rejected by the employer as chhat bidis improperly and without justification the employees can make a claim in that behalf and the same would be tried under sections 20 and 21. Therefore the Act has made a specific provision for the enforcement and implementation of the minimum rates of wages prescribed by notifications. The present notification purports to ignore the said provisions and sets up a machinery to settle the said disputes. Clauses 1 and 2 of the notification have prescribed the revised minimum rates of wages. If, in the matter of payment of the said wages, any disputes arise they must be left for adjudication by the authority prescribed by section 20. That is another reason why the doctrine of implied powers cannot be invoked in support of the validity of the impugned clauses in the notification. There is yet another consideration which is relevant in dealing with the question about the implied powers. The doctrine of implied power can be invoked where without the said power the material provision of the Act would become impossible of enforcement. In the present 404 case all that section 5 requires is the fixation of minimum rates of wages, and that has been done by the notification by cls. 1 and 2. What the subsidiary clauses purport to do is to make the enforcement of the fixed rate effective by providing for a machinery to deal with the possible disputes arising between the parties as a result of the practice of discarding chhat bidis. In other words, cls. 1 and 2 fix the minimum rates of wages and thus section 5 has been complied with and enforced. The remaining clauses purport to make the implementation of the provisions of cls. 1 and 2 effective. That is very different from giving effect to section 5 itself. The enforcement of the notification is clearly not the same thing as exercising the power of fixing or revising the minimum rates of wages under section 5. A Power may be implied, if necessary, in discharging the duty imposed upon the appropriate Government or in exercising the power conferred on the State Government in the matter of fixing or revising the minimum rates of wages; but surely no power can be implied for making effective the implementation of the notification issued under the said power or in the discharge of the said duty. The purpose of the Act cannot be said to have failed after the minimum rates of wages are prescribed and notified. What may turn out to be ineffective is the provision for payment of the said wages by reason of the rejection of good bidis; but that is a matter of an industrial dispute which has to be adjudicated upon under sections 20 and 21 or under other provisions of the law. It is true that a large section of the workers in the bidi trade is illiterate, uneducated and unorganised; and there can be no doubt that their grievance on the ground of improper rejection of the bidis deserves to be redressed, but, in our opinion, the procedure adopted by the respondent in redressing the said grievance is outside the scope of the Act, and therefore beyond the powers conferred on it by section 5. The proper remedy 405 in such a case may be to make a comprehensive reference of the dispute to the competent industrial tribunal and invite the tribunal to make a proper award in that behalf. We are, therefore, inclined to take the view that cls. 3 to 7 which form an integral scheme are outside the purview of the powers conferred on the respondent by section 5 of the Act and must therefore be declared to be ultra vires. It is common ground that these clauses are severable from cls. 1 and 2 and that their invalidity does not affect the validity of the said two clauses. In the result Civil Appeals Nos. 415 and 417 are allowed and Civil Appeals Nos. 416 and 418 are dismissed. Respondent to pay the costs of the petitioners in Civil Appeals Nos. 415 and 417. One set of hearing cost. C.A. Nos. 415, 417, allowed. C.A. Nos. 416, 418 dismissed.

By section 3 of the , the appropriate Government is authorised to fix minimum rates of wages for employees in the Scheduled employments and section 5 lays down the procedure for fixing and revising such minimum wages. The State Government published a notification dated June 11, 1958, fixing minimum rates of wages in respect of employments in bidi making in the Vidarbha region. Clauses 1 and 2 of the notification prescribed the minimum rates district wise and provided for higher rates for making bidis known as 'Hatnakhun ' in all the districts. Clauses 3 to 7 dealt with disputes between the employers and the employees as to how bad bidis were to be discarded and in what proportion and as to the payment for such discarded bidis. The appellant contended that cls. 3 to 7 of the notification were ultra vires: ^ Held, that cls. 3 to 7 of the Notification were outside the purview of the powers conferred upon the State Government 382 by section 5 of the Act and were ultra vires. The provisions of the Act empowered the Government only to fix minimum wages; they did not authorise it to make rules for resolving the disputes regarding the rejection of bad bidis and regarding the payments to be made for the rejected bidis. The Act empowered the Government to fix the remuneration payable to an employee if the other terms of the contract were observed; it did not authorise the Government to vary the other terms. Under the contract the employer was entitled to decide which bidis to discard, and to retain such bidis and to pay only for such bidis as were accepted by him. Clauses 3 to 7 of the notification purported to modify these terms in material particulars and this was not within the power conferred by the Act upon the Government. Nor could these clauses be justified on the basis of implied powers. The doctrine of implied powers could only be invoked when it was found that a duty was imposed or a power conferred on an authority buy a statute and it was further found that the duty could not be discharged or the powers could not be exercised at all unless some auxiliary or incidental power was assumed to exist. Even if cls. I and 2 would become ineffective without cls. 3 to 7 being there that would not be a proper basis for invoking the doctrine of implied powers. The definition of 'wages ' in section 2(h) of the Act postulated the binding character of the other terms of the contract and brought within the purview of the Act only the term relating to wages. By implication the very basic concept of wages could not be ignored. By sections 20 and 21 the Act makes specific provision for the settlement of claims in regard to payment of minimum wages and as such no powers could be implied in the Government to set up a separate machinery to settle such disputes. Further no power could be implied to make cls. 1 and 2 of the notification effective: such power could only be implied if it was necessary to make section 5 of the Act itself effective. Michael Fenton and James Fraser vs Jhon Stephen Hompton, (1957 59) 117 R. R. 21, referred to.

% 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 non delivery of the goods booked by the respondent on September 5, 1955 to several destinations under "Railway Risk" due to the sinking of "Barge No. 6, carrying the wagons containing the goods" led to the filing of four suits which were dismissed by the Trial Court holding that the accident was not due to the negligence of the Railway employees. The High Court, accepting the appeal of the respondent by its judgment dated April 13, 1966 held that the sinking of Barge was not due to "inevitable accident" but due to the serious negligence of the Railway employees and their failure of duty to take due care which it was required to take as a bailee as revealed by their own Enquiry Committee held with reference to Ss. 83 and 84 of the Railways Act read with section 2 of the Indian Railways Board Act (4 of 1905) and rule 18 of the Railway Board Rules. The High Court remanded the suits for determination of the quantum of the decretal amount due to the respondent. The trial court after remand gave decrees in favour of the respondent on 10th September, 1966 without interest claimed up to the date of filing of the suit and interest "pendent lite". The High Court, on appeal by the respondent by its judgment dated 3 9 1968 allowed interest "pendent lite" and future interest at the rate of 4 1/2% per annum. Dismissing the two sets of appeal by the Union, one by Special Leave against the order dated 13 4 1966 determining the liability and another by certificate against the judgment dated 3 9 1968 awarding interest the High Court. ^ HELD: (1) The liability of the Railway was that of a bailee. The consignments were booked at Railway risk. The onus of proving that the Railway employees took the necessary amount of care and they were not guilty of negligence rested on the Railway Authorities. The question of onus is not important when the entire evidence is before the court. In the instant case there was no legal evidence to prove "inevitable accident" but suppression of important documents and non production of important witnesses in charge of the Barge. The Barge sank because of the serious and gross negligence of the railway employees and the railways did not take due care which it was required to take as a bailee. [617B D; 618F G] (II) The Enquiry Committee, in the instant case, is a Joint Enquiry, under the rules and the report is admissible under Ss. 5, 7 and 9 of the Evidence Act. The claim for privilege is not admissible because no such claim was made before the Courts below and there was no affidavit of the Minister incharge or the Secretary of the Department to support a claim for privilege. [616G H] (III) One of the principles for award of damages is that so far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the contract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, 615 the principle is that as far as possible the injured party should be placed in as good a situation if the contract has been performed. In other words, it is to provide compensation for the loss which naturally flows from the breach. The market rate is a presumptive test because it is the general intention of law that in giving damages for breach of contract, the party complaining should, so far as it can be by money, be placed in the same position as he would have been in if the contract had been performed. The rule as to market price is intended to secure only an indemnity to the purchaser. The market value is taken because it is presumed to be the true value of the goods to the purchaser. In the instant case, the High Court correctly applied these principles and adopted the contract price in the facts and circumstances of the case as the correct basis of compensation. [619 D]

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 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.

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.

The appellants had applied for compensation to the Jagir Abolition Officer under section 13 of the Bombay Merged Territories and Areas (Jagir Abolition) Act, 1953 in respect of their proprietary jagirs. Against the orders of the said officer they preferred appeals to the Revenue Tribunal which were dismissed for non prosecution. The appellants thereupon filed applications for restoration of the appeals within 30 days of the receipt of the orders of dismissal of the appeals. These applications were dismissed as time barred, the Tribunal taking the view that time was to be calculated from the date of the order. The appellants ' applications under article 227 of the Constitution to the High Court failed and they came by way of special leave, to this Court. It was contended on behalf of the appellant that (i)the Tribunal even while deciding ex parte had to decide on merits and that (ii) the applications for restoration were filed within the time prescribed in Regulation 21 made under the Bombay Revenue Tribunal Act, 1958 which applied to the case. HELD:(i) In the context of section 20 and ;in view of the express language of section 17(1) of the Jagirs Abolition Act the Tribunal had no power to dismiss the appeals in question for non prosecution, but it was obligatory on its part of decide the appeals on merits and to record is decision even though there was default on the part of the appellant to appear in the appeal. [142 E F] (ii) The Tribunal also committed an error of law in dismissing as time barred the applications for restoration of the appeals made by the appellants. In Regulation 21 made under Bombay Revenue Tribunal Act, 1958 the time prescribed for such applications is thirty days from the date of receipt of the Tribunal 's order dismissing the appeal, and the appellants had filed their applications within the said period. [145 A, B] Regulation 21 lays down the procedure for dealing with applications for restoration made under Regulation 20 and the latter Regulation includes within its scope all appeals 'decided ex parte ' whether on merits or otherwise. It could not therefore be said that Regulation 21 did not apply to the case. [144 H]

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.

Civil Appeals Nos. 185 to 187 of 1961. Appeals by special leave from the judgment and order dated May 13, 1959, of the Patna High Court in Misc. Judicial Case No. 352 of 1957. WITH Petitions Nos. 163 to 165 of 1959. Petitions Under article 32 of the Constitution of India for the enforcement of Fundamental Rights. M. C. Setalvad, Attorney General of India, Veda Vyasa and Naunit Lal, for the appellants/petitioners. A. section R. Chari, D. P. Singh., M. K. Ramamurthi, R. K. Garg and section C. Agarwala, for the respondents. 500 1961. November 20. The Judgment of the Court was delivered by KAPUR, J. The principal question raised in these appeals and petitions under article 32 of the Constitution is whether sugar cane falls within the term "green vegetables" and is therefore exempt from sales tax under the exemption given by the notification dated August 28, 1947, issued under section 6 of the Bihar Sales Tax Act 1947, (Bihar 19 of 1947), hereinafter called the 'Act '. After hearing the arguments in these appeals and petitions we announced our decision dismissing them with costs and we now proceed to give our reasons for the same. The three appeals by special leave are brought by the assessee and relate to assessment of sales tax for three years, 1950 51, 1951 52 and 1952 53 for which the amount of sales tax levied was Rs. 28,866, Rs. 23,383 and Rs. 23,298 respectively. Besides the three appeals the assessee company has filed three petitions under article 32 challenging the constitutionality of the assessments. In this judgment the appellant and the petitioner is a private limited company and it will be termed "appellant" and the State of Bihar which is respondent will be termed the "respondent". The appellant took an objection to the assessment and filed appeals to the Deputy Commissioner of Commercial taxes and then a revision to the Board of Revenue and then at its instance the following question was referred by the Board of Revenue to the High Court for opinion: "Whether sugar cane is a green vegetable within the meaning of item 6 of notification No. 9884 FT dated 28 8 47 and as such exempt from taxation. " The High Court answered the question against the appellant and held that "sugar cane" was not 501 included in the term "green vegetables" and it is the correctness of that answer which has been canvassed before us. In the petitions under article 32 of the Constitution it was contended that the appellant being a producer of sugar cane was not a "dealer" within the meaning of the Act and therefore no tax was payable on sale of sugar cane by it. The exemption under the Act is provided under section 6 of the Act which, at the relevant time, was as follows: section 6 "No tax shall be payable under this Act on the sale of any goods or class of goods specified in this behalf by the (State) Government by notification in the Official Gazette, subject to such conditions as may be mentioned in the notification: Provided no notification shall be issued under this section without giving in the Official Gazette such previous notice as the State Government may consider reasonable, of its intention to issue such notification. " Under section 6 of the Act the notification relied upon was issued on August 28, 1947. This was notification No. 9884 FT which was in the following terms: "In exercise of the powers conferred by section 6 of the Bihar Sales Tax Act, 1947 (Bihar Act XIX of 1947), and in supersession of the previous notifications on the subject the Governor of Bihar is pleased to direct that no tax shall be payable under the said Act on the sale of goods specified in the second column of the schedule hereto annexed subject to the exceptions, if any, set out in the corresponding entry in the third column thereof. 502 THE SCHEDULE Serial Description Exception subject to which the No. of goods. exemption has been allowed. 1. . . . 2. . . . 3. . . . 4. . . . 5. . . . 6 Green vegetables Except when sold in sealed other than pota containers. . . . . . . . . . . ." The question raised is that sugar cane falls within the term "green vegetables" in entry 6 of the Schedule and is therefore exempt from assessment to Sales tax. In support of this contention counsel for the appellant relied upon a judgment of the for the appellant relied upon a judgment of the Bombay High Court, The State of Bombay vs R. section Phadtara (1) where it was held that sugar cane is "fresh vegetable" and is therefore exempt from sales tax under a similar notification issued under the Bombay Sales Tax Act. Changla C. J., there observed at page 496 as follows: "In its plain and natural meaning a "vegetable" clearly is wide enough to cover "sugar cane"; but what is urged by the Advocate General is that we must not give it that wide meaning but must give it the popular meaning as under stood by people who deal in vegetables or eat vegetables, and it is urged that from that narrow and restricted point of view sugar cane is not vegetable. This is a taxing statue and if in favour of that construction which gives relief to the subject. That was exactly the 503 approch of the Sales Tax Tribunal and in our opinion that approach was a very proper one." This observation is not in accord with the opinion given by this Court in Ramaytar Badhriprasad vs Assistant Sales tax Officer, Akola (1) in which under an almost identical entry it was held that "betel leaves" is not included in the term "vegetables". After quoting with approval a passage from the judgment of the Nagpur High Court, Madhya Pradesh pan Merchants Association vs State of Madhya Pradesh (2) this court said: "the word "vegetable" in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table. " If that is the meaning of the word "vegetables" sugar cane cannot fail within entry 6 which relates to green vegetables. In Webster 's dictionary "sugar cane" has been defined as "a grass extensively grown in tropical and warm regions for its sugar" and in Oxford dictionary it is defined as "a tall peronnial grass cultivated in tropical and sub tropical countries and forming the chief source of unmanufactured sugar". Therefore it cannot be said that sugar cane falls within the definition of the words "green vegetables". The second question which was raised before us and which arises in the petitions under article 32 is that the appellant company is not a "dealer" within the meaning of the word as defined in section 2(c) of the Act which is as follows: " "dealer" means any person who sells or supplies any goods (including goods sold or supplied in the execution of a contract) 504 whether for commission, remuneration or otherwise and includes any family or a Hindu joint family, the Government and any society club or association which sells or supplies goods to its members". The words of this sub section are very wide and cover the case of the appellant and therefore this point is also without substance and must be rejected. But it was argued that the definition of the word "dealer" in the Act which was amended by Bihar Annual Finance Act 1950 is applicable only for the financial year beginning April 1, 1950, and not for subsequent years and for that aid was sought from the preamble to the Bihar Annual Finance Act 1950. That preamble is as follows: "whereas it is expedient to amend the Bihar Sales Tax Act, 1947, and the Bihar Agricultural Income Tax Act, 1948, to levy a tax on passengers and goods carried by public service vehicles and public carries and to lay down rates on Sales Tax payable under Bihar Sales Tax Act 1947 to fix limit of taxable agricultural income to lay down rates of agricultural Income Tax Act and Super Tax chargeable under Bihar Agricultural Income Tax Act, 1948 for the financial year beginning on the 1st day of April 1950 and to make further provisions in connection with the finance of this State of Bihar". The preamble cannot limit or change the meaning of the plain words of s.2(c) of the Act which apply to the case of the appellant and therefore the amended section is applicable to the present case. It is an erroneous approach to the question to say that because of the words "for the financial year beginning on the first of April 1950" in the particular context in the preamble, the definition of the word "dealer" was amended only for one year Nothing has been shown indicating that section 505 (2)(i) of Bihar Annual Finance Act intended to effect a temporary amendment in the previous definition of the word "dealer" in cl(c) of s.2 of the Act. The contention is therefore repelled. It was also submitted that the assent of the President was not given to the Bihar Annual Finance Act 1950. In our opinion that submission is equally without force because tax on sale of goods is a matter entirely within entry 54 of the State List and the amendment made in the definition of the word "dealer" in the Act did not require the assent of the President. In our opinion the appeals and the petitions under article 32 are without merit and are therefore dismissed with costs. One hearing fee. Appeals and writ petitions dismissed.

Under section 6 of the Bihar Sales Tax Act, 1947, the Government issued a notification exempting certain goods from the 499 payment of sales tax, including "green vegetables other than potatoes, except when sold in sealed containers". The appellant who was a producer of sugar can was assessed to sales tax. He contended that sugar cane was a green vegetables and was exempted from tax and that he was not a dealer as defined in section 2 (c) of the Act and could not be assessed to sales tax. ^ Held, that sugar cane was not a green vegetable and was not exempted under the notification. The word "vegetables" in taxing statutes was to be understood as in common parlance i.e. denoting class of vegetables which were grown in a kitchen garden or in a farm and were used for the table. The dictionaries defined sugar cane as a "grass." Ramavtar Budhaiprasad vs Assistant Sales Tax Officer, Akola, ; , followed. The State of Bombay vs R. section Phadtare, [1956] 7 section T. C. 495, disapproved. Held, further, that the appellant was a dealer within the definition in section 2(c). Section 2(c) was amended by the Bihar Annual Finance Act, 1950. The amended was not a temporary amendment for only one year; the amended section was applicable to the present case. The amending Act did not require the assent of the President as the matter fell entirely within entry 54 of the State List.

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 appellant Coffee Board filed writ petitions in the High Court praying for a declaration that the mandatory delivery of the Coffee under section 25(i) of the , was not sale and that section 2(t) of the Karnataka Sales Tax Act, 1957 required to be struck down if the same encompassed compulsory acquisition also, and challenging the show cause notice, proposing to re open the tax assessment and the pre assessment notice proposing to assess the Board to purchase tax on the Coffee transferred from Karnataka to outside the State. The Coffee Board has also filed in the High Court writ petitions, challenging the assessments and the demands for the purchase tax. The appellant Coffee Board had contended that the compulsory delivery of Coffee under the extinguishing all the marketing rights of the growers was 'compulsory acquisition ' and not sale or purchase to attract levy of purchase tax and that the appellant was only a 'trustee ' or agent of the growers not exigible to purchase tax and that all the export sales were in the course of export immune to tax under Article 286 of the Constitution. It was held by the High Court that an element of consensuality subsisted even in compulsory sales governed by law and once there was an element of consensuality even though minimal, that would be sale or purchase for purposes of Sale of Goods Act and the same would be exigible to sales or purchase tax under the relevant Sales Tax law of the country. On an analysis of all the provisions of the in general and sections 17 and 25 in particular, the High Court held that on the true principles of compulsory acquisition or eminent domain, it was difficult to hold that on compulsory delivery by growers to the Board, there would be compulsory acquisition of coffee by the Coffee Board. The High Court dismissed all the writ petitions by a common judgment. The Coffee Board filed appeals in this Court by 349 certificate against the decision of the High Court. The writ petitions filed in this Court were for the determination of the rights, obligations and liability between the petitioners and the Coffee Board in respect of the sales tax due and payable on the transactions between the parties. Dismissing the appeals and the Writ Petitions Nos. 358 and 37 of 1986 and disposing of the Writ Petitions Nos. 36 and 39 of 1986, the Court. ^ HELD: The question involved in these appeals and the writ petitions was the exigibility of tax on sale, if any, by the growers of the coffee to the Coffee Board. Basically, it must depend upon what is sale in the general context as also in the context of the relevant provisions of the Karnataka Sales Tax Act 1957 as amended from time to time, and the . These, however, must be examined in the context of general law, namely, the and the concept of sale in general. [358F G] Coffee Board is a 'dealer ' registered as such under the and the Sales Tax Acts of all the States in which it holds auctions/maintains depots runs coffee houses. It collects and remits sales tax on all the coffee sold by it to the State in which the sale takes place. It transfers coffee from one State to another. [360B,E] This Court (Bench of Five Judges) in the case of State of Kerala vs Bhavani Tea Produce Co., ; , which arose under the Madras Plantations Agricultural Income Tax Act, held that when growers delivered coffee to the Board, all their rights therein were extinguished and the Coffee vested in the Board. The Court, however did not hold that there was a taxable 'sale ' by the grower to the Board in the year in question. The Court in this case was bound by the clear ratio of that decision and it could not by pass the same. That decision concludes all the issues in this case. Several questions were canvassed in these appeals in view of the decision of the High Court, and all the questions were answered by this Court in the Bhavani Tea Produce Co. 's case (supra) against the appellant. [360F G; 364B] All the four essential elements of sale (1) parties competent of contract, (2) mutual consent, though minimal, by growing coffee under the conditions imposed by the (The Act), (3) transfer of property in the goods and (4) payment of price though deferred were present in the transaction in question. As regards the provision under section 26(2) empowering the Coffee Board to purchase additional 350 coffee not delivered for inclusion in the surplus pool, it is only a supplementary provision enabling the Coffee Board to have a second avenue of purchase, the first avenue being the right to purchase coffee under a compulsory delivery system formulated under section 25(1) of the Act. The scheme of the Act is to provide for a single channel for sale of coffee grown in the registered estates. The Act directs the entire coffee produced except the quantity allotted for internal sale quota, if any, to be sold to the Coffee Board through the modality of compulsory delivery and imposes a corresponding obligation on the Coffee Board to compulsorily purchase the coffee delivered to the pool, except (1) where the coffee delivered is found to be unfit for human consumption, and (2) where the coffee estate is situated in a far off and remote place or the coffee grown in an estate is so negligible as to make the sale of coffee through compulsory delivery an arduous task and an uneconomical provision. [367E H; 368A B] In the nature of transactions contemplated under the Act, mutual assent either express or implied is not totally absent in this case in the transactions under the Act. Coffee growers have a volition or option, though minimal or nominal to enter into the coffee growing trade. If any one decides to grow coffee, he must transact in terms of the regulation imposed for the benefit of the coffee growing industry. Section 25 of the Act provides the Board with the right to reject coffee if it is not upto the standard. Value to be paid as contemplated by the Act is the price of the coffee. There is no time fixed for delivery of coffee either to the Board or the curer. These indicate consensuality not totally absent in the transaction. [368C E] The scheme contemplated under the Act was not an exercise of eminent domain power. The Act was to regulate the development of coffee industry in the country. The object was not to acquire coffee grown and vest the same in the Coffee Board. The Board is only an instrument to implement the Act. The High Court had rightly observed that the Board has been chosen as the instrumentality for the administration of the Act. It cannot be said in the Act, there is any compulsory acquisition. In essence, the scheme envisages sale and not compulsory acquisition. The terms 'sale ' and 'purchase ' have been used in some of the provisions and that is indicative that no compulsory acquisition was intended. The levy of duties of excise and customs under sections 11 and 12 of the are inconsistent with the concept of compulsory acquisition. Section 13(4) of the clearly fixes the liability for 351 payment of duty of excise on the registered owner of the estate producing coffee. The Board is required to deduct the amount of duty payable by such owner from the payment to the grower under section 34 of the Act. The duty payable by the grower is a first charge on such pool payment becoming due to the grower from the Board. Section 11 of the Act provides for levy of duty of customs on coffee exported out of India. This duty is payable to the Customs Authorities at the time of actual export. The levy and collection of this duty are not unrelated to the delivery of coffee by the growers to the Board of the payments made by the Board to the growers. The duty of excise as also the duty of customs are duties levied by Parliament. It is not a levy imposed by the Board. The revenue realised from levy of these duties forms part of the Consolidated Fund of India, which may be utilised for the purpose of the only if the Parliament by law so provides. The true principle or basis in Vishnu Agencies (Pvt.) Ltd. vs Commercial Tax officer and others, etc. ; , , applies to this case. Offer and acceptance need not always be in an elementary form, nor does the law of contract or sale of goods require that consent to a contract must be express. Offer and acceptance can be spelt out from the conduct of the parties which cover not only their acts but omissions as well. The limitations imposed by the Control order on the normal right of the dealers and consumers to supply and obtain goods, the obligation imposed on the parties and the penalties prescribed by the order do not militate against the position that eventually, the parties must be deemed to have completed the transaction under an agreement by which one party binds itself to supply the stated quantity of goods to the other at a price not higher than the notified price and the other party consents to accept the goods on the terms and conditions mentioned in the permit or the order of allotment issued in its favour by the concerned authority. [375C H; 376A B] A contract, express or implied, for the transfer of the property in the goods for a price paid or promised is an essential requirement for a 'sale '. In the absence of a contract, express or implied, there cannot be any sale in law; however, in this case, as the scheme of the Act is, there was contract contemplated between the growers and the Coffee Board. In law, there cannot be a sale whether or not compulsory in the absence of a contract express or implied. [376B C] The imposition of tax in the manner done by the Sales Tax Authorities upheld by the High Court was correct and the High Court was right. The appeals failed. [378D] 352 Civil Writ Petition No. 358 of 1986 was dismissed. Writ Petition No. 36 of 1986, the Court could not go into the contentions in this petition. The rights and obligations of the parties inter se between the petitioners and the Coffee Board might be agitated in appropriate proceedings. Writ Petition 37 of 1986 was dismissed without prejudice to the rights of the petitioners to agitate the question of liability of the petitioner vis a vis the Coffee Board in respect of the Sales Tax due and payable on the transactions between the parties in appropriate proceedings. In Civil Writ Petition No. 39 of 1986, the Court passed no order; this was without prejudice to the right of the parties taking appropriate proceedings if necessary for the determination of the liabilities inter se between the petitioners and the Coffee Board for the amount of the Sales Tax payable. [378E G] Indian Coffee Board vs State of Madras, 5 S.T.C. 292; C.E.B. Draper & Sons Ltd. vs Edward Turner & Son Ltd., ; State of Kerala vs Bhavani Tea Produce Co., ; ; Consolidated Coffee Ltd. & Anr. vs Coffee Board, Bangalore, etc. ; , ; Peanuts Board vs The Rockhampton Harbour Board, 48 Commonwealth Law Reports 266; Vishnu Agencies (Pvt.) Ltd. etc. vs Commercial Tax officer and others etc. ; , ; Indian Steel and Wire Products Ltd., Andhra Sugar Ltd. and Karam Chand Thapar, ; ; State of Madras vs Gannon Dunkerley & Co. Ltd., ; ; New India Sugar Mills vs Commissioner of Sales Tax, Bihar, [ 19631 Suppl. 2 S.C.R. 459; Charanjit Lal Choudhury vs The Union of India & Ors., ; ; State of Karnataka and another etc. vs Ranganatha Reddy and Anr. ; , ; Milk Board (New South Wales) vs Metropolitan Cream Pty. Ltd., ; and State of Tamil Nadu vs N. K. Kamaleshwara, 119761 1 S.C.R. 38, referred to.

The appellant assessee was a partnership firm carrying on business inter alia of manufacture and erection of cranes. During the assessment year 1965 66, the assessee entered into two contracts for supply and erection of 3 motion electrical overhead travelling cranes. The assessee carried out both the contracts and fabricated and erected 3 motion electrical overhead travelling cranes according to the contract specifications. A question arose in the assessment of the assessee to sales tax for the assessment year 1965 66 whether the amount of Rs. 1,34,500/ received by the assessee under the contract with M/s. Kamlapati Motilal Sugar Mills and the amount of Rs. 2,38,000/ received under the contract with M/s. Upper Doab Sugar Mills Ltd., formed part of the turnover of the assessee and was liable to sales tax. The Sales Tax Officer took the view that the contracts were essentially contracts of sale of ready made cranes and the erection of the cranes at the factory site was merely incidental to the sales and the amounts of Rs. 1,34,500/ and Rs. 2,38,000/ received under the contracts were, therefore taxable. This view was upheld by the Assistant Commissioner in appeal, but in revision the Additional Judge (Revisions) held that each of the two contracts was a works contract not involving any sale of goods and hence the amounts were not exigible to sales tax. On a reference to the High Court at the instance of the Commissioner of Sales Tax, the High Court took the view that each of the two contracts was for supply of 3 motion electrical overhead travelling cranes as a complete unit and "the predominant object was supply of crane as complete unit" and "the bestowing of labour and skill in the execution of the contract" appeared to have been incidental to the supply of the machine. " The High Court observed that in its view parties "intended the property to pass in the subject matter of the contract, namely, the completed crane as movable property" and concluded that it was a contract of sale of goods and not a contract for work and labour. The High Court accordingly answered both the questions referred to it against the assessee and in favour of the Revenue. Allowing the appeal by special leave the Court, ^ HELD: 1. The primary test to find out whether a contract is a contract of sale or a contract for work and labour is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work. The Court 's have evolved some subsidiary tests to resolve the difficulty arising in the application of this primary test as there are a large number of cases which are on the 622 border line and fall within what may be called "grey area". One such test formulated by the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh vs Purshottam Premji, 26 STC 38 is: "The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole. .In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it (at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price." [628 C G] Commissioner of Sales Tax, M.P. vs Purshottam Premji, 26 STC 38; State of Rajasthan vs Man Industrial Corporation 24 STC 349; Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra, ; ; applied. Each of the two contracts for fabrication and erection of a 3 motion electrical overhead travelling crane is not a contract for sale but a contract for work and labour, (a) It is essentially a transaction for fabricating component parts and putting them together and erecting them at the site so as to constitute a 3 motion electrical overhead travelling crane. The transaction is no different than one for fabrication and erection of an open godown or shed with asbestos or tin sheets fixed on columns, (b) It is not as if a 3 motion electrical overhead travelling crane is fabricated by the manufacturer and then sold and delivered to the customer as a chattel, (c) The fabrication and erection of a 3 motion electrical overhead travelling crane is a highly skilled and specialised job and the component parts have to be taken to the site and they are assembled and erected there and it is only when this process is complete, then a 3 motion electrical overhead travelling crane comes into being. The process of assembling and erection requires a high degree of skill and it is not possible to say that the erection of a 3 motion electrical overhead travelling crane at the site is merely incidental to its manufacture and supply. The fabrication and erection is one single indivisible process and a 3 motion electrical overhead travelling crane comes into existence only when the erection is complete. The erection is thus a fundamental and integral part of the contract, because without it the 3 motion electrical overhead travelling crane does not come into being. The manufacturer would undoubtedly be the owner of the component parts when he fabricated them but at no stage does he become the owner of 3 motion, electrical overhead travelling crane as a unit so as to transfer the property in it to the customer. The 3 motion electrical overhead travelling crane comes into existence only when the component parts are fixed in position and erected at the site, but at that stage it becomes the property of the customer because it is permanently embedded in the land belonging to the customer. The result is that as soon as 3 motion electrical overhead travelling crane comes into being, it is the property of the customer and there is, therefore, no transfer of property in it by the manufacturer to the customer as a chattel. [630C D, 631E H 632 A] Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra, [1979] 1 SCR page 644: followed.

% The respondent assessee carried on business in Tendu leaves. He contended before the Assessing Authority that there was no inter state sale of Tendu leaves, that the entire sales of Tendu leaves were effected in Uttar Pradesh, and that he did not know if the purchasers had taken these Tendu leaves to places outside Uttar Pradesh, and even if they have so taken the assessee could not be assessed to tax under the , as the contract between him and the purchaser was to purchase goods in U.P. This contention was not accepted and the Assessing Authority assessed the respondent. The Assistant Commissioner (Judicial) having dismissed the appeal against the order of the Assessing Authority, the respondent went in Second Appeal to the Sales Tax Appellate Tribunal. The Tribunal took notice of T.P. Form IV which was a transport permit issued by the Forest department, regarding the validity of Nikasi of Tendu leaves from the forest, and came to the conclusion that merely because T.P. Form had been issued, it does not follow that there were inter state sales. The Tribunal allowed the appeal and quashed the order passed by the assessing authority as well as First Appellate Authority. The Revenue went up in appeal to the High Court, which held that the goods were moved out of U.P. in pursuance of an agreement of sale entered into between the assessee and their customers and that the condition precedent for imposing sales tax under the Central Sales Tax 447 Act was not present and dismissed the appeal. Dismissing the Special Leave Petitions of the Department, this Court, ^ HELD: 1. Sale could be said to be in the course of inter state trade only if two conditions concur, viz. (1) a sale of goods, and (2) transport of those goods from one State to another. Unless both these conditions are satisfied, there could be no sale in the course of interstate trade. There must be evidence that the transportation was occasioned by the contract, and as a result goods moved out of the bargain between the parties from one State to another. [448H; 449A] Bengal Immunity Co. vs State of Bihar, 6 STC 446 referred to 2. The condition precedent for imposing sales tax under the , is that the goods must move out of the State in pursuance of some contract entered into between the seller and the purchaser. [449F G] 3. T.P. Form IV is a transport permit issued by the Forest Department. The Forest Department has given in writing that this permit did not relate to sale but was a certificate regarding the validity of Nikasi of Tendu Leaves from the forest. Merely because T.P. Form has been issued, it does not follow that there were inter state sales. [448F G] 4. The onus lies on the Revenue to disprove the contention of the assessee, that a sale is a local sale and to show that it is an inter state sale. [449C]

The respondent was assessed to income tax for assessment year 1960 61 under section 23(3) of the, Income Tax Act, 1922 and for the assessment years 1961 62 and 1962 63 under section 143(3) of the income Tax Act, 1961. The validity of the notices issued under section 147(a) read with section 148 of the Act of 1961 in respect of these three assessment years was challenged by the respondent under Act 226. Though the notices did not disclose any material to justify their issue, the Income Tax Officer in his return before the High Court stated that during the course of assessment for the year 1963 64 of the wife of the respondent, she contended having received valu able assets from the respondent between 11th December 1955 and 28th October, 1960 without adequate consideration in money or money 's worth. The income from the said assets which should have been included in the return of the re spondent was not so included by him and that the capital gains arisen therefrom was also not included or disclosed by the respondent In his returns. A Learned Single Judge relying upon the decision of the Supreme Court in V.D.M. RM. M. RM. Mathiah Chettiar vs Commissioner of Income tax, Madras quashed the notices. The appeal of the Revenue failed before the Divi sion Bench. ' Dismissing the appeal, HELD: By failure of the assessee to include the share income of his wife and minor child in his return, it cannot be deemed that he has failed to disclose fully and truly all material facts necessary for the assessment within the meaning of section 34(1)(a) of the Indian Income Tax Act. [1107B] V.D.M. RM. M. RM. Muthiah Chettiar vs Commissioner of Income tax, Madras, ; Malegaon Electricity Co. (P) Ltd. vs 1103 Commissioner of Income tax, Bombay, and Commis sioner of Income tax, Kerala vs Smt. P.K. Kochammu Amma, Peroke, , followed.

The respondent are co operative societies of growers of sugarcane who supplied sugarcane to the appellant which is a sugar manufacturing factory. The use and supply of sugarcane is controlled under the provisions of the . The Sugarcane Control order, 1955 empowers the Government to fix the minimum price payable by the manufacturer of sugar to the grower of sugarcane. In 1962, the Sugarcane Control (Additional Powers) Act 1962 came into existence. Pursuant to the Powers conferred by the 1962 Act, the Central Government amended the 1955 Control order by introducing clause 3A providing for payment of additional price for sugarcane purchased by the producers of sugar. The 1955 Control order was repealed and replaced by the Sugarcane Control order 1966. The respondent are recognised by the Government of India and the appellant for the purpose of 1966 Control order. Under the 1966 order the Government was competent to denote an area where sugarcane is grown as a reserved area for factory. The sugarcane grown in that area is required to be sold to the allotted factory. The Government controls all aspects of the use of sugarcane grown in the reserved area. The 1966 order provides for fixation of minimum price of sugarcane payable by manufacturers of sugar to the growers. In determining the minimum price the Government is required to take into account (i) cost of production of sugarcane, (ii) return to the grower from alternative crops and the general trend of prices Of agricultural commodities; (iii) the availability of sugar to the consumer at a fair price; (iv) the price at which sugar is sold by the producers; and (v) the recovery of sugar from sugarcane. The 1966 Control order further provides for payment of additional price in addition to the minimum price. On determination of the price the same ` is required to be intimated in writing to the producers of sugar, growers Co operative Societies of Growers or the local Growers ' Association. An appeal is provided to the Government of India against the determination of the additional price. Clause 5(3) of the 1966 Control order provides that if the Central Government is satisfied that during any year a factory has made no profit or has made inadequate profit that Government may exempt either wholly or partially any producer of sugar from payment of the additional price. The relevant authority under the 1966 Control order fixed additional price payable by the appellants to the respondent. No appeal was preferred either by the appellant or the respondent. The appellants did not pay the additional price. appellant made applications seeking exemption on the ground that the appellants had made inadequate profits. The Government exempted the appellants from paying whose of the additional price for the year 1961 62 and reduced the additional price for the year 1960 61 without giving any opportunity of being heard to the respondent The respondents challenged the validity of the grant of exemption by filing a writ petition in the High Court. The High Court allowed the said writ petition on the ground that the order of the Central Government was violative of principles of natural justice, since no opportunity was given to the respondents to be heard in the matter. 741 Dismissing the appeal by certificate, ^ HELD: (1) Clause 5(1) provides for the payment of additional price and II clause 5(3) provides for exemption from the payment of additional price. Clause 5(5) provides for filing an appeal to the Central Government by any person feeling aggrieved by the decision of the fixation of additional price. The power to grant exemption cannot be said to be independent of the provisions of clause 5 of tho order. The object of 1966 control order is to promote sugar industry and to eliminate unnecessary impediments in The production of sugar. It also ensures a fair deal to the growers of the sugarcane. The provisions of the control order are intended to maintain harmony between the Growers of sugarcane and the producers of sugar and to enable both of them to share profits reasonably. is necessary to give opportunity to be heard both to the growers of the sugarcane as well as the producers of sugar when the Government exercises powers under 1966 Control order for determining the additional price and granting exemption from payment of additional price. [744 H, 745 A E] (2) The grant of exemption from payment of price affects rights and interests of the growers of sugarcane. The order of exemption takes away rights which had accrued in favour of the growers of sugarcane. It is, therefore necessary for the Government to consider the points of view or objections of the growers on the application made by the factories producing sugar seeking exemption from payment of additional price. [745F, G, 746A] (3) The situations in which a duty will arise to act judicially according to. natural justice cannot be exhaustively enumerated. A duty to act judicially will arise in the exercise of power to deprive a person of legitimate interest or expectation that additional price would be paid. The factors which point to an exercise of power judicially are the nature of interest to be affected. the circumstances in which the power falls to be exercised and the nature of the sanctions, if any, involved. [746 C] (4) It is clear that the purpose and purport of the 1966 Control order point to the inescapable conclusion that the sugarcane growers are to be heard not only when additional price is fixed but also when exemption is granted to factories from payment of additional price. [746 D]

In exercise of the powers under section 3 Of the Essential Com modities Act, 1955, and under cl. 5 of the Sugar (Control) Order, 1955, the Government of India issued a notification dated July 30, 1958, fixing the ex factory price per maund of sugar produced in Punjab, Uttar Pradesh and North Bihar. The petitioners challenged the legality of the notification on the grounds (1) that it was beyond the ambit of authority conferred on the Central Government under section 3 of the Essential Commodities Act, 955, and clause 5 Of the Sugar (Control) Order, 1955, and that, in any case, it was bad as it could not subserve the purposes of the Act ensuring equitable distribution of the commodity to the consumer at a fair price, (2) that the Act and the Order did not authorise the Central Government to fix ex factory prices, and,, in any case, the notification failed to fix prices for the ultimate consumer, (3) that it imposed an unreasonable restriction on the right to trade under article 10(1)(g), inasmuch as it fixed the price arbitrarily, and there was no reasonable safeguard against the abuse of power, and (4) that it was discriminatory because it fixed ex factory prices only for factories in Punjab, Uttar Pradesh and North Bihar and not for factories in other parts of India and there was no reasonable classification discernible on any intelligible differentia on the basis of which prices had been controlled in certain regions only. Held, (1) The notification dated July 30, 1958, is within the authority conferred on the Central Government by section 3 Of the , and cl. 5 of the Sugar (Control) Order,1955. (2) Section 3 of the Act which provides for control of price is very general in terms and authorises the Central Government to fix the ex factory price of sugar without fixing the wholesale or retail prices; and, since fair prices for the consumer are ensured by fixing the ex factory price, the notification in question subserves the purposes of the Act, and is valid. (3) Clause 5 of the Sugar (Control) Order, 1955, lays down the factors which have to be taken into consideration in fixing prices, and as the prices were fixed in accordance therewith, the 124 action taken by the Government in the interests of the general public could not be challenged on the ground that it was an unreasonable restriction on the right to carry on trade under article 19(1)(g) of the Constitution. (4) Though under the notification prices are fixed for fac tories only in Punjab, Uttar Pradesh and North Bihar, in effect, they are fixed for the whole of India, as the other States are deficit ; consequently, the notification brought about no discrimination between different regions.

Civil Appeal No. 622 of 1960. Appeal from the judgment and order dated February 12, 1960, of the Allahabad High Court (Lucknow Bench) at Lucknow in Writ Petition No. 228 of 1959. 1. M. Lall, E. Udyarathnam and section section Shukla, for the appellant. C. B. Agrawalla and C. P. Lal, for the respondents. November 3. The Judgment of the Court was delivered by SHAH, J. In 1951 the appellant Devendra Pratap Narain Rai Sharma held the post of "Inspector Qanungo" in the Revenue Department of the State of Uttar Pradesh and was selected for the post of Tehsildar on probation. By order dated April 21, 1952, the Collector of Jhansi suspended the appellant and commenced an enquiry against him on certain charges of misdemeanour. In June, 1952, the Collector recommended to the Land Reforms Commission that the appellant be reverted to the post of "Naib Tehsildar", but the Commissioner recommended to the State Government that the applicant be dismissed from service. 317 The State Government accepted the recommendation of the Commissioner and dismissed the appellant from service, by order dated September 16, 1953. The appellant then commenced an action (Suit No. 163 of 1954) in the Court of the Civil Judge, Lucknow, challenging the legality of the order of dismissal principally on the ground that he was not afforded the opportunity of defending himself and of showing cause against the action proposed to be taken against him. The Civil Judge dismissed the suit but the decree of the Judge was reversed by the High Court of Civil Judicature at Allahabad. The High Court held that reasonable opportunity was not afforded to the appellant either before the recommendation was made for imposing penalty or before imposing punishment and therefore the appellant was deprived of the protection of article 311 of the Constitution. The High Court, accordingly, allowed the appeal, set aside the decree of the Civil Judge and granted a declaration that the order passed by the Government of Uttar Pradesh dated September 16, 1953, purporting to dismiss the appellant was void, inoperative and illegal and the appellant must be deemed to continue in service. The appellant was then by the Government of Uttar Pradesh Notification dated March 30, 1959, reinstated to his original post of Tehsildar. He was posted at Tehsil Puranpur in District Pilibhit and took charge of his office on April 28, 1959. The appellant then applied to the Accountant General of Uttar Pradesh for payment of arrears of salary and allowances due to him. The Accountant General, by letter dated May 18. 1959, informed the appellant that he was "entitled to draw pay and allowances with effect from April 28, 1959" and that as regards the arrears of pay and allowances for the period between April 21, 1952, and April 28, 1959, reference had been made to the State Government about the terms and 318 conditions of the appellant 's reinstatement and that action would be taken on receipt of instructions in that behalf. The appellant was again suspended by order dated July 11, 1959, issued by the Board of Revenue and was directed to hand over charge to the Naib Tehsildar of Tehsil Puranpur. On July 24, 1959, the Board of Revenue ordered that the salary of the appellant for the period between April 21, 1952, and the date of taking over charge of his duties as Tehsildar on reinstatement will be fixed as follows: (1) The pay from April 21, 1952 till the date of orders of his dismissal will be limited to the subsistence allowance of Rs. 76/11/ already drawn by him. (2) The pay for the period from the date following the date of the order of his dismissal till the date of his taking over charge of his duties as Tahsildar on reinstatement will be fixed at Rs. 1/ p.m. as token pay. The appellant was also informed that the period of his dismissal, i.e. April 21, 1952, to the date of his taking over charge of his office as Tehsildar on reinstatement will be treated as "on duty", and will count towards pension. The appellant applied on August 25, 1959, to the High Court at Allahabad by a petition under article 226 of the constitution praying for a writ quashing the order directing enquiry into the allegations regarding his work and conduct as Tehsildar at Garautha, District Jhansi and for a direction setting aside the order of suspension dated July 11, 1959, and for a direction permitting the appellant to draw his full salary and allowances with all increments amounting to Rs. 27,238/10/ and for an order to the Accountant General to issue pay slips at the rate of Rs. 325/ p.m. from the date 319 of taking over charge with dearness and house allowances with further increments, if any, falling due in the scale of Rs. 200 10 250 15 400, and for directions to the respondents to issue orders for confirmation of the appellant with effect from April 19, 1953. The appellant claimed that the Government of Uttar Pradesh had no power to reopen the enquiry concluded by the decision of the High Court of Allahabad and that the State was bound to pay him salary with increments and allowances for the period of suspension as if he was on duty during that period. He also claimed that he must be deemed to have been confirmed in the post of a Tehsildar and, therefore, entitled to salary in the grade of Tehsildar. The High Court held that the second enquiry against the appellant directed by the Board of Revenue was not barred by virtue of the previous decision and that the appellant could not be deemed to have been confirmed with effect from April, 1953. The High Court further held that because the appellant had not claimed the salary for the period April 21, 1959, to November 24, 1954, in the Civil Suit filed by him he should be deemed to have relinquished that part of his claim. Regarding the salary for the period November 24, 1954, to April 28, 1959, the High Court held that fixation of Rs. 1/ by the Board of Revenue as token salary of the appellant amounted to punishment which the Government could not impose without following the procedure laid down by article 311 of the Constitution. In the view of the High Court the appellant having been reinstated, there was no justification for not granting him full salary till July 14, 1959, the date till which he continued to function as Tehsildar after reinstatement. But the High Court observed, "A writ of mandamus can, however, only direct the opposite parties to proceed in accordance with law. We, therefore, direct that the order contained in annexure 11 be quashed and the State Government 320 directed to reconsider the matter in the light of the relevant rule after giving notice to and hearing the petitioner. " The High Court further held that the appellant was not entitled to any higher salary nor was there anything to show that he had earned any annual increment or had crossed the efficiency bar. Against the order passed by the High Court partially allowing the petition and directing the State Government to reconsider the matter regarding the pay and allowances due to the appellant for the period November 24, 1954, to April 28, 1959, this appeal has been preferred with certificate of fitness granted under Articles 132 (1) and 133 (1)(b) of the Constitution. In our view, the State Government was competent to direct a fresh enquiry against the appellant for dereliction of duty even if such dereliction was in the period relating to which proceedings were previously started and the appellant had been dismissed from service. The appellant was not in the earlier proceedings exonerated by the High Court in respect of the alleged misconduct charged against him, and, in any event, charge against him in the second enquiry was different from the charge in the first enquiry. The High Court had in the suit challenging the order passed in the first enquiry expressly observed that on the question as to misconduct and the punishment, no opinion was expressed. The suit filed by the appellant was decreed only on the ground that he had not been afforded a reasonable opportunity of showing cause against the charge against him and also the punishment decided to be imposed upon him. Authorities on which reliance was placed by counsel for the appellants, namely, Dwarkachand vs State of Rajasthan, Nanak Chandra Bairagi vs 321 Supdt. of police, Sibsagar and Mohan Singh Chaudhari vs Divisional Personal officer, Northern Railway, Ferozepore Cantt, do not support the plea that the second enquiry is, in the circumstances of the case, barred. An adjudication on the merits by a quasi Judicial body may or may not debar commencement of another enquiry in respect of the same subject matter. But in this case we are concerned with the scope of the High court order. The binding effect of a judgment depends not upon any technical consideration of form, but of substance. The High Court in the appeal filed by the appellant in suit No. 163 of 1954 did not exonerate the appellant from the charges. The High Court decreed the suit on the ground that the procedure for imposing the penalty was irregular, and such a decision cannot prevent the State from commencing another enquiry in respect of the same subject matter consistently with the provisions of articles 310 and 311. In Dwarkachand 's case, in a previous enquiry the public servant concerned had been exonerated; and in Mohan Singh Chaudhari 's case a decision by the, civil court declaring illegal an order dismissing a public servant by an officer not authorised in that behalf was held binding on all the parties in proceedings under Art 226 till such decision was set aside in accordance with law. In Kanak Chandra 's case it was held that an order in exercise of powers of revision by the Governor under the authority reserved to him setting aside on order of censure passed by a subordinate authority and dismissing the public servant concerned from service did not amount to a second departmental enquiry. These cases do not lend support to the proposition that after an order passed in a enquiry against a public servant imposing a penalty is quashed, by a civil court, no further proceeding can be commenced against him even if in the proceeding can be commenced against him even if in the proceeding in which the order quashing 322 the enquiry was passed, the merits of the charge against the public servant concerned were never investigated. If the State Government was competent to order a fresh enquiry, we see no reason why it would be incompetent to direct suspension of the appellant during the pendency of the enquiry. The High Court in dealing with the appellant 's claim to salary during the period of his suspension pending the earlier enquiry observed that there was no justification for "not granting the appellant his full pay" for the period after the date of the suit. But the counsel for the State of Uttar Pradesh asserted that it is open to the State, notwithstanding the direction, to award as remuneration to the appellant for the period for which he was under suspension any amount which on a reconsideration of the matter in the light of the relevant rules and after hearing the appellant the State Government considers just and proper. This power, counsel contends, arises by virtue of Rule 54 of the Fundamental Rules framed by the State of Uttar Pradesh under the authority conferred under article 309 of the Constitution. Counsel says that it was because of this rule that the High Court directed the State Government to reconsider the matter in the light of the relevant rules. In our view, this contention is wholly misconceived. Rule 54, as amended in 1953, stands as follows: "54. (1) When a Government servant who has been dismissed, removed or suspended is reinstated, the authority competent to order the reinstatement shall consider and make a specific order (a) regarding the pay and allowances to be paid to the Government servant for the period of his absence from duty and 323 (b) whether or not the said period shall be treated as a period spent on duty. (2) Where such competent authority holds that the Government servant has been fully exonerated or, in the case of suspension, that it was wholly unjustified, the Government servant shall be given the full pay to which he would have been entitled, had he not been dismissed, removed or suspended, as the case may be together with any allowances of which he was in receipt prior to his dismissal, removal or suspension. (3) In other cases, the Govt. servant shall be given such proportion of such pay and allowances as such competent authority may prescribe. Provided that the payment of allowances under clauses (2) and (3) shall be subject to all other conditions under which such allowances are admissible. (4) In a case falling under clauses(2) the period of absence from duty shall be treated as the period spent on duty for all purposes. (5) In a case falling under clause (3) the period of absence from duty shall not be treated as period spent on duty unless such competent authority specifically directs that it shall be so treated for any specified purposes. This rule has no application to cases like the present in which the dismissal of a public servant is declared invalid by a civil court and he is reinstated. This rule, undoubtedly enables the State Government to fix the pay of a public servant whose dismissal is set aside in a departmental appeal. But in this case the order of dismissal was declared invalid in a civil suit. The effect of the decree of the 324 civil suit was that the appellant was never to be deemed to have been lawfully dismissed from service and the order of reinstatement was superfluous. The effect of the adjudication of the civil court is to declare that the appellant had been wrongfully prevented from attending to his duties as a public servant. It would not in such a contingency be open to the authority to deprive the public servant of the remuneration which he would have earned had he been permitted to work. The High Court has disallowed to the appellant his salary prior to the date of the suit. The bar of O.2 r. 2 of the Civil Procedure Code on which the High Court apparently relied may not apply to a petition for a high prerogative writ under article 226 of the Constitution, but the High Court having disallowed the claim of the appellant for salary prior to the date of the suit, we do not think that we would be justified in interfering with the exercise of its discretion by the High Court. The order of the High Court therefore is confirmed. The State has made a wholly unjustifiable claim to fix the salary of a public servant wrongfully prevented from performing his duties, even after he is reinstated in consequence of a decision of the civil court declaring his dismissal as wrongful. As, however, the principal relief claimed by the appellant is not granted, we think that the proper order is that there will be no order as to costs throughout.

The order of dismissal against the appellant was set aside by the High Court, holding inter alia, that reasonable opportunity was set afforded to the appellant before imposing the penalty dismissed and the appellant must be deemed to continue in service. Thereafter the appellant was reinstated, but he was awarded salary at the rate of Rs. 76 11 0 till the order of dismissal, and at a token rate of Rs. 1/ for the period between the order of dismissal and reinstatement. The appellant was again suspended and enquiry was directed against him in respect of dereliction of duty for which he had already been once dismissed and re instated. The appellant moved the High Court for a writ to quash the order directing the said enquiry. He claimed that Government had no power to re open the enquiry concluded by the decision of the High Court and that the State was bound to pay him salary with increments for the period of suspension as if he was on duty during that period. The High Court, inter alia, held that the second enquiry against the appellant was not barred by virtue of the previous decision, but the fixation of token salary amounted to punishment which could not be imposed without following the procedure laid down in article 311 of the Constitution, and there was no justification for not granting him full salary. The appellant came up in appeal to the Supreme Court by certificate. ^ Held, that the State Government was competent in the circumstances, to direct a fresh enquiry against the public servant for dereliction of duty, and to suspend him. Where the order of dismissal of a public servant was declared invalid by the decree of a Civil Court the effect was that the public servant was never to be deemed to have been lawfully dismissed from service, and the order of reinstatement was superfluous. It was not open to the authority 316 to deprive the public servant of the remuneration which he would have earned has he been permitted to work. Held, further, that r. 54 of the Fundamental Rules of the Uttar Pradesh Government enables the State Government of fix the pay of a public servant, when dismissed is set aside in a departmental appeal, but that rule has no application to cases in which the dismissal of a public servant is declared invalid by the decree of a Civil Court and he is consequently re instated. Dwarkachand vs State of Rajasthan, I.L.R. , Nanak Chandra Bairagi vs Supdt. of Police, Sibsagar, I.L.R. and Mohan Singh Choudhri vs Divisional Personnel Officer, Northern Railway, Ferozepore Cantt. I.L.R. , not applicable.

The appellant, an employee of the Municipal Corporation Ahmedabad was holding the post of Laboratory Officer and while he was so holding the post, he by a Notification dated 21.12.1966, issued by the State Government, was appointed as a Public Analyst for the local area within the municipal limits of the Corporation. The respondent filed a complaint before the Magistrate for offences punishable under Sections 465, 468 and 20 1. I.P.C. alleged to have been committed by the appellant while exercising his functions as a Public Analyst. The appellant moved the High Court under Section 482, for quashing the criminal proceedings sought to be initiated against him by the said complaint. His principle contention was that he being a public servant removable from office only by the State Government, the magistrate could not take cognizance of the alleged offences and that previ ous sanction of the State Government as contemplated under section 197, Cr. P.C. was necessary. The High Court rejected the contention of the appellant and dismissed the petition. He has filed this appeal after obtaining special leave from the Court. Dismissing the appeal, this Court, HELD: The privilege or immunity from prosecution without sanction extends only when the accused is a public servant of the kind mentioned in Section 197, Cr. He must be a public servant as defined in Section 21 of the Indian Penal Code and not removable from his office save by or with the sanction of the State Government or the Central Government as the case may be. The offence must also be one committed by the accused while acting or purporting to act in the discharge of his official duty. Section 197, Cr. P.C. clearly intends to draw a line between public servants and to pro vide that only in the case of the higher ranks should the sanction of the Government to their prosecution be neces sary. [513C D, H] 512 The words "removable from office" occurring in Section 197 signify removal from the office one is holding. [514B] In the instant case, the appellant was not holding any public office in connection with the affairs of the State. The State Government had merely entrusted him with the functions of a Public Analyst which could be granted and taken by an administrative Act. It was on account of his being employed by the Municipal Corporation that he was appointed as a Public Analyst in the cadre against any post. The Prevention of Food Adulteration Act also does not con tain any deeming provision to treat the Public Analyst as a public servant. [514D E] The appellant is not therefore a public servant remova ble only by the State Government. [514G]

By section 2(1) of the Madras Vexatious Litigation (Prevention) Act 1949, the High Court of Madras was competent to issue an order against any person that no proceedings shall be instituted by him in any court (i) in the Presidency town without the leave of the High Court, and (ii) 'elsewhere without the leave of the District and Sessions Judge. On the application of the Advocate General of Andhra Pradesh the High Court of Andhra Pradesh ordered that no proceeding should be instituted by the appellant in the City of Hyderabad without leave of the High Court, in the City of Secunderabad without leave of the Chief City Civil ;Judge and elsewhere, without leave of the concerned District and Sessions Judge. In his appeal to this Court, the appellant contended that: (i) the High Court had no jurisdiction to take action under the Act as its provisions were not extended to the Telangana area of the State, which formed part of the former State of Hyderabad; and (ii) the Act was unconstitutional because it prevented some citizens from approaching the Court, which everyone is entitled to in a State governed by the rule of law. HELD: (i) (Per K. Subba Rao, K.N. Wanchoo, M. Hidayatullah and S.M. Sikri, J5.) The High Court was in error in holding that the Act merely created a procedural jurisdiction to put persons who indulge habitually in vexatious litigation under a procedural restraint in the former High Court of Madras, which jurisdiction, on its division into the two High Courts of Madras and Andhra Pradesh inhered in both the High Courts and continued to inhere in the High Court of Andhra Pradesh even for the purposes of those areas to which the Act had not been extended. [752 D F] The Act was passed by the Madras Provincial Legislature,and conferred jurisdiction upon the Madras High Court to deal with habitual litigants indulging in vexatious litigation. It was not an inherent jurisdiction of the Madras High Court. By sections 30 and 53 of the Andhra State Act, 1953, the Vexatious Litigation (Prevention) Act continued to be in force in the Andhra State, and the Andhra High Court possessed the same jurisdiction as the former Madras High Court. But the Act is unworkable in the State of Andhra Pradesh which is formed under the , by adding the Telangana area of the former Hyderabad State to the State of Andhra; and section 65 of the does not alter the position. [753 H] 744 All laws are intended to operate territorially and no Provincial Legislature in India, possesses extra territorial jurisdiction. What the Madras Legislature enacted was to operate in its own territory and it said so in the Vexatious Litigation (Prevention) Act. In its operative part also, the order under the Act was to be made with a territorial distinction between the Presidency town and the rest of the Presidency of Madras. The Act vested a jurisdiction in the High Court to deal with a particular type of litigant, but the Act made the High Court deal with the matter territorially and if new territories we 're to be governed by it had to be extended to the new territories and till so extended, the Act can only operate within the old territories. Under section 119 of the , no law of one of the amalgamating States is to be extended to the area of the other amalgamating States, except by a competent legislative or other competent authority, and further, the law shall be construed as restricted to the territories within each State immediately before the reorganisation. Since the Act has not been extended to the Telangana area, the application of the Act in that area is made impossible by section 119, and it cannot be extended by judicial construction. No doubt, the Court possesses a power, under section 121 of the , to construe laws by adapting them in such a manner as to facilitate their application to the newly formed State, but the power is of adaptation and not legislation. An increase in the territories in which an Act is to apply is dependent on legislation such as is contemplated by section 119. [753 F H; 754 A C] Moreover, there being no Presidency town in the State of Andhra Pradesh, section 2(1)(i) of the Act is inapplicable in the State of Andhra Pradesh. The mention of the Presidency town in the sub section was not with a view to indicate the seat of the High Court, but because the Madras High Court, possessed original jurisdiction in the Presidency town. Therefore, the distinction between the City of Hyderabad and other parts of Andhra Pradesh, drawn by the High Court as if the City of Hyderabad was a Presidency town, was an artificial distinction which should not have been drawn by the High Court. Section 2(1)(ii) is also inapplicable because, the contention that the entire State may be taken to be governed by that sub clause would lead to the strange result that the District and Sessions Judge would decide whether a particular litigant should be allowed to move the High Court in, appeal, revision or in an original proceeding. [754 E H] Per Shah, J. (Dissenting): Parliament having by the Andhra State Act invested the High Court of Andhra with authority to exercise all jurisdiction which the High Court of Madras possessed, within the territories of the State of Andhra, and thereafter, having by section 65(1)(a) of the extended the exercise of that authority over the entire territory of Andhra Pradesh, it would be impossible to accept the argument that in respect of the jurisdiction conferred by the Vexatious Litigation (Prevention) Act, the High Court of Andhra Pradesh was incompetent to pass the order which it did against the appellant. [759 A C] The Andhra High Court was a successor of the Madras High Court and exercised all the powers and administered the same law which the latter exercised in the territories comprised in the Andhra State. Since Parliament expressly provided by section 55 of the Andhra State Act, that a court may construe a law which it has to enforce, with such alterations not affecting the substance as may be necessary or proper to adapt it to the matter before the court, the expression "Presidency town" must, in the context of the constitution of a separate Andhra High Court, mean the town of the State in which the 745 High Court was located. If it be granted that the High Court of: Andhra had jurisdiction to pass orders under the Vexatious Litigation (Prevention) Act, it would be difficult to hold that section 119 of the restricts the exercise of the power by the High Court of Andhra Pradesh to prevent a vexatious litigant from instituting proceedings in 'and from Certain areas of the Andhra Pradesh and not elsewhere. Section 65(1) of the which must be read harmoniously with section 119 authoring the High Court of Andhra Pradesh to exercise all jurisdiction, which the High Court of Andhra could exercise, over all the territories transferred to the State of Andhra Pradesh from the existing State of Hyderabad. The Vexatious Litigation (Prevention) Act, does not require that the person to be restrained must be residing in or have a domicile within the jurisdiction of the Court, nor has the order contemplated to be passed, any direct territorial operation. It is a personal direction which imposes restrictions upon the person restrained. Once the High Court pronounces an order, it may be removed in appropriate cases only by the High Court, where the proceeding is to be instituted in any court in the town in which the High Court is located, and elsewhere, by order of the District and Sessions Court; and so, there is no conflict of jurisdiction between the High Court and the District Court. [756 D H] z (ii) (By Full Court): The Act is not unconstitutional. The litigants who are prevented from approaching the court without proper sanction are persons who habitually file vexatious actions. Even they are not deprived of their right to go to a court in genuine and bona fide actions, but the Act only creates a check. The object of the Act is to promote public good, because, it cannot be claimed that it is an inviolable right of any citizen to bring vexatious actions without control.

Respondent Ram Ratan was employed as a Forest Guard in the Forest Department of Madhya Pradesh Government. He was served with a charge sheet dated March 6, 1969, in which he was accused of misconduct. Respondent refuted the charges. A departmental enquiry was held by the Divisional Forest Officer, Mr. Mathotra, in respect of the charges framed against the respondent. Charge of misconduct was held proved whereupon the punishing authority served respondent with a second show cause notice dated February 12, 1970, as contemplated by Article 311(2) of the Constitution as it stood prior to its amendment in 1976. After the respondent replied to the notice the disciplinary cum punishing authority imposed the penalty of compulsory retirement on the respondent. The respondent questioned the validity and correctness of the punishment in Civil Suit No. 227 A/73 filed by him in the Court of the Civil Judge, Civil Court, Class II, Sabalgarh. The trial Court decreed the suit and set aside the order imposing the major penalty of compulsory retirement and granted a declaration that respondent continues in service. On appeal by the State of Madhya Pradesh, the Second Additional District Judge, Morena, set aside the decree of the trial Court and dismissed the suit of the respondent. On appeal by the respondent to the High Court a learned single judge of the Madhya Pradesh High Court a allowed the appeal of respondent and set aside the decree made by the District Judge and restored the one passed by the trial Court with the result that a declaration was granted that the respondent would continue in service till the date of his superannuation. Hence this appeal by special leave by the State of Madhya Pradesh. Allowing the appeal, the Court ^ HELD: 1. Article 311(2) as it stood at the relevant time prior to its amendment in 1976 imposed a constitutional obligation upon the punishing authority to serve a second show cause notice where it was proposed after departmental inquiry to impose on the delinquent Government servant any of the 1244 penalties referred to in article 311 so as to give a reasonable opportunity of making representation on the penalty proposed. Rule 15(4)(i)(b) of the 1966 Rules prescribes procedure to be followed by the disciplinary authority before imposing punishment to the effect that the concerned authority should give a notice setting out the penalty proposed to be imposed on the concerned government servant, and calling upon him to submit within 15 days of the receipt of notice or such further time not exceeding 15 days, as may be allowed, such representation as he may wish to make on the proposed penalty on the basis of the evidence adduced during the inquiry held under rule 14. The punishing authority has in the second show cause notice to specify the punishment which it tentatively or provisionally decides upon to impose looking to the gravity of the charge which is held proved. At that stage the decision of the punishing authority is a tentative decision and in the very nature of things it must be so because an opportunity has to be given to the delinquent government servant to make a representation on the nature of penalty. This would imply that if the delinquent officer in his representation makes out a case for a lesser punishment the disciplinary authority would keep an open mind and after applying its mind to the representation made by the delinquent government servant, the authority may either confirm its earlier tentative decision or it would be open to it to award a lesser penalty then the one tentatively decided. [1247 C H] 2. Principle of natural justice and fair play implicit in article 311(2) and rule 15(4)(i)(b) would require that the disciplinary authority has to take into consideration the representation made by the delinquent government servant in response to the notice which is a constitutional obligation, and if the delinquent officer is in a position to pursuade by his representation, to so modulate the punishment as would accord with the gravity of the misconduct and other mitigating or extenuating circumstances all of which may enter into the verdict of deciding upon the penalty, and consequently the disciplinary authority would be free to impose a lesser penalty than the one proposed in the second notice. This is the constitutional scheme. [1248 A B] If the view, namely, that the disciplinary authority must tentatively decide upon the penalty and specify the penalty in the second show cause notice and after taking into consideration the representation made by the delinquent government servant in response to the notice it can only confirm the tentative decision but cannot award a lesser punishment, the exercise of giving second show cause notice becomes self defeating and giving of the notice inviting the representation on the question of penalty would be an exercise in futility. Such an approach would render a tentative decision as final and the rest being an empty formality. Such could not be the underlying object in enacting a constitutional mandate for the protection of government servants. [1248 C E] In service jurisprudence for different types of misconduct various penalties are prescribed in service rules. 1966 Rules prescribe as many as 9 penalties which can be awarded for good and sufficient reasons. Compulsory retirement is one of the major penalties. Similarly, removal from service which shall not be a disqualification for future appointment in government service and dismissal from service which shall ordinarily be a disqualification for future employment under the government are the other two major penalties. The disciplinary authority keeping in view the gravity of misconduct committed by the government servant will tentatively determine the penalty to be imposed upon the delinquent government servant. Degree of seriousness of misconduct will ordi 1245 narily determine the penalty keeping in view the degree of harm that each penalty can inflict upon the government servant. Before serving the second show cause notice the disciplinary authority will determine tentatively the penalty keeping in view the seriousness of misconduct. But this is a tentative decision. On receipt of representation in response to notice, the disciplinary authority will apply its mind to it, take into account any extenuating or mitigating circumstances pleaded in the representation and finally determine what should be the penalty that would be commensurate with the circumstances of the case. [1248 E H, 1249 A] It a major penalty was tentatively decided upon and a lesser or minor penalty cannot be awarded because this was not the specified penalty, the government servant to whom a notice proposing major penalty is served would run the risk of awarded major penalty because it would not be open to award a lesser or a minor penalty than the one specified in the show cause notice. Such a view runs counter to the principle of penology. In criminal and quasi criminal jurisprudence where the penalties are prescribed it is implicit thereunder that a major penalty would comprehend within its fold the minor penalty. If a major penalty is proposed looking to the circumstances of the case, at that stage, after taking into consideration the representation bearing on the subject and having an impact on the question of penalty a minor penalty can always be awarded. In penal statute maximum sentence for each offence is provided but the matter is within the discretion of the judicial officer awarding sentence to award such sentence within the ceiling prescribed by law as would be commensurate with the gravity of the offence and the surrounding circumstances except where minimum sentence is prescribed and Court 's discretion is by legislation fettered. [1299 A D] Therefore, if any particular penalty is specified as tentatively proposed in the second show cause notice the disciplinary authority after taking into consideration the representation made by the delinquent government servant can award that penalty or any lesser penalty and in so doing article 311(2) will not be violated. In fact, this leaves open a discretion to the punishing authority which accords with reason, fair play and justice. [1251 B C] Hukam Chand Malhotra vs Union of India,[1959] Suppl. 1 SCR 892; followed. Union of India and Ors. vs K. Rajappa Menon,[1969] 2 SCR 343; explained. Supreme Court while exercising its extraordinary jurisdiction under Act. 136 of the Constitution, is not bound to set aside the order of the High Court directing reinstatement of the employee, when he has succeeded in the two courts below. Quantifying the backwages and the costs would accord with the demands of social justice, reason and fairplay. [1252 D E] Punjab Beverages P. Ltd. vs Suresh Chand and Ors. ; ; followed.

The appellant firm was assessed to sales tax under the pro visions of the Bihar Sales Tax, 1944, for three periods commencing from October 1, 1947, and ending on March 31, 1050. Its claim for certain deductions was disallowed, and its applications in revision under section 24 Of the Act to the Board of Revenue, Bihar, were dismissed by three orders dated August 20, 1953, September 3, 1953 and April 30, 1954. Under section 25(1) of the Act the appellant applied to the Board to state a case to the High Court of Patna on certain questions of law, but the applications were dismissed by order dated August 30, 1954, on the ground that no questions of law arose. The appellant then moved the High Court for requiring the Board to state a case on the said questions of law. The High Court dismissed the applications in respect of the first two periods of assessment, but by order dated November 17, 1934, directed the Board to state a 277 case in regard to the third period on one of the questions of law which only, in its opinion, arose. By its judgment dated January 21, 1957, the High Court answered the question against the appellant. On February 17, 1955, the appellant made applications to the Supreme Court for special leave to appeal against the orders of the Board of Revenue dated August 20, 953, and September 3, 1953, in respect of the first two periods; and on April 12, 1955, it similarly applied for special leave in respect of the third period. Leave was granted in respect of all the three applications by order dated December 23, 1955, the leave granted in regard to the third period being confined to the order of the Board dated August 30, 1954. When the appeals came up for hearing the question was raised as to whether the appeals were maintainable in view of the fact that no applications for leave to appeal were filed against the orders of the Board of Revenue and the High Court subsequent to the orders of the Board in respect of which only special leave had been granted. Held, that though the words of article 136 of the Constitution of India are wide, the Supreme Court has uniformly held as a rule of practice that there must be exceptional and special circumstances to justify the exercise of the discretion under that Article. Pritam Singh vs The State, ; , V. Govinda rajulu Mudaliar vs The Commissioner of Income tax, Hyderabad, A.I.R. 1959 S.C. 248 and Messrs Chimmonlall Rameshwarlal vs Commissioner of Income tax (Centyal), Calcutta, , relied on. Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax, West Bengal, ; and Baldev Singh vs Commis sioner of Income tax, Delhi and Ajmer, , explained. Held, further, that in the circumstances of the present case the appellant was not entitled to a grant of special leave against the orders of the Board of Revenue where the result would be to by pass the High Court by ignoring its orders. Held, also, that though special leave might have been granted on an application made under article 136, the Court is not precluded from coming to a conclusion at the time of the hearing of the appeal that such leave ought not to have been granted. Baldota Brothers vs Libra Mining Works, A.I.R. 1961 S.C.C. 100, followed.

The appellant was appointed an Sub Inspector, food & Supplies by respondent No. 2 on 13.4.1975 on ad hoc basis against service man quota; the post being purely temporary liable to be terminated without notice and without assigning any reasons or on arrival of a regular candidate. The appellant continued in service on that post till November 17, 1980, when his services were terminated. Prior to the termination of his services he was placed under suspension on April 15, 1980 in view of the criminal proceedings under Section 420, IPC pending against him and before the culmination of criminal proceedings, his services were terminated by order dated November 17, 1980, as aforesaid. Criminal case against the appellant was decided on October 21, 1981 wherein he was acquitted of the charge. The appellant on receiving the order of termination of his services filed Civil Suit 453 of 1981 in the court of Senior Sub Judge, narnaul praying for a declaration that the orders of suspension as also termination were illegal, wrong, arbitrary and without jurisdiction and that the appellant was entitled to reinstatement and regularisation of his service under the Government notification dated 1.1.1980 issued by the Chief Secretary to the Government of Haryana authorising regularisation of such ad hoc employees who held the Class III posts for a minimum period of two years. According to the appellant his case was covered by the said notification and as such he was entitled to all the benefits of service. The Senior Sub Judge held that as the appellant was acquitted of the offence, the authorities should have revoked the suspension order and have paid the pay for the period for which the appellant remained under suspension and thus allowed to the appellant all the benefits. An appeal was taken by the respondents to the Addl. District Judge who affirmed the order of the trial court holding that no enquiry was conducted before termination of the service of the appellant. Against the order of the Addl. District Judge, the respondents preferred an appeal 74 before the High Court and the High Court allowed the appeal holding that the appellant was not entitled to be regularised automatically unless he fulfilled all the conditions given in the notification. It was also held that the case of the appellant was considered for regularisation by the Department but the same was not found suitable; the services of the appellant were terminated in accordance with the terms of his appointment. The appellant has filed this appeal against that order in this court after obtaining special leave. Allowing the appeal, this Court, HELD: The order of suspension made by the respondent No. 2 is admittedly on the sole ground that criminal proceeding was pending against the appellant. The order of termination had been made illegally during the pendency of the order of suspension and also during the pendency of the criminal proceeding which ultimately ended with the acquittal of the appellant. The settle position in law is that the appellant who was suspended on the ground of pendency of criminal proceeding against him, on being acquitted of the criminal charge is entitled to be reinstated in service. His acquittal from the criminal charge does not debar the disciplinary authorities to initiate disciplinary proceedings and after giving an opportunity of hearing to the appellant pass an order of termination on the basis of the terms and conditions of the order of his appointment. [78C E] As the appellant whose name was sent through Employment Exchange and who was appointed and has completed two years service on 31.12.1979, he is entitled to be considered for regularisation in the post of Sub Inspector, Food and Supplies. [78E] Smt. Rajinder Kaur vs State of Punjab and Anr. , ; ; Anoop Jaiswal vs Government of India, ; ; Hardeep Singh vs State of Haryana and Ors.,[1987] 4 S.L.R. 576, referred to.

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 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.

Civil Appeal No. 346 of 1958. 452 Appeal by special leave from the judgment and order dated May 10, 1955, of the former Madhya Bharat High Court in Misc. Appeal No. 26 of 1954. section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant. section T. Desai, K. B. Bhatt and B. R. L. Iyengar, for the respondent. November 16. The Judgment of Wanchoo, Das Gupta and Dayal,JJ., was delivered by Dayal J. Shah J., delivered a separate Judgment. RAGHUBUR DAYAL, J. The appellant and the respondent entered into a partnership at Indore for working coal mines at Kajora gram (District Burdwan) and manufacture of cement etc. , in the name and style of 'Diamond Industries '. The head office of the partnership was at Indore. The partnership was dissolved by a deed of dissolution dated August 22, 1945. Under the terms of this deed, the appellant made himself liable to render full, correct and true account of all the moneys advanced by the respondent and also to render accounts of the said partnership and its business, and was held entitled to 1/4th of Rs. 4,00,000/ solely contributed by the respondent toward the capital of the partnership. He was, however, not entitled to get this amount unless and until he had rendered the accounts and they had been checked and audited. The second proviso at the end of the convenants in the deed of dissolution reads: "Provided however and it is agreed by and between the parties that as the parties entered into the partnership agreement at Indore (Holker State) all disputes and differences whether regarding money or as to the relationship or as to their rights and liabilities of the parties hereto in respect of the 453 partnership hereby dissolved or in respect of question arising by and under this document shall be decided amicably or in court at Indore and at nowhere else." On September 29, 1945, a registered letter on behalf of the respondent was sent to the appellant. This required the appellant to explain to and satisfy the respondent at Indore as to the accounts of the said colliery within three months of the receipt of the notice. It was said in the notice that the accounts submitted by the appellant had not been properly kept and that many entries appeared to be wilfully falsified, evidently with malafide intentions and that there appeared in the account books various false and fictitious entries causing wrongful loss to the respondent and wrongful gain to the appellant. The appellant sent a reply to this notice on December 5, 1935, and denied the various allegations, and requested the respondent to meet him at Asansol or Kajoraram on any day suitable to him, within ten days from the receipt of that letter. On August 18, 1948, the appellant instituted Suit M. section No. 33 of 1948 in the Court of the Subordinate Judge at Asansol against the respondent for the recovery of Rs. 1,00,000/ on account of his share in the capital and assests of the partnership firm 'Diamond Industries ' and Rs. 18,000/ as interest for detention of the money or as damages or compensation for wrongful withholding of the payment. In the plaint he mentioned about the respondent 's notice and his reply and to a second letter on behalf of the respondent and his own reply thereto. A copy of the deed of dissolution, according to the statement in paragraph 13 of the plaint, was filed along with it. On October 27, 1948, respondent filed a petition under section 34 of the Arbitration Act in the Asansol Court praying for the stay of the suit in 454 view of the arbitration agreement in the original deed of partnership. This application was rejected on August 20, 1949. Meanwhile, on January 3, 1949, the respondent filed Civil Original Suit No. 71 of 1949 in the Court of the District Judge, Indore, against the appellant, and prayed for a decree for Rs. 1,90,519 0 6 against the appellant and further interest on the footing of settled accounts and in the alternative for a direction to the appellant to render true and full accounts of the partnership. On November 28, 1949, the respondent filed his written statement in the Asansol Court. Paragraphs 19 and 21 of the written statement are: "19. With reference to paragraph 21 of the plaint, the defendant denies that the plaintiff has any cause of action against the defendant or that the alleged cause of action, the existence of which is denied, arose at Kajora Colliery. The defendant craves reference to the said deed of dissolution whereby the plaintiff and the defendant agreed to have disputes, if any, tried in the Court at Indore. In the circumstances, the defendant submits that this Court has no jurisdiction to try and entertain this suit. The suit is vexatious, speculative, oppressive and is instituted malafide and should be dismissed with costs. " Issues were struck on February 4, 1950. The first two issues are: "1. Has this Court jurisdiction to entertain and try this suit? 2. Has the plaintiff rendered and satisfactorily explained the accounts of the partnership in terms of the deed of dissolution of partnership ?" 455 In December 1951, the respondent applied in the Court at Asansol for the stay of that suit in the exercise of its inherent powers. The application was rejected on August 9, 1952. The learned Sub Judge held: "No act done or proceedings taken as of right in due course of law is 'an abuse of the process of the Court ' simply because such proceeding is likely to embarass the other party." He therefore held that there could be no scope for acting under section 151, Code of Civil Procedure, as section 10 of that Code had no application to the suit, it having been instituted earlier than the suit at Indore. The High Court of Calcutta confirmed this order on May 7, 1953, and said: "We do not think that, in the circumstance of these cases and on the materials on record, those orders ought to be revised. We would not make any other observation lest it might prejudice any of the parties. " The High Court further gave the following direction: "As the preliminary issue No.1 in the two Asansol suits have been pending for over two years, it is only desirable that the said issues should be heard out at once. We would, accordingly, direct that the hearing of the said issues should be taken up by the learned Subordinate Judge as expeditiously as possible and the learned Subordinate Judge will take immediate steps in that direction. " Now we may refer to what took place in the Indore suit till then. On April 28, 1950, the appellant applied to the Indore Court for staying that suit under sections 10 and 151 Code of Civil Procedure. 456 The application was opposed by the respondent on three grounds. The first ground was that according to the term in the deed of dissolution, that Court alone could decide the disputes. The second was that under the provisions of the Civil Procedure Code in force in Madhya Bharat, the court at Asansol was not an internal Court and that the suit filed in Asansol Court could not have the effect of staying the proceedings of that suit. The third was that the two suits were of different nature, their subject matter and relief claimed being different. The application for stay was rejected on July 5, 1951. The Court mainly relied on the provisions of the Second proviso in the deed of dissolution. The High Court of Madhya Bharat confirmed that order on August 20, 1953. The position then, after August 20, 1953, was that the proceedings in both the suits were to continue, and that the Asansol Court had been directed to hear the issue of jurisdiction at an early date. It was in these circumstances that the respondent applied under section 151, Code of Civil Procedure on September 14, 1953, to the Indore Court, for restraining the appellant from continuing the proceedings in the suit filed by him in the Court at Asansol. The respondent alleged that the appellant filed the suit at Asansol in order to put him to trouble, heavy expenses and wastage of time in going to Asansol and that he was taking steps for the continuance of the suit filed in the Court of the Subordinate Judge of Asansol. The appellant contested this application and stated that he was within his rights to institute the suit at Asansol, that that Court was competent to try it and that the point had been decided by overruling the objections raised by the respondent and that the respondent 's objection for the stay or 457 proceedings in the Court at Asansol had been rejected by that Court. He denied that his object in instituting the suit was to cause trouble and heavy expenses to the respondent. It may be mentioned that the respondent did not state in his application that his application for the stay of the suit at Asansol had been finally dismissed by the High Court of Calcutta and that that Court had directed the trial Court to decide the issue of jurisdiction at an early date. The appellant, too, in his objection, did not specifically state that the order rejecting the respondents 's stay application had been confirmed by the High Court at Calcutta and that that Court had directed for an early hearing of the issue of jurisdiction. The learned Additional District Judge, Indore, issues interim injunction under O. XXXIX, Code of Civil Procedure, to the appellant restraining him from proceeding with his Asansol suit pending decision of the Indore suit, as the appellant was proceeding with the suit at Asansol in spite of the rejection of his application for the stay of the suit at Indore, and , as the appellant wanted to violate the provision in the deed of dissolution about the Indore Court being the proper forum for deciding the dispute between the parties. Against this order, the appellant went in appeal to the High Court of Judicature at Madhya Bharat, contending that the Additional District Judge erred in holding that he was competent to issue such an interim injunction to the appellant under O. XXXIX of the Code of Civil Procedure and that it was a fit case for the issue of such an injunction and that, considering the provisions of O. XXXIX, the order was without jurisdiction. The High Court dismissed the appeal by its order dated May 10, 1955. The learned Judges agreed with the contention that O. XXXIX, r. 1 did not 458 apply to the facts of the case. They, however, held that the order of injunction could be issued in the exercise of the inherent powers of the Court under section 151, C.P.C. It is against this order that the appellant has preferred this appeal, by special leave. On behalf of the appellant, two main questions have been raised for consideration. The first is that the Court could not exercise its inherent powers when there were specific provisions in the Code of Civil Procedure for the issue of interim injunctions, they being section 94 and O.XXXIX. The other question is whether the Court, in the exercise of its inherent jurisdiction, exercised its discretion properly, keeping in mind the facts of the case. The third point which came up for discussion at the hearing related to the legal effect of the second proviso in the deed of dissolution on the maintainability of the suit in the Court at Asansol. We do not propose of express any opinion on this question of jurisdiction as it is the subject matter of an issue in the suit at Asansol and also in the suit at Indore and because that issue had not yet been decided in any of the two suits. On the first question it is argued for the appellant that the provisions of cl. (c) of section 94, Code of Civil Procedure make it clear that interim injunctions can be issued only if a provisions for their issue is made under the rules, as they provide that a Court may, if it is so prescribed, grant temporary injunctions in order to prevent the ends of justice from being defeated, that the word 'prescribed ', according to section 2, means 'prescribed by rules ' and that rr. 1 and 2 of O.XXXIX lay down certain circumstances in which a temporary injunction may be issued. There is difference of opinion between the High Court on this point. One view is that a Court 459 cannot issue an order of temporary injunction if the circumstances do not fall within the provisions of Order XXXIX of the Code: Varadacharlu vs Narsimha Charlu (1), Govindarajulu vs Imperial Bank of India (2), Karuppayya vs Ponnuswami (3), Murugesa Mudali vs Angamuthu Mudali (4) and Subramanian vs Seetarama (5). The other view is that a Court can issue an interin injunction under circumstances which are not covered by Order XXXIX of the Code, if the Court is of opinion that the interests of justice require the issue of such interin injunction: Dhaneshwar Nath vs Ghanshyam Dhar (6), Firm Bichchha Ram vs Firm Baldeo Sahai (7),Bhagat Singh vs jagbir Sawhney (8) and Chinese Tannery owners ' Association vs Makhan Lal (9). We are of opinion that the latter view is correct and that the Courts have inherent jurisdiction to issue temporary injunctions in circumstances which are not covered by the provisions of O.XXXIX, Code of Civil Procedure. There is no such expression in section 94 which expressly prohibits the issue of a temporary injunction in circumstances not covered by O. XXXIX or by any rules made under the Code. It is well settled that the provisions of the Code are not exhaustive for the simple reason that the Legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently for providing the procedure for them. The effect of the expression 'if it is so prescribed ' is only this that when the rules prescribe the circumstances in which the temporary injunction can be issued, ordinarily the Court is not to use its inherent powers to make the necessary orders in the interests of justice, but is merely to see whether the circumstances of the case bring it within the prescribed rule. if the provisions of section 94 460 were not there in the Code, the Court could still issue temporary injunctions, but it could do that in the exercise of its inherent jurisdiction. No party has a right to insist on the Court 's exercising that jurisdiction and the Court exercises its inherent jurisdiction only when it considers it absolutely necessary for the ends of justice to do so. it is in the incidence of the exercise of the power of the Court to issue temporary injunction that the provisions of section 94 of the Code have their effect and not in taking away the right of the Court to exercise its inherent powers. There is nothing in O. XXXIX, rr. 1 and 2, which provide specifically that a temporary injunction is not to be issued in cases which are not mentioned in those rules. The rules only provide that in circumstances mentioned in them the Court may grant a temporary injunction. Further, the provisions of section 151 of the Code make it clear that the inherent powers are not controlled by the provisions of the Code. Section 151 reads: "Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of the justice or to prevent abuse of the process of the Court. " A similar question about the powers of the Court to issue a commission in the exercise of its powers under section 151 of the Code in circumstances not covered by section 75 and Order XXVI, arose in Padam Sen vs The State of Uttar Pradesh (1) and this Court held that the Court can issue a commission in such circumstances. It observed at page 887 thus: "The inherent powers of the Court are in addition to the powers specifically conferred on 461 the Court by the Code. They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the purpose mentioned in section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature. " These observations clearly mean that the inherent powers are not in any way controlled by the provisions of the Code as has been specifically stated in 151 itself. But those powers are not to be exercised when their exercise may be in conflict with what had been expressly provided in the Code or against the intentions of the Legislature. This restriction, for practical purposes, on the exercise of these powers is not because these powers are controlled by the provisions of the Code but because it should be presumed that the procedure specifically provided by the Legislature for orders in certain circumstances is dictated by the interests of justices. In the above case, this Court did not uphold the order of the Civil Court, not coming under the provisions of order XXVI, appointing a commissioner for seizing the account books of the plaintiff on the application of the defandants. The order was held to be defective not because the Court had no power to appoint a commissioner in circumstances not covered by section 75 and O. XXVI, but because the power was exercised not with respect to matters of procedure but with respect to a matter affecting the substantive rights of the plaintiff. This is clear from the further observations made at page 887. This Court said: "The question for determination is whether the impugned order of the Additional Munsif appointing Shri Raghubir Pershad Commissioner for seizing the plaintiff 's books of account 462 can be said to be an order which is passed by the Court in the exercise of its inherent powers. The inherent powers saved by section 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it. These powers are not powers over the substantive rights which any litigant possesses. Specific powers have to be conferred on the Courts for passing such orders which would affect such rights of a party. Such powers cannot come within the scope of inherent powers of the Court in matters of procedure, which powers have their source in the Court possessing all the essential powers to regulate its practice and procedure. " The case reported as Maqbul Ahmad Pratap Narain Singh does not lay down that the inherent powers of the Court are controlled by the provisions of the Code. It simply holds that the statutory discretion possessed by a Court in some limited respects under an Act does not imply that the Court possesses a general discretion to dispense with the provisions of that Act. In that case, an application for the preparation of a final decree was presented by the decree holder beyond the period of limitation prescribed for the presentation of such an application. It was however contended that the Court possessed some sort of judicial discretion which would enable it to relieve the decree holder from the operation of the Limitation Act in a case of hardship. To rebut this contention, it was said at page 87: "It is enough to say that there is no authority to support the proposition contended for. In their Lordships ' opinion it is impossible to hold that, in a matter which is governed by Act, an Act which in some limited respects gives the Court a statutory discretion, there can be 463 implied in the Court, outside the limits of the Act, a general discretion to dispense with its provisions. It is to be noted that this view is supported by the fact that section 3 of the Act is peremptory and that the duty of the Court is to notice the Act and give effect to it, even though it is not referred to in the pleadings". These observations have no bearing on the question of the Court 's exercising its inherent powers under section 151 of the Code. The section itself says that nothing in the Code shall be deemed to limit or otherwise affect the inherent power of the Court to make orders necessary for the ends of justice. In the face of such a clear statement, it is not possible to hold that the provisions of the Code control the inherent power by limiting it or otherwise affecting it. The inherent power has not been conferred upon the Court; it is a power inherent in the Court by virtue of its duty to do justice between the parties before it. Further, when the Code itself recognizes the existence of the inherent power of the Court, there is no question of implying any powers outside the limits of the Code. We therefore repel the first contention raised for the appellant. On the second question, we are of opinion that in view of the facts of the case, the Courts below were in error in issuing a temporary injunction to the appellant restraining him from proceeding with the suit in the Asansol Court. The inherent powers are to be exercised by the Court in very exceptional circumstances, for which the Code lays down no procedure. The question of issuing an order to a party restraining him from proceeding with any other suit in a regularly constituted Court of law deserves 464 great care and consideration and such an order is not to be made unless absolutely essential for the ends of justice. In this connection, reference may usefully be made to what was said in Cohen vs Rothfield (1) and which case appears to have influenced the decision of the Courts in this country in the matter of issuing such injunction orders. Scrutton, L. J., said at page 413: "Where it is proposed to stay an action on the ground that another is pending, and the action to be stayed is not in the Court asked to make the order, the same result is obtained by restraining the person who is bringing the second action from proceedings with it. But, as the effect is to interfere with proceedings in another jurisdiction, this power should be exercised with great caution to avoid even the appearance of undue interference with another Court". And again, at page 415: "While, therefore, there is jurisdiction to restrain a defendant from suing abroad, it is a jurisdiction very rarely exercised, and to be resorted to with great care and on ample evidence produced by the applicant that the action abroad is really vexatious and useless." The principle enunciated for a plaintiff in a earlier instituted suit to successfully urge a restraint order against a subsequent suit instituted by the defendant, is stated thus in this case, at page 415: "It appears to me that unless the applicant satisfies the Court that no advantage can be gained by the defendant by proceeding with the action in which he is plaintiff in another part of the King 's dominions, the Court should not stop him from proceeding 465 with the only proceedings which he, as plaintiff, can control. The principle has been repeatedly acted upon. " The injunction order in dispute is not based on any such principle. In fact, in the present case, it is the defendant of the previously instituted suit that has obtained the injunction order against the plaintiff of the previously instituted suit. The considerations which would make a suit vexatious are well explained in Hyman vs Helm (1). In that case, the defendant, in an action before the Chancery Division of the High Court brought an action against the plaintiffs in San Francisco. The plaintiffs, is an action in England, prayed to the Court to restrain the defendants from proceeding further with the action in San Francisco. It was contended that it was vexatious for the defendants to bring the action in San Francisco as the witnesses to the action were residents of England, the contract between the parties was an English contract and that its fulfilment took place is England. In repelling the contention that the defendants ' subsequent action in San Francisco was vexatious, Brett, M. R., said at page 537: "If that makes an action vexatious it would be a ground for the interference of the Court, although there were no action in England at all, the ground for alleging the action in San Francisco to be vexatious being that it is brought in an inconvenient place. But that is not the sort of vexation on which an English Court can act. It seems to me that where a party claims this interference of the Court to stop another action between the same parties, it lies upon him to shew to the Court that the multiplicity of actions is vexatious, and that the whole burden of proof lies upon him. He does not satisfy that burden of proof by merely she 466 wing that there is a multiplicity of actions, he must go further. If two actions are brought by the same plaintiff against the same defendant in England for the same cause of action, then, as was said in Mchonry vs Lewis and the case of the Peruvian Guano Company vs Bockwoldt (23 Ch. D. 225), prima facie that is vexatious, and therefore the party who complains of such a multiplicity of actions had made out a prima facie case for the interference of the Court. Where there is an action by a plaintiff in England, and a crossaction by a defendant in England, whether the same prima facie case of vaxation arises is a much more difficult point to decide and I am not prepared to say that it does. " It should be noticed that this question for an action being vexatious was being considered with respect to the subsequent action brought by the defendant in the previously instituted suit and when the restraint order was sought by the plaintiff of the earlier suit. In the case before us, it is the plaintiff of the subsequent suit who seeks to restrain the plaintiff of the earlier suit from proceeding with his suit. This cannot be justified on general principles when the previous suit has been instituted in a competent Court. The reasons which weighed with the Court below for maintaining the order of injunction may be given in its own words as follows: "In the plaint filed in the Asansol Court the defendant has based his claim on the deed of dissolution dated 22, 1945, but has avoided all references to the provisions regarding the agreement to place the disputes before the Indore Courts. It was an action taken by the present defendant in anticipation of the present suit and was taken in flagrant breach 467 of the terms of the contract. In my opinion, the defendant 's action constitutes misuse and abuse of the process of the Court. " The appellant attached the deed of dissolution to the plaint he filed at Asansol. Of course, he did not state specifically in the plaint about the proviso with respect to the forum for the decision of the dispute. Even if he had mentioned the term, that would have made no difference to the Asansol Court entertaining the suit, as it is not disputed in these proceedings that both the Indore and Asansol Courts could try the suit in spite of the agreement. The appellant 's institution of the suit at Asansol cannot be said to be in anticipation of the suit at Indore, which followed it by a few months. There is nothing on the record to indicate that the appellant knew, at the time of his instituting the suit, that the respondent was contemplating the institution of a suit at Indore. The notices which the respondent gave to the appellant were in December 1945. The suit was filed at Asansol in August 1948, more than two years and a half after the exchange of correspondence referred to in the plaint filed at Asansol. In fact, it is the conduct of the respondent in applying for the injunction in September 1953, knowing full well of the order of the Calcutta High Court confirming the order refusing stay of the Asansol suit and directing that Court to proceed with the decision of the issue of jurisdiction at an early date, which can be said to amount to an abuse of the process of the Court. It was really in the respondent 's interest if he was sure of his ground that the issue of jurisdiction be decided by the Asansol Court expeditiously, as ordered by the Calcutta High Court in May 1953. If the Asansol Court had clearly no jurisdiction to try the suit in view of the terms of the deed of dissolution, the decision of that issue 468 would have finished the Asansol suit for ever. He, however, appears to have avoided a decision of that issue from that Court and, instead of submitting to the order of the Calcutta High Court, put in this application for injunction. It is not understandable why the appellant did not clearly state in his objection to the application what the High Court of Calcutta had ordered. That might have led the consideration of the question by the Indore Court in a different perspective. It is not right to base an order of injunction, under section 151 of the Code, restraining the plaintiff from proceeding with his suit at Asansol, on the consideration that the terms of the deed of dissolution between the parties make it a valid contract and the institution of the suit at Asansol is in breach of it. The question of jurisdiction of the Asansol Court over the subject matter of the suit before it will be decided by that Court. The Indore Court cannot decide that question. Further, it is not for the Indore Court to see that the appellant observes the terms of the contract and does not file the suit in any other Court. It is only in proper proceedings when the Court considers alleged breach of contract and gives redress for it. For the purposes of the present appeal, we assume that the jurisdiction of the Asansol Court is not ousted by the provisions of the proviso in the deed of dissolution, even though that proviso expresses the choice of the parties for having their disputes decided in the Court at Indore. The appellant therefore could choose the forum in which to file his suit. He chose the Court at Asansol, for his suit. The mere fact that Court is situate at a long distance from the place of residence of the respondent is not sufficient to establish that the suit has been filed in that Court in order to put the respondent to trouble and harassment and to unnecessary expense. 469 It cannot be denied that it is for the Court to control the proceedings of the suit before it and not for a party, and that therefore, an injunction to a party with respect to his taking part in the proceedings of the suit would be putting that party in a very inconvenient position. It has been said that the Asansol Court would not act in a way which may put the appellant in a difficult position and will show a spirit of cooperation with the Indore Court. Orders of Court are not ordinarily based on such considerations when there be the least chance for the other Court not to think in that way. The narration of facts will indicate how each Court has been acting on its own view of the legal position and the conduct of the parties. There have been case in the past, though few, in which the Court took no notice of such injunction orders to the party in a suit before them. They are: Menon vs Parvathi Ammal(1), Harbhagat Kaur vs Kirpal Singh (2) and Shiv Charan Lal vs Phool Chand (3). In the last case, the Agra Court issued an injunction against the plaintiff of a suit at Delhi restraining him from proceeding with that suit. The Delhi Court, holding that the order of the Agra Court did not bind it, decided to proceed with the suit. This action was supported by the High Court. Kapur J., observed at page 248: "On the facts as have been proved it does appear rather extra ordinary that a previously instituted suit should be sought to be stayed by adopting this rather extraordinary procedure. " It is admitted that the Indore Court could not have issued an induction or direction to the Asansol Court not to proceed with the suit. The effect of issuing an injunction to the plaintiff of the 470 suit at Asansol, indirectly achieves the object which an injunction to the Court would have done. A court ought not to achieve indirectly what it cannot do directly. The plaintiff, who has been restrained, is expected to bring the restraint order to the notice of the Court. If that Court, as expected by the Indore Court, respects the injunction order against the appellant and does not proceed with the suit, the injunction order issued to the appellant who is the plaintiff in that suit is as effective an order for arresting the progress of that suit as an injunction order to the Court would have been. If the Court insists on proceeding with the suit, the plaintiff will have either to disobey the restraint order or will run the risk of his suit being dismissed for want of prosecution. Either of these results is a consequence which an order of the Court should not ordinarily lead to. The suit at Indore which had been instituted later, could be stayed in view of section 10 of the Code. The provisions of that section are clear, definite and mandatory. A Court in which a subsequent suit has been filed is prohibited from proceeding with the trial of that suit in certain specified circumstances. When there is a special provision in the Code of Civil Procedure for dealing with the contingencies of two such suits being instituted, recourse to the inherent powers under section 151 is not justified. The provisions of section 10 do not become inapplicable on a Court holding that the previously instituted suit is a vexatious suit or has been instituted in violation of the terms of the contract. It does not appear correct to say, as has been said in Ram Bahadur vs Devidayal Ltd. (1) that the Legislature did not contemplate the provisions of section 10 to apply when the previously instituted suit be held to be instituted in those circumstances. The provisions of section 35A indicate that the Legislature was aware of false or vexatious claims or defences 471 being made, in suits, and accordingly provided for compensatory cost. The Legislature could have therefore provided for the non application of the provisions of section 10 in those circumstances, but it did not. Further, section 22 of the Code provides for the transfer of a suit to another Court when a suit which could be instituted in any one of two or more Courts is instituted in one of such Courts. In view of the provisions of this section, it was open to the respondent to apply for the transfer of the suit at Asansol to the Indore Court and, if the suit had been transferred to the Indore Court, the two suits could have been tried together. It is clear, therefore, that the Legislature had contemplated the contingency of two suits with respect to similar reliefs being instituted and of the institution of a suit in one Court when it could also be instituted in another Court and it be preferable, for certain reasons, that the suit be tried in that other Court. In view of the various considerations stated above, we are of opinion that the order under appeal cannot be sustained and cannot be said to be an order necessary in the interests of justice or to prevent the abuse of the process of the Court. We therefore allow the appeal with costs, and set aside the order restraining the appellant from proceeding with the suit at Asansol. SHAH, J. I have perused the judgment delivered by Mr. Justice Dayal. I agree with the conclusion that the appeal must succeed but I am unable to hold that civil courts generally have inherent jurisdiction in cases not covered by rr. 1 and 2 of O. 39, Civil Procedure Code to issue temporary injunctions restraining parties to the proceedings before them from doing certain acts. The powers of courts, other than the Chartertd High Courts, in the exercise of their ordinary original Civil jurisdiction to issue temporary injunctions are defined by the terms of section 94(1)(c) and 472 O. 39, Civil Procedure Code. A temporary injunction may issue if it is so prescribed by rules in the Code. The provisions relating to the issue of temporary injunctions are to be found in O. 39 rr. 1 and 2: a temporary injunction may be issued only in those cases which come strictly within those rules, and normally the civil courts have no power to issue injunctions by transgressing the limits prescribed by the rule. It is true that the High Courts constituted under Charters and exercising ordinary original jurisdiction do exercise inherent jurisdiction to issue an injunction to restrain parties in a suit before them from proceedings with a suit in another court, but that is because the Chartered High Courts claim to have inherited this jurisdiction from the Supreme Courts of which they were successors. This jurisdiction would be saved by section 9 of the Charter Act (24 and 25 Vict. c. 104) of 1861, and in the Code of Civil Procedure, 1908 it is expressly provided by section 4. But the power of the civil courts other than the Chartered High Courts must be found within section 94 and O. 39 rr. 1 and 2 of the Civil Procedure Code. The Code of Civil Procedure is undoubtedly not exhaustive: it does not lay down rules for guidance in respect of all situations nor does it seek to provide rules for decision of all conceivable cases which may arise. The civil courts are authorised to pass such orders(as may be necessary for the ends of justice, or to prevent abuse of the process of court, but where an express provision is made to meet a particular situation the Code must be observed, an departure therefrom is not permissible. As observed in L. R. 62 I. A. 80 (Maqbul Ahmed vs Onkar Pratab) "It is impossible to hold that in a matter which is governed by an Act, which in some limited respects gives the court a statutory discretion, there can be implied in 473 court, outside the limits of the Act a general discretion to dispense with the provisions of the Act." Inherent jurisdiction of the court to make order ex debito justitiae is undoubtedly affirmed by section 151 of the Code, but that jurisdiction cannot be exercised so as to nullify the provisions of the Code. Where the Code deals Expressly with a particular matter, the provision should normally be regarded as exhaustive. Power to issue an injunction is restricted by section 94 and O. 39, and it is not open to the civil court which is not a Chartered High Court to exercise that power ignoring the restriction imposed there by, in purported exercise of its inherent jurisdiction. The decision of this Court in Padam Sen vs The State of Uttar Pradesh(1) does not assist the case of the appellant. In Padam Sen 's case this Court was called upon is a original appeal to consider whether an order of a Munsiff appointing a commissioner for seizing certain account books of the plaintiff in a suit pending before the Munsiff was an order authorised by law. It was the case for the prosecution that the appellants offered a bribe to the commissioner as consideration for being allowed to tamper with entries therein, and thereby the appellants committed an offence punishable under section 165A of the Indian Penal Code. This Court held that the commissioner appointed by the civil court in exercise of powers under O. 26 C. P. Code did not hold any office as a public servant and the appointment by the Munsiff being without jurisdiction, the commissioner could not be deemed to be a public servant. In dealing with the argument of counsel for the appellants that the civil court had inherent powers to appoint a commissioner in exercise of authority under section 151 Civil Procedure Code for purposes which do not fall 474 within the provisions of section 75 and O. 26 Civil Procedure Code, the Court observed: "Section 75 of the Code empowers the Court to issue a commission, subject to conditions and limitations which may be prescribed, for four purposes, viz., for examining any person, for making or adjusting accounts and for making a partition. Order XXVI lays down rules relating to the issue of commissions and allied matters. Mr. Chatterjee, learned counsel of the appellants, has submitted that the powers of a Court must be found within the four corners of the Code and that when the Code has expressly dealt with the subject matter of commissions in section 75 the Court cannot invoke its inherent powers under section 151 and thereby add to its powers. On the other hand, it is submitted for the State, that the Code is not exhaustive and the Court, in the exercise of its inherent powers, can adopt any procedure not prohibited by the Code expressly or by necessary implication if the Court considers it necessary for the ends of justice or to prevent abuse of the process of the Court. x x x x x x x x The inherent powers of the Court are in addition to the powers specifically conferred on the Court by the Code. They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the purposes mentioned in section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature. It is also well recognized that the inherent power is not to be exercised in a manner which will be 475 contrary or different from the procedure expressly provided in the Code." The Court in that case held that in exercise of the powers under section 151 of the Code of Civil Procedure, 1908 the Court cannot issue a commission for seizing books of account of plaintiff a purpose for which a commission is not authorized to be issued by section 75. The principle of the case is destructive of the submission of the appellants. Section 75 empowers the Court to issue a commission for purposes specified therein: even though it is not so expressly stated that there is no power to appoint a commissioner for other purposes, a prohibition to that effect is, in the view of the Court in Padam Sen 's case, implicit in section 76. By parity of reasoning, if the power to issue injunctions may be exercised, if it is prescribed by rules in the Orders in Schedule I, it must he deemed to be not exercisable in any other manner or for purposes other than those set out in O. 39 rr. 1 and 2. Appeal allowed.

M filed a suit at Asansol against H for recovery of money. Later, H filed a counter suit at Indore against M for recovery of money. In the Asansol suit one of the defences raised by H was that the Asansol court had no jurisdiction to entertain the suit. H applied to the Asansol court to stay the suit but the court refused the prayer. An appeal to the Calcutta High Court against the refusal to stay was dismissed with the direction that the preliminary issue of jurisdiction should be disposed of by the trial court immediately. Thereupon, H applied to the Indore court for an injunction to restrain M from proceeding with the Asansol suit pending the disposal of the Indore suit and the court purporting to act under O. 39 Code of Civil Procedure granted the injunction. M appealed to the Madhya Bharat High Court which dismissed the appeal holding that though O. 39 was not applicable to the case the order of injunction could be made under the inherent powers of the court under section 151 Code of Civil Procedure. ^ Held, that the order of injunction was wrongly granted and should be vacated. Per, Wanchoo, Das Gupta, and Dayal,JJ. The Civil courts had inherent power to issue temporary injunctions in cases which were not covered by the provisions of O. 39 Civil Procedure Code. The provisions of the Code were not 451 exhaustive. There was no prohibition in section 94 against the grant of a temporay injunction in circumstances not covered by O. 39. But inherent powers were not to be exercised when their exercise was in conflict with the express provisions of the Code or was against the intention of the legislature. Such powers were to be exercised in very exceptional circumstances. A plaintiff of a suit in another jurisdiction could only be restrained from proceeding with his suit if the suit was vexatious and useless. It was not so in the present case. It was proper that the issue as to jurisdiction should be decided by the Asansol court as directed by the Calcutta High Court. The Indore court could not decide this issue. Beside, it was open to the Asansol court to ignore the order of the Indore court and to proceed with the suit. This would place M in an impossible position. An order of a court should not lead to such a result. Varadacharlu vs Narsimha Charlu, A.I.R. 1926 Mad.258; Govindarajalu vs Imperial Bank of India, A.I.R. 1932 Mad. 180 ; Karuppayya vs Ponnuswami, A.I.R. 1933 Mad. 500(2); Murugesa Mudali vs Angamuthu Madali, A.I.R. 1938 Mad. 190 and Subramanian vs Seetarama, A.I.R. 1940 Mad. 104, not approved. Dhaneshwar Nath vs Ghanshyam Dhar, A.I.R. 1940 All.185, Firm Richchha Ram vs Firm Baldeo Sahai, A.I.R. 1940 All.241, Bhagat Singh vs Jagbir Sawhney, A.I.R. 1941 Cal. 670 and Chinese Tannery Owners ' Association vs Makhan Lal, A.I.R. 1952 Cal. 550, approved. Padam Sen vs State of U.P. [1961] 1 section C. R. 884, Cohen vs Rothfield, L. R. and Hyman vs Helm, L. R.(1883) , relied on. Per, Shah, J. Civil courts have no inherent power to issue injunctions in case not covered by O. 39, rr. 1 and 2 Code of Civil Procedure. The power of civil courts, other than Chartered High Courts, to issue injunctions must be found within the terms of section 94 and O. 39, rr. 1 and 2. Where an express provision is made to meet a particular situation the Code must be observed and departure therefrom is not permissible. Where the Code deals expressly with a particular matter the provision should normally be regarded as exhaustive. Padam Sen vs State of U. P. [1961] 1 section C. R. 884, relied upon.

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.

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.

The question for determination in these two appeals was whether the appellant firms were entitled to registration under section 26A of the Indian Income tax Act and the common point of law involved was the interpretation of the words " constituted under an instrument of partnership " occurring in that section. In Appeal No. 85 the assessee firm was said to have been constituted by a verbal agreement in April, 1948, and the deed of partnership was drawn up in September, 1949. The application for registration under section 26A of the Act for the assessment year 1949 1950 was made thereafter to the Income tax Officer. In Appeal NO. 389 the assessee firm was verbally constituted in 81 642 June, 1944, and a memorandum of partnership was executed in June 1948. The application for registration under section 26A for the assessment years 1945 46 and 1946 47 was made on August 24, 1949. The applications were rejected by the Income tax Officer and the appeals preferred by the assessees were also dismissed by the Income tax Appellate Tribunal. The High Court took the view that section 26A of the Indian Income tax Act contemplated a firm created or brought into existence by an instrument of partnership and answered the questions against the assessees. It was contended on their behalf that solong as the assessment was not made, they were entitled to registration irrespective of the year in which the instrument of partnership came into existence. This was controverted on behalf of the Revenue and their case was that a firm seeking registration under section 26A of the Act should be created by an instrument of partnership, or at any rate, such instrument should be in existence during the relevant accounting year, i. e. the year previous to the year of assessment in respect of which the application for registration was made. Held, that the words " Constituted under an instrument of partnership occurring in section 26A of the Indian Income tax Act included not only firms that were created by instruments of partnership but also those that were subsequent to their creation, clothed in legal form by reducing the terms and conditions of the partnership in writing. Dwarkadas Khetan & Co. vs Commissioner of Income tax, Bombay City, Bombay, , approved. Kalsi Mechanical Woyks, Nandpur vs Commissioner of Income tax, Simla, , Padam Parshad Rattan Chand vs Commissioner of Income tax, Delhi, , Bery Engineering Co., Delhi vs Commissioner of Income tax, Delhi, , Income tax Commissioner, Delhi vs Messrs. Birdhi Chand Girdhari Lal, and Khimji Walji & Co. vs Commissioner of Income tax, Bihar and Orissa, , dissented from. Section 26A, read with SS. 26, 28 and Rules 2 to 6B, laid down the following essential conditions that a firm must fulfil before it could claim registration under section 26A of the Act (1) that it must be constituted under an Instrument of Partnership, specifying the individual shares of the partners; (2) that an application on behalf of and signed by, all the partners, containing all the particulars as set out in the Rules, must be made; (3) that the application must be made before the assessment of the income of the firm was made under section 23 Of the Act for that particular year; (4) that the profits (or loss, if any) of the business relating 643 to the previous year, i. e., the relevant accounting year, must be divided or credited, as the case may be, in accordance with the terms of the Instrument ; and lastly, (5) that the partnership must be genuine and in actual existence in conformity with the terms and conditions of the Instrument. Where, therefore, as in the instant cases, the partnership did not admittedly function in terms of an instrument of partnership which was operative during the accounting year, it could not be registered during the following assessment year. Commissioner of Income tax, Bombay North vs Shantilal Vrajlal & Chandulal Dayalal & CO. , dis approved. Per M. HIDAYATULLAH, J. While it was clearly not possible to read " constituted by " for the words " constituted under " occurring in section 26A of the Act, it was doubtful whether the instrument of partnership sought to be registered must be in existence in the accounting year in order to entitle it to registration. Dwarkadas Khetan & Co. vs Commissioner of Income tax, Bombay City, Bombay, , 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.

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.

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 who was carrying on business in food grains in partnership with another person submitted the returns of the income of the firm for the accounting years even after his partner 's death. It was found that certain income of the firm was concealed and the Income tax Officer not only assessed the firm to tax for the suppressed income but also imposed penalties for concealing the said income. Appeals to the higher income tax authorities failed and the appellant then applied to the High Court for a writ of certiorari quashing the orders of assessment and imposition of penalty on the ground inter alia that the firm was dissolved by his partner 's death and no penalty could be imposed after dissolution of the firm, The High Court rejected the petition. On appeal with the certificate of the High Court, Held, that by virtue of section 44 and other provisions of the Income Tax Act a partner of a dissolved partnership firm may not only be made liable to assessment for income tax for the accounting years but despite dissolution of the firm he may be made liable to pay penalty for concealing the income of the firm under section 28(1)(c) of the Act. The analogy of dissolution of a Hindu joint Family does not apply to dissolution of a partnership. Mareddi Krishna Reddy vs Income tax Officer, Tenali, , approved. Commissioner of Income tax vs Ravalaseema Oil Mills, and section V. Veerappan Chettiar vs Commissioner of Income tax, Madras, , disapproved. Mahankali Subbarao vs Commissioner of Income tax, , distinguished. The Legislature intended that the provisions of Ch. IV of the Act shall apply to a firm even after discontinuance of its business. In interpreting a fiscal statute the Court cannot proceed to make good deficiencies if there be any. In case of doubt it should be interpreted in favour of the tax payer. The expression "assessment" has different connotations an has been used in its widest connotation in Ch. IV and section 44 97 766 he Act. It is not restricted only to computation of tax but includes imposition of penalty on tax payers found in the process of assessment guilty of concealing income. Commissioner of Income tax, Bombay Presidency and Aden vs Khemchand Ramdas, , referred to. The Income tax Act provided a complete machinery for obtaining relief against improper orders passed by the Income tax Authorities and the appellant could not be permitted to abandon that machinery, and invoke the jurisdiction of the High Court under article 226 of the Constitution against the orders of the taxing authorities.

Civil Appeals Nos. 62 and 77 of 1959. Appeals from the judgment and decree dated March 25, 1953, of the Madras High Court in A. section Nos. 731 and 720 of 1950. M. C. Setalvad, Attorney general for India and M.S.K. Sastri for the appellants Nos. 2 to 8 and also for legal Representatives of appellant No. 1 in C. A. No. 62 of 1959. A. V. Viswanatha Sastri, M. K. Ramamurthi and section T. Venkataraman, for respondents Nos. 2 and 10 (in C. A. No. 62 of 69) and respondents Nos. 2 and 16 (In C. A. No. 77/59). 209 R. Ganapathy Iyer and G. Gopalakrishnan for appellant No. 2 and also for legal Representative of appellant No. 1 (in C. A. No. 77 of 1961) C. R. Pattabhi Raman and G. Gopalakrishnan, for appellant No. 3 in (C. A. No. 77/59). October 26. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These two appeals have been brought to this Court by two sets of defendants with a certificate of the Madras High Court and they arise out of a suit instituted under o. 1, r. 8 on behalf of the general body of creditors for administration against the trustees and alienees of the properties which belonged to their debtors. Defendant 14 and his sons defendants 18 to 24 are the appellants in Civil Appeal No. 62 of 1959 while defendants 12, 13 and 16 are the appellants in Civil Appeal No. 77 of 1959. Defendants 1 to 6 are the debtors. They were members of an undivided Hindu family known as Kalakkad Pannayar family in Tirunelveli District. The family was doing Commission agency business in petrol, kerosene and crude oil. It had secured agency rights from the Burmah Shell Company. The members of the family became heavily indebted by about June, 1936, and as a result there was a pressure from their creditors. In order to meet the said pressure a deed of composition was executed (EX. B. 2) on July 8, 1936. As a result of this composition 56 out of the creditors of the family agreed to a scheme for settlement of their debts. Under this deed defendant 7 was constituted as a trustee and as such was empowered to take over the assets of the debtors, sell them to the best advantage and distribute the proceeds rateably amongst all credit. It appears that before the scheme under the competition could be successfully or effectively worked out one of the creditors, Ayyah Ayyar, filed an insolvency petition, No. 26 of 1936, in the Sub Court at Tirunelveli on July 30, 1936. By this 210 petition the creditor wanted defendants 1 to 6 to be r adjudged insolvent. During the pendency of these a proceedings, on August 26, 1936 defendants 1 to ff executed a deed of trust, (Ex.B.7); by this document they conveyed all their movable and immovable properties including (J the outstanding due to them to three trustees. These were defendant 7 Subbarayalu Reddiar, Veerabahu Pillai and Narayana Pillai. Tho trustees were authorised to dispose of the assets of (defendants 1 to 6 and distribute the proceeds rateably amongst the creditors. Narayana Pillai died in February, 1938. Veerabahu Pillai died some time before the present suit was instituted. Defendants 9 and 10 are the undivided sons of defendants 7, whereas defendant 11 is the widow and defendants 12 and 13 are the step brothers of Veerabahu Pillai. The trustees accerted the trust and entered upon their duties. They took possession of the immovable properties covered by the trust. They paid off the secured creditors, and in regard to unsecured creditors they arranged to pay 50% of their dues by selling the immovable properties either to the creditors themselves or to third parties directing them to discharge the secured debts, and the unsecured debts to the extent of 50% of their value. It is common ground that except their family house in which defendants 1 to 6 resided all other immovable properties belonging to them were conveyed under the trust deed. Defendant 14 was a secured creditor in whose favour a mortgage of the first schedule properties had been excelled for a sum of Rs. 30,000 on June 3, 1935 (exhibit B 95). This mortgage carried 10%, compound interest. It appears that he had also lent a sum of Rs. 3,000 on a promissory note on July 17, 1935 [exhibit B 95(a)]. This note carried interest at 12%. The promissory note was supported by the pledge of the mortgage deed. In order to pay off the debts thus due to defendant 14 the trustees conveyed to him schedule I mortgaged properties for Rs. 42,000 on May 22, 1937 (EX. B 94) 211 Out of the said consideration the amount due under the mortgage as well as the amount due under the promissory note were satisfied leaving a balance of Rs. 3,030 in the hands of the purchaser. He was directed to utilise this balance for repaying 50% of the dues of purchaser and 3 who have brought the present suit. The sale deed in favour of defendant 14 was executed by only two out of the three trustees,, defendant i and Veerabahu Pillai. Defendants 18 to 24 are the son of defendant 14. As we have already seen defendant 14 and his sons are the appellants in (Civil Appeal No. 62 of 1959. Defendant 7 who was one of the trustees, was a creditor of the trustees to the extent of Rs. 6,000. His daughter in law was a creditor to the extent of Rs. 2,000 . In satisfaction of 50% of the debt due to these two persons the trustees conveyed schedule III properties to defendants 8, 9 and 10 who are the undivided sons of defendant 7 (exhibit B. 8). This document executed on December 16, 1936, for Rs. 4,000. The purchasers in their turn sold the properties to defendant ]7 on May 30, 1947. Defendant 12 is the step brother of the trustee Veerabahu Pillai and he purchased schedule V properties on November 7, 1941, for Rs. 2,000 (exhibit B 90). Defendant 13 who is the brother of defendant 12 purchased schedule II properties for Rs. 15,000 on August 29, 1937, (exhibit B. 37). B. 37). This document was executed only by two out of the three trustees. Another sale deed was passed in favour of defendant 13 in respect of schedule properties (exhibit B. 79) on February , 1942, for Rs. 2,000. Defendant 16 who is the son in law of defendant 13 purchased two sets of properties schedule VII and schedule VII A on May 7, 1943, and June 4, 1943, (Exs. B 104 and B 105) for Rs. 8,000 and Rs. 600 respectively The properties thus conveyed to the respective purchasers were put into their possession. It is with the sale deeds executed in favour of defendant 14 and those executed in favour of 212 defendant 12, 13 and 16 that we are concerned in a the present appeals. Defendants 12, 13 and 16 are the appellants in Civil Appeal No. 77 of 1959. In 1943 defendants 1 to 6 brought a suit, o. section . No. 30 of 1943 in the Sub Court at Tirunelveli for the administration of the trust created by them, for account from the trustees and for recovery of the trust properties. To this suit they impleaded the surviving trustees and the alienees as defendants. In this suit a preliminary decree for account was passed by this Sub Court. Their claim, however, for the recovery of immovable properties was not Granted. This decree gave rise to three appeals before the Madras High court, one by defendants 1 to 6 and the others by the trustees and the alienees respectively. These appeals were appeals A. section No. 473, 510 and 544 of 1944. The three appeals were heard together and on December 20, 1944, a common judgment was delivered. The High Court confirmed the ending of the trial court that the trustee were liable to render account for the management of the trust, and it remanded the suit for a finding as to the market value of the lands covered by the respective sale deeds which had been challenged by defendants 1 to 6 The High Court thought that in determining the validity of the claim made by defendants 1 to 6 it was necessary to find out the proper value of the properties at the relevant time for that alone would enable the Court to decide whether the alienations had been effected by the trustees for grossly inadequate price as alleged by defendants 1 to 6. In the course of its judgment the High Court observed that it was not open to the authors of the trust to challenge the validity of the transaction which was permitted by them by the instrument of trust, for it was clear that under the said trust deed the trustee were empowered to convey properties to the creditors in the discharge of their duties. After remand the Subordinate Judge took 213 evidence, made his findings and submitted them to the High Court. It was at that stage that defendants 1 to 6 filed a petition for withdrawal of the litigation. This petition was allowed on December 12, 1947, with the result that the suit filed by defendants 1 to 6 O.S. No. 30 of 1943, was dismissed with costs throughout. Whilst the proceedings in the said three appeals were pending in the High Court and before defendants 1 to 6 were allowed to withdraw the litigation the present suit was filed on October 29, 1947, by the three plaintiff who are the creditors of defendants 1 to 6 and who purported to act on behalf of the general body of creditors. Leave was granted to the plaintiff under o. 1, r. 8 and the suit has, therefore, been conducted as a representative suit. In the suit the plaintiffs ask for an account from defendant 7 and defendants 11 to 13 who are the legal representatives of Veerabahu Pillai on the allegation that the trustee have been guilty of wilful default. They also claim a declaration that the properties described in schedules I to VII A and VIII are still impressed with the trust and they ask for an order for the administration of the trust by removing defendant 7 and appointing an administrator to realise the amount due from the trustees on such account and to recover possession of the properties mentioned in the said schedule, re call them and distribute the sale proceeds rateably amongst the unsecured creditors. Several defences were raised to this suit by the several defendants. It was denied that the trustees were negligent in the matter of collecting the outstandings and that the alienations effected by them were for inadequate considerations and otherwise improper and unjustified. It was urged that the present suit was barred by res judicata as a result of the withdrawal of 0. section No. 30 of 1943. It was further alleged that the suit was not maintainable, that it was bad for non joinder of 214 parties and was barred time. The respective by alienees pleaded that the transfers in their favour were valid and binding. Defendant 7 Defendant specifically urged that he was not guilty of any breach of trust; J and a plea was also raised that the creditors who . had filed the present suit had acquiesced in some of the dealings . Defendant 12 resisted the plaintiffs ' case that he had intermeddled in the management of the trust estate and was therefore liable as a trustee de son tort. An objection was raised about the proper valuation of the suit and it was urged that the proper court fee had not been paid. It was denied that sale deeds executed by only two out of the three trustees were invalid. On these pleadings twenty nine issues were framed by the learned trial judge. In substance the trial judge rejected the plaintiffs ' claim for account, but he passed a decree declaring that the properties described ill schedules I to III, V, VII, I to and VIII continued to be impressed with the trust imposed upon them by the trustees. The decree directed the removal of defendant 7 and the appointment of the advocates instead as administration. It further directed defendants is, 13,14, 16 and 17 to deliver possession of the properties in their respective possession and asked the administrators to re sell the said properties and distribute the proceeds amongst the creditors and to pay the surplus, if any, to defendants 1 to 6. Under the decree defendants 12, 13, 14 and 16 were held entitled to receive the respective consideration of the sales and mortgages together with interest and they were also liable to render account for profits of the properties in their possession. This decree gave rise to three appeals before the High Court. Appeal A. section No. 720 of 1949 was filed by defendant 14 and his sons defendants 18 to 24. Appeal A. No. 731 of 1949 was filed by defendants 12, 13 and 16; and Appeal A. section No. '21 215 of 1950 by defendants 8, 9, 10 and 17. Ill substance the High Court has confirmed the decree passed by the trial court and dismissed all the three appeals. The High Court has, however, modified the trial court`s decree in regard to the interest which the decree had ordered to be paid to the alienees. The High Court took the view that in adjusting equities between the alienees, the alienations in whose favour were found to be invalid, and the trust, the contract rate of interest need not be awarded. Subject to the modifications made in regard to the payment of interest the rest of the decree has been confirmed. Defendants X, 9 and 10 and the legal representative of defendant 17 who died pending the proceedings before the High Court have not challenged the decree passed by the High Court in their Appeal A. section No. 21 of 1950. Defendants 14 and 18 to 24 as well as defendants 12,13 and 16 have, however, challenged the decision of the High Court and have obtained a Certificate from the said High Court in that behalf It would thus be seen that in the two appeals before this Court we are concerned with six transactional. B 94 which is executed in favour of defendant which is executed in defendant 12, Exs. B. 37 and B. 79 which are executed in favour of defendant 13 and Exs. B 104 and R 105 which are executed in favour of defendant 16. Broadly stated both the Courts below have found that all these alienations were effected for inadequate consideration. It has also been found that Exs. B 94 and B 37 are invalid for the reason that they have bee executed by only two out of the three trustees, whereas the transfers under EXS. B 12, B 13 and be 16 held to be invalid as they are transfers in favour of the relations of one of the trustees Veerabahu. It has further been found that defendant 12 intermeddled with the estate of the trust and must therefore be regarded as trustee de son tort and therefore the transfer made to him is 216 invalid as a matter of law. Both the Courts have rejected the plea of res judicata and limitation raised by the defendants. There are some of the points of law which are common to both the appeals and it would be convenient to deal with them in a the order in which they have been raised before . The First point argued before US by the learned Attorney General on behalf of the appellants in Civil Appeal No. 62 of 1959 (defendants 14 and 18 to 24) is one of limitation. He contends that on a fair and reasonable construction the present suit attracts the application of article 120 and is therefore barred. On the other hand, Mr. viswanatha Sastri, for The plaintiffs, contends that the plaint clearly showed that the plaintiffs are not asking merely for a declaration but they are also claiming that a new administrator should be appointed and a direction should be issued that the property in question should be delivered to him. Such a claim, according to him, obviously attracts article 131. It is common ground that if article 120 applies the suit is beyond time, whereas if article 134 is applicable the suit is within time. The decision of this question would naturally depend upon the construction of the plaint. Is the claim made in the plaint one of declaration, or is it a claim for possession of immovable properties? The plaint sets out all the material facts which constitute the background to the present litigation, marks material allegations in respect of all the alienation impeached in the plaint, and by paragraph 35 it prays, inter aha, that schedules I to VII A and should be adjudged as still impressed as trust imposed on them by the deed of August 26, 1936, and direct their re sale. That is cl.(c) of paragraph 35. By cl.(d) it is prayed that the Court should order the administration of the trust by removing defendant 7 if need be and appointing an administrator or officer of court (1) to realise the 217 amounts mentioned in cl. (a), (b) to recover possession. and re sell the properties referred to in paragraph (c), (3) to distribute the proceeds rateably amongst the unsecured creditors and perform such other acts and functions as may be necessary to 6 effectuate the trust in question. The learned Attorney General contends that cl. (c) asks for adjudication or declaration that the properties in question are impressed with the trust and that is no mere than a declaration, and according to him cl.(d) prays for the appointment of an administrator to realise the amounts and to recover possession of the properties and re sell them. He suggests that on a fair construction of cl. (d) all that the plaintiff pray for is the removal of defendant 7 and the appointment of an administrator with power to realise the amounts specified and to recover possession of the properties indicated and to re sell them. This is not a claim that possession should be delivered to the administrator in the present suit. It may be conceded that if read by itself alone cl.(d) may be capable of the construction which the learned Attorney General seeks to put on it; but in construing the plaint we must have regard to all the relevant allegations made in the plaint and must look at the substance of the matter and not its form. It is significant that the plaintiffs have valued the suit for the purpose of court fee and jurisdiction at Rs. 23,745 and this valuation includes several items ill respect of different properties valued under s, 7(5) of the Court Fees Act. The valuation made in respect of the different items of properties under s.7(5) is obviously and clearly valuation made on the footing that a claim for possession is made. In fact the Plaint specifically avers that the plaintiff valued the suit for possession covered by covered and D 2 under . 7(5) as indicated in the plaint. Thus there can be no doubt that the plaint has been valued on the basic that a claim for possession of the properties covered by the schedules Is intended to be made. Besides, 218 it is also significant that in regard to the claim made be the plaintiff in respect of the transfer in favour of defendant 14 his sons defendant 18 to 24 have been joined specifically on the ground that since the plaintiffs claim possession of the said property the said defendants are necessary parties as it is found that they are in possession of the said properties. In other words, the joinder of defendants 18 to 24 to the present suit is based solely on the ground that a claim for possession is made in the plaint and defendants 18 to 24 being in possession are necessary parties to the suit. Therefore, in our opinion, reading the plaint as a whole it would be unreasonable to construe cl. (d) in paragraph 35 in the manner suggested by the learned Attorney General. The prayer which the clause really purports to make is that as administrator should be appointed and that an order should be passed against the respective defendants asking them to deliver possession of the properties to the said administrator. If that we so the plaint cannot be construed as one in which a mere claim for declaration is made. It is a plaint in which a declaration is no doubt claimed but based on the said declaration or adjudication a further claim for possession to the administrator is also made. The result, therefore, is that the argument that the prayer made in the plaint attracts article 120 must be rejected. The next continuation urged is that the plaintiffs cannot sue for possession but must Confine themselves only to a claim for declaration. It is not disputed by the learned Attorney General that in regard to public charitable trusts the beneficiaries are entitled to sue for setting aside alienations of the trust properties improperly effected by the trustees, and to ask for the restoration of possession of the said trust properties to the trustees newly appointed. Indeed, there is ample judicial 219 authority in support of this position. In A. Subramania Iyer vs P Nagarathna Naicker (1), it was held by the Madras High Court that in a suit by the worshippers of a temple to have the alienation of the trust property by some of the defendants, trustees. to the other defendants declared invalid and for possession to the trustees, the proper decree to be made if the Court be of the opinion that the alienation is invalid is to decree possession to those defendants who are trustee. It was further held that the trustees need not be referred to a separate suit for the purpose. In masjid Shahid Ganj vs Shiromani, gurdwara Parbandhak Committee, Amritsar (2) the Privy Council has recognised this right in these words: 'The right of a Muslim worshipper may be regarded as an individual right, but what is the nature of the right It is not a sort of easement in gross, but an element in the general right of a beneficiary to have the waqf property recovered by its proper custodians and applied to its proper purpose. Such an individual may, if he sues in time, procure the ejectment of a trespasser and have the property delivered into the possession of the Mutawali or of some other person for the purposes of the waqf ". The argument, however, is that in regard to private trustee which are governed by the Indian Trusts Act such a course is not open to the beneficiary because of the provisions of s.63 of the Trustee Act. Section 63 provides that where trust property comes into the hands of a third person inconsistently with the trust, the beneficiary may require him to admit formally, or may institute a suit for a declaration, that the property is comprised in the trust. The learned Attorney General contends that the only remedy available to a beneficiary under a private trust is that prescribed by 863 and no other. He can either require the alienee to admit that the property is comprised in the trust, or if the alienee refuses to make the admission the (1) (2) (1940) L. R. 671. A. 251, 267, 220 beneficiary may bring a suit for a declaration in that behalf In support of this contention strong reliance has been placed on the decision of the Privy Council in Rani (Chhatra Kumari Devi vs Prince Mohan Bikram Shah (1). In that case the respondent had claimed title to the properties as owner in various ways and had sued as the proprietor of the properties covered by the action. All these grounds were rejected and it was held that the respondent could claim no title as a proprietor at all. Even so, while dealing with the question of limitation the Privy Council made certain observations and it is those observations which are pressed into service by the learned Attorney General. Article 144 on which the respondent relied in that case, it has been held, is applicable only to a possessory suit by the owner of the property claimed against a person holding adversely to him without title, and the plea made by the respondent that he was the owner on several grounds was rejected; but in the course of its judgment the Privy Council assumed that by reason of the contract pleaded by the respondent the properties were impressed with the continuing trust in favour of the respondent, and observed that even so their Lordships were unable to hold that "this would entitle him to sue for possession as owner". Sir George Lowndes, who delivered the judgment of the Board, referred to the fact that "the Indian law does not recognise legal and equitable estates. By that law, there can be but one owner, and where the property is vested in a trustee, the owner must, their Lordships think, the trustee, and so the right of a beneficiary is, in proper case, to call upon the trustee to Convey to him". It is in that connection that Sir George Lowndes further observed that the enforcement of this right would, their Lordships think, be barred after six years under article 120 of the Limitation Act, and if the beneficiary has allowed this period (1) PAT. 851 221 to expire without suing he cannot afterwards file a possessory suit, until conveyance he is not the owner. It is clear that such a trust as is relied upon in the present case would not fall within s.10 of the Limitation Act as it would be impossible to hold that the properties which vested in the appellant under the terms of the wills which have been proved were so vested for the specific purpose of making them over to the respondent". It would thus be seen that these observations mean no more than this that the beneficiary under a private trust cannot claim to recover possession of the property from the trustee so as to attract the application of article 144 of the Limitation Act. He can make the claim for a declaration which would be governed by article 120. It is quite clear that the question as to whether in a proper case the beneficiary can. not apply for the removal of the trustee, for the appointment of a new trustee, and for the delivery to the new trustee of the property improperly alienated by the previous trustee did not fall to be considered in that case. All that the Privy Council was called upon to consider was whether a beneficiary can bring a suit for possession against a trustee and whether such a suit can be governed by article 144; and in holding that such a suit cannot be brought by the beneficiary the Privy Council pointed out that article 144 postulates a suit by the owner and a beneficiary is not an owner under the Indian Law of Trusts. We are, therefore, satisfied that the observations on which reliance is placed by the learned Attorney General cannot be said to amount to a decision that in no case can a beneficiary claim that the trustee appointed under the trust should be removed and new trustee should be appointed and the trust properties improperly alienated by the previous trustee should be ordered to be delivered into the possession of the new trustee. Section 63 no doubt provides for the two remedies which are available to the beneficiary, but in our opinion 222 section 63 cannot be treated as exhaustive on the subject and so it cannot be urged that a claim for constructive possession like the one made in the present suit is prohibited by 8. 63. Prima facie section 10 of the Limitation Act seems to contemplate an action by a beneficiary under a trust to which 8. 10 applies and provides that in such an action the beneficiary may follow the property and ask for a proper order &8 to the delivery of the said property to the Dew trustee. If that be so, the provisions of section 10 would suggest that the remedies prescribed by 8. 63 are not exhaustive. Besides, it would be relevant to observe that if section 63 is held to be exhaustive as to the remedies available to & beneficiary it would lead to very anomalous results. If a trustee improperly alienates the trust property the only remedy which would on that view be available to the beneficiary is to obtain a declaration. How would this declaration be effective to bring back to the trust the property improperly alienated? Strictly and literally construed section 63 dose not refer to the remedy for the appointment of a new trustee either, so that on a literal construction of section 63 even that remedy may be outside its purview but assuming that a beneficiary can ask for a declaration that the property alienated is impressed in the trust and also add a prayer for the appointment of a new trustee that only means that after the new trustee is appointed he will have to sue the alienee for possession and very often this suit would be defeated by the alienee 's plea of adverse possession. It is hardly necessary to emphasis that when the beneficiary sues for a declaration as required by section 63 and the alienee resists the said suit the adverse possession of the alienee is emphatically brought out and the pendency of the beneficiary 's suit would not affect that position so that on the view that a. 63 is exhaustive more often than not the beneficiary 's claim would in substance be defeated by the adverse possession of the alienee. 223 In Subbaiya Pandaram vs Mahamad Mustapha Maracayar (1), this is exactly what happened. In, the presence of the purchaser it was declared that the trust have been validly created and that the property was in fact a trust property. Their Lordships pointed out that "at the moment when the said decree was passed the possession of the property was adverse and the declaration that the property had been properly made subject to the trust disposition, and therefore ought not to have been seized, did not disturb or affect the quality of his possession ; it merely emphasised the fact that it was adverse. No further step was taken in consequence of that declaration until the present proceedings were instituted when it was too late. " We would like to add that if for bringing back to the trust the properties improperly alienated by the trustees two suits are required to be filed we apprehend that the second suit by the newly appointed trustee for obtaining possession of the properties would almost always be too late, and so section 63 cannot be read as exhaustively dealing with all the remedies available to the beneficiary. We must, therefore, reject the argument that the suit for possession in the form in which the prayer has been made by the plaintiffs is incompetent. That takes US to the question of res judicata. The argument is that on general grounds of res judicata the dismissal of the suit (O. section No. 30 of 1943) filed by defendants 1 to 6 should preclude the trial of the present suit. It has been fairly conceded that in terms section 11 of the Code cannot apply because the present suit is filed by the creditors defendants 1 to 6 in their representative character and it conducted as a representative suit under o. 1, r. 8; and it cannot be said that defendants 1 to 6 who were plaintiffs in the earlier suit and the creditors who have brought the present suit are the same parties or parties who claim (1) [1923] L.R 50 I.A. 295. 224 through each other. Where section 11 is the thus inapplicable it would not be permissible to rely upon the general doctrine of res judicata. We are dealing with a suit and the only ground on which res judicata can be urged against such a suit can be the provisions of section 11 and no other. In our opinion therefore, there is no substance in the ground that the present suit is barred by res judicata. The next question which falls to be considered is the most important question in these appeals. We have already seen that three trustees were appointed under the trust deed executed by defendants 1 to 6 and two of the impugned sale deeds have been executed by only two out of the said three trustees. The Courts below have held that two out of the three trustees could not convey a valid title and so on that ground alone the two transfers are invalid. It is urged before us that this conclusion is not justified on a fair and reasonable construction of cl. 23 of the trust deed. fore considering this point it is necessary to state the legal position in the matter under the Trusts Act. Section 48 of the Trusts Act provides that when there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides. It is thus clear that all acts which the trustees intend to take for executing the trust must be taken by all of them acting together. Therefore, there can be no doubt that if the validity of the alienations effected by the trustees falls to be considered only in the light of section 48 the fact that out of the three trustees only two have executed the sale deeds would by itself make the transactions invalid and would not convey title to the alienees. This position is not in doubt. Lewin on "Trusts" has observed that "in the case of co trustees the office is a joint one. Where the administration of the trust is vested in 225 Co trustees they all form as it were but one collective trustee, and therefore must execute the duties of the office in their joint capacity. it is not uncommon to hear one of several trustees spoken of as the acting trustee but the Court knows no such distinctions, all who accept the office are in the eyes of the law acting trustees. If anyone refuses or be incapable to join it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court. However, the act of one trustee done with the sanction and approval of a co trustee any be regarded as the act of both. But such sanction or approval must be strictly proved (1) If one of the trustees refuses to join in the execution of the trust, under the Indian law section 34 of the Trusts Act provides for the remedy. The other trustees can apply to the Court as contemplated by 8. 34 and the trust may accordingly be executed. As we have seen section 48 contemplates that its provisions will not apply where the instrument of trust otherwise provides. In other words, if a trust deed under which more trustees than one are appointed expressly provides that the execution of the trust may be carried out not by all but by one or more then of course the matter world be governed by the special provision of the trust deed. The argument urged by the learned Attorney General is that cl. 23 of the trust deed in suit makes such a provision. Both the Courts below have rejected this plea but it is urged that the said conclusion is based on a misconstruction of the relevant clause. Clause 23 has been thus translated by the High Court: "In all the proceedings to be taken in connection with this estate, you three, either unanimously or according to the decision of the majority, shall act". In the earlier litigation stated by defendants 1 to 6 this clause was thus translated: (1) Lewin on trusts, 15th ed., p. 190. 226 "All the steps to be taken in connection with this estate should be according to the unanimous opinion of all the three of you or as decide(1) by the majority". The learned trial judge has made this translation of the clause in the present proceedings: "In all the proceedings to be taken in connection with the estate all the three should act either unanimously or according to the decision of the majority". The learned Attorney General has supplied us with the literal translation of the clause which reads thus: "In connection with this estate, in all proceedings to be taken you three unanimously or according to the decision of the majority shall act". We have carefully compared all the translations, and we feel no difficulty in holding that the translation supplied in the earlier litigation is somewhat inaccurate, whereas all the three translations made in the present proceedings substantially agree. Taking the translation supplied by the learned Attorney General it is clear that what this clause requires is that the three trustees shall act, and it provides that they shall act according to the decision which may be reached either unanimously or by majority. "You three," that is to say the three trustees, is the subject of the predicate shall act"; and the words between the subject and the predicate indicate how the decision has been reached. Reading the clause as a whole it is difficult to accept the argument that this clause allows two of the three trustees to act without joining the third trustee in the actual action to be taken in the execution of the trust. It is not necessary under the clause that in the matter of executing the trust every decision must he unanimous. The clause recognises that in some matters decision may be by majority; but nevertheless it requires that once a decision is reached either unanimously or by majority, in giving effect to the decision and in taking any given action in the execution of the trust all the three must act. Thus read this clause conforms to the statutory provision 227 contained in 8. 48 of the Indian Trusts Act and is not intended to provide for an exception to the said provisions at all. It is urged that if no departure was intended to be made from the principles laid down in section 48 the clause need not have been added at all. This argument is wholly inconclusive. There are General other clauses in the trust deed which also bring out provisions corresponding to the relevant provisions of the Trusts Act and this argument may apply to the said clauses as well. The authors of the trust, while creating the trust, have made elaborate provisions in respect of the trust, while creating the trust, leave made elaborate provisions in respect of the several matters concerning the execution of the trust, and the whole scheme of the trust deed is consistent with the operative cl. 23 in that it seems to require all the trustees to act together even though the decisions which they seek to give effect to may have been majority decisions and not unanimous decisions. Therefore, in our opinion, the Courts below were right in holding that cl. 23, like the main provision of section 48, requires that all the trustees should have joined in the execution of the sale deeds in question. That being so, Exs. :B 91 and B 37 which are respectively executed in favour of defendant 14 and defendant 13 are invalid and can pass no title to the alienees on the ground that only two out of the three trustees have executed them [Vide: Lala Man Mohan Das vs Janki Prasad (1)]. In support of the validity of these transfers an alternative argument has been urged before US. It is pointed out that according to Lewin on Trusts, if the act to the two trustees has been done with the sanction and approval of the third trustee then it may be regarded as an act of the three trustees, and it is urged that in the present case the third trustee had consented and shown his approval to the transactions in question. The two sale deeds have been executed by defendant 7 and Veerabahu (6) [1944] L. R. 72 T. A. 39. 228 Pillai, and they do not bear the signature of Narayana Pillai but this. alternative contention proceeds. on the assumption that though Narayana Pillai did not sign the document (exhibit B 94) he had in fact consented to it and had shown his approval to the transaction. This argument, however, cannot be accepted having regard to the concurrent finding recorded by the Courts. below on this point. Dealing with this question the trial court has referred to the discrepant versions given for Narayana Pillai not joining in the execution of the sale deed. He points out that no mention is. made in the sale deed as regards. the circumstances under which the third trustee did not join. Then he examines the evidence given by defendant 7 and points out the infirmities in the said evidence. He compares. the evidence given by defendant 13 in the previous. suit and observes that the explanations. given are inconsistent. One of the explanations was that Narayana Pillai declined to come to the Sub Registrar 's office as he was. heavily involved and that people would think that he was selling his. property. The other explanation was that Narayana Pillai wanted come accommodation, and when his co trustees refused to agree he declined to join the execution of the document. The trial court has observed that there was nothing to show that Narayana Pillai was financially involved at the relevant time, and he points. Out that in fact Narayana Pillai had gone to the sub Registrar 'section Office near about that time in connection with another transaction. That is how the trial court has rejected the argument that Narayana Pillai was a consenting party to the transaction in question. The High Court has concurred with this conclusion. In dealing with this question the High Court has preferred to believe the evidence of the first defendant that Narayana Pillai considered the prices fixed for exhibit B 94 as very low and for that reason refused to be a party to it. It has contrasted this reason with the other reasons given on behalf of the alienees, and it has recorded its conclusions in these words: 229 "Whatever may be the reason it is certain that Narayana Pillai was not a consenting party to the transaction and there being no other evidence by way of minutes of any meeting of the trustees had decided with the knowledge of Narayana Pillai, though he had dissented, we are unable to hold that there has been such a decision of the majority as would bind the dissenting trustee". It does appear the original draft of exhibit B 94 was made on the assumption that all the trustees would join in the execution of the document but the hope and anticipation formed by the two trustees was believed and so the document was ultimately executed by two of them without Narayana Pillai joining. We have considered the evidence to which our attention was invited in this connection, and we see no reason to interfere with the concurrent conclusion recorded by the Courts below that Narayana Pillai was not a consenting party to the transfer in question. 'that being so, the alternative ground made in support of exhibit B 94 fails. If the transfers in favour of defendant 14 (exhibit B 94) as well as Ex;. B 37 in favour of defendant 13 fail on this ground it is really not necessary to consider the further question as to whether both the said transfers were effected for grossly inadequate consideration. The next question which has been raised on behalf of defendant 14 is in regard to the amendment made by the High Court in its decretal order. It is urged that this amendment was made after the appeals to this court had been admitted and so it is without jurisdiction. It appears that the certificate was granted by the High Court to the respective defendants who have come to this Court as appellants on November 26, 1954, and the appeals were admitted on December 4, 1955, whereas the amendment has been made after the appeals were admitted. The application for the amendment in question was made under section 151 and 152 of the Code; and it became necessary because the decretal order drawn in the High Court referred to the profits 230 of which accounts were directed as mesne profits. The use of the words "mesne profits" would have inevitably brought ill the period of three years beyond which accounts could not be claimed. By r J their application the plaintiffs alleged that the use of "mesne profits" in the decretal order was inconsistent with the judgment which had directed accounts of the net profits as so they claimed that the decretal order should be corrected in cl. III, sub cl.(3). According to the prayer thus made it was suggested that the clause should read as follows "that the defendants 12, 13 and 14 are liable for the net profits of the properties purchased by them under schedule V, schedule II and schedule I respectively" The word "net profit" was used in the place of "mesne profits" originally introduced ill the order. When this application for amendment was argued before the High Court the defendants pleaded that the use of the words "mesne profits" was proper and should not be changed. It was urged on their behalf that in its judgment the High Court had introduced the words "mesne profits" deliberately and so the decretal order was perfectly correct. This contention has been negatived by the High Court, and in our opinion rightly. It appears that in the earlier portion if his judgment Krishnaswami Naidu, J., summarised ill one paragraph the effect of the decree passed by the trial court; and in giving this summary he observed that under the decree defendants 12, 13, 14 and 16 were held entitled to be paid the respective considerations of the sales and mortgages together with interest they being liable to account for mesne profits as per the terms of the decree. Two things are clear. Th s part of the judgment does not contain the decision of the High Court at all. It is really concerned with the narration of the relevant facts and it purports to summarise the effect of the decree and nothing more. Besides, the use of the words "mesne profits" in the context is obviously the result of inadvertence because the decree of the 231 trial court had in the relevant clause used the words "net profits" and not "mesne profits". Thus, there can be no doubt that the decretal order drawn in the High Court through error introduced the words "mesne profits" and such an error could be corrected by the High Court under sections 151 and 152 of the Code even though the appeals may have been admitted in this Court before the date of correction. But apart from this technical argument about the jurisdiction of the High Court to make the correction the point in question has been raised on the merits before us; and it is urged that the plaintiffs are not entitled to anything more than three years ' profits from the respective defendants. The argument is that article 109 of the Limitation Act applies to such a claim and the claim is confined to three years under that article. Article 109 deals with claims for profits of immovable property belonging to the plaintiffs which have been wrongfully received by the defendants and it prescribes there years ' period of limitation commencing from the time when the profits were received. Normally there is no doubt that a successful plaintiff would be entitled to mesne profits for three years and not more; but in the present case we are dealing with a claim made by the plaintiffs on behalf of the trust and the decision in their favour has rendered it necessary to adjust equities between the trust and the respective alienees alienations in whose favour have been set aside as invalid. We have already seen that having set aside the alienations in favour of defendant 14 and others the Courts below have directed that the alienees should get the amounts due to them from the trust. It has also been directed that interest at the rate awarded by the decree should be paid to them on the said amounts. This clearly is an equitable relief granted to the alienees. Having held that the alienees should get interest on the amounts due to them from the dates of their respective mortgages or 232 sales the Courts in fairness have directed that the alienees in turn should give an account of the net profits of the properties which were wrongfully in their possession commencing with the date when 7 they got possession. If the technical argument based on article 109 is upheld as a matter of law there would be no scope for giving equitable relief to the alienees as all and they may be driven to file fresh actions to recover their claims and such actions would have to face the possible plea of limitation. That is why the High Court has observed that the question about the net profits awardable to the trust and interest awardable to the alienees involves considerations of equitable adjustment, and it is by way of an equitable adjustment that the relevant directions have been issued by the decree. It is not disputed that the Court had jurisdiction to make such an equitable adjustment. Indeed, in many cases of this type Courts have made equitable adjustments between rival parties Vide: Satgur Prasad vs Har Narain Das (1); Bhagwat Dayal Singh vs Debi Dayal Sahu (2). The principal and interest ordered to be paid to defendant 14 and the profits ordered to be paid by him are thus integral parts of on equitable adjustment between the plaintiffs and defendant 14. It is also urged on behalf of defendant 14 that the High Court was in error in modifying the decree passed by the trial Court by changing 10 1/2% interest at compound rate to 10 1/2% simple interest in favour of defendant 14. The contention if that under the mortgage executed in favour of defendant 14 (Erg. B 95) the contract rate was 101 compound interest and as mortgagee defendant 14 was entitled to that rate. In support of this argument reliance is placed on the decision of the Privy Council in Jagnnath Prasad Singh Chowdhury vs Surajmal Jalal (a). In that case the Privy Council has held (1) (1932) L. R. 59 1. A.A. 147. (2) (1908) L. R. 35 I. A. 48, 59. (3) (1926) L.R. 54 I. A. 1. 233 that on a preliminary decree for foreclosure or sale under O. XXXIV ,rr. 2, 4 of the Code, a mortgagee is entitled to interest at the rate and with the . rests stipulated in the mortgage, down to this date filed for redemption by the decree. This position 6 cannot be disputed; but the answer to the plea is that the present decree is not passed in an action instituted by defendant 14 as a mortgagee. The present decree is passed while adjusting equities between defendant 14 the alienation in whose favour is set aside; his rights as mortgagee are equitably recognised and thereby further litigation is avoided. Since the decree by which defendant 14 is allowed to recover his mortgage dues has been passed for giving him equitable relief it was open to the High Court to consider whether compound interest should be paid to him or not. As the High Court has pointed out, while adjusting equities between the parties the mortgage does not become revived as such but the relief granted to the 14th defendant is based on equity and justice, and so the High Court thought that the interests of justice would be met if he is paid out of the sale proceeds the principal amount of the mortgage with simple interest at 10 1/2%. We have carefully considered the contention ' raised by the learned Attorney General in this behalf but we do not think that we would be justified in interfering with the modification made by the High Court in the decree passed by the trial court. In the result Civil Appeal No. 62 of 1959 files by defendants 14 and 18 to 24 fails and is dismissed with costs. We now turn to Civil Appeal No. 77 of 1959 filed by defendants 12, 13 and 16. We will take the case of defendant 12 first. We have already seen that in favour of defendant 12 a sale deed has been executed on November 7, 1941 (exhibit B 90). This sale deed has been set aside on two grounds one that it is executed in favour of a person who by intermeddling with the estate of the trust has 234 become trustee de son tort, and second that the properties covered by the document have been sold for inadequate consideration. It is conceded by Mr. Ganapathy Iyer that if we confirm the J finding recorded by the Courts below against defendant 12 on the first point that it self would invalidate the transfer in his favour. He has, however, argued that the said finding is erroneous. Having carefully considered the relevant material we see no reason to interfere with the finding in question. In this connection it would be enough if we briefly refer to the relevant evidence bearing on this point. Defendant 12 wrote to Pichu Ayyar Avergal, defendant 15, who was a clerk of the trust estate on August 20, 1936, in these words: request you that Pathai properties may be checked, that Piramanayakam Pillai coming (there) may be consulted with regard to all matters and settlement made and that you may also come here on Monday morning and render necessary assistance". The tone of the communication and its contents are significant. It is not the language of a person who is merely assisting the trustee. He is issuing directions to the clerk of the trust. Defendant 12 was a creditor of defendants 1 to 6. It is, however, common ground that when sale deed (exhibit B.12) was executed in favour of defendant 13 on December 19, 1936, defendant 13 who is no other than the brother of defendant 12 had undertaken to satisfy defendant 12s debt and so as from that date defendant 12 had ceased to be a creditor of the estate. Even so, he was intermeddling with the estate throughout. On October 14,1938, he wrote to the Agent of the Travancore National and Quilon Bank suggesting that he would pay a sum of Rs. 10,000 for the entire amount payable to the bank by the debtors and he requested the Bank to have the debt discharged in that manner. Then he added that "as the price of the lands have gone down very much owing to conditions at the present time" he requested that the sum of Rs. 10,000 may 235 be received and that the entire debt should thus be discharged. It, would be noticed that at this date defendant 12 was not a creditor of the estate and he had, therefore, no business to write to the Bank. This letter, like the earlier one which we have already seen, clearly indicates that defendant 12 had taken it upon himself to administer the trust. To the same effect is another letter written by him to the official Liquidator of the said Bank on January 9, 1939. In this letter defendant 12 says that "the trustees are arranging for several settlements in deference to the wishes of Mr. Ayyah Sastri, but owing to the nature of time the matter stands unsettled even though both are agreed willingly ". Then he refers to the proposal to settle all the debts and promises that "the matter will be finally settled if the trustees meet you personally". "I, therefore, request you ', says defendant 12, to kindly excuse the little delay and pray to fulfill the great task", and he adds " I am also coming there". Then followed a suit by the Bank, No. 12 of 1939 to which defendants 12 and 13 were impleaded and in this suit defendants 12 and 13 entered into a compromise with the plaintiff Bank and obtained a compromise decree. It is unnecessary to refer to the terms of the compromise decree. What is material is the conduct of defendant 12 in entering into compromise with the Bank. Defendant 13 may have been justified in entering into the compromise but defendant 12 could have done to only as an intermeddler. This decree was passed on February 14, is also relevant on this point. This is a notice issued to defendant 12 by one of the creditors of the estate. It appears that this creditor had given to defendant 12 a receipt signed by him in order to enable defendant 12 to draw the amount from defendant 14 to be paid to the said creditor. The notice further recites that "it now transpires that about the middle of July, 1937, you drew the said amount of Rs.455 from the said Janakirama Iyer and have 236 failed till now to account for the same to my client". In other words, this notice shows that defendant 12 had promised to pay to the creditor Rs. 425 due to him from the estate and had failed to do so. The result was the suit by the creditor (Small Cause Suit No. 58 of 1940). This suit again was compromised by defendant 12. There is yet another document Ex 121 which shows how defendant 12 was intermeddling with the estate. This is a receipt passed by the clerk of the estate to one Subbayyar Avergal on March 9, 1937. It reads thus: "According to the order directed by defendant 12 I have received from you on this date Rs. 400 from the sale of the current Pisanam paddy produce from the estate of M. R. Ry. P.S. Krishnaswami Ayyar Avergal vagaira, Kalakkadu Pannai". It is clear that the clerk of the estate Pichandi Ayyar who passed the receipt had been directed by defendant 12 to receive Rs.400 from Subbayyar Avergal. The had accordingly received that amount and passed a receipt in that behalf. Now, is. defendant 12 directed the clerk of the estate to receive a certain amount for and on behalf of the estate it clearly amounts to intermedding with the estate and it makes him trustee de son tort. Defendant 12 had given evidence in the earlier litigation in which he had stated that he, defendant 13 and Veerabahu Pillai were members of an undivided family. In the present proceedings defendant 12 has gone back upon his admission that he and his brothers constituted an undivided family. The trial court has accepted this latter plea and the High Court has not differed from it; but that apart, the several statements made by defendant 12 in the said evidence clearly show that he was taking as much active part in the affairs of the trust as his brother Veerabahu. There is yet another fact to which reference may be made. As the High Court has pointed out, the sale in favour of defendant 12 was executed on 237 November 7, 1941, and yet the properties covered by the said document appear to have been put in his possession as early as 1937. In other words, defendant 12 entered into possession of the properties nearly four years before the sale was executed in his favour. It is in the light of these facts that the Courts below have held that defendant 12 is a trustee de son tort. As is observed is Williams on Executors and Administrator(1) "a very slight act of intermeddling with the goods of the deceased will make a person executor de son tort". In the present case the acts of intermeddling by defendant 12 spread over a fairly long period and cannot in any sense he regarded as minor and insignificant. We would accordingly hold that defendant 12 is in the position of trustee de son tort and to the sale deed executed in his favour (Ex. B 90) is bad on that account alone. In regard to defendant 13 there are two transactions in his favour, exhibit B 37 and exhibit exhibit 37, as we have already seen, is invalid for the reason that it has been executed by two out of the three trustees. That leaves exhibit B 79; but before we deal with that transaction it would be relevant to refer to a general consideration which applies to all the transfers in favour of defendants 12, 13 and 16. Defendants 12 and 13 are the step brothers of Veerabahu and defendant 16 is the son in law of defendant 13. It is quite clear that under section 52 of the Trusts Act "no trustee whose duty it is to sell trust property, and no agent employed by such trustee for the purpose of the sale, may, directly or indirectly, buy the same or any interest therein, on his own account or as agent for a third person". This position is thus stated by Lewin on Trust: "A trustee is absolutely and entirely disabled from purchasing the trust property whether it be real estate or a chattel personal, land, or a ground rent, in reversion or possession, whether the purchase be made in the trustee 's own name or (1) Williams of Executors and Administrators, 14th ed. , Vol. 1, p. 28, 238 in the name of a trustee for him, directly or indirectly, as to a purchaser upon a contract or understanding (amounting to more than mere expectation) that the purchaser shall re sell to the trustee, by private contract or public auction, from himself as the single trustee, or with the sanction of his co trustees(1). Thus, the alienations by the trustees in favour of the near relatives of one of the trustees would be bad for this reason. Besides, under section 47 of the Indian Trusts Act a trustee cannot delegate his office or any of his duties either to a co. trustee or to a stranger, unless the instrument of trust so provides, or the delegation is in the regular course of business, or the delegation is necessary, or the beneficiary, being competent to contract, contents to the delegation. The trust did impose upon the trustees the obligation to sell the properties of the trust at the highest price recoverable and to distribute the sale proceeds amongst the creditors of the authors of the trust. The documents in favour of defendants 13 and 16 seem to leave it to the respective purchasers to pay the debts and that map be another infirmity in the transaction. Going back to exhibit B 79 which is a transfer in favour of defendant 13 it is evident that this transaction is inevitably connected with another transaction exhibit B 25. exhibit B 79 has been executed for a consideration of Rs.2,000 and odd and it relates to 3 acres and 14 cents of schedule VIII property. It appears that defendant 13 had obtained another sale deed exhibit B 25 on April 19, 1937 This sale deed consisted of 51 items of property belonging to the trust which had spread over five villages. These items consisted of house sites and lands. The sale deed was for Rs. 5,000. Defendant 13 in his turn proceeded to sell the said property by different lots to respective buyers. Amongst the creditors of the estate was Lakshmi (1) Lewin on Trusts, 15th ed, p. 797. 239 Ammal to whom Rs. 800 was payable on the basis of 50% of return of debt. Defendant sold to I. Lakshmi Ammal 64 cents out of the lands purchased by him under exhibit B 25. It, however, appears that in respect of the 3 acres and 14 cents which ,7 was the subject matter of exhibit B 25. Original Suit No. 32 of 1941 was instituted by persons who claimed title to the said property. To that suit Lakshmi Ammal was impleaded as to defendant and so was defendant 13. Ultimately the said suit was decreed and the property in question was held to belong to the plaintiffs in that suit and not to the estate of defendants 1 to section It was as a result of this decree that exhibit B 79 came to be passed in favour of defendant 13. This document purports to convey 3 acres and 14 cents of another property to make good the lose to him by reason of the decree in Suit No. 32 of 1941. Thus, it would be seen that the transaction evidenced by exhibit B 70 can stand only if the transaction by evidenced by exhibit B 26 is valid and not otherwise. The Courts below have held that this latter transaction is obviously and patently invalid. In our opinion, this conclusion is right. It is true that exhibit B 25 is not directly challenged in the present suit because the properties covered by it have been sold to different purchasers by defendant 13 and they have not been impleaded. Even so, since exhibit B 25 is the very foundation of exhibit B 79 it is open to the plaintiffs to contend that the validity of Ex 26 should be considered for determining the validity of exhibit B 79, and that is what the Courts below have done. Now, one has merely to look at the broad features of exhibit B 25 to be satisfied that it is an invalid transaction. It is patent that no attempt was made to value the properties individually. The properties numbering 51 and spread over five villages were all grouped together and sold for Rs. 5,000 without making any serious efforts to determine the value 240 of the lot. The purchaser was told to sell the properties to the respective creditors of the estate and thus satisfy them. The in substance is delegation of the functions of the trustees which they could not J delegate to defendant 13. The stamp paper for the sale deed exhibit B.25 stands in the name of Veerabahu Pillai and defendant 13 was unable to explain how the stamp paper came to be in that name. Defendant 13 admitted that he did not inspect the property before its purchase and that he had no idea about its value. As the trial court had observed, the transaction cannot be regarded was a bona fide sale because the property consists of odd assortment of punja lands and house sites in Pathi, Padmaneri and Sivalpuri villages". Therefore, we have no difficulty whatever in agreeing with the conclusion of the Courts below that exhibit B 25 was invalid; if that be so exhibit B 79 must be held to be invalid for that reason alone. Incidentally, we may refer to the fact that defendant 13 admitted in the earlier suit that he had not refunded the purchase money to Lakshmi Ammal and that substantially destroys the basis of exhibit B 79 because defendant 13 not having paid anything to Lakshmi Ammal had no right to retain the property conveyed to him. The last transactions which have yet to be examined are those in favour of defendant 16. In regard to these transactions the trial court has found that evidence adduced by the plaintiffs shows that the consideration for which properties were sold were grossly inadequate. The vendee, defendant 16, did not care to examine himself. Besides, as we have already pointed out he is a close relation of defendants 12 and 13. The High Court has concurred with the trial court 's conclusion. The only point which was attempted to be made by Mr. Pattabhiraman in challenging the correctness of this concurrent conclusion is that the Courts appear to have assumed that the agricultural lands conveyed to defendant 16 were all double crop lands. On this assumption he suggested that . 241 the calculation made about the true value of the said properties errs on the side of overstatement. It is not disputed that of the lands conveyed 3 1/2 acres and 24 cents are single crop while approximately 3 acres are double crop. On looking at the judgments of both the Courts below, however, we are satisfied that the argument is misconceived because neither judgment proceeds on the assumption that the whole of the agricultural property is double crop land. In fact the discussion in the judgment of the trial court on Issue No. 27 quite clearly negative the assumption made by Mr. Pattabhiraman. that being so as the Courts below have observed, evidence led by the plaintiffs in support of their case that the transfers were effected for grossly inadequate price has remained unrebutted. The question about the value of the property has been determined on the evidence, documentary and oral, led in the case, and both the Courts have found in favour of the plaintiffs and against the alienees. Incidentally, we may point out that Mr. Viswanatha Sastri appears to be right when he suggests that schedule VII refers to the properties both at Thirukurunkudi as well as Padmaneri though the heading of the schedule refers only to Thirukurunkudi. In the result Civil Appeal No. 77 of 1959 preferred by defendants 12, 13 and 16 fails and is dismissed with costs. Appeals dismissed.

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.

The appellant filed a suit for recovery of certain properties from the respondents. The suit was decreed by the trial court The respondents appealed to the High Court, but pending the appeal, the appellant, in execution of the decree of the trial court, obtained possession of the suit properties and recovered the costs awarded. Only July 13, 1949, the High Court set aside the decree of the trial court, and on August 24, 1950, the appellate decree was amended by deleting the name of one of the decree holders from the decree. The respondents filed two applications one on February 11, 1953 for costs and the other on February 13, 1953 for restitution of the properties and costs paid, under section 144 of the Civil Procedure Code, 1908. The trial court ordered execution to proceed and on appeal the High Court confirmed the order. In the appeal to the Supreme Court, it was contended that: (i) the application for recovery of costs was barred by limitation under article 182 of the Limitation Act, 1908, as it was filed beyond 3 years from the date of the appellate decree and (ii) the application for restitution was not an application for execution and was therefore governed by article 181 of the Limitation Act; and as the period of limitation of 3 years under that article, starts from the date when the right to apply accrues the application for restitution was also barred by limitation. HELD (by Full Court): (i) The execution application for the recovery of costs was within time. [439 E; 455 H] By the amendment of August 24, 1950, the name of one of the decree holders was struck out from the decree and the result was, to that, extent, the rights of the parties were modified by the amended decree. it was therefore. a case where the decree has been amended within the meaning of article 132(4) of the Limitation Act, and the application for execution could be filed within 3 years from the date of the amendment. [455 G] (ii) (Per Subba Rao, Raghubar Dayal, Rajagopal Ayyangar and Mudholkar JJ.) : On a fair construction of the provisions of section 144 of the Code, an application for restitution must be held to be one for execution of a decree, and having been filed within 3 years from the date of the amended decree was within time. [455 B, H] Having regard to the history of the section, there is no reason why such an application should not be treated as one for execution of the appellate decree. The object of the section is to make the scope of restitution clear and unambiguous. It does not say that an application for restitution, which till the Code of 1908 was enacted was an application for execution, should be treated as an original petition. Whether an application is one for execution of a decree or in an original application depends upon the nature of the application and the relief asked for. When a party, who lost his property in execution of a decree, seeks to recover it back by 437 reason of the appellate decree in his favour, he is not initiating any original proceeding but is concerned only with the working out of the appellate decree in his favour. [450 E H; 451 A] it would be inconsistent to hold that an application for restitution would be an original petition, if the appellate decree did not give a direction for restitution, and that it would be an execution application if it did. Such an inconsistency could be avoided if a direction for restitution were implied in every appellate decree setting aside or modifying the decree of the lower court. [451 C E] The existence of section 47 in the Code would make section 144 redundant. The latter section was enacted to prescribe the procedure, define the powers of the court and expressly bar the maintainability of a suit in respect of a relief obtainable under it. [451 E, G] The fact that the section has been placed in the "Miscellaneous" part of the Code for convenience of arrangement, cannot affect the question if in reality the application for restitution is one for execution : at the most it is only one of the circumstances relevant to the enquiry and it is not decisive. [452 D E] Merely because, under section 144, the application has to be filed in "the court of first instance" and under section 38, a decree may be executed both by "the Court which passed if ' or by "the court to which it is sent for execution. " an application under section 144, does not ease to be one for execution. For under section 37, the expression "Court which passed a decree" includes the "Court of first instance", when the decree to be executed has been passed in the exercise of appellate jurisdiction. [452 E G] If an execution application to which section 47 applies does not cease to be an execution application by reason of the section being included in the definition of a "decree" under a. 2(2), an execution application under section 144 cannot likewise cease to be one for the reason that the said section is included in the definition of decree. The two sections were included only for the purpose of giving a right of appeal. [453 C D] To construe an application for restitution as not one for execution would lead to anomalies specially under sections 6, 7 And 15 of the Lemitation Act. The existence of anomalies may have no relevance when a provision of a statute is clear and unambiguous, but will certainly have a bearing when the section is ambiguous. Further, in a procedural matter pertaining to execution when a section yields to two conflicting constructions, the court should adopt a construction which maintains rather their disturbs the equilibrium in the field of execution. [453 H; 454 A, F] Per Sarkar J. (dissenting) : The application under section 144 is not one in execution and therefore would not be governed by article 182 of the Limitation Act but by article 181. Since, under article 181 time starts to Tun from the date the right to apply accrues and the period provided is three years, the application for restitution would be barred. [442 D F] Apart from the fact that the application is not described as one in execution the provision in the section for the making of an order for the purpose of effecting restitution would lead to the conclusion that it is this order that is to be executed for obtaining restitution; and therefore the earlier application resulting in such order, could not be one for execution. [440 D E] if the application under section 144 is one for execution, then the pro@ion in the section that no suit shall be instituted for the Purpose of obtaining restitution, and the inclusion of the determination of a question under section 144 within the definition of decree in section 2(2) would be unnecessary because of section 47. The latter ion which relates to questions arising in 438 execution bars a suit to obtain the same relief, and the determination of any question under that section is included within the definition of decree. [440 F H] Further, under a. 144, the application has to be made to "the Court of first instance" and not to a transferee court, whereas, under sections 38 and 39 and OXXI, r. 10, the holder of a decree desiring to execute it shall apply to the court to which the decree has been sent for execution. [441 A C] While the section 583 of the Code of 1882, expressly provided that restitution would be by way of execution, section 144 of the Code of 1908, deliberately omits reference to execution. This departure in the terminology used, would tend to the view that it was intended that the procedure under the new section would not be by way of execution. [441 F G] If the language of the section by itself clearly indicates that the procedure is not to be by way of execution, it would not be legitimate to interpret the section in a different way because of the deprivation of the benefits under sections 6, 7 and 15 of the Limitation Act. [442 B] It cannot be said that the right to apply for restitution accrued when the appellate decree was amended, for under section 9 of the Limitation Act, case began to run from the date of the appellate decree, when the right to apply first accrued. [442 H]

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 appellant was elected to the Madras Legislative Council from the Madras District Graduates Constituency. His election was challenged by the Respondent, his nearest rival candidate by an election petition alleging, mainly, that a large number of cars had been employed for the conveyance of voters to the polling booths in violation of section 123(5) of the Representation of the People Act, 1951. The High Court held that the corrupt practice was established and set aside the appellant 's election. It also declared the respondent elected in his place. The original order passed by the High Court did not :name the appellant as guilty of corrupt practice but the Court, by a subsequent order reviewing its previous order, gave a declaration to that effect. In the appeal to this Court, it was contended by the appellant that the plea in the petition regarding violation of section 123(5) was vague and not sufficiently defined so as to give him notice of the charge he had to meet, and furthermore, that the learned Judge who tried the case improved both the pleading on the subject and the evidence led by the election petitioner by calling certain witnesses and looking into documents which he had no power to do. It was therefore contended that all the evidence which the learned Judge collected suo motu should not be looked at and if the case of the petitioner was confined to the bare plea raised, the petition would deserve to be dismissed because it was not clear in the plea and was lacking in proof. HELD: dismissing the appeal: On the facts, the High Court had rightly found that many cars were employed for the conveyance of voters in the constituency. The circumstantial chain of evidence was sufficient to show the connection between the appellant and the use of the cars for the conveyance of voters. The corrupt practice under section 123(5) was therefore brought home. A B] (i) The plea in the petition in essence was that cars were used for the purpose of conveying voters contrary to the prohibition contained in the Election Law. The names of the booths and the divisions in which the booths were situated together with the particulars of the cars and the persons primarily concerned with cars at the polling booths had been mentioned. The connection of the appellant with the use of the cars had been specifically pleaded. Sufficient particulars of the allegation had therefore been given and the rest were matters of evidence which did not require to be pleaded. (ii) The power of a Civil Court to summon court witnesses is contained in O. XVI r. 14 of the Co& of Civil Procedure. The Representation of People Act enjoins that all the powers under the Code can be exercised and all the procedure as far as may be ,applicable to the trial 1020 of civil suits may be followed in the trial of election petitions. The court trying an election petition therefore has the power to summon a Court witness if it thinks that the ends of justice require or that the case before it needs that kind of evidence. The policy of election law seem to be that for the establishment of purity of elections, investigation into to be that for the nasal factices including corrupt practices at elections all allegations of malpractices include corrupt practices at elections should be thoroughly made. In the present case a large number of cars were obviously used presumably for the purpose of carrying voters to the booths. In the face of this voluminous evidence it was open to the judge, if evidence was available to establish who had procured or hired judge, summon witnesses who could depose to the same. Such a vehicles, to exercised by the learned judge . [1028 B F] (iii) In the present case it was not possible to reach the conclusion the voters were brought to the polling booths in violation of that 23(5), the result de the election had been materially affected. In a single transferable vote, it is very difficult to say how the voting would have gone, because if all the votes which the appellant had got, had gone to one of the other candidates who were eliminated at the earlier counts, those candidates could have won. The declaration of the respondent 's election would be merely a guess or surmise as to the nature of the voting which would have taken place if the corrupt practice had not been perpetrated and the High Court 's direction declaring him elected must therefore be set aside. [1032 B D] (iv) The appellant was properly named as guilty of corrupt practice although the order was incorporated by the learned Judge through a review. It was his duty to have named persons who had been guilty of corrupt practice and he made this up later. There is no need 'for any specific power for review since the power to name any person guilty of corrupt Practice is already contained in the Act. Whether it comes in the original judgment or by a supplementary or complementary order, is not much to the purpose that order was correctly made. [1032 E]

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 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.

Defendant No. 1 was the Sthanee of Kavalappara estate which was an impartible estate governed by Marumakkathayam law. The plaintiffs claimed maintenance based on a family custom entitling the members to maintenance out of the entire income of the Sthanam. Past maintenance was claimed as also future maintenance from the date of the suit. Defendant No. 1 denied that the plaintiffs had any right based on custom as claimed by them; according to him from older times two kalams of the Sthanam had been set apart for their maintenance. He claimed that the Privy Council in suit No. 46 of 1934 had declared him absolute owner of the Sthanam properties but despite that, out of generosity only he had been paying to the junior members of the Swaroopam Rs. 17.000/ annually. The trial court granted maintenance to the plaintiffs for the period claimed at the rate of Rs. 250/ per mensem for each of the plaintiffs. Defendant No. 1 appealed to the High Court and the plaintiffs filed cross objections as the rate of maintenance allowed to them was lower than they had claimed. The High Court partly allowed the appeal negativing the plaintiffs ' claim for arrears of maintenance, and dismissed the cross objections of the plaintiffs. Both the parties appealed to this Court. The questions that fell for consideration were: (i) whether the right to maintenance as claimed by the plaintiffs was based on custom; (ii) whether the High Court was right in disallowing the claim of the plaintiffs to arrears of maintenance; (iii) whether the rate of maintenance as ordered by the trial court and ' confirmed by the High Court was justified. HELD: (i) An alleged custom, in order to be valid, must be proved by testimony to have been obeyed from consciousness of its obligatory character. A mere convention between family members or an arrangement by mutual consent for peace and convenience cannot be recognised as custom. In order that a custom should acquire the character of law the custom must be accompanied by the intellectual element, the opinion necessitatis. the recognition that there is authority behind it. [45 B C; D E] Rarnrao vs Yeshwantrao, I.L.R. , applied. In the present case the evidence sufficiently proved a custom in Kavalappara estate by which the Sthanee was legally obliged to give maintenance to junior members of the family. It was possible that the practice of paying maintenance to junior members originated as an act of generosity of the previous Sthanee. But it had continued without interruption for such a length of time that it had acquired the character of a legal right. [42] Kochuni vs Kuttanunnt, A.I.R. 1948 (P.C.) 47, 52, explained. 37 (ii) Although it had been alleged by the plaintiffs that they had not been paid any maintenance, the High Court had ' found that maintenance had been given to the plaintiffs ' mother with whom the plaintiffs had been living. The High Court 's refusal to grant to the plaintiffs arrears of maintenance before the date of the, suit must, in the circumstances, be upheld. [46 C] (iii) The High Court in fixing the amount of maintenance for each of the plaintiffs at Rs. 250./ per month had taken into account all the relevant factors. It had further directed that it was open to the parties after two years to move the trial court for variation in the rate of maintenance fixed on the ground of altered circumstances of the Estate. There was no reason for interfering with the judgment of the High Court in this matter. [46. G]

Some of the erstwhile employees of Burmah Shell, in an earlier writ petition, claimed restoration of the commuted portion of pension and enhancement of pension on par with the pensioners of Hindustan Petroleum Corporation Limited, (HPCL). At the time of hearing, the claim for restoration of the commuted portion of pension was given up. This Court accepted the claim of the petitioners as regards enhancement of pension and ordered a sizeable hike in the pension. The present writ petition claims the same relief which was given up at the time of hearing of the earlier writ petition, viz., restoration of commuted portion of pension. Admitted ly, HPCL had deferred its decision till 1992 in this regard. On behalf of the petitioners it was contended that though, HPCL has deferred its decision till 1992, the peti tioners were not precluded from approaching this Court and that the earlier decision did not operate as res judicata. On behalf of the respondents it was contended that as soon as HPCL revises its scheme the petitioners would also be entitled to the benefit thereof and that grant of the relief earlier would create disparity between the persons who receive pension from HPCL and those from the Respondent. Dismissing the writ petition, this Court, HELD: 1.1. It would be inappropriate to interfere and grant the relief as prayed for at this stage since that would create disparity between the personnel who receive pension from Hindustan Petroleum Corporation Ltd. and the respondent Corporation. [965B] 963 1.2. This Court has already held that the retired per sonnel of Burmah Shell would be entitled to a hike in pen sion at par with pensioners of HPCL. (W.P. No. 590/87 decid ed on 11.5. 1988). HPCL has not accorded to its pensioners the relief of restoration of the commuted portion of pension after the expiry of 15 years. The order passed by this Court is as recent as May 11, 1988. After such a short time lag and in the absence of any substantial change in the posi tion, it is not desirable to entertain the claim for resto ration of commuted pension. The petitioners are governed by a special scheme, which is not at par with Government em ployees or the other Public Sector Undertakings. [964G H; 965A] Common Cause & Ors. vs Union of India, ; , referred to.

n No. 96 of 1955. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. Purushottam Tricumdas, J. B. Dadachanji Ravindra Narain and O. C. Mathur, for the petitioner. C. K. Daphtary, Solicitor General of India, B. R. L. Iyengar and T.M. Sen, for the respondents. October 23. The Judgment of Sinha, C. J., Das, Sarkar and Ayyangar, JJ., was delivered by Das, J. Mudholkar, J., delivered a separate Judgment. section K. DAS, J. This is a writ petition on behalf of two petitioners. The first petitioner is the Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi, through Hakim Mohammed Jamil Khan, stated to be its properly elected Secretary. The second petitioner is Hakim 159 Mohammad Jamil Khan himself, who states that he is still one of the trustees or members of the said Board. The petition was initially filed on behalf of the first petitioner. Subsequently, an amendment petition was moved which was allowed by us. As a result of the amendments allowed petitioner No. 2 was added as one of the petitioners, and certain new grounds of attack were added in para. 14 of the petition. To these grounds we shall advert later. The short facts giving rise to the petition are these. One Hakim Mohammad Ajmal Khan was a physician (of Unani medicine) of all India repute. He lived in Delhi and started a pharmaceutical institute in the town known as Hindustani Dawakhana in the year 1903. He also established a medical college known as the Tibbia College. He died in the year 1927. But before his death, in the year 1911, he along with certain other persons formed a society styled Anjuman i Tibbia and had it registered under the (Act XXI of 1860). The name of the society was changed in 1915, and it became known as the Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi. For convenience we shall refer to it as the Board. The Board ran the Tibbia College ' and an attached hostel. The pharmaceutical institute was also managed by it, though at one stage petitioner No. 2 claimed the institute as his private property. Certain rules and regulations were made for the functioning of the Board, which were amended from time to time. The main objects of the Board were thus stated in the rules : (a) to establish colleges for the purpose of imparting higher education in the Unani and Ayurvedic systems of medicine to the inhabitants of India; (b) to improve the indigenous systems of medicine on scientific lines and for that 160 purpose to establish one or more pharmaceutical institutes (dawakhanas); and (c) to have medical books compiled and translated and to adopt other means which might enhance the popularity of those systems and add to the information of the people in general on hygiene etc. The maximum number of members (called trustees in the rule) was 35 to be elected from all the then Provinces of India. It was stated in r. 5 that one third of the members of the Board should be Hakims and Vaids. The financial year of the Board was to be from April 1 to March 31 of each year, and the annual subscription to be paid by a member of the Board was fixed at Rs. 12/ per annum payable in advance before April 30 of each year. Rule 6 laid down the circumstances in which the office of a member should be deemed to be vacant, and one of such circumstances was the failure of a member to pay him annual subscription before the date fixed for such payment. There were also rules regarding (a) power of inspection of the college, hostel etc., (b) ordinary meetings of the Board of Trustees and (c) matters which could be dealt with by the Board and its sub committees. It is not necessary to state these rules in detail. Rule 13 provided for the formation of a Managing Committee consisting of nine members and six officials for a period of three years and the functions of the Managing Committee were also prescribed in the rules. The office bearers of the Board and the Managing Committee were to be the same and consisted of (1) a President, (ii) a Senior Vice President, (iii) a Junior Vice President, (iv) a Secretary, (v) a Financial Secretary, and (vi) a Joint Secretary. It was laid down in r. 26 that the office bearers of the Board were to be elected for three years by the members. The rules also laid down the powers and duties of the President, 161 Secretary, Financial Secretary and Joint Secretary. One of the rules said that the office of the Secretary of the Board shall, as far as possible, vest in the lineal descendants of Hakim Mohammad Ajmal Khan. Hakim Mohammad Jamil Khan son of Hakim Mohammad Ajmal Khan and petitioner No. 2 before us, was the first Secretary of the Board. In the year 1948 Shri Rameshwar Dayal, the then Collector of Delhi, and Dr. Yudhvir Singh the then President of the Delhi Municipal Committee, and certain other persons were elected as members of the Board. Dr. Yudhvir Singh was elected President and one Shri Mool Chand Gagerna was appointed Joint Secretary. Soon after the elections in 1948, a struggle ensued between different groups of members for obtaining control of the Board and the college, and for possession of the Hindustani Dawakhana. Certain criminal proceedings followed. On October 18, 1949, a suit was brought in the court of the senior Subordinate Judge, Delhi under H. 92 of the Code of Civil Procedure against the Secretary and 31 members of the Board. In that suit an application was made for the appointment of a receiver and on October 19, 1949, the Subordinate Judge appointed two local advocate as joint receivers with plenary powers. These receivers took possession of the Dawakhana and the college between October 19 and 23, 1949. When the suit was still pending, the Delhi State Legislature passed an Act called the Tibbia College Act, 1952 (Delhi Act No. 5 of 1952), hereinafter referred to as the impugned Act. This Act same into fore on October 10, 1952. The constitutional validity of the Act is the principal question for decision on this writ petition and we shall presently refer to the provisions thereof. We may only state here that by section 9 of the impugned Act, the Board stood dissolved and all property, movable and immovable, and all rights, powers and privileges 162 of the Board vested in a new Board constituted under the Act. This new Board is called the Tibia Delhi College Board and we shall Refer to it as the new Board. After the passing of the impugned Act, the suit instituted before the Subordinate Judge, the Delhi was withdrawn. On the withdrawal of the suit, an application was made for making over possession of the properties to the new Board. That application was allowed in spite of the objection of petitioner No. 1. Petitioner No. 1 unsuccessfully moved the High Court of Punjab against that order. Thereafter, petitioner No. 1 moved this Court under article 32 of the Constitution for the issue of a writ restraining the State of Delhi and the newly constituted Board under the impugned Act, the State from enforcing the provisions of the impugned Act and the new Board from exercising any functions thereunder. The respondents to the petition raised a number of preliminary objections, and on December 13, 1954, the writ petition was withdrawn. This was followed by some amendments of the rules of the Board and it is stated on behalf of the petitioners that a fresh election was held in accordance with the amended rules on January 6, 1955. On January 11, 1955, the Managing Committee passed a resolution authorising the Secretary to institute a proceeding in this Court to enforce the fundamental rights of petitioner No. 1. The present petition was then filed on March 14, 1955, in pursuance of that resolution. The petition was subsequently amended in the manner already indicated by us. The State of Delhi and the new Board are the respondents to the present petition. The learned Advocate for the petitioners has challenged the validity of the Act on two main grounds. His first ground that the Delhi State Legislature had no legislative power or competence to enact the impugned Act, which must on that ground be declared invalid and inoperative. The second ground proceeds on the footing that assuming 163 the Delhi State Legislature had power to enact the impugned Act, the Act is bad because its several provisions violate the fundamental rights guaranteed to the petitioners under article 14, 19 and 31 of the Constitution. Two subsidiary points have also been urged before us, one to the effect that the Delhi State Legislature could not by the impugned Act over ride the provisions of the which is a Central Act, and the other to the effect that the Delhi State Legislature acted mala fide in passing the impugned Act. We shall presently deal with these arguments in the order in which we have stated them. It is necessary to state here, however, that a preliminary objection similar to the one urged against the previous petition was also urged in respect of the present petition. The learned Solicitor General appearing on behalf of the respondents has urged that by reason of the failure of the members to pay the annual subscription in time, all of them ceased to be members in 1950 1951; therefore, the elections held in 1955 were of no effect there being no one competent to elect; and the Board as a Board ceased to exist before 1955 and neither petitioner No. 1 nor petitioner No. 2 could maintain the present writ petition. Some of the affidavits made on behalf of the parties containing averments with regard to the payment or non payment of subscription particularly in the years 1949 50 and 1950 51 were read, and exhibit B. series which were the cash books of the years 1951 to 1954 were also placed before us. On one side there is the averment on behalf of the respondents that no subscriptions were paid before the due date for the years 1949 50 and 1950 51 by any of the members. As against this, it is stated on behalf of the petitioners that petitioner No. 2 and some of the other members paid their subscription to the Financial Secretary for the years 1949 50 and 1950 51. An affidavit made by the then Financial Secretary was also placed before us. From appeal of the affidavits 164 and the documents filed it appeared to us that the . question being one of disputed facts could not be satisfactorily decided on the materials placed before us. We, therefore, thought it proper and convenient to consider the legal points urged as regards the constitutional validity of the impugned Act and of the action taken thereon. Now, we take up the first argument advanced on behalf of the petitioners. This argument has been put in the following way. The State of Delhi became a Part State on the coming into force of the Constitution of India. Under article 239 of the Constitution as it then stood, a Part State was to be administered by the President acting, to such extent as he thought fit, through a Chief Commissioner or a Lieutenant Governor to be appointed by him or throughout the Government of a neighbouring State. Article 240 of the constitution enabled Parliament by law to create or continue for any Part State a body, whether nominated, elected or partly nominated and partly elected, to function as a Legislature for the State. By virtue of the power conferred by article 240, Parliament enacted the Government of Part a States Act, 1951 (Central Act 49 of 1951), by which a Legislative Assembly was constituted for some of the Part C States including one for Delhi. Section 21 of the said Act laid down the extent of legislative power of the Legislative Assembly. This section said inter alia that the Legislative Assembly of a Part a State may make laws for the whole or any part of the State with respect to any of the matters enumerated in the State List (List II) or in the Concurrent List (List III). There was an exception provided with regard to the Legislative Assembly of the State of Delhi in respect of public order, police etc., which is not relevant for our purpose. Section 22 said that if any provision of a law made by the Legislative Assembly of 0, Part State was repugnant to any provision of a law made by Parliament, then the 165 law made by Parliament, whether passed before or after the law made by the Legislative Assembly of the State, shall prevail and the law made by the Legislative Assembly of the State shall, to the extent of the repugnancy, be void. There is an Explanation to the section which is not 'relevant for our purpose and need not be read. The point which the learned Advocate for the petitioners has emphasised is that under section 21 aforesaid, the extent of the legislative power of the Delhi State Legislature was limited to the making of laws for the whole or any part of the Delhi State with respect to any of the matters enumerated in the State List or in the Concurrent List of the Seventh Schedule to the Constitution. Now, item 32 of the State List (List II) is in these terms: "32. In corporation, regulation and winding up of corporations, other than those specified in List I. and universities, unincorporated trading, literary, scientific, religious and other societies and associations; co operative societies. " Items 43 and 44 of the Union List (List I) are in these terms: 43. Incorporation, regulation and winding up of corporations, including banking, insurance and financial corporations but not including co operative societies 44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities. " The argument of the learned Advocate for the petitioners is this. The old Board which was registered under the and is petitioner No. 1 before us, was a corporation, whose objects were not confined to the State of Delhi. Therefore, any legislation with regard to it could fall under item 44 of List 1 and not under 166 item 32 of List II. This argument consists of two parts first, that the old Board was a corporation, and, secondly, that its objects were not confined to one State. The learned Advocate urge that being the position, the Delhi State Legislature had no legislative competence to make the impugned legislation which went beyond the extent of its legislative power under 8. 21 of Act 49 of 1951. It is worthy of note here that if the Board were not a corporation, then the impugned legislation would not fall under item 44 of List I; alternatively, if the Board were not a corporation but its objects were confined to only one State, viz. the State of Delhi, then again item 44 would not be attracted. On behalf of the respondent there is a threefold reply to the argument stated above: firstly, that the Board was not a corporation; secondly, its objects did not extend beyond the State of Delhi; and thirdly, the impugned legislation is supportable under item 11 of List II relating to "Education" and item 28 of the Concurrent List (List III) relating to "Charities and charitable institution". The first and foremost question is whether the old Board was a corporation in the legal sense of that word. What is a Corporation? Corporations may be divided into two main classes, namely, corporations aggregate and corporations sole. We are not concerned in the present case with Corporation sole. A corporation aggregate has been defined as a collection of individuals united into one body under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with the capacity of acting in several respects as an individual, particularly of taking and granting property, of contracting obligations and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation or at any subsequent 167 period of its existence". (Halsbury 's Laws of England, 3rd Edn. Vol. 9, page 4.) A corporation aggregate has therefore only one capacity, namely, its corporate capacity. A corporation aggregate may be a trading corporation ora non trading corporation. The usual examples of a trading corporation are (1) charter companies, (2) companies incorporated by special acts of parliament, (3) companies registered under the Companies Act, etc. Non trading corporations are illustrated by (1) municipal corporations, (2) district boards, (3) benevolent institutions, (4) universities etc. An essential element in the legal conception of a corporation is that its identity is continuous, that is, that the original member or members and his or their successors are once In law the individual corporators, or members, of which it is composed are something wholly different from the corporation itself; for a corporation is a legal persona just as much as an individual. Thus, it has been held that a name is essential to a corporation; that a corporation aggregate can, as a general rule, only act or express its will by deed under its common seal; that at the present day in England a corporation is created by one or other of two methods, namely, by Royal charter of incorporation from the Crown or by the authority of Parliament that is to say, by or by virtue of statute. There is authority of long standing for saying that the essence of a corporation consists in (1) lawful authority of incorporation, (2) the persons to be incorporated, (3) a name by which tho persons are incorporated, (4) a place, and (5) words sufficient in law to show incorporation. No particular words are necessary for the creation of a corporation; any expression showing an intention to incorporate will be sufficient. The learned Advocate for the petitioners has referred us to various provisions of the and has contended that the 168 result of these provisions was to make the Board a corporation on registration. It is necessary now to read some of the provisions of that Act. The Act is entitled an Act for the registration of literary, scientific and charitable societies and the preamble states that it was enacted for improving the legal condition of societies established for the promotion of literature, science, or the fine arts, or for the diffusion of useful knowledge etc. , or for charitable purposes. Section 1 of the Act states that any seven or more persons associated for any literary, scientific, or charitable purpose, or for any such purpose as is described in s.20 of the Act may, by subscribing their names to a memorandum of association and filing the same with the Registrar of Joint stock Companies form themselves into a society under the Act. Section 2 lays down that the memorandum of association shall contain and one of the particulars it must contain is "the objects of the society". Section 3 deals with registration and the fees payable therefor. Sections 5 and 6 are important for our purpose and should be read in full. The property, movable and immovable, belonging to a society registered under this Act, if not vested in trustees, shall be deemed to be vested, for the time being, in the governing body of such society, and in all proceedings, civil and criminal, may be described as the property of the governing body of such society by their proper title. Every society registered under this Act may sue or be sued in the name of the president, chairman, or principal secretary, or trustee, as shall be determined by the rules and regulations of the society, and, in default of such determination, in the name of Such person as shall be appointed by the governing body for the occasion: 169 Provided that it shall be competent for any person having a claim or demand against the society, to sue the president or chairman, or principal secretary of the trustees thereof, if on an application to the governing body some other officer or person be not nominated to be the defendant. " Section 7 provides for non abatement of suits or proceedings and the continuance of such suite or proceedings in the name of or against the successor of the person by or against whom the suit was brought. Section 8 says that if a judgment is recovered against a person or officer named on behalf of the society such judgment shall not be put in force against the property, movable or immovable, or against the body of such person or officer, but against the property of the society. Section 10 provides that in certain circumstances mentioned therein a member of the society may be sued by the society; but if the defendant shall be successful in any such suit brought at the instance of the society and shall be adjudged to recover his costs, he may elect to proceed to recover the same from the officer in whose name the suit was brought, or from the society. Sections 13 and 14 provide for dissolution of societies and the consequences of such dissolution. These provisions have also an important bearing on the questions before us and are quoted in full. Any number not less than three fifths of the members of any society may determine that it shall be dissolved, and thereupon it shall be dissolved forthwith, or at the time then agreed upon, and all necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules o the said society applicable thereto, if any, and, if not then as the governing body shall find expedient, provided that, in the event of any 170 dispute arising among tho said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal court of original civil jurisdiction of the district in which the chief building of the society is situate, and the Court shall make such order in the matter as it shall deem requisite: Provided that no society shall be dissolved unless three fifths of the members shall have expressed a wish for such dissolution by their votes delivered in person, or by proxy, at a general meeting convened for the purpose: Provided that whenever any Government is a member of, or a contributor to, or otherwise interested in any society registered under this Act, such society shall not be dissolved, without the consent of the Government of the state of registration. If upon the dissolution of any society registered under this Act there shall remain, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the said society or any of them, but shall be given to some other society, to be determined by the votes of not less than three fifths of the members present personally or by proxy at the time of the dissolution, or, in default thereof, by such Court as aforesaid: Provided, however, that this clause Shall not apply to any society which shall have been founded or established by the contributions of shareholders in the nature of a Joint Stock Company. " Now, the question before us is regard being had to the aforesaid provisions was the Board a corporation? Our conclusion is that it was not. The most important point to be noticed in this connection is that in the various provisions of the 171 , there are no sufficient words to indicate an intention to incorporate, on the contrary, the Provisions show that there all absence of such intention. Section 2 no doubt provides for a name as also for the objects of the society. Section 5, however states that the property belonging to the society, if not vested in trustees, shall be deemed to be vested in the governing body of the society and in all proceedings, civil and criminal, the property will be described as the property of the governing body. The section talks of property belonging to the society; but the property is vested in the trustees or in the governing body for the time being. The expression property belonging to the society" does not give the society a corporate status in the matter of holding or acquiring property, it merely describes the property which vests in the trustees or governing body for the time being. Section 6 gives the society the right to sue or be sued in the Name of the president, chairman etc. and 8. 7 provides that no suit or proceeding in a civil court shall abate by reason of the death etc of the person by or against whom the suit has been brought. Section 8 again says that any judgment obtained in a suit brought by or against the society shall be enforced against it. It has been submitted before that 88. 6, 7 and 8 clothe the society with a legal personality and a perpetual succession; and section 10 enables the members of the society to be sued as strangers certain circumstances, by the society, and the Costs awarded to the defendant in such a suit may be recovered, at his election, from the officer in whose name the suit was brought. Dealing with very similar provisions (sections 7. 8 and) of the English Trade Union Act, 1871 (34 and 35 Vict, . 31) Lord Lindley said in the celebrated case of Taff Vale Railway vs Amalgamated Society of Railway Servants (1). (1) ; 172 The Act does not in express terms say what use is to be made of the name under which the trade union is registered and by which it is known. But a trade union which is registered under the Act must have a name . It may acquire property, but, not being incorporated, recourse is had to the old well known machinery of trustees for acquiring and holding such property, and for suing and being sued in respect of it (ss.7, 8,9). The property so held is, however, the property of the union; the union is the beneficial owner. The Act appears to me to indicate with sufficient clearness that the registered name is one which may be used to denote the union as an unincorporated society in legal proceedings as well as for business and other purposes." In Trade Union Law ' by N. A. Citrine (1950 edn.) to which the learned Advocate for the petitioners has referred, it is stated at p. 143: The object of this section (section 9) was to provide a method of enabling legal proceedings to be brought in respect of the property of a registered trade union. Since the legislature had no intention of giving such unions corporate status with power to hold property and to sue and be sued in their registered names, it was necessary to provide for the vesting of their property in trustees and to permit them to bring or defend legal proceedings in respect of that property on the unions behalf. section 8 of this Act, having provided for the vesting of the union 's property in its trustees, the present section supplements that section by empowering the trustees to bring or defend, on the union 's behalf, civil or criminal proceedings concerning its property." In Bonsor vs Musicians ' Union(1) the position (1) (L. R.) 173 Of a registered trade union in England came under consideration of the House of Lords in an appeal from the Court of Appeal. On a review of earlier decision including the decision in Tuff Vale Railway vs Amalgamated Society of Railway Servants(1), Lord Macdermott, Lord Keith of Avenholm and Lord Somervell of Harrow held that a registered trade union was not juristic person distinguishable at any at any moment of time from the members of which it was composed. After referring to the various provisions of the Trade Union Act 1871 and some of the earlier decision bearing on the question Lord MacDermott said: ' "I base this opinion primarily on the statutes. The more closely they are examined the clearer it seems to be that the legislature, though minded to bestow upon registered unions some of the gifts and attributes of legal personality, had no intention of doing more and was, indeed, adverse to the idea of going the whole length and making those unions new creatures, distinct in law from their membership, and fundamentally different from the combination of persons which the definition requires all trade unions to be." Lord Morton of Henryton and Lord Porter, who expressed the minority view, held that a registered trade union though not an incorporated body, was yet capable of entering into contracts and of being sued as a legal entity, distinct from its individual members. It is clear from the aforesaid decisions that provisions similar to the previsions of sections 5, 6, 7 and 8 of the were held not to show any intention to incorporate; on the contrary, the very resort to the machinery of trustees or the governing body for the time being acquiring and holding the property showed that there was no intention to incorporate the society or (1) ; 174 union of as to give it a corporate capacity for the purpose of holding and acquiring property. It , appears to us that the legal position is exactly the same with regard to the provisions in sections 6, 6, 7 and 8 of the . They do J not show any intention to incorporate, though they confer certain privileges on a registered society, which would be wholly unnecessary if the registered society were a corporation. Sections 13 and 14 do not carry the matter any further in favour of the petitioners. Section 13 provides for dissolution of societies and adjustment of their affairs. It says in effect that on dissolution of a society necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules of the society; if there be no rules, then as the governing body shall find it expedient provided that in the event of any dispute arising among the said governing body or the members of the said society, the adjustment of the affairs shall be referred to the Court. Here again the governing body is given a legal power somewhat distinct from that of the society itself; because under s.16 the governing body shall be the governors, council, directors, committee, trustees or other body to whom by the rules and regulations of the society the management of its affairs is entrusted. We have, therefore, come to the conclusion that the provisions aforesaid do not establish the main essential characteristic of a corporation aggregate, namely, that of an intention to incorporate the society. We may further observe that the scheme and provisions of the Societies Registration Act,1860 are very similar to those of the Friendly Societies Act, 1986 (59 and 69 Vict. 0.25), as amended in certain respects by subsequent enactments. It is appropriate to quote here what Dennis Lloyd has said in his 'Law relating to Unincorporated Association ' (1938 edn.) at page 59 in respect of the 175 provisions of the Friendly Societies Act, 1896 as modified by subsequent enactments. He has said: The modern legislation still maintains the policy of the older Acts in withholding corporate status from friendly societies. Registration does not result in incorporation, but merely entitles the society so registered to enjoy the privileges conferred by the Act. These privileges are of considerable importance and certain of them go a long way toward giving registered societies. a status in many respects analogous to a corporation strictly so called, but without being technically incorporated. Thus something in the nature of perpetual succession is conceded by the provision that the society 's property is to vest in the trustees for the time being of the society for the use and benefit of the societies and its members and of all persons claiming through the members according to the society 's rules, and further (and this is the most noteworthy provision) that the property shall pass to succeeding trustees without assignment or transfer. In the same way, though the society, being unincorporated, is unable to sue and be sued in its own name, it is given the statutory privilege of suing and being sued in the name of its trustees. " We think that these observations made with regard to similar provisions of the Friendly Societies Act, correctly and succinctly summarise the legal position in respect of the several provisions of the . Those provisions undoubtedly give certain privileges to a society registered under that Act and the privileges are of considerable importance and some of those privileges are analogous to the privileges enjoyed by a corporation, but there is really no incorporation in the sense in which that word is legally understood. 176 On behalf of the petitioners reliance has been placed on the decision in Krishnan vs Sundaram (1) where Kania, J., (as he then was) said: The position of a society registered under the is like that of a club or a joint stock company. " There was no discussion of the question of incorporation, and the decision cannot be accepted as authoritatively laying down that a society registered under the Societies Registration, Act is a corporation. There was a similar observation without any discussion in Boppana Rukminamma vs Maganti Venkata Ramadas(2) and N. A. Nannier vs Official Assignee, Madras (3). There is how ever, a fairly full discussion of the question in Satyavart Sidhantalankar vs The Arya Samaj, Bombay (4) where Bhagwati, J., held that a Society registered under the was a legal entity apart from the members constituting it, and it can sue and be sued in its own name. The question which fell for decision in that case was not whether a society registered under the was 'incorporated ' as that term is legally understood. The question there was whether such a society could sue or be sued accept in the manner provided by 6 and 7. It was held that it could and the reason given was thus expressed by the learned Judge: " I am of opinion that the provisions contained in sections 6, 7 and 8 of the are not inconsistent with the user of the registered name of the society in connection with legal proceedings. As Lord Lindley observed in Taffy Vale Railway Company`s case (supra), "I do not say that the use of the name is compulsory but it is at least permissive. " If this is the true legal position of a society registered under the Societies Registration (1) (140)43 Bom L.R. 56 (2) A.I.R. 1940 Mad. (3) A. I. R.1951 Mad.875. (4) 177 Act, the objection . that the plaintiffs and the defendants are one and the same and that the suit as framed is not maintainable by reason of the society being the plaintiffs as well as the defendants disappears. The plaintiffs are suing on behalf of themselves and all the members of the society. The First defendant is the president of the society and represents the society. As I have already observed the society on its registration with the Registrar of Joint Stock Companies becomes a legal entity apart from its members; it would be therefore idle to contend that the society arc the plaintiffs as well as the first defendant in this action ' It is unnecessary for use to consider the correctness or otherwise of the reason given; it is sufficient for use to state that we do not think that the decision proceeds on the footing that a society registered under the is a corporation in the sense of being incorporated as that term is legally understood, but if it does, we are unable to accept it as correct. " The precise question which has arisen before US arose in Servants of India Society, Poona vs The Charity Commissioner of Bombay ). The facts of that case were these. The "Servants of India Society" was an institution which was registered under the . It owned considerable movable and immovable property both in the State of Bombay as well as in other parts of India. The State of Bombay issued a notification under a 1(4) of the Bombay Public Trusts Act, 1950 (Bom. Act XXIX of 1950) which applied the provisions of that Act to a society formed for religious or charitable purposes and registered under the . An application was made under 8.18(1) of the Bombay Public trusts Act 1950 for registration of the Servants of India Society. During an enquiry into (1) ; 178 that application an objection was taken that the Servants of India Society having been registered under the was a corporation and had objects also outside the Bombay State and therefore, a legislation purporting to regulate the activities of such a society fell in entry 44 of List I and consequently the State Legislature had no power to make any law to regulate the affairs of such a society. This objection was dealt with first by the Assistant Charity Commissioner and then the Charity Commissioner; thereafter, an application Was made under 8. 72 of the Bombay Public Trusts Act, 1950 to the Court of the District Judge, Poona. Then the matter was taken to the High Court on appeal from the decision of the District Judge. The appeal came up for hearing before our learned brother Mudholkar, J. (who was then a Judge of the Bombay High Court) and Patel, J. After referring to several decision including the decision of Bhagwati, J. in Satyavart Sidhantalankar vs The Arya Samaj, Bombay (1) our learned brother held that the Servant of India Society registered under the was a legal entity and a quasi corporation. He further held that entry 44 in List I and the first part of entry 32 in List II relating to incorporation, regulation and winding up of corporations ' must be given a liberal construction and quasi corporations would come under those entries. Basing himself on a parity of reasoning relating to entry 7 in List III which related to 'Contracts ', he said that if quasi. contracts would come under entry 7, quasi corporation must also come under entries 43 and 44 of List I and the first part of entry 32 of List II. mr. Justice Patel took a different view. He said: A reference to entry 32 of the State List shows that, incorporation regulation and winding up of corporation, other than those specified in List I (Union List, entries 43 regulation and (1) 179 44), and universities are expected from Union List. Further "unincorporated trading, literary, Scientific, religious and other Societies and associations" and "co operative societies" are also excepted from the Union List. The emphasis would appear to be on the word unincorporated ' used in connection with "trading, literary, scientific, religious and other societies and associations". If an association or society is unincorporated, then it may not fall within the Union List. The question, therefore, that is pertinent to be decided is not whether or not an association or a society is a legal entity or a quasi corporation, but whether it is incorporated or unincorporated. If this is borne in mind, then it is amply clear that entries 43 and 44 of the Union List would cover only those societies and associations which are incorporated; and those which may have legal entity but which are not incorporated will not fall within the Union List. " The matter was then referred to a third Judge (Gokhale, J.) who thus expressed his view: In my judgment, societies registered under the societies Registration Act are neither corporations nor quasi corporations, but are unincorporated societies contemplated under the second part of entry 32 of the State List." Mr. Justice Gokhale also expressed the view that when Considering the ambit of an express legislative power in relation to an unspecified residuary power, abroad interpretation must be given to the former; the case, however, is different where under the Constitution there are two complementary powers each expressed in precise and definite terms and in such a case there is no justification for giving a broader interpretation one power rather than to the other. We find ourselves in agreement with 180 this view. It seems clear to use that entries 43 and 44 of list I when they talk of incorporation, regulation and winding up of corporations relate to such legal entities as have been incorporated and are corporations in the full sense of the term. Similarly,the first part of entry 32 of List II when it talks of "incorporation, regulation and winding up of corporation '` relates to such legal entities as are incorporated. This is further clarified by the second part of entry 32 which talks of "unincorporated trading. literary, scientific, religious and other societies and association". In entry 32 there is a dichotomy in the two parts thereof: the first part relates to incorporated societies which are corporations in the true sense of that term, and the second part relates to unincorporated societies. The justification is between incorporated societies and unincorporated societies and there can be no doubt as to which of the two parts in which a society registered under the will fall, be it called a quasi corporation or by any other name. A society registered under the may have characteristics which are analogies to some of the characteristics of a corporation; yet it is not incorporated and remains an unincorporated society. AS soon as it is held that it is an unincorporated society, it must come under the second Part of entry 32 of List II. In this view of the matter it is unnecessary to decide the further questions as to (1) whether the objects of the old Board extended beyond the State of Delhi, and (2) if other entries such as entry 11 of List II and entry 28 of List III can support the impugned legislation. We may, however, observe that if we had come to a different conclusion on the question whether the old Board was a corporation or not and it became necessary to decide question No. (1) above, we might have held that in view of the rules governing the old Board, its objects were not confined to the State of Delhi only in the sense 181 that it would not have been ultra vires of the old Board to have started colleges etc., outside the State of Delhi. We should however, add that the activities of the old Board did not, as a matter of fact, extend beyond the State of Delhi on the (late when the impugned Act was enacted. There is another aspect of the question which has to be considered here. Section 3 of the impugned Act is in these terms: 3. (1) With effect from such date as the Chief Commissioner may, by notification in the official Gazette, appoint (hereinafter referred to in this Act as "the appointed day"), the entire management and control of the Ayurvedic and Unani Tibbi College, Delhi now vested in the Board of Trustee of the Ayurvedic and Unani Tibbi College, Delhi, shall be vested in a Board to be called the Tibbia College Board". (2) The Board shall be a body corporate having perpetual succession and a common seal and shall by the said name sue and be sued. " Sub section (2) of 8. 3 says in express terms that the new Board constituted under the impugned Act is given a corporate status; in other words, the new Board is a corporation in the full sense of the term Does the impugned legislation still come within entry 32 of List II . We think it does and for these reasons. We have held that the old Board was not a corporation, even though it was registered under the . When, therefore, the Delhi State Legislature passed a law dissolving the old Board, it was really dealing with an unincorporated society or association By the impugned legislation, however, it gave the new Board a corporate status, but at the same time so delimited the powers and duties of the new Board as to confine them to the State of Delhi 182 only. The impugned Act is entitled an Act to provide for transfer of the management of the Ayurvedic and Unani Tibbi College, Delhi, founded by the late Hakim Ajmal Khan from its present trustees to a Board. " In other words, the Act deals only with the college in Delhi and the pharmaceutical institute attached to it. Section 7 which gives the powers and duties of the new Board is in these terms: 7. The Board shall exercise the following powers and perform the following duties, namely: (a) to maintain the Ayurvedic and Unani Tibbi College, Delhi with a view to impart higher eduction to men and women in the Ayurvedic and Unani Systems of Medicine and to promote and conduct research in the same: (b) to maintain and improve the Hindustani Dawa Khana and Rasayanashala; (c) to provide for studies to enable incorporation, where necessary of the principle of the modern system of Medicine and surgery in order to help the scheme of studies for the Ayurvedic and Unani systems according to the exigencies of time; (d) to help produce and publish books in order to facilitate the carrying out of the objects specified in the clauses (a) to (c); (e) to receive gifts, donations or benefactions from Government and to receive bequests, donations and transfer of movable or immovable properties from trustees, donors or transferors, as the case may be; (f) to deal with any property belonging to or vested in the Board in such manner as the Board may deem fit for advancing the objects specified in clauses (a) to (d); 183 (g) to do all such things as may be necessary incidental or conductive to the attainment of all or any of the subjects specified in clauses (a) to (d) Unlike the rules governing the old Board which enabled it to establish colleges outside Delhi for the purpose of imparting higher education ill the Unani and Ayurvedic systems of medicine, section 7 gives the new Board powers and duties with regard to the Ayurvedic and Unani Tibbi College at Delhi and the pharmaceutical institute and laboratory attached to it. This is made further clear by the definition of the word Board ' in 8. 2, incorporation section, namely, 8. 3, constitution of the Board as laid down in 8. 4, and the sections relating to the power of the chief commissioner to supersede the Board, to make rules to carry out the objects of the Act and the power of the Board to make regulations not inconsistent with the Act for carrying out the purposes thereof. None of the provisions of the impugned legislation accepting 8. 9 to which we shall presently refer give the new Board any powers or duties other than those connected with the college, attached pharmaceutical institute and laboratory, all situate in the State of Delhi. We now come to 8. 9 which is in these terms: "9.(1) As from the appointed day, the Board of Trustees of the Ayurvedic and Unani Tibbi College, Delhi, a society registered under the provisions of the Registration of Societies Act, 1860, on the 12th day of August, 1911, by the name Anjuman i Tibbia whose purpose, Constitution and name was amended on 25th November, 1915), shall stand dissolved and all property, movable and immovable, and all rights, powers and privileges of the said society which immediately before the appointed day belonged to or were vested in the said society shall vest in the 184 Board and shall be applied for the purposes for which the Board is constituted. (2) As from the appointed day all debts and liabilities of the said society shall stand transferred and attached to the Board and thereafter be discharged and satisfied by the Board. (3)Any will deed or other document whether made or executed before or after the commencement of this Act, which contains any bequests gifts, or trust in favour of the society shall as from the appointed day, be construed as if the Board were therein named instead of the Society. " It no doubt says that all rights, powers and privileges which immediately before the appointed day belonged to or were vested in the old Board shall vest in the new Board; but it adds that those rights, powers and privileges shall be applicable for the purposes for which the new Board is constituted. We must, therefore, read B. 9 as being subject to the provisions of 7 of the Act. In terms 9 says that the rights, powers and privileges of the old Board shall be available to the new Board and shall be applied for the purposes for which the new Board is constituted . The words underlined are important, and show clearly enough that the right, powers and privileges of tho old board are available to the new for a limited purpose only, namely, for the purposes for which the new Board is constituted. If the purposes for which the now Board is constituted are confined to the institutions in Delhi, then obviously the objects for which the new Board is incorporated do not extend beyond the State of Delhi. The conclusions at which we have arrived may now be summarised as follows: (1) On registration under tho , the old Board did not 185 become a corporation is the sense of being incorporated within the meaning entry 44 of List I; it remained and hoodwinked to be an unincorporated society though under the several provisions of the it had certain privileges, some of the privileges being analogous to those of corporation; (2) the impugned legislation while creating the new Board has given it a corporate statue, but has confined its powers and duties to the college, pharmaceutical institute and laboratory in Delhi and while giving the new Board rights, powers and privileges of the old Board has limited them to such purposes for which the new Board is constituted; (3) the impugned legislation therefore, falls under entry 32 of List II; so far as the dissolution of the old Board is concerned, under the second part of the entry and so far as incorporation of the new Board is concerned, under its first part. That being the position, the impugned legislation was well within the legislative competence and power of the Delhi State Legislature. We must, therefore, overrule the first ground of attack urged on behalf of the petitioners. We now proceed to a consideration of the second ground of attack. So far as the alleged violation of article 14 is concerned, The petitioners have stated in their petition: "There are various other institutions where there have been actual allegations of mismanagement but the State has picked out the petitioner. Assuming, without admitting, that there has been mismanagement by the petitioner of its affairs, there is not the slightest suggestion in the whole Act that it is promulgated on the ground of any mismanagement on the part of the petitioner. The said Act is an arbitrary piece of legislation and There is no reasonable 186 Classification whatsoever on which it can be supported. " To this the reply of the respondents is that the old Board was grossly mismanaging its affairs they said. "Before the said Act was passed, there was a great deal of discontent among the students of the said institution and also the general public and there was strong agitation against cross mismanagement by the trustees of the said Board. That owing to the gross mismanagement of the Board 's affairs by the trustees the situation had so deteriorated that early in 1949 there were constant students ' strikes, defalcation of funds and frequent interruption in work and studies of the institution. " In our view the petitioners have not made out any basis for the contention that (1) there were other institutions similarly situated, and (2) petitioner No. 1 was picked out for unequal treatment. The names of no other institutions similarly situated have been disclosed. In the first Sholapur case Chiranjit Lal Chowdhuri, vs The Union of India (1) it was held by a majority of Judges of this court that even one corporation, (in our case one society) or a group of persons can be taken as a class by itself for the purpose of legislation, provided it exhibits some exceptional features which are not possessed by others. The courts should prima facie 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 (1) ; , 915, 914. 187 Instances of similar nature is not enough for this purpose". (per Mukherjea, J. at pp. 913 914 of the report. These observations apply with equal force to the present case and we are unable to sustain the contention of the petitioners that any right under article 14 of the Constitution has been violated. As to article 31 of the Constitution it seems clear to us that cl. (2) of the said Article as it stood at the relevant time has no application. The impugned legislation does not relate to nor does it provide for, compulsory acquisition of property for a public purpose. The impugned legislation provided for the transfer of the management of the Ayurvedic and Unani Tibbi College, Delhi, from the old Board to a new Board and for that purpose the old Board was dissolved and a new Board was created with certain rights, powers and privileges to be applied for the exercise of powers and performance of duties as laid down in 8. 7 of the Act. Such legislation does not fall under article 31(2) and cannot be judged by the tests laid down there in. As to cl. (1) of article 31 there is no question of any violation of that clause if the law by which the transference of management has been made is valid law. We have already held that the impugned legislation was well within the legislative competence of the Delhi State Legislature. Now the question is the impugned legislation bad on the ground that it violates the right of the petitioners under article 19(l)(f)? The property for the protection of which article 19(l)(f) is invoked belonged either to the Board or to the members composing the Board at the date of the dissolution. In either event, on the terms of 8. 5 of the Societies Registration Act, 1960, the property was to be deemed to be vested in the governing body of the Board. There could be no doubt that if the Board was dissolved by 188 competent legislative action, and in view of our conclusions on the first point raised it must be held that this had taken place the Board would cease to exist and having ceased to exist cannot obviously lay any claim to the property. This however may not be sufficient to negative the contention urged before us by the petitioners. If the legal ownership of the property by the Board or the vesting of it in the governing body was merely a method or mechanism permitted by the law whereby the members exercised their rights quoad the property, the dissolution of the Board and with it of the governing body thereof would merely result in the emergence of the right of the members to that property. It is, therefore, necessary to ascertain the precise rights the members of the Board possessed to see whether the changes effected by the impugned Act amount to on infringement of their rights within the meaning of article 19(l)(f). During the subsistence of the society, the right of the members was to ensure that the property was utilised for the charitable objects set out in the memorandum and these did not include any beneficial enjoyment Nor did the members of the Society acquire any beneficial interest on the dissolution of the society; for 8. 14 of the Act, quoted earlier, expressly negatived the right of the members to any distribution of the assets of the dissolved body. In such an event the property had to be given over to some other society, i.e., for being managed by some other charitable organisation and to be utilised for like purposes, and the only right of the members was to determine the society to whom the funds or property might be transferred and this had to be done by not less than three fifths of the members present at the meeting for the purpose and, in default of such determination, by the civil court. The effect of the impugned legislation is to vary or affect this privilege of the members and to vest the property in a new body created by it enjoined to administer it so to serve the same purposes as the dissolved 189 Society. The only question is whether the right to determine the body which shall administer the funds or property of the dissolved society which they had under the pre existing law is a right to 'acquire, hold and dispose of property ' within the meaning of article 19(l)(f), and if so whether the legislation is not saved by article 19(5). We are clearly of the opinion that right is not a right of property within the meaning of article 19(l)(f). In the context in which the words 'to dispose of ' occur in article 19(l)(f), they denote that kind of property which a citizen has a right to hold the right to dispose of being part of or being incidental to the right to hold Where however the citizen has no right to hold the property, for on the terms of 8. 14 of the Societies Registration Act the members have no right to hold ' the property of the dissolved society, there is, in our opinion, no infringement of any right to property within the meaning of article 19(l)(f). In this view, the question as to whether the impugned enactment satisfies the requirements of article 19(5) does not fall to be determined. The two decisions on which the learned Advocate. for the petitionary has relied are the State of West Bengal vs Subodh Gopal Bose (1) and Dwarkadas Srinivas vs The Sholapur Spinning, & Weaving Co. Ltd.(2). We do not think that these decisions have any application in the present case. In the State of West Bengal vs Subodh Gopal Bose(1) this Court was considering a piece of legislation which affected the right of the first respondent therein who had purchased a particular touzi at a revenue sale. As such purchaser he acquired under 8. 37 of the Bengal Revenue Sales Act, 1859, the right to avoid and annul all under tenures and forthwith to eject all under tenant" with certain exceptions. In exercise of that right the respondent gave notices of . ejectment and brought a suit in 1946 to evict certain tenants. The suit was decreed. When the appeal (1) ; (2) [1954] section C. R. 674. 190 was pending, a new legislation was made which took away the right of the first respondent which he had obtained by a decree of a court of law. In these circumstances it was held that the right of the first respondent under article 19(l)(f) was violated. The facts of that case were wholly dissimilar and the respondent`s right there did not depend on his being a member of a society. In the second Sholapur case Dwarkadas Srinivas vs The Sholapur Spinning & Weaving Co. Ltd .(1) a Controller was appointed by Government to supervise the affairs of the mills of a certain company under the Essential Supplies Emergency Powers Act, 1946. The controller made certain requisitions which the Directors refused to comply with. The Governor General then made an ordinance which was followed by an Act. Under the provisions of the ordinance the Central Government delegated all its powers to the Government of Bombay. The Government of Bombay then appointed certain Directors to take over the assets and management of the mills. These new Directors passed a resolution making a call of Rs. 50/ on each of the preference Shares payable at the time stated in the resolution. The appellant in that case was a preference shareholder who was called upon to pay Rs. 1,62,000/ in pursuance of the resolution aforesaid on the preference shares where which he held. The appellant then brought a suit challenging the validity of the ordinance and out of that suit appeal to this Court arose. It was held by this Court that the impugned ordinance and the act replacing it authorised in effect a deprivation of the property of the company within the meaning of article 31 without compensation and violated the fundamental right of the appellant therein as a preference shareholder, who was called upon to pay the moneys unpaid on his shares. The point to be noticed as distinguishing that case from the case under our consideration is this (1) ; 191 the Sholapur Spinning and Weaving Co. Ltd, which was the company in that case, had not been dissolved or brought to an end by the impugned ordinance or the Act replacing it and the appellant in that case continued to be a preference shareholder; not only did he continue to be a preference share holder but he was called upon to pay the moneys unpaid on his shares. It is obvious, therefore, that the appellant was entitled to complain that by the impugned ordinance he was being deprived of his property without fulfilling the requirements of article 31 of the Constitution. The position in the case under our consideration is, as pointed out already, entirely different. In our view the impugned legislation does not violate any fundamental right of the petitioners under articles 14, 19 or 31 of the Constitution. This disposes of the two main grounds on which the legislation in question has been impugned. We now turn to the two subsidiary points. It has been argued that some of the provisions of the impugned Act are in conflict with the provisions of the ; therefore under section 22 to the Government of part a States Act, 1951 the provisions of the impugned Act, in so far as they are repugnant to the provisions of the , must be held to be void. The simple answer to this argument is that 8. 22, to which we had earlier referred in the course of this judgment, has no application Section 22 provides for inconsistency between laws made by Parliament (in the sense in which the word Parliament ' is used in the Constitution of India) and laws made by the Legislative assembly of a Part State. The was not a law made by Parliament; therefore a 22 has no application in the present case. We have already held, for reasons earlier given, that the Delhi State Legislature had legislative competence or power either to amend the 192 in respect of unincorporated societies, or to make a law for a particular unincorporated society, and even to create a new corporate body provided its objects were confined to the State of Delhi of Delhi. In effect the impugned legislation provides for a disolution of the old Board which was an unincorporated society and for the creation of a new corporate body for the management of the Ayurvedic and Unani Tibbi College, Delhi. In this view of the matter, no question of any conflict with the arises in this case. It has also been argued that the impugned legislation is a piece of colourable legislation because the Delhi State Legislature acted mala fide in enacting it. This argument is completely answered by what this Court said in K. C. Gajapathi Narayan Deo vs The State of Orissa (1). This court said: It may be made clear at the outset that the dotrine of colourable legislation does not involve any question of bona fide or male fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular Legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand. if the legislature lacks competence, the question motives does not arise at all If the constitution of a State distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental rights, questioned do aries to whether the legislature in a particular case has or has not in (1) S.C.R. 1, 10, 11. 193 respect to the subject matter of the status or in the method of enacting it, transgressed the limits of its constitutional powers. Such 7 transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of 7 cases that the expression "colourable legislation" has been applied in certain judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise." From what we have said earlier it should be manifestly clear that the Delhi State Legislature did not transgress any of the limitations placed on it, when it enacted the impugned legislation. There being no transgress whatsoever, the further question of the transgression being veiled by a disguise or pretence does not really arise. Nor is it necessary for us to enquire into the motives which led the Delhi State Legislature to enact the impugned legislation. In the affidavits filed on behalf of the respondents enough materials have been placed to show why the Delhi State Legislature considered it necessary to dissolve the old Board and transfer the management of the college to a new Board. This was a matter for the Legislature to consider and not for this Court to investigate. In the result we hold that there is no merit in the petition which is accordingly dismissed with costs MUDHOLKAR, J. While I agree with my brother Das J., that the petition be dismissed I would like to say a few words. This petition under article 32 of the Constitution has been preferred by 194 the Board of Trustees, Ayurvedic and Unani Tibia College, through its Secretary, Hakim Mohammad Jamil Khan By Act 5 of 1952 called the Tibia College hi Act, 1952 the erstwhile Delhi State Legislative Assembly dissolved the Board of Trustees of the Ayurvedic and Unani Tibia (College, incorporated a Board called 'Tibia College Board ' and transferred to that Board all the property, rights, powers and privileges of the Board of Trustees of the Ayurvedic and Unani Tibia College also the management and control of the Ayurvedic and Unani Tibia College to the aforesaid Board. The reason for doing so would appear from the Statement of objects and Reasons appended to the Bill which are as follows: This Bill seeks to take powers for transferring the management of the Ayurvedic and Unani Tibia College, Delhi, from its present trustees to a Board under the control of the Delhi State Government. The College has been grossly mismanaged for some time past with the result that its reputation is very low today. In early 1949, the situation deteriorated to such an extent that there were students strikes, defalcation of funds and frequent interruptions in scholastic work. The Collector, Delhi made an interim prayer to the Civil Court for the appointment of receivers. This prayer was granted and three receivers appointed by the Civil Court are at present in charge of the properties and management of the institution. This arrangement, which is good so far as it goes, is inevitably temporary and inadequate, and it seems desirable to provide by legislation for the control and management of the College and the properties attached thereto." (Statement of objects and Reasons published in the Gazette of India, Extraordinary, Part II, section 2, July 18, 1952). The petitioner 's complaint is that its property has been taken may without compensation and 195 handed over to a Board in contravention of article 31 of the Constitution and that this has been done under a law which the Delhi legislature was not competent to make. The following four contentions were raised by Mr. Purshottam Trikamdas on behalf of the petitioner. (1) That the Delhi Legislative Assembly was not competent to pass the impugned Act. (2) Even assuming that it had legislative competence the Act offends articles 14, 19 and 31. (3) The under which the Board of Trustees were registered being a Central Act the Delhi legislative assembly had no power to over ride it. (4) The law was enacted by the legislature mala fide. I will confine my observations mainly to the first and third points because, it is only with regard to them that my view is somewhat different from that taken by my learned brother. The respondents point out that the petitioner Board having been registered under the is nothing more than an unincorporated society and that the Delhi State legislature was competent to enact a affecting it under the latter part of Entry 32 of List II which runs thus: ". . . unincorporated trading, literary, Scientific, religious and other societies. and assassination; co operative societies". According, however, to Mr. Purshottam, after the Board of Trustees was registered as a Society under the it blossomed into a corporation and since admittedly its objects extend beyond the limits of the Delhi State the State Assembly could not make any law affecting 196 it. This contention has been negatived by my learned brother. An alternative contention was also raised on behalf of the petitioner on the basis of certain decisions and my opinion in Servants of India Society, Poona vs The Charity Commissioner of Bombay (1) to the effect that upon registration J. the Board became at least a quasi corporation. This contention has also been negatived by my learned brother. If, as the petitioner says the Board, after registration under the was transformed into a corporation the Delhi Legislative assembly could not make a LAW with respect to it under Entry 32 because though under the first part thereof it can make a law affecting corporation, its powers cannot reach a corporation, the objects of which extend beyond the limit of the Delhi State. But as my learned brother has pointed out and with which I respectfully agree, the essence of a corporation is its incorporation ' and as the does not provide for incorporation the petitioner cannot be recorded as a corporation. It is true that even though it possesses some of the attributes of a corporation it ii not a corporation but in my view it is a near corporation ' or a quasi corporation '. This is what I have held in the Servants of India Society 's case (1) and I adhere to that view. There, relying on some Indian decision and the decision in The Taff Vale Railway Co. vs The Amalgamated Society of Railway Servants(2), I held that such a society is a legal entity and that a State legislature cannot make any law affecting it under the second part of Entry 32 of List II. The question whether a registered society which enjoyed more or less the same powers as those under the is a legal entity fell for consideration by the House of Lords in Bonsor vs Medicines ' Union(3) and there Lords Morton and Parker held that (1) ; 381 (2) ; (3) [1956] A.C.104 197 such a society is a legal entity though not a corporation and thus accepted the position that there is an intermediate semi corporation status. Lord Keith held that such a society is both a legal entity and association of individuals, that is, it is a quasi corporation to the extent recognized by the governing statute and a voluntary association for other purpose. Lords McDermott and Somervell, however, did not accept the position that there is any intermediate semi corporate status at all. With respect, I think that the view taken by the majority has much to commend itself. That this is the better view is the opinion of Prof. Dennis Lloyd (vide 1956 M. L. R. at p. 360) and of Dr. Glanville William (vide Salmond 's Jurisprudence, 1957 ed. p. 356). I have not come across a contrary opinion in any recent treatise or article. Now, under the , which was enacted by the Governor General in Council upon registration a society is entitled to sue and can be sued in the name of its President, Secretary etc., as shall be determined by its rules or by its governing body. A suit by or against the society would not abate by reason of the death of the person through whom or against whom the suit had been brought. A judgement obtained against a person sued as representing a society shall not be enforced against him but against the property of the society. The society can sue any of its members for arrear of subscription, damages etc. It can also enter into contracts as an entity. Upon dissolution, its property cannot be distributed amongst its members but must go to some other society. All these are the characteristics of a separate legal entity such as a corporation. If the law confers on a body all the normal powers of a legal person it will be a corporation in all but name. A registered society, however, cannot hold property and to that extent it must be treated a a voluntary 198 association, made up of its constituents. Therefore, it can be regarded as a quasi corporation or, in the words of Lords Morton and Porter, a near corporation". Now, a quasi corporation or a near corporation whatever we may call it being a legal entity at least for some purposes is not a mere society made up of its constituents. The question, therefore, must be considered whether the latter part of Entry 32 confers power on the State legislator to legislate about legal entities. ' Let US consider the scope of the latter part of Entry 32. It permits the making of laws concerning societies and associations which are not incorporated. This would imply that thereunder the legislature cannot provide for the incorporation ' of a society or association. One of the main results of incorporation is to confer upon the thing incorporated the status of a separate legal entity. Even so, under this Entry the legislator has a wide discretion in the matter of conferral of powers upon a society. But can it confer such powers on it as would alter its character as a society and convert it into a legal entity, may be only for certain purposes? By its very definition a society is a voluntary association and can have no existence separate from its constituents. It is thus not a separate legal entity ill any sense and for any purpose. That Entry makes it clear by using the word unincorporated ', that the power conferred by it is confined to such societies and associations only. Therefore, in my judgment the Entry does not permit of any law being made which confers on a society such powers as would constitute it into a legal entity. A fortiorari, it does not permit a law to be made which takes away from society already existing and which is a legal entity any of the powers of that legal entity, such as those conferred by the , much less can it destroy that entity For doing so it will have to take the aid of other entries, if any, which permit legislation concerning Legal entities . 199 The Board, as already stated, was registered under the . That was a law made by the Indian legislature under 24 & 25 Vict. 67 passed in the year 1860. That law conferred the power to make laws for the whole of British India on the Governor General in Council the ambit of whose power is set out in 8. 22 which runs thus: The Governor General in Council shall have Power at Meetings for the Purpose of making Laws and Regulations a aforesaid, and subject to the Provisions herein contained, to make Laws and Regulations for repealing, amending, or altering any Laws or Regulations whatever now in force or hereafter to be in force the Indian Territories now under the Dominion of Her Majesty, and to make Laws and Regulations for all Persons, Whether British or Native, Foreigners or others, and for all Courts of Justice whatever, and for all Places and Things whatever within the said Territories, and for all Servants of the Government of India within the dominions of Princes and States in Alliance with Her majesty; and the Laws and Regulations so to be made by the Governor general in Council shall control and supersede and Laws and Regulations in anywise repugnant thereto which shall have been made prior thereto by the Governors of the Presidencies of Fort Saint George and Bombay respectively in Council, or the Governor or Lieutenant Governor in Council of any Presidency or other territory for which a council may be appointed, with Power to make law and Regulations, under and by virtue of these Act: Provided always, that the said Governor General in Council shall not have the power of making any Laws or Regulations which shall repeal or in any way affect any of the Provisions of this Act. 200 Or any of the Provisions of the Acts of the Third and Fourth Years of King William the Fourth, Chapter Eighty five and the Sixteenth and Seventeenth Years of Her Majesty, Chapter Ninety five, and of the Seventeenth and Eighteenth Years of Her Majesty, Chapter Seventy Seven, which after the pacing of this Act shall remain in force: or any Provisions of the Act of the Twenty first and Twenty second Years of Her Majesty, Chapter one Hundred and Six entitled an Act for the better Government of India; or of the Act of the Twenty second and Twenty third years of Her Majesty, Chapter Forty one, to amend the same: or of any Act enabling the Secretary of State in Council to raise Money in the United Kingdom for the Government of India: or of the Acts for punishing Mutiny and Desertion in Her Majesty 's Army or in Her Majesty`s Indian Forces reflectively; but subject to the Provision contained in the Act of the Third and Fourth Years of King William the Fourth, Chapter Eighty five, Section Seventy three, respecting the Indian Articles of War: Or any Provisions of any Act passed in this present session of Parliament, or here after to be passed, in anywise affecting Her Majesty`s Indian Territories, or the Inhabitants thereof: Or which may affect the Authority of Parliament, or the Constitution and rights of the East India Company, or any Part of the unwritten Laws or constitution of the United Kingdom of Great Britain and Ireland, where on may depend in any Degree the Allegiance of any Person to the Crown of the United Kingdom, or the Sovereignty or Dominion of the Crown over any Part of the said Territories " 201 This clearly shows that the Governor General in Council was unhampered in the matter of making laws by any legislative lists and thus enjoyed plenary powers to make any kind of law on every conceivable topic which did not fall within the excepted Categories. Within the sphere of his powers the Governor General in Council was and could consequently make a law conferring upon a society such powers as could transform it into legal entity either for all purposes or only some. If he chose to confer all the powers of a corporation upon a registered society, that society would become a corporation in all but a name. The position of the State Legislature in the matter of making laws is not the same as that of the Governor General in Council under the statute of 1860. For, though it enjoys no less plenary powers than the Governor General in Council, its spheres of legislation are restricted by the legislative lists and it cannot overstep them by doing something directly which is patently outside Lists The only entry in List II on which reliance was placed on behalf of the respondents as conferring power on the Delhi legislature to make the impugned law is the latter part of Entry 32, List II. That entry speak of societies, that is, of associations of individuals as distinct from a legal entity, from that which has a separate legal existence. An association has no such separate existence, that is, none apart from its members. That entry therefore, could not furnish the Delhi legislature with the power to make a law affecting a separate legal entity such as the petitioner. Section of the impugned Act dissolved the petitioner, a legal entity and transfers its property, rights etc., to a corporation created by it. Thus it deals with a legal entity and the rights of that entity. This is wholly outside the ambit of the latter part of Entry 32. It would have been 202 possible for the State legislature to resort to the first part of that Entry had the object of the society been limited to the Delhi state but, as already ' ' stated, the objects extent beyond the Delhi State. The reason why I think it would have been possible is that the entry is not restricted to incorporation of a corporation but deals also with the regulation or winding up of a corporation which would include a quasi corporation or any other fictitious legal person, and further because the essence of winding up can be no different from that of dissolution. No doubt, ours is a federal constitution and the legislative fields of Parliament and of the state legislatures are demarcated, In addition we have a concurrent field in which Parliaments legislative power is exercisable and, subject to certain conditions, also that of the state legislatures. But even so, there is a certain amount of overlapping in the entries in the three lists pertaining to these three legislative fields. Therefore when a law is challenged on the ground of legislative competence what one has to ascertain is its pith and substance. It is well settled that if in pith and substance it is found that the legislature could make that law under a particular entry, the mere fact that it incidentally trenches upou some other entry, not pertaining to the legislation, it cannot be struck down as being beyond the competence of the legislature which made it. For finding out its pith and substance, let us examine the Act. It is comprised of 16 sections. Section 3 deals with the incorporation of the Tibia college Board and transferring to it the management and control of the Tibia College vested in the petitioner board. Section 9 deals with the dissolution and transfer of property of the Board of Trustee of the Ayurvedic and Unani Tibia College Delhi to the Tibia College Board and the remaining sections deal with incidental matters such as 203 definitions, constitution of the Board, powers of the Board and so on. One of the conclusion reached by my learned brother is that Ho far as the dissolution of the old Board is concerned the impugned law falls under the second part of Entry 32 and so far the incorporation of the new Board is concerned under its first part. It may be that a legislature may seek to derive its powers to enact a law concerning different topics from various entries in legislative List. But this aspect of a legislatures power has no significance when, in a divided jurisdiction its law is challenged on the ground of encrouchment on a field not open to it. Tho question which would then arise for consideration would be what is the pith and substance of the law? The degree of encroachment made by it on another field would be a guide for ascertaining its pith and substance . Here the impugned Act is aimed at dissolving the petitioner, Board and transferring all its property, rights etc. No doubt, the transfer is to be in favour of a corporation created be the At. No doubt also, that most of the provisions of the act, apart from 3 and 9, deal exclusively with matters pertaining to the newly created entity. But looking to the preamble as well as sections 3 and of the act the creation of new Board and its incorporation is not the pith and substance of the Act. The sole reason for its creation is to transfer to it what was, till then, with the petitioner Board. The new Board was thus to serve only a consequential purpose and its incorporation cannot be said to be the pith and substance of the impugned Act. The activities of the petitioner were not confined to the state of Delhi. That Act cannot there fore, be sustained by reference to the first part of Entry 2. The pith and substance of the law being the dissolution of the petitioner Board, a legal entity, and transference of its property and rights to someone else, it cannot be sustained by reference to the power conferred by the latter part of Entry 32. 204 For sustaining the law the learned Solicitor General had played reliance also on Entries 10 and 28 of List II. What we have to See, therefore, is whether the impugned law could be made by the Delhi Legislature under these entries . It is not disputed that the Petitioner Board is a trustee. It is also clear from the objects with which the trust was established, (which have been set out in the judgment of my learned brother) that it was for a charitable purpose. The petitioner is, therefore, a charitable trust and the object of the law is to dissolve it and transfer its property etc. Entries 10 and 28 of List III run thus: Entry 10: Trust and Trustees". Entry 28: "Charities and charitable institutions, charitable and religious endowments and religious legislatures". The entries are not limited to trusts or charitable institutions which are 'unincorporated societies ' as is the, latter part of Entry 32 of List II. Entry 10 clearly permits a law being made with regard to a trust or trustee which is a separate legal entity. Similarly Entry 32 permits a law to be made affecting charities and charitable institutions of every kind, whether consisting of voluntary associations of individuals or having a corporate or semi corporate character. For, institutions may have a corporate or a semi corporate character as for instance Hindu religious endowments and these are plainly included in the later Entry. The Delhi legislature had, therefore, competence to make a law dissolving a charitable trust and transferring its property, right etc. , to another institution. The aforesaid two entries permit making a law of this kind. No doubt these entries are in the concurrent field but sine the impugned Act was reserved for the assent of the President and was assented to by him on September 12, 1952, it 205 cannot be called in question on the ground of repugnancy with an 'existing law ' or a law made by Parliament. I agree with the view taken by my learned brother on the second and the fourth points urged by Mr. Purshottam and have nothing to add. As regards the third point the argument on behalf of the petitioner is that section 22 of the Government of Part States Act, 1951 (which created a legislature for the Delhi State, then a Part State) precluded the Delhi legislature from enacting a law repugnant to an Act of Parliament and that as the impugned Act contains provisions which are repugnant to those of the , it is ultra vires. Apart from the fact that what a 22 prohibits is a repugnancy with a law made by Parliament itself the is not one of such law the argument does not really arise upon the view I have taken. The petitioner Board upon Registration under that Act becomes a quasi corporation and thus a separate legal entity. Even though it owed its existence to the provisions of the , the Delhi legislature was free to deal with it under its powers under List III because by doing so it did not enact a law repugnant to the provisions of the . That Act still retains its full force and rigour and is unaffected by the impugned Act. The petitioner Board may, by operation of the impugned law, not be able to exercise any of its powers under the but that would be not because the provisions of that law are abrogated in any sense but because the petitioner Board has ceased to exist a a legal entity. The argument must, therefore, be rejected. The petition is, therefore, dismissed with costs. Petition dismissed.

The Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi was registered under the . It ran the Tibbia College, Delhi and an attached hostel and managed the Hindustani Dawakhana. The Delhi State Legislature passed the Tibbia College Act, 1952, which dissolved the Board, incorporated a new Board and vested all the property and all the rights, powers and privileges of the old Board in the new Board. The petitioners challenged the validity of the Act on the grounds that the old Board was a corporation whose objects were not confined to Delhi and legislation with regard to it would fall under Entry 44 of List I of the Seventh Schedule to the Constitution and as such the State Legislature was not competent to pass the impugned Act, (ii) that the setting up of a new Board as corporation was beyond the powers of the State Legislature, (iii) that the Act violated articles 14,19 and 31 of the Constitution, (iv) that the Act could not override the which was a Central Act, and (v) that the legislature acted mala fide in passing the impugned Act. ^ Held, (per Sinha, C. J. Das, Sarkar and Ayyangar,JJ.) that the State Legislature was competent to enact the impugned Act. On registration under the the old Board did not become a corporation in the sen e of being incorporated within the meaning of Entry 44 of List I; it continued to be an unincorporated society though under the provisions of the it had certain privileges analogous to those of corporations. The provisions in the impugned Act relating to the dissolution of the old Board fell within the second part of Entry 32 of List II which included unincorporated societies. Though the impugned Act while creating the new Board gave it a corporate status, it confined its powers and duties to institutions 157 in Delhi and limited its rights, powers and privileges to the purposes for which it was created. The provisions of the impugned Act relating to the incorporation of the new Board fell within the first part of Entry 32 of List II. Taff Vale Railway vs Amalgamated Society of Railway Servants, and Bonsor vs Musicians ' Union, , referred to. Krishnan vs Sundaram, (1940) 43 Bom. L.R. 562, Boppana Rukminiamma vs Maganti Venkata Ramadas, A.I.R. 1940 Mad. 946, and M. A. Nunnier vs Official Assignee, Madras, A.I.R. 1951 Mad. 875 and Satyavart Sidhantalankar vs The Arya Samaj, Bombay, , distinguished. The Servants of India Society, Poona vs The Charity Commissioner of Bombay, (1960) 63 Bom. L.R. 379, approved. Held, further, that the impugned Act did not violate articles 14,19 or 31. The petitioner had failed to show that there were other institutions similarly situated as the petitioner and that the petitioner had been picked out for unequal treatment. Since the transfer of management was made by a valid law there was no question of violation of article 31 (1); and since the impugned Act did not provide for compulsory acquisition of property article 31(2), as it stood at the relevant time, had no application. Neither the dissolved Board nor its member had any right to hold the property of the dissolved Board and there was no infringement of article 19(1)(f) involved in the Act vesting the property in the new Board. Under the , the members of a society did not acquire any beneficial interest on the dissolution of the society; the only right which they had was to determine as to which other society the property should be ' given to for management. This was not a right to property within the meaning of article 19(1)(f) and the taking away of such a right by the impugned Act did not violate article 19(13(f). (Chiranjit Lal Chowdhuri vs The Union of India, ; , relied on. State of West Bengal vs Subodh Gopal Bose, ; and Dwarkadas Shrinivas vs The Sholapur Spinning and Weaving Co., Ltd. ; , distinguished. Held, further, that there was no question of conflict between a law made by Parliament and a law made by the State Legislature as the , was not a law made by Parliament. The State Legislature had the power either to amend the in respect of unincorporated societies, or to make a law relating to a corporation provided its activities were confined to Delhi. The Delhi State Legislature did not transgress any of its limitations in 158 enacting the impugned Act and no question of mala fides of the legislature arose. K.C. Gajapati Narayn Deo vs The State of Orissa, relied on. Per, Mudholkar, J., Though the old Board could not be regarded as a corporation as the does not provide for incorporation it possessed some of the attributes of a corporation and it was a 'near corporation ' or a 'quasi corporation '. It was a legal entity. The second part of Entry 32 of List II did not permit a law to be made which took away from an existing legal entity its powers such as those conferred by the and which destroyed the legal entity. The impugned Act could not be supported under the first part of Entry 32 of List II as the objects of the Board were not limited to the Delhi State. But Entries 10 and 28 of List III permitted the State Legislature to make a law dissolving a charitable trust and transferring its property, rights etc. to another institution and the impugned Act could be sustained under these Entries. Servants of India Society, Poona vs The Charity Commissioner of Bombay, (1950) 63 Bom. L. R. 397, The Taff Vale Railway Co. vs The Amalgamated Society of Railway Servants, ; and Bonsor vs Musicians ' ' Union, , referred to.

Tsubongse the election petitioner and the respondent herein who contested from the Longkhim Chre constituency of the Nagaland Legislative Assembly as a Congress (I) candidate in the election held on 10.11.82 lost by a margin of 133 votes to Horangse the appellant and who was the Deputy Speaker of the last legislative Assembly. The respondent filed an election petition on the ground that the appellant was guilty of four instances of corrupt practice falling under Section 123(1) of the Representation of People Act, 1951 and on three other grounds, namely; (1) display of a banner with the caption "do not sell Nagaland to India", a corrupt practice within the meaning of Section 123 (3A) of the Act; (2) exceeding the limit of expenditure amounting to corrupt practice within the meaning of Section 123(6) of the Act and (3) use of government vehicles for the purpose of the election. The learned Single Judge, who tried the election petition, found only one of the aforesaid grounds of corrupt practice, namely, presentation of four red waist coats proved and the other grounds not proved, and therefore, he allowed the election petition and set aside the appellant 's election on that ground. Hence the appeal. Allowing the appeal, the Court ^ HELD :In an election petition, the petitioner who alleges corrupt practice must prove his case which is disputed by the returned candidate indepen 343 dently of the fact whether the returned candidate has proved his defence or not. [348E] Here on the evidence of R.Ws. 1 to 5, the appellant got the waist coats distributed through P.W. 14 who was then a staunch worker of the Naga National Democratic Party in September, 1982 long before the election process had started, as per the custom of Nagas to make gifts in return for the gifts received by dignitaries. The evidence let in by the respondent election petitioner to prove the item of alleged corrupt practice on the part of the appellant is wholly insufficient and unacceptable to prove the charge satisfactorily. Though in the election petition it is clearly alleged that the appellant gave red waist coats to P.Ws. 11 to 13 and Lithsabha at 4 p.m. On 27.10.82 for inducing them to cast their votes in his favour in the presence of P.Ws. 14 and 15 and they witnessed the offer and reported the matter subsequently to the respondent, P. Ws. 14 and 15 do not claim in their evidence personal knowledge about the offer on presentation of the waist coats by the appellant to these four persons and about the inducement of the appellant to cast their votes in favour. Admittedly, P.W. 14 had asked P.Ws. 11, 12 and 13 to remember the date and time of the appellant 's visit to their houses where he claims to have gone alongwith P.W. 15 soon after the departure of the appellant from each of those places. It is clear that these three witnesses, P.Ws. 11 to 13 have mentioned the date and month of the appellant 's visit only on the basis of what P.W. 14 told them to remember. P. W. 14 who was a staunch worker of the NNDP and had switched over to the Congress (I) Party to which P.W. 15 belongs, sometime before the election, and P.W. 16 are interested witnesses. P.W. 15 has stated in his evidence that the appellant appealed to the people of the village to cast their votes in his favour and that he went to the houses of P.Ws. 11 to 13 in Lirise village only thereafter. If that is so, it is not likely that the appellant, then the Deputy Speaker would have carried the gunny or hessian bag containing the waist coats himself without being accompanied even by a single worker or sympathiser of the NNDP when he is stated to have visited those four houses for presenting the waist coats and inducing the recipients to cast their votes in his favour. The evidence of P.Ws. 11 to 13 that P.Ws. 14 and 15 came to their houses within minutes after the appellant left the places and asked them about what had been given to them by the appellant and that when they told them that red waist coats have been given to then with a request to favour him with their votes, and they asked them to remember the date and time and not to deny the matter later P.W. 14 has stated so in his evidence is artificial and unreliable. The evidence of P.Ws. 11 to 15 about the date of the appellant 's visit to Lirise village and the presentation of the red waist coats to P.Ws. 11 to 13 and another is equally not impressive. Therefore, the appellant cannot be said to have committed any "corrupt practice". [351B C; 350C H]

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 appellant and Dr. Jain, respondent No. 4, completed their M.B.B.S. course in the years 1983 87. from Gandhi Medical College, Bhopal. While Dr. Jain had been admitted into that course in the Gandhi Medical College, Bhopal after he had passed the entrance test, the appellant first sought admission to M.B.B.S. course in the M.S. Ramayya Medical College, Bangalore, after paying the capitation fee and after completing the first year of the course in that Col lege she got herself transferred in 1984 to the Gandhi Medical College, Bhopal, with the approval of the State Government and with no objection from the Ramayya College, Bangalore. After passing M.B.B.S. both of them cleared their internship of one year and also joined a house job in Radiology in the same college and completed the same in August 1989. Both of them then applied for a single seat in the Master 's Degree (M.D.) course in Radiology at Gandhi Medical College, Bhopal. The appellant having secured higher marks got admission to this seat in preference to Dr. Jain. Dr. Jain, thereupon, challenged the admission of the appellant by means of a writ petition before the High Court on the ground inter alia that the transfer of the appellant from the Bangalore Medical College to the Bhopal Medical College was itself invalid and since the very admission of the appellant to the M.B.B.S. course degree in the Bhopal College was invalid, she could not at all have been considered for admission to the M.D. course which was available only to the institutional candidates. The High Court allowed the writ petition, quashed the admission of the appellant and directed that Dr. Jain, be admitted to that seat. Hence this appeal by the appellant. Allowing the appeal, this Court, HELD: The validity of an order for transfer may be chal lenged 430 contemperaneonsly by a third party whose claim for admission or transfer is superseded by such order but cannot be al lowed to be challenged by a third party because he finds, in retrospect, at a future point of time, that it has affected his interests as a result of subsequent events. [437E] The order of the State of Madhya Pradesh permitting the transfer of the appellant cannot be struck down as void. There has been some irregularity hut, in the circumstances in which it was passed, it was one within the competence of the State Government. [437F] There is the need to avoid disturbing settled issues which affect the life and career of an individual after a lapse of time or after the interposition of further events, as a result of which he has rightly developed a sense of security. [441B] In the instant case, the merit list of 1989 is nothing but a reproduction of the merit list of 1988 confined to a narrower group of students of the same hatch. The latter did show the appellant to have obtained more marks than Dr. Jain and, in this sense, was adverse to his interests. The omis sion of Dr. Jain to challenge the correctness of the list then lulled the appellant into a sense of security that the merit list was acceptable to all. Dr. Jain, should therefore be barred, on equitable consideration from challenging the order of merit at the present stage. [441G]

The petitioner in their writ petitions to this Court contested the ban on sale within the State of Maharashtra, of tickets of lottories organised by the Indian Red Cross Society, Dadra and Nagar Haveli branch and authorised by the administration of Dadra and Nagar Haveli. Dismissing the writ petitions, ^ HELD: (1) (i) The Bombay Lotteries (Control and tax) and Prize Competition (Tax) Act, 1958 is an Act to control and tax lotteries and prize competition in the State of Maharashtra. The Act contains detailed provisions for the licensing, regulation and control of lottery within the State of Maharashtra. Section 32(c), provides that nothing in the Act shall apply to "a lottery specially authorised by the State Government." [203G H] (ii) In the case of lotteries authorised by the Government of Maharashtra, the Government of Maharashtra may retain to itself all necessary powers for the regulation and control and the prevention of misuse of fund and exploitation of guileless members of the public. In the case of lotteries authorised by the Government of other States it may be difficult and even impossible for the Government of Maharashtra to take adequate regulatory steps to prevent abuse of the authority given by Governments of other States to non Governmental agencies to organize lotteries. It may be equally difficult for the Governments of other States to take 202 adequate measures for prevention of abuse of such authority within the State of Maharashtra. [204C D] 2. No hostile discrimination whatever is involved in not extending the exemption from the applicability of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958 'to lotteries authorised but not organized by the Government of other States '. [204D] 3. Lotteries organised by the Government of India or the Government of the State have been taken out from Entry 34 of List II of Schedule VII by Entry 40 of List 1. There is, therefore no question about the competence of the Legislature of Maharashtra to legislate in respect of the sale or distribution, in the State of Maharashtra, of tickets of all lotteries organized by any agency whatsoever other than the Government of India or the Government of a State. [203E F] H. Anraj and others vs State of Maharashtra, explained.

% 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 appellants manufacture a medicated syrup "Sharbat Rooh Afza" according to a formula and containing some fruit juices. Acting under section 3 of the , the Central Government made the Fruit Products order in 1955; as a result of an amendment in September 1956 of the relevant provisions of this Order, the requirement of the minimum percentage of fruit juices in a fruit syrup covered in of the Second Schedule of the Fruit Order was raised from 10% to 25%. This requirement was duly notified to the Appellants. Thereafter as a result of an inspection of their factory by the Marketing development Officer, the appellants received an order from him requiring them to stop further manufacture and sale of 'Sharbat Rooh Afza ' forthwith on the ground that it did not contain the minimum percentage of fruit juices prescribed by the relevant provisions of the Fruit Order. The appellants challenged this order in a Writ Petition on the ground, inter alia, that the Fruit Order did not apply to 'Sharbat Rooh Afza ' and also that the impugned order and the Fruit Order were invalid. The High Court, however, rejected these grounds, upheld the validity of the Fruit Order and dis missed the petition. It was contended on behalf of the appellants that the 'Sharbat ' was a medicinal product and not a 'fruit product ' as defined by cl. 2(d) of the Fruit Order; that the Fruit Order was invalid because it could have appropriately been issued only under the , and not the ; and that the impugned order was invalid because it affected the appellant 's Trade mark rigts. HELD : (i) The Sharbat was a fruit product within the meaning of cl. 2(d) (v) of the Fruit order as the residuary part of that clause took in any beverages containing fruit juices or fruit pulp; as such, its production could be controlled by the relevant provisions of the order. The High Court was right in rejecting the appellant 's contention that the Sharbat was a medicinal product in view of the fact that the appellants had not claimed exemption from the application of the Fruit Order by complying with Cl. 16(1)(c) thereof. [200 E G; 201 H; 203 A] (ii)As section 3(1) of the authorised the Central Government to regulate the qualitative and quantitative production of essential commodities, and as the pith and substance of the relevant provisions of the Fruit Order was clearly to regulate the qualitative production of the Fruit Products covered by it, the contention that the regulations imposed by the order were outside the purview of section 3(1), could 193 not be accepted. The order was not therefore invalid on the ground that it purported to tackle the problem of adulteration and should therefore have been issued under the . [201 D 202 C] (iii)The Fruit Order and the Act under which it was issued were constitutionally valid as the restrictions imposed by them were reasonable and in the interest of the general public. What the impugned order purported to do was to require the appellants to comply with reasonable restric tions imposed by the Fruit Order and the fact that, incidentally, compliance with the Fruit Order might tend to affect the trade mark rights, could not render the impugned order invalid. [203 D E] (iv)The definition of 'synthetic beverage ' in cl. 2(k) of the Fruit Order which indicates that it is a beverage which contains no fruit juice cannot be said to conflict with the requirements of cl. 11(2) that beverages containing less than 25% fruit juices should be sold as 'synthetic ' pro ducts. Furthermore, cl. 11 contains a positive provision and the validity of the mandatory requirements of cl. 11 could not be impaired by the alleged inconsistency between that provision and the definition of 'synthetic ' beverage prescribed by cl. 2(k). [203 A B] Amrit Banaspati Co. Ltd. vs The Stale of U.P. Cr. A. No. 141 of 1959 dated 30 11 60, referred to.

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.

Civil Appeal No. 587 of 1960. Appeal by special leave from the award dated December 16, 1958, of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 387 of 1958. M. C. Setalvad, Attorney General of India and I. N. Shroff, for the appellant. K. R. Choudhuri, for respondnet No. 1. Naunit Lal, for respondent No. 2. 1961. November 17. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises out of the proceedings taken at the instance of the appellant, the Kirloskar Oil Engines Ltd., Kirkee, Poona under section 36A of the (14 of 1947) (hereafter called the Act). It appears that certain disputes pending between the appellant and the respondents, its workmen, were referred to the industrial tribunal for its adjudication by the Government of Maharashtra. The disputes in question related to seven demands made by the respondents: two of these were in regard to privilege leave and allowances. The tribunal which tried the dispute made its award in two parts. of the award which dealt the demand of privilege leave and different kinds of allowances was made on June 30, 1958, and published on July 7, 1958. On August 2, 1958, the appellant applied to the State Government for reference of certain points to the tribunal for its clarification under section 36A. Accordingly an order of reference was made in respect of the two items privilege leave and allowances. The tribunal has made the necessary clarification in regard to its direction as to privilege leave. It has, however, held that the direction made by it for the payment to the workmen under paragraph 14 of its award needed no clarification. It held that in substance 493 the appellant was seeking for a modification of the said direction and that could not be done in the clarification proceedings contemplated by section 36A. The clarification award was thus made by the tribunal and submitted to the Government. It is against this award that the appellant has come to this Court by special leave. It would be convenient at this stage to indicate briefly the nature of the clarification claimed by the appellant before the tribunal. In regard the claim for privilege leave the original award by paragraph 10 had directed as follows: "All the workmen, both daily and monthly rated, get privilege leave according to the provisions of the . The leave usually comes to 14 or 15 days in a year I consider a privilege leave of 15 days a year to both the sections of the workmen in the Kirloskar oil Engines as quite adequate. At present this leave is allowed to be accumulated for two years. Here I am of the opinion that the accumulation should be up to 45 days. I therefore direct that all the workmen of the Kirloskar Oil Engines Ltd., Poona, shall be granted 15 days privilege leave (including privilege leave under the ) which will be allowed to be accumulated up to 45 days. " The appellant apprehended that the direction of the award may justify a claim by every worker whose name is on the muster roll to 15 days privilege leave irrespective of his actual attendance during the year. In other words, the appellant argued before the tribunal in the present proceedings that the words used by the original award were wide enough to justify a claim for 15 days privilege leave even where the workman was absent from work, for say 360 days in a year, provided his name appeared on the muster roll of the appellant. The tribunal appreciated the force of this 494 argument. It is common ground that under section 79 of the , it is only where a worker has worked for a period of 240 days or more in a factory during a calendar year that he becomes entitled during the subsequent calendar year to leave with wages for a number of days calculated at the rate of one day for every twenty days of work performed by an adult worker in the previous calendar year, or at the rate of one day for every fifteen days work performed by a child. The tribunal observed that it was not the intention of the award to depart from the basic principle prescribed by section 79; and so it made the necessary clarification by adding that in order to entitle him to the privilege as directed by the award every workman must put in 240 days or more of actual working during the previous calendar year. Thus, in regard to the provision made by the award as to privilege leave the clarification claimed by the appellant was made. In regard to the second point on which clarification was sought the relevant direction in the award reads thus: "At present if a workman works on a weekly off or on a holiday, he gets a substituted holiday under the but no additional payment. In my opinion a workman makes plans well in advance about spending his holidays. He spends his time in the company of his colleagues and refreshes himself. If he gets a substituted holiday, he is deprived of his enjoyment. He should therefore be compensated in money as well as by a day off. I therefore direct that if a workman has to work on a weekly off or on a holiday (paid or unpaid) he should be paid 1 1/2 times his wages and dearness allowance over and above substituted holiday. " 495 The appellant urged before the tribunal that this direction needed to be clarified because as it stood it was likely to impose on the appellant very heavy financial burden. The tribunal held that the direction itself was very clear and that under the guise of clarification the appellant was seeking its modification. So the tribunal rejected the appellant 's claim for any clarification in that behalf. In the present appeal the learned Attorney General attempted to argue that the accumulation of privilege leave up to 45 days allowed by the award was not justified. In our opinion, this argument cannot be entertained in the present appeal for two reasons. First, no such plea appears to have been made before the tribunal in the present clarification proceedings and so the appellant cannot be allowed to raise a new plea now. Besides, it is necessary to bear in mind the limitations of the enquiry permitted under the proceedings contemplated by section 36A of the Act. The said section empowers the appropriate Government to refer any question to the tribunal if the said Government is satisfied that any difficulty or doubt arises as to the interpretation of any provision of an award made by the said tribunal. It further provides that when such a question is referred to it the tribunal shall, after giving the parties an opportunity of being heard, decide such question and its decision shall be final and binding on all such parties. It is thus clear that the scope of the enquiry under section 36A is limited to the decision of the difficulties or doubts arising as to the interpretation of any provision in the award. If the words used in any provision of an award are ambiguous or obscure and it is not reasonably possible to interpret them the difficulty arising from the use of such ambiguous or obscure words may be resolved by moving the appropriate Government to make a reference under section 36A. It is obvious 496 that any question about the propriety, correctness or validity of any provision of the award would be outside the purview of the enquiry contemplated by the section. If a party to the award is aggrieved by any of its provisions on the merits the only remedy available to it is by making an appeal, say for instance under article 136 of the Constitution, to this Court. A grievance felt by a party against any provision of the award can be ventilated only in that way and not by adopting the procedure prescribed by section 36A. Thus, the enquiry permissible under section 36A is limited to the question of the interpretation of the provision of the award in question and no more. That is why, we think, that even if the appellant had sought to raise the question about the propriety of allowing the accumulation of privilege leave up to 45 days before the tribunal, and even if such a question had been referred by the State Government to the tribunal under section 36A, the tribunal would have been justified if in refusing to consider it because the point raised had nothing to do with the interpretation of the provision but is concerned with its merits and its propriety. Therefore, in our opinion, the appellant is not entitled to raise this point before us in the present appeal. The next contention raised by the appellant is against the refusal of the tribunal to entertain its application for clarification in regard to the provision for the payment to the worker 1 1/2 times his wages and dearness allowance over and above a substituted holiday if he has to work on a weekly off or on a holiday (paid or unpaid). The grievance of the appellant in substance is that in 1956 and 1957, on account of shortage of electrical energy for industrial purposes the State Government compelled the factories to change their weekly holidays from Sunday to some other week day, each factory or group of factories observing one week day as weekly off. According to the appellant, if a handful of workmen are to work on a weekly off or on a 497 holiday when the whole factory is closed then there would be some justification for making the payment to the workmen required to work on such a day; but there would be no justification for making such payment where the whole factory works on a weekly off or on a holiday. In support of this contention the appellant relies on the observation made in the original award that the basis for directing the additional payment for working on a weekly off or on a holiday is that the workman is deprived of an opportunity to spend his time in the company of his colleagues and refresh himself. It is urged that when all his colleagues are working there is no point in saying that anyone is deprived of an opportunity to spend his time in the company of his colleagues. The tribunal was not impressed by this argument and so it has refused to make any clarification cum modification in its award. It is significant that the argument based on the orders issued by the State Government requiring the factories to change their weekly holidays owing to shortage of electric energy was not raised before the tribunal at the time when it originally heard the dispute between the parties. It has stated in the present order that it looked at its notes of arguments and noticed that no such plea was raised before it at that time. Besides the tribunal has observed that having regard to the definition of the word "week" under section 2 (f) of the as well as the provisions of section 52 of the said Act it would have been open to the appellant to have another day of the week declared as the first day of the week for its purposes. If the appellant had adopted such a course the difficulty on which it relied would not have arisen. The appellant contends that the reasons given by the tribunal in rejecting its claim for clarification are not sound. We are not impressed by this argument. As we have already pointed out, the present argument ignores the limitations of the scope of the 498 enquiry under section 36A. It is clear that in substance the argument is that the direction issued by the award in regard to the payment in question should be modified, and in support of the claim for modification reliance is placed on the relevant orders issued by the State Government for changing the weekly holidays. Such a claim cannot obviously be entertained in clarification proceedings under section 36A. A proceeding contemplated by section 36A is not a proceeding intended to enable the tribunal to review or modify its own order; it is intended to enable the tribunal only to clarify the provisions of its award where a difficulty or doubt arises about the interpretation of the provisions. Quite clearly the impugned provisions contained in paragraph 14 of the award in relation to this demand are clear and unambiguous. Whatever may be the appellant 's grievance in respect of the validity or the propriety of the said directions there is no difficulty or doubt about their meaning; and so we are satisfied that the tribunal was right in refusing to alter the said direction in the present proceedings. The result is the appeal fails and is dismissed with costs. Appeal dismissed.

Certain disputes between the appellant and its workmen were referred to the industrial tribunal for adjudication by the State Government under the provisions of the . The award made by the tribunal provided, inter alia, (1) that if a workman had to work on a weekly off or on a holiday he should be paid 1 1/2 times his wages and dearness allowance over and above a substituted holiday, and (2) that all the workmen shall be granted 15 days privilege leave in a year which could be allowed to be accumulated up to 45 days. The appellant applied to the Government under section 36A of the Act stating that the directions given by the tribunal had to be clarified on the grounds, inter alia, (1) that the reason for directing the additional payment for working on a weekly off or on a holiday was that the workman was deprived of an opportunity to spend his time in the company of his colleagues and refresh himself, but that there was no basis for this since the whole factory worked on weekly off or on a holiday, and (2) that the accumulation of privilege leave of 45 days to all workmen was not justified. The tribunal made a clarification as regards privilege leave confining it to only those workmen who had put in 240 days or more of actual working during the previous calendar year so as to be in conformity with the provisions of the , but as regards others matters it held that the directions given were quite clear and that under the guise of clarification the appellant could not seek a modification of the award under section 36A. ^ Held, that 36A of the , was intended to empower a tribunal to clarify the provisions of the award passed by it where a difficulty or doubt arose about their interpretation, and not to review or modify its own order. Any question about the propriety, correctness or validity of any provision of the award would be outside the purview of the enquiry contemplated by that section.

The respondent was employed by the appellant company, but later on his work and conduct became very unsatisfactory and repeated warnings, both oral and written, did not show any improvement. A thorough inquiry into his record of service was made and a report was submitted which showed that he was unsuitable to be retained in its service. No formal enquiry, however, was held by submitting a charge sheet to the respondent and giving him an opportunity to rebut those chares. The appellant gave him a choice either to terminate his services on payment of full retrenchment compensation, or if he refused to accept the same, to make an application for permission to terminate his services. Eventually, the appellant filed an application before the Labour Appellate Tribunal under section 22 Of the Industrial Disputes (Appellate Tribunal) Act, 1950, for permission to discharge the respondent from its service. The application was originally heard ex parte, the respondent not appearing, and the Tribunal, by order dated October 14, 1955, allowed the application. Subsequently the respondent made an appli cation for a review of the order under Or. 47, R. I, for setting it aside under Or. 9, R. 13 and for restoration of the application under Or. 41, R. 21, Of the Code of Civil Procedure. The Tribunal found that there was sufficient cause for the respondent not appearing when the application was called on for hearing, and set aside the ex parte order and restored the appellant 's application. On a further hearing of the application, the parties adduced evidence and the Tribunal, after hearing them, rejected the application on the, ground that a prima facie case had not been made out for permission to discharge the respondent. On appeal to the Supreme Court it was contended for the appellant (1) that the Labour Appellate Tribunal had no jurisdiction to review its own order and (2) that it exceeded its jurisdic tion under section 22 Of the Act, in discussing the evidence led before it in meticulous detail and coming to the conclu sion that the appellant failed to make out a prima facie case to discharge the respondent from its service. Held: (1) that under section 9, sub sections (1) and (10) of the Act the Labour Appellate Tribunal had jurisdiction to set aside the 515 ex parte order dated October 14, 1955, and restore the application to its file. (2) that under section 22 of the Act, the jurisdiction of the Labour Appellate Tribunal in considering whether a prima facie case has been made out by the employer, is to see whether the employer is acting mala fide or is resorting to any unfair labour practice or victimisation, and whether on the evidence led it is possible to arrive at the conclusion in question. Though the Tribunal may itself have arrived at a different conclusion it has not to substitute its own judgment for the judgment in question. Atherton West & Co. Ltd. vs Suti Mill Mazdoor Union and Others, , The Automobile Products of India Ltd. vs Rukmaji Bala & others; , and Laksh mi Devi Sugar Mills Limited vs Pt. Ram Sarup, (1956) S.C.R. 916, relied on. In the instant case, though the appellant was justified in making the application for permission to discharge the respondent on account of his work and conduct being demon strably unsatisfactory, and the standard of proof which the Tribunal ];ad applied for finding whether there was a Prima facie case was not strictly justifiable, in view of the fact that no formal inquiry into the charges against the respond ent was held and the evidence on behalf of the appellant did not show that the respondent was given an opportunity to controvert the allegations made against him, the decision of the Tribunal was upheld.

The petitioners participated in the arbitration without demur. When the award was made in 1981 no objection was taken by them that it was bad being unreasoned one. The High Court dismissed the challenge to the award. In the special leave petition it was contended for them that relevant documents had not been taken into consideration. Dismissing the special leave petition, HELD: The High Court has pointed out that the award does not indicate that all relevant documents had not been taken into consideration. The parties participated in the arbitration. There is no allegation of any violation of principles of natural justice. There is no mistake of law apparent on the face of the award or gross mistake of facts resulting in miscarriage of justice or of equity. It would, therefore, be unjust under article 136 of the Constitution to interfere or keep the finding at bay. [642C D]

In 1949 the appellant framed a scheme called " Tonnage Pro duction Bonus Scheme " whereunder the workmen were to get 13 days ' basic wages by way of bonus on a production Of 30,000 tons and thereafter an additional one day 's basic wage for every 46o tons produced upto a maximum Of 36,000. The scheme was accepted by the workmen. In 1953 the workmen raised industrial disputes claiming profit bonus for the years 1950 51 and 1951 52 in addition to the production bonus and asked for revision of the production bonus scheme. The Industrial Tribunal, to which the disputes were referred, rejected both the claims. On appeal, the Appellate Tribunal awarded profit bonus equal to one month 's basic wage for 1951 52 but dismissed the claim for 1950 51 as having been made too late. It revised the production bonus scheme by providing for i day 's basic wage for each increase Of 460 tons over 30,000 tons uPtO 36,000 tons and for 2 days, basic wage for each increase Of 46o tons in excess Of 36,000 tons. The appellant contended (i) that the Tribunal had no jurisdiction to vary the production bonus scheme ; (ii) that such a scheme could only be varied by agreement ; (iii) that no proper grounds had been made out for varying the scheme ; (iv) that profit bonus could not be awarded in addition ' to production bonus ; (v) that the production bonus in this case was really profit bonus ; and (vi) that there was no available surplus out of which profit bonus could be paid. Held, that the Tribunal had jurisdiction to revise the pro duction bonus scheme. Payment of production bonus was payment of further emoluments depending not upon extra profits, but, upon extra production, as an incentive to the workmen to put in more than the standard performance. Though it was discretionary with the appellants to introduce the scheme, once the scheme was introduced and put into operation, it became a term of employment of the workmen and any dispute with respect to such term of employment was an industrial dispute which could properly be referred to a Tribunal. The power of the Tribunal in considering the scheme 1013 was not confined to the question of mala fides etc. of the employer 's action but it had power to vary the terms of the scheme if circumstances justified it. There was no justification for interfering with the scheme upto a production Of 36,000 tons in view of the agreement between the parties. But the scheme did not provide for production above 36,000 tons and as such there was no agreement with respect to this, and as the production had gone up beyond 36,000 tons it was necessary to provide for production bonus beyond this quantity. There were two reasons for increase in the rates of payment of production bonus, viz., (i) the intensification of the efforts of the workmen in increasing production, and (ii) the progressive going down of the labour cost of production per ton as production increased. The rates had to be increased progressively with production. Consequently, for each 46o tons increase in production the proper rates for payment of production bonus would be 1 1/4, 1 3/4 and 2 days ' basic wages respectively or production between. 36,000 and 42,000 tons, 42,000 and 48,000 tons, 48,000 and 54,000 tons and 54,000 and 60,000 tons. The " Tonnage Production Bonus Scheme " introduced by the appellant was in fact also a production bonus scheme and not a profit bonus scheme. The fact that one of the terms of the scheme empowered the directors to cancel or reduce the payment of production bonus in case the gross profit was not sufficient to meet fixed dividends, interest, depreciation charges, taxation and 10% dividend to ordinary shareholders did not make it a profit bonus scheme as the circumstances mentioned are not the same that have to be taken into account in arriving at the available surplus according to the Full Bench formula. Nor was the position altered by the clause in the scheme which empowered the appellant to cancel or modify the scheme in case Government enforced by legislation any scheme for bonus or profit sharing as this did not mean that the scheme itself was for profit sharing or profit bonus. The other clauses of the scheme clearly indicated that it was for production bonus. If there was an available surplus of profits according to the Full Bench Formula the workmen were entitled to get profit bonus in addition to the production bonus. Mathuradas Kanji vs Labour Appellate Tribunal, A.I.R. , distinguished. Held further, that there was available surplus of profits and the profit bonus equal to one month 's basic wages was properly awarded by the Appellate Tribunal for [1951 52. The claim for deduction for rehabilitation was made on a wrong basis by the appellant. In order to arrive at a realistic figure for rehabilitation the total block should be divided into three heads : (i) land,(ii)buildings, railway sidings and things of that nature which had a. much longer life and where no imports were needed, and (iii)machinery. In the case of land no replacement was necessary and no provision need be made for rehabilitation. In the 1014 case of buildings etc. the multiplier would be smaller while the divisor would be larger. Machinery bad again to be sub divided according to when it was purchased so as to arrive at correct multipliers and divisors. As machinery purchased before the last war stood on one footing there would be a pre 1939 block. The second block may be of machinery purchased during the war and the third of that purchased after the war. The last two were not rigid divisions. In the circumstances of the present case, the proper multipliers for these three bocks would be 4, 2 and 1 respectively. As both Tribunals had accepted 10 as the divisor that may be accepted as. the divisor for the three blocks. Calculating on that basis the rehabilitation costs did not wipe out the entire gross profits as claimed by the appellants and there was an available surplus out of which profit bonus could be paid. The clerical staff, budli workers and temporary workers were not entitled to claim attendance bonus as they were differ ent from other workmen.

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.

The appellant was in the service of the respondent but sub sequently he was discharged on the plea that he had become surplus 4443 to the requirement of the respondent. The Industrial Tribu nal found that the respondent had been guilty of unfair labour practice and victimisation and held that the order of discharge was illegal and that he should be reinstated, with arrears of salary and allowances from the date of discharge. The respondent having failed to implement the award, the appellant filed an application under section 2o(2) of the Industrial Disputes (Appellate Tribunal) Act, 1950, for computation of the money value of the benefit of reinstate ment. The Industrial Tribunal assessed the value of rein statement at the sum of Rs. 1,000 by adopting the measure of damages as laid down under section 95 of the Code of Civil Procedure. Under the bye laws framed by the respondent the services of an employee could be terminated on giving one month 's notice. Held, that the monetary value of the benefit of reinstate ment is to be computed not on the basis of a breach of the contract of employment nor on the basis of a tort alleged to have been committed by the employer by reason of the non implementation of the direction for reinstatement contained in the award. The computation has to be made by the Indus trial Tribunal having regard to all the.circumstances of the case, such a?, the terms and conditions of employment, the tenure of service, the possibility of termination of the employment at the instance of either party, the possibility of retrenchment by the employer or resignation or retirement by the employee and even of the employer himself ceasing to exist, or of the employee being awarded various benefits including reinstatement under the terms of future awards by Industrial Tribunals in the event of industrial disputes arising between the parties in the future. The observations of Greer L. J. in Salt vs Power Plant Co., Ltd. , 325, relied on. In the instant case, having regard to the bye laws, the appellant would have been entitled to only one month 's salary in lieu of notice, as and by way of compensation for non implementation of the direction for reinstatement, but this right could not be availed of by the respondent in view of the finding of the Tribunal that he was guilty of unfair labour practice and victimisation, and a correct estimate of the value of the benefit of reinstatement had to be made bearing in mind all the relevant factors.

The appellant Bank instituted a departmental inquiry against one of its employees, a clerk in one of its branch es. The departmental inquiry was held for four acts of misconduct and the inquiry officer came to the conclusion that two of the charges were fully proved, while one charge was proved to a limited extent, and the fourth charge was not established. On the basis of the report of the inquiry officer, the competent authority decided to dismiss the employee from service, and issued a notice to him under paragraph 521(10)(a) of the Award of the All India Industri al Tribunal popularly known as the Shastri Award, requiring him to show cause as to why the said punishment should not be imposed on him. He was also given a hearing as required by the said provision, and thereafter an order was passed to the effect: that the established charges viz. uttering indecent words, threatening the agent, and failure to do the work allotted are quite serious and would warrant dismissal, though he may not be dismissed, in view of the extenuating circumstances, but that at the same time it would not be desirable to retain him in the Bank 's service, and that as such, "he be discharged on payment of one month 's pay and allowances in lieu of notice. In terms of para 521(10)(c) of the Shastri Award this would not amount to disciplinary action." An industrial dispute was raised by the first respond ent Uuion, and it was referred to the Central Government Labour Court, for adjudication and by its award the Labour Court upheld the order of dismissal. 12 The first respondent Union preferred a writ petition to the High Court and raised several contentions, but the High Court confined its decision only to one point, viz. whether the termination of the service was retrenchment, and whether it was made in accordance with the provisions of Section 25F of the ; held that the termina tion of the service of the second respondent was retrench ment within the meaning of section 2(00), and was made in breach of the statutory provision contained in Section 25F in as much as no retrenchment compensation was paid to the employee, and set aside, the order of termination of serv ice. In the appeal by the Bank to this Court, the question for consideration was: whether the order of termination of service served on the employee, amounts to punishment or not. Allowing the appeal, this Court, HELD: 1. It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpre tation of the provisions of paragraphs 521(5)(e) and 521(10)(c) of the Award and ignoring their context. [17B] 2. The termination of service of the employee in the instant case under paragraph 521(10)(c) of the Award is as a result of the disciplinary proceedings, and is punitive. It is, therefore, not "retrenchment" within the meaning of Section 2(00) of the . Hence, there was no question of complying with the provisions of Section 25F of the Act. The decision of the High Court has, therefore, to be set aside. [25G H; 26A] 3. It is clear from the context in which sub clause (e) of sub para (5) occurs that the entire expression, namely, "have his misconduct condoned and he merely discharged" has nothing but penal implications, and the measure mentioned therein is a sequal to the disciplinary action taken for one of the gross misconducts mentioned in sub para (4). It is not possible to arrive at any other conclusion on a reading of the sub paragraph as a whole. The discharge spoken of there is nothing but a punishment for a gross misconduct. This is so not only because it is enumerated as one of the punishments along with others but also because firstly there is a provision of simple discharge elsewhere in paragraph 522 of the Award. and when the Award intended to provide for it, it has done so in sub paras (2)(c), (2)(d) and (3). [20G H; 21A B] 13 4. Sub paras (9) and (10) of paragraph 521 lay down the procedure for taking disciplinary action as well as for awarding punishment following such action. Sub paras (9), 10(a), 10(b) would indicate that discharge under sub paras (2)(c), (3), (5) and (10)(c) is also a punishment, for when the employee is discharged under the said provisions after the inquiry, under the provisions of sub paras (9) and (10), there is no provision made for treating either the whole or part of the period of suspension during the inquiry, as on duty. [21D & G H] 5. In view of the fact that sub clause (a) requires that a hearing should be given to the employee against the pro posed punishment, the authority is enjoined under sub clause (c) to take into account the gravity of the mis conduct, the previous record of the employee and any other aggravating or extenuating circumstances that may exist and may be brought on record "while awarding punishment by way of disciplinary action". The sub clause then provides for discharge with or without notice or on payment of a month 's pay and allow ances, in lieu of notice. The punishment of discharge is to be awarded in two circumstances. The first circumstance is when there are sufficiently extenuating circumstances but the mis conduct is of a "gross" type. The second circum stance is when the charge is such that the Bank does not for some reason or other think it expedient to retain the em ployee any longer in service but the evidence is insuffi cient to prove the charge. [22D E] 6. Read with sub para (5)(e), the provisions of sub clause (c) of sub para (10) become more clear that if a mis conduct is not of a "gross" type, it may be merely condoned without any further action. But when it is of "gross" type, the authority has no option but to condone and to proceed to discharge the employee. The expressions used both in sub para (5)(e) and sub para 10(c) in that respect are identical. Similar is the action contemplated for the second circumstance referred to in sub para 10(c), namely when the charge though unsustainable for want of evidence is such that it is considered inexpedient to retain the employ ee in service. [23D E] 7. Since in the context, such a discharge is by way of punishment, the relevant provisions give a discretionary power to the authority to convert, what would otherwise be a dismissal into a mere discharge. This is for the benefit of the employee. It protects him from the banefull consequences of dismissal. At the same time, it relieves the management of the burden of retaining him in service when it has become inexpedient to do so. Thus the provision of such discharge works to the advantage of both. At the same time, it cannot be gainsaid that the said 14 discharge is as a result of the disciplinary proceeding. Although in form it may not, and in the peculiar circum stances, it is intended that it should not look like a disciplinary action, it cannot be denied that it flows from and is a result of the disciplinary proceedings. To make clear, however, that the action, though spawned by the disciplinary proceedings should not prejudice the employee, the last sentence viz: "Discharge in such cases shall not be deemed to amount to disciplinary action", has been added by way of abundant precaution. [23F H; 24A] 8. That this is not a discharge simpliciter or a simple termination of service becomes clear when it is compared both with the provisions of para 522(1), and with those of sub paras (2)(c), (2)(d) and (3) of paragraph 521 itself. The distinction between discharge contemplated under para graph 521(10)(c) and discharge simpliciter or simple termi nation of employment under the other provisions is clear enough. This will also show that the two belong to different categories and are not the same. While the former is intend ed to be punitive, the latter is not. As is further clear from the provisions of paragraphs 521(2)(c), (2)(d) and (3), the discharge contemplated there, as against simple termina tion, is in proceedings under "sub paragraphs (9) and (10) infra relating to discharge". In other words, it is as a result of a disciplinary proceeding. [24B; 25C D] 9. To construe the discharge under paragraphs 521(5)(e) and 521(10)(c) as a simple discharge not flowing from disci plinary proceedings will deprive an employee of a valuable advantage, viz. that of challenging the legality and propri ety of the disciplinary action taken against him, whatever the form of the order, by showing that he was either not guilty of any misconduct or that the misconduct was not of a "gross" type or that the punishment meted out to him by way of discharge was not warranted in the circumstances etc. It is not, therefore, in the interests of the employees to construe the provisions as the High Court has done. The predominant object of the Award is to protect the interests of the employees. [25E F] 10. Remanding the matter to the High Court for deciding the other contentions raised in the writ petition, is not advisable for various reasons. The misconducts complained of against the employee are of 1966. He was charge sheeted in January 1968 and removed from service on April 9, 1970. The Court proceedings have been pending for more than about 23 years. In the meanwhile, the respondent No. 2 who was a clerk on the date he was charge sheeted, has become a lawyer and has been practicing as such. Further, the mis conducts, which are held 15 proved by the Labour Court are of "gross" type within the meaning of paragraph 521(4) of the Award. The Labour Court is the final fact finding forum. The High Court while setting aside the order of the Labour Court has granted reinstatement in service and back wages and pursuant to the said order, the employee has already received an amount of Rs.93,000. The effect of decision would be to set aside not only the order of reinstatement but also of the back wages which would require the employee to refund the said amount. Even though the employee was prepared to refund the amount and to contest the petition on other grounds, at present, the employee is in his fifties. Taking into consideration all these facts the interests of justice would be served if the order of the High Court is set aside and the order of the Labour Court is restored without requiring the employee to refund the amount he has already received. [26E G; 27C E]

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".

Civil Appeal No. 144 of 1960. Appeal by special leave from the judgment and order dated July 26, 1957, of the Madhya Pradesh High Court in Civil Revision No. 966 of 1955. B. R. L. Iyengar and K. P. Bhatt, for the appellant. G. section Pathak, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondents. November 16. The Judgment of the Court was delivered by SARKAR, J. In this case an arbitration agreement had been filed in court under section 20 of the , and an order of reference made thereon. The arbitrator in due course entered 477 upon the reference and made and filed his award in court on July 14, 1955. The award concerned partition of certain properties between the wife and children of one Bhairon Bux. The award was however unstamped and unregistered. An objection was taken to a judgment being passed on such an award. On such objection, the trial court passed an order remitting the award to the arbitrator for re submitting it to the court on a duly stamped paper and after getting it registered. Against this order the High Court at Nagpur was moved in revision. The learned Single Judge hearing the revision application took the view that the award required to be stamped. But he felt that it could not be remitted to the arbitrator under section 16 of the , which is the only provision under which an award can be remitted to an arbitrator. It appears that there was an earlier judgment of the Nagpur High Court in the case of Ramkumar vs Kushalchand (1) in which it had been held that where the award was unstamped it could under paragraph 14 of Schedule I to the Code of Civil Procedure be remitted to the arbitrator with a direction to re write it on a stamped paper and re submit it to court. The provisions of that paragraph of the Code have now been substantially reproduced in section 16 of the . The trial Judge had based himself on this earlier judgment of the High Court. The learned Single Judge was apparently not satisfied with the correctness of the decision in Ramkumar 's case (1) and he referred three questions for decision by a larger bench of that High Court. The questions referred were: (a) Is the award made on a reference by the Court on an application under section 478 20 of the chargeable to stamp duty? (b) Is such an award compulsorily registerable when it relates to partition of immovable property of the value of one hundred rupees and upwards? (c) Has the Court powers under section 16(1) (c) of the of 1940 or otherwise to remit an award to the arbitrator or umpire to get it stamped and/or registered? The matter was thereupon heard by a Division Bench of the High Court constituted by two learned Judges. Before them it was agreed by both the parties that the award required to be stamped. This disposed of the first question. The learned Judges felt that it was not necessary at that stage of the proceeding to answer the second question, namely, whether the award required registration. In the result they only answered the third question as to whether an award could be remitted under section 16 (1) (c) of the to the arbitrator to get it stamped and they answered that question in the affirmative. They held that a want of stamp would be an illegality apparent on the face of the award and therefore the case would fall under section 16(1)(c) of the . They also held, following the case of Lakhmichand vs Kalloolal (1), that the copying of the award on a stamped paper was purely ministerial, and making of an award did not deprive the arbitrator of the authority to copy an award on the requisite stamp paper. They approved of the decision in Ramkumar vs Kushalchand (1). The present appeal is against this judgment of the Division Bench. The only question argued at the bar was whether the answer of the Division Bench to the third question was correct. 479 Now section 16(1)(c) of the Act is in these terms: section 16 (1): The Court may from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such terms as it thinks fit . . . . . . . (c) where an objection to the legality of the award is apparent upon the face of it. We think that the Division Bench of the High Court was clearly in error. Under section 16 of the an award can be remitted to the arbitrators only for reconsideration. When it is remitted for re writing it on a stamped paper, it is not remitted for reconsideration. Reconsideration by the arbitrators necessarily imports fresh consideration of matters already considered by them. Now they can only consider and give a decision upon matters which are referred to them under the arbitration agreement. It follows that the reconsideration can only be as to the merits of the award. They reconsider nothing when they re write the award on a stamped paper. We think the matter was correctly put by Mitter, J., in Nani Bala Saha vs Ram Gopal Saha (1) in the following observation: "That cl. (c) means this and nothing more: namely, that where the court finds an error of law in the award itself or in some document actually incorporated thereto on which the arbitrator had based his award, that is to say, finds the statement of some erroneous legal proposition which is the basis of the award, it can remit the award to the arbitrator for reconsideration" and "Want of registration is a defect dehors the award or the decision of 480 the arbitrator, and so in our judgment is not covered by cl. (c) of section 16 (1), of 1940". What was said there about a want of registration is clearly equally applicable to a want of stamp. Mr. Pathak appearing for the respondent contended that under section 14 (1) of the it was clearly the duty of the arbitrator to inform the parties of the amount of stamp duty payable on the award. Section 14 (1) is in these terms: Section 14 (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. We are unable to see how this section can provide the basis for the order made in this case. It only says that the arbitrators shall inform the parties of the fees and charges payable. Even assuming that the word 'charges ' includes duty payable for the stamp to be affixed to the award, at best, this section would support an order directing the arbitrators to supply this information. It would not justify an order requiring the arbitrators to inscribe the award afresh on a stamped paper and re submit it to court. As at present advised, we have grave doubts if the fees and charges mentioned in section 14 (1) include the stamp duty payable on the award. Section 17 of the Stamp Act requires that stamping should be at the time of execution. Under section 14 (1) of the it is only after the singing of the award that is its execution, that the arbitrators are required to supply the information about the fees and charges. It is, of course, no part of the duty of the arbitrators under the Act or otherwise to find the costs of stamp themselves. Therefore 481 it is difficult to appreciate how the word `charges ' mentioned in this section includes stamp. But on this question it is not necessary for us to express any final opinion in this case. Mr. Pathak contened that even if the case did not come within section 16 (1) (c) of the , the order in the present case can be supported under section 151 of the Code of Civil Procedure which preserves the inherent power of a court to make such orders as may be necessary for the ends of justice. It is true that section 41 of the makes the provisions of the code of Civil Procedure applicable to proceedings before a court under the . But it is well known that after making his award the arbitrator is functus officio. To cite one authority for this proposition we may quote the observations of Mellish, L. J., in Mordue vs Palmer(1). "I think the result of the cases at law is that when an arbitrator has signed a document as and for his award, he is functus officio, and he cannot of his own authority remedy any mistake." In the present case, ex hypothesi, the award has already been made and the arbitrator has therefore become functus officio. It is that award which requires stamp. Section 151 of the Code cannot give the court power to direct the arbitrator to make a fresh award; that would be against well established principles of the law of arbitration. It would again be useless to have another copy of the award prepared and stamped for the copy would not be the award and no action in a court can be taken on it. The order cannot therefore be supported by section 151 of the Code. It is of some interest to read here the following passage from Russel on Arbitration 14th Ed., p. 325. 482 "The usual practice in preparing an award is to have two copies made of it. One the arbitrator signs, which then becomes then the original award, and this is delivered to the party who takes up the award. The other copy is available for the other parties if they apply for it." "The original award, before it is available for any purpose whatsoever, must be duly stamped, but there is no obligation upon the arbitrator to stamp it, and he does not usually do so. " We should observe here that the last paragraph in the aforesaid quotation does not appear in the 16th edition of Russel 's work. Perhaps this is because in England an award is no more required to be stamped by virtue of section 35 Sched. 8, of the Finance Act, 1949, which was passed after the 14th edition was published. Lastly, Mr. Pathak tried to support the order under sections 13 (d) and 15 (b) and (c) of the . A bare perusal of the provisions mentioned would show that the order made in this case cannot be based on any of them. Section 13 (d) deals with correction of clerical mistakes or accidental slips in the award, neither of which we think an omission to stamp is. Further more, section 13 is only an enabling section giving certain powers to the arbitrator. The arbitrator cannot be compelled to exercise these powers. Section 15 deals with a court 's power to modify or correct an award. In the present case, the Court did not purport to exercise that power. We, therefore, think that the Division Bench was in error in thinking that an order could be made remitting the award to the arbitrator with a direction to re write it on a stamped paper and resubmit it to court. That is the only point that we decide in this case. 483 In the result this appeal is allowed. The orders of the Courts below remitting the award are set aside. The appellant will get the cost throughout. Nothing that we have said in this judgment will affect the right of the parties to take such steps, if any are available to them at law, for curing the defect arising from the award being on an unstamped paper. Appeal allowed.

An arbitration agreement was filed in court under section 20 of the , and an order of reference was made thereon. The arbitrator entered upon the reference and in due course filed his award in court. The award was however, unstamped and on objection raised that no judgment 476 could be passed on such an award, the trial court passed an order remitting the award to the arbitrator for re submitting it to the court on duly stamped paper. The High Court took the view that want of stamp would be an illegality apparent on the face of the award, which could therefore be remitted under section 16(1) (c) of the Act. ^ Held, that all unstamped award cannot be remitted under section 16(1) (c) of the , to the arbitrator to get it stamped, because want of stamp is a defect dehors the award or the decision of the arbitrator and does not amount to an illegality apparent upon the face of it within the meaning of that section. Ramkumar vs Kushalchand, A.I.R. 1928 Nag. 166 and Lakshmichand vs Kalloolal, 1956 N.L.J. 504, disapproved. Nani Bala Saha vs Ram Gopal Saha, A.I.R. 1945 Cal. 19, approved. Held, further, that after making an award the arbitrator is functus officio, and section 151 of the Code of Civil Procedure cannot therefore give the court power to direct the arbitrator to make a fresh award and re submit it after writing it on proper stamp paper. Mordue vs Palmer, , relied on. Dubitante, it is doubtful if the fees and charges mentioned in section 14(1) of the Arbitration act, 1940, include the stamp duty payable on the award.

One V. Krishna Reddy filed an election petition against Veera Reddy, respondent No. 1, a returned candidate in the elections held for the Andhra Pradesh Legislative Assembly in February, 1978 on the ground that the returned candidate was disqualified to be chosen to fill the post under Section 9A of the Representation of People Act, 1951 inasmuch as he has subsisting contracts with the Government of Andhra Pradesh. The appellant, Thammarna was impleaded as original respondent No. 5 though he is not a necessary party. He did not file any written statement. Neither did he lead any evidence nor did he cross examine the witnesses produced by respondent No. 1 and the election petitioner. In fact, he did not even participate in the arguments before the High Court. In the appeal filed by Thammanna against the Judgment dated April 24, 1979 of the High Court of Andhra Pradesh dismissing the election petition filed by Krishna Reddy, a preliminary objection was raised as to whether the appellant had the locus standi to maintain the appeal. Dismissing the appeal, the Court, ^ HELD: (1) The appellant cannot, by any reckoning, be said to be a 'person aggrieved ' by the decision of the High Court, dismissing the Election Petition. [84C] (2) Before a person is entitled to maintain an appeal under Section 116C of the Representation of the People Act, 1951 which is analogous to Section 96(1) of the Civil Procedure Code, all the following three conditions must be satisfied: (1) that the subject matter of the appeal is a conclusive determination by the High Court of the rights with regard to all or any of the matters in controversy, between the parties in the election petition. (2) that the person seeking to appeal has been a party in the election petition, and (3) that he is a "person aggrieved", that is a party who has been adversely affected by the determination. In the present case, these conditions, particularly Nos. (1) and (3) have not been fulfilled. [79B D] 74 (3) Just as the term "decree" in Section 96(1) of the Civil Procedure Code means an adjudication which "conclusively determines all or any of the matter in controversy in the suit", the expression "any final order" as used in Section 116C of the Representation of the People Act contemplates a conclusive determination of all or any of the matters in controversy in the election petition between the parties. [78F G] (4) The appellant was not a necessary party to be impleaded as there was no allegations or claims in the election petition which would attract section 82 of the Representation of the People Act. In this case, the question of the Court joining him as a party respondent under Section 86(4) of the Act also did not arise, as he was impleaded before the High Court as respondent No. 5 though it was not obligatory for the Election Petitioner to do so. Even so, respondent No. 5 did not join the controversy. He neither joined issue with the contesting respondent No. 1 nor did he do anything tangible to show that he had made a common cause with the Election Petitioner against respondent No. 1. In fact, the only parties between whom the matters in controversy, were at issue, were the Election Petitioner and Respondent No. 1. [79F H] (5) Although the meaning of the expression "person aggrieved" may vary according to the context of the statute and the facts of the case, nevertheless, normally a 'person aggrieved ' must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something. [80A B] Bar Council of Maharashtra vs M. V. Dabholkar, [1975] 2.S.C.C. 703 and J. N. Desai vs Roshan Kumar A.I.R. 1976 S.C. 576 at p. 534 referred to. (6) The principle that election petition is a representative action on behalf of the whole body of electors in the constituency has a very limited application to the extent it has been incorporated in Sections 109 to 116 of the Representation of the People Act and its application cannot be extended to appeals under the Act. Firstly, these provisions are to be found in Chapter IV, under the main caption: 'WITHDRAWAL AND ABATEMENT OF ELECTION PETITIONS '. Then, the provisions of these sections, also repeatedly refer to the withdrawal or abatement of 'election petitions ' and also to procedure in respect thereof before the 'High Court '. The provision relating to Appeals in Sections 116A, 116B and 116C, have been included separately, in Chapter 'IV A ', captioned "APPEALS". [81E G, 83G H, 84A] Secondly, Section 116C, enjoins upon the Supreme Court to hear and determine every appeal under this Act in accordance with the provisions of the Code of Civil Procedure and the Rules of the Court. No doubt this is, "subject to the provisions of the Act and the rules if any, made thereunder". But this clause only means that the provisions of the Code and the Rules of the Court in hearing an appeal to this Court will apply except to the extent their application has been excluded expressly or by necessary implication by any provision of the Act. There is no provision in Chapter IV A of the Act, analogous to Sections 109 to 116 of the Act, which curtails, restricts or fetters an appellants ' right to withdraw an appeal. Nor is there any such provision in the Code or the Rules of this Court which does so. If the intention of the Legislature was that the provision of Sections 109 to 116 which apply to the withdrawal of election petition, should also govern the withdrawal of appeals, there was no difficulty in inserting similar provisions in Section 116C or elsewhere in Chapter IV A. [81G H, 82A C] 75 Bijayananda Patnaik vs Satrughna Sahu, [1964] 2 S.C.R. 538 at p. 545, followed.

The respondent was employed by the appellant company, but later on his work and conduct became very unsatisfactory and repeated warnings, both oral and written, did not show any improvement. A thorough inquiry into his record of service was made and a report was submitted which showed that he was unsuitable to be retained in its service. No formal enquiry, however, was held by submitting a charge sheet to the respondent and giving him an opportunity to rebut those chares. The appellant gave him a choice either to terminate his services on payment of full retrenchment compensation, or if he refused to accept the same, to make an application for permission to terminate his services. Eventually, the appellant filed an application before the Labour Appellate Tribunal under section 22 Of the Industrial Disputes (Appellate Tribunal) Act, 1950, for permission to discharge the respondent from its service. The application was originally heard ex parte, the respondent not appearing, and the Tribunal, by order dated October 14, 1955, allowed the application. Subsequently the respondent made an appli cation for a review of the order under Or. 47, R. I, for setting it aside under Or. 9, R. 13 and for restoration of the application under Or. 41, R. 21, Of the Code of Civil Procedure. The Tribunal found that there was sufficient cause for the respondent not appearing when the application was called on for hearing, and set aside the ex parte order and restored the appellant 's application. On a further hearing of the application, the parties adduced evidence and the Tribunal, after hearing them, rejected the application on the, ground that a prima facie case had not been made out for permission to discharge the respondent. On appeal to the Supreme Court it was contended for the appellant (1) that the Labour Appellate Tribunal had no jurisdiction to review its own order and (2) that it exceeded its jurisdic tion under section 22 Of the Act, in discussing the evidence led before it in meticulous detail and coming to the conclu sion that the appellant failed to make out a prima facie case to discharge the respondent from its service. Held: (1) that under section 9, sub sections (1) and (10) of the Act the Labour Appellate Tribunal had jurisdiction to set aside the 515 ex parte order dated October 14, 1955, and restore the application to its file. (2) that under section 22 of the Act, the jurisdiction of the Labour Appellate Tribunal in considering whether a prima facie case has been made out by the employer, is to see whether the employer is acting mala fide or is resorting to any unfair labour practice or victimisation, and whether on the evidence led it is possible to arrive at the conclusion in question. Though the Tribunal may itself have arrived at a different conclusion it has not to substitute its own judgment for the judgment in question. Atherton West & Co. Ltd. vs Suti Mill Mazdoor Union and Others, , The Automobile Products of India Ltd. vs Rukmaji Bala & others; , and Laksh mi Devi Sugar Mills Limited vs Pt. Ram Sarup, (1956) S.C.R. 916, relied on. In the instant case, though the appellant was justified in making the application for permission to discharge the respondent on account of his work and conduct being demon strably unsatisfactory, and the standard of proof which the Tribunal ];ad applied for finding whether there was a Prima facie case was not strictly justifiable, in view of the fact that no formal inquiry into the charges against the respond ent was held and the evidence on behalf of the appellant did not show that the respondent was given an opportunity to controvert the allegations made against him, the decision of the Tribunal was upheld.

In the State of Madhya Pradesh vs V. P. Sharma, ; this Court held that once a declaration under section 6 of the Land Acquisition Act 1894 was made the notification under section 4(1) of the Act was exhausted and there could be no successive notifications under section 6 with respect to land in a locality specified in one notification under section 4(1). Relying on the above judgment the present writ petitions were filed in order to challenge successive notifications under section 6 following a single notification under section 4(1) in respect of land belonging to them. Meanwhile in order to meet the situation created by the judgment in V. P. Sharma 's case the President of India promulgated the Land Acquisition (Amendment and Validation) Ordinance (1 of 1967). The Ordinance was later followed by the Land Acquisition (Amendment and Validation) Act 1967. Section 2 of this Act purported to amend section 5 A of the principal Act by allowing the making of more than one report in respect of land which had been notified under section 4(1). Section 3 purported to amend section 6 of the principal Act by empowering different declarations to be made from time to time in respect of different parcels of land covered by the same notification under section 4(1) irrespective of whether one report or different reports had been made under section 5 A sub section Section 4 of the Act purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the ordinance namely January 10, 1967, notwithstanding that more than one declaration under section 6 had been made in pursuance of the same notification under section 4(1), and notwithstanding any judgment, decree or order of any court to the contrary. The Amending Act also laid down time limits for declarations under section 6 of the principal Act after the notification under s 4(1), had been issued in respect of notifications made after January 20. 1967 the time limit was three years; in respect of notification made before that date the time limit was to be two years after that date. Provision was also made for payment of interest on compensation due to persons in respect of whose land declarations under section 6 had been delayed beyond a specified period; no interest was however, to be paid to those to whom compensation had already been paid. The petitioners by leave of Court amended their petitions to attack the validity of the. aforesaid Validating Act on the following main grounds : (1) By seeking to validate past transactions of a kind which had been declared invalid by this Court without retrospectively changing the substantive law under which the past transactions had been effected the legislature was encroaching over the domain of the judicial power vested by the Constitution in the judiciary exclusively; (ii) The Validating Act did not L4Sup. C.I.1684 42 revive the notification under section 4 which had become exhausted after the first declaration under section 6 and no acquisition following thereafter could be made without a fresh notification under section 4; (iii) The Validating Act violated article 31(2) of the Constitution inasmuch as it purported to authorise acquisitions without fresh notifications under section 4 thereby allowing compensation to be paid on the basis of the said . notification under section 4 without allowing for increase in the value of land thereafter; (iv) The Validating Act violated article 14 of the Constitution in various ways. HELD: Per Wanchoo C.J., Bachawat & Mitter, JJ. (i) The American doctrine of well defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions ' is bad if the invalidity has already been pronounced upon by a court of law. A.K. Gopalan vs State, ; , referred to. (ii) The absence of a provision in the amending Act to give retrospective operation to section 3 of the Act does not affect the validity of section 4. It was open to Parliament to adopt either course e.g. (a) to provide expressly for the retrospective operation of section 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or even to have become invalid because, inter alia, of the making of more than one declaration under section 6 of the Land Acquisition Act, notwithstanding any judgment decree or order to the contrary. Parliament was competent to validate such actions and transactions, its power in that behalf being only circumscribed by appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set forth in Part III of the Constitution. Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in the past. [67 C F] Case law referred to. (iii) The impugned Act does not violate article 31(2). The Act does not in express terms enact any law which directly affects compensation payable in respect of property acquired nor does it lay down any principles different from those which were already in the Land Acquisition Act of 1894. After the amendment of the Constitution in 1955 the question of compensation is not justiciable and it is enough if the law provides that a person expropriated must be given compensation for his property or lays down the principles therefor. [67 G H] The Legislature might well have provided in the Act of 1894 that it would be open to the appropriate Government after issuing a notification under section 4 to consider objections raised under section 5 with regard to the different localities from time to time enabling different reports to fie made under section 5 A with consequent adjustments in section 6 providing for declarations to be made as and when each report under section 5A was considered. By the validation of action taken under section 6 more than once in respect of a single notification under section 4, the original scheme of acquisition is not altered. The public purpose behind the notification remains the same. It is not as if a different public purpose and acquisition of land for such purpose were being interploated by means of the Validating Act. Only the shortcoming in the Act as to want to provision to enable more than one decla ration under section 6 are being removed. [68 D F] 43 The date of valuation under the Validation Act is that of the issue of notification under section 4(1), a principle which has held the field since 1923 Legislative competence to acquire land under the provisions of the Land Acquisition Act cannot be challenged because of constant appreciation of land values all over the country due to the prevalent abnormal inflation. There must be some time lag between the commencement and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said commencement as the date of valuation. Sections 4 and 23 of the Land Acquisition Act are protected by article 31(5) (a) of the Constitution. Only sections 5 A and 6 of the Act have been amended. The amendment does not alter the principle of compensation fixed by the Act nor contravene article 31 of the Constitution in any way. [69 G 70 B] It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acquisition proceedings. The population in Indian cities especially in the capital is ever increasing. The State has to plan the development of cities and it is not possible to take up all schemes in all directions at the same time. The resources of the State may not be sufficient to acquire all the area required by a scheme at the same time. Of necessity the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at a time could only be taken up in consonance with the resources available. Even contiguous blocks could be developed gradually and systematically. In view of such factors it cannot be said that the principle of fixing compensation on the basis of the price prevailing on the date of the notification under section 4(1) of the Land Acquisition Act was not a relevant principle which satisfied the requirements of article 31(2).[70 C 71 H] The State of West Bengal vs Mrs. Bela Banerjee, ; , State of Madras vs D. Namasivaya Mudaliar, ; and, P.V. Mudaliar vs Deputy Collector, ; , considered. (iv) The validating Act was not violative of article 14. Whenever an Amending Act is passed there is bound to be some difference in treatment between transactions which have already taken place and those which are to take place in the future. That by itself will not attract the operation of article 14. Again, even with respect to transactions which may be completed in the future, a reasonable classification will not be struck down. [72 C] Jalan Trading Co. vs Mazdoor Union, ; , relied on. It is not possible to say that because the Legislature thought of improving upon the Act of 1894 by prescribing certain limits of time as from 20th January 1967 the difference in treatment in cases covered by the notification before the said date and after the said date denies equal protection of laws because the transactions are not similarly circumstanced. Some of the notifications issued under section 4 must have been made even more than 3 years before 20th January, 1967 and such cases obviously could not be treated in the same manner 'as notifications issued after that date. article 14 does not strike at differentiation caused by the enactment of a law between transactions governed thereby and those which are not so governed. [73 H 74 B] Hatisingh Manufacturing Co., Ltd. vs Union of India, ; No grievance can be made because interest is denied to persons who have already taken the compensation. Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act. [74 E F] 44 Per Shelat and Vaidialingam, JJ. (dissenting) By validating the acquisition orders and declarations made on the basis of an exhausted notification under section 4 the impugned Act saves government from having to issue a fresh notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner of the benefit of the appreciated value in the meantime. The real object of section 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validating all that is done under an exhausted section 4 notification and thus in reality fixing an anterior date i.e. the date of such a dead section 4 notification for fixing the compensation. The impugned Act thus suffers from a two fold vice : (i) that it purports to validate acquisitions orders and notifications without resuscicating the notification under section 4 by any legislative provision on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (ii) that its provisions are in derogation of article 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under section 4 which had become exhausted and for keeping them alive no legislative provision is to be found in the impugned Act. It is therefore not possible to agree with the view that the purpose of section 4 is to fill the lacuna pointed out in Sharma 's case nor with the view that it raises a question of adequacy of compensation. The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under s 4 which by part acquisitions thereunder had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notifications. The fact that neither section 4 nor section 23 of the principal Act are altered does not make any difference. [89 D H, 85 H] Section 4 of the Amending Act must therefore be struck down as invalid. [90 A]

% The appellants in C.A. Nos. 59 and 60 of 1982, who were appointed as Civil Judges on temporary and officiating basis on probation, were not confirmed after the expiry of the period of probation or the extended period of probation, and their services were terminated by the State Government under Rule 12 of the Madhya Pradesh Government Services (Temporary and Quasi Permanent Service) Rules, 1960. They filed writ petitions before the High Court, challenging the orders of termination of service as illegal and invalid, contending that in view of Rule 3 A, providing that a Government servant in respect of whom a declaration under cl. (ii) of Rule 3 had not been issued, but had been in temporary service continuously for five years in a service or post in respect of which such declaration could be made, shall be deemed to be in quasi permanent service unless for reasons to be recorded in writing they should be deemed to be in Quasi Permanent Service, since no declaration under cl. (ii) of Rule 3 had been issued and they had been in service continuously for five years. On behalf of the respondents it was contended that the question of confirmation came within the purview of Article 235 of the Constitution vesting in the High Court control over subordinate courts and, consequently, the provision of Rule 3 A had no application to the members of the Subordinate Judicial Service. Division Bench of the High Court took the view that if in Rule 3 A in place of the words "appointing authority" the words "competent authority" be read it would be consistent with Article 235 of the 493 Constitution, and dismissed the writ petitions holding that the resolution passed in the Court meeting, adjudicating the appellants unfit for confirmation, satisfied the requirement of Rule 3 A as continuance in Quasi Permanent capacity was included within the ambit of confirmation. The services of the respondent in .A. No. 2860 of 1985 were also terminated under Rule 12 of the Rules. In the writ petition filed by him, the Full Bench of the High Court, while approving the aforesaid view expressed by the Division Bench, held that the findings of the High Court in its resolution, considering the respondent unfit for confirmation, could not be regarded as reasons within the meaning of Rule 3 A, and quashed the impugned termination order. Disposing of the appeals, ^ HELD: Whether a member of Subordinate Judicial Service should be confirmed or not is absolutely the concern of the High Court. The question of confirmation falls squarely within Article 235 of the Constitution and no rule framed by the State Government can interfere with the control vested in the High Court under Rule 235. [498A B ] B.S. Yadav vs State of Haryana, ; and High Court of Punjab & Haryana vs State of Haryana, ; relied on. Both the Full Bench and the Division Bench were wrong in placing reliance upon Rule 3 A of the M.P. Government Service (Temporary and Quasi Permanent) Rules, 1960. As the High Court did not confirm the omcials, the question of their being deemed to be in Quasi Permanent Service does not arise. Further, as the question of confirmation was completely within the domain of the control of the High Court under Article 235 of the Constitution, there is no necessity to read the words "competent authority" in place of "appointing authority", for Rule 3 A was inapplicable to the members of the Subordinate Judicial Service. Moreover, there is a specific provision in the termination of service of a Judicial officer who is found by the High Court to be unfit for confirmation as provided in Rule 16(5) of the Madhya Pradesh Judicial Service (Classification, Requirement

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.

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.

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.

eview Petition No. 16 of 1960. 519 Petition for Review of this court 's Judgment and order dated April 26, 1960, in Civil Appeal No. 64 of 1956. A. V. Viswanatha Sastri, R. Ganapathy Iyer and Gopalkrishnan, for the petitioners. K. N. Rajagopala Sastri, and P. D. Menon, for respondent. November 23. Das, J., delivered his own Judgment. The Judgment of Kapur and Hidayatullah, JJ. was delivered by Hidayatullah, J. section K. DAS, J. I had taken a view different from that of my learned brethren when this appeal was heard along with Pringle Industries Ltd., Secunderabad vs The Commissioner of Income tax, Hyderabad (1), and that view was expressed in a very short judgment dated April 26, 1960. Now, we have had the advantage of hearing a very full argument with regard to the facts of the appeal, and I for myself have had the further advantage and privilege of reading the judgment which my learned brother Hidayatullah, J., is proposing to deliver in this appeal. I have very carefully considered the question again with reference to the facts relating thereto and, much to my regret, have come to the conclusion that I must adhere to the opinion which I expressed earlier. My view is that the facts of this case are indistinguishable from the facts on which the decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax, C.P. and Berar(2) was rendered, and on the principles laid down by this court in Assam Bengal cement Co., Ltd. vs The Commissioner of Income tax, West Bengal (3), it must be held that the expenditure of Rs. 6111/ in this case was on revenue account and the respondent firm was entitled to the allowance which it claimed. 520 The short facts are these. The respondent firm carried on a business in the purchase and sale of conch shells (called chanks). It used to acquire the stock of conch shells (1)by purchase from the Fisheries purchase from the Fisheries Department of the Government of Madras and (3) by fishing for and gathering such shells from the sea. It disposed of the stock so acquired at Calcutta, the different between the cost price and selling price less expenses being its profit made in business. On November 9 1945 it took on lease from the Director of Industries and Commerce, Madras, the exclusive right. liberty and authority to fish for, take and carry away "chank" shells in the sea off the coast line of the South Arcot District including the French Kuppama of Pondicherry. The boundary of the area within which the right could be exercised was given in a schedule to the lease. The lease was for a period of three years from July 1, 1944 to June 30 1947 on a consideration of an yearly rent of section 6111/ to be paid in advance. Clause 3 of the lease contained the material terms there of and may be set out in full. The lesser hereby convenants with the lesson as follows: (i) To pay the rent on the day and in manner aforesaid. (ii) To deliver to the Assistant Director of Pearl and Chank Fisheries, Tuticorn all Velampuri shells that may be obtained by the lessee upon payment of their value as determined by the Assistant Director. (iii) To collect chanks caught in nets and by means of diving as well. In the process of such collection of shells not to fish chank shells less than 2/1/4 inches in diameter and if any chank shells less than 2/1/4 inches in 521 diameter be brought inadvertently to shore, to return at once alive to the sea all such undersized shells. (iv) Not at any time hereafter to transfer or underlet or part with possession of this grant or the rights and privileges hereby granted or any part thereof without the written consent of the lessor. (v) At the end or sooner determination of the term hereby created peaceably and quietly to yield to the lesson the rights and privileges hereby granted, and (vi) To report to the Assistant Director of Pearl and Chank Fisheries (South), Tuticorn the actual number of shells kept unsold in different stations after the expiry of the lease period. For the assessment year 1946 47, the respondent firm submitted a return of its income to the Income tax Officer, Karaikudi Circle, showing its income from sale of chanks purchased from divers at Rs. 7194/ by sale of chanks purchased from Government Department at Rs. 23, 588/ and Rs. 2819/ by sale of chanks gathered by themselves (through divers) after deducting Rs. 6111/ being the rent paid to Government under the contract referred to above. It sought to deduct Rs. 6111/ from its profits from business on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business under section 10(2)(xv) of the Income tax Act. This claim was disallowed by the Income tax Officer and on appeal by the Appellate Assistant Commissioner. On further appeal to the Appellate Tribunal the respondent firm contended that the 522 decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax(1)applied to this case inasmuch as the payment was to secure the stockin trade for its business. The Appellate Tribunal was of the opinion that the Privy Council decision covered the case, but felt itself bound by the decision of the Full Bench of the Madras High Court in K. T. M. T. M. Abdul Kayum Hussain Sahib vs Commissioner of Income tax, Madras (2). The Tribunal acceded to the demand for a reference to the High Court, and accordingly referred the following question to the High Court for its decision. "Whether on the facts and circumstances of the case the payment of the sum of Rs. 6111/ made by the assessee under the terms of the agreement entered into with the Director of Industries and Commerce, Madras on 9th November, 1945 was not an item of revenue expenditure incurred in the course of carrying on the business of the assessee and, therefore, allowable under the provisions of section 10 of the Indian Income tax Act?" The reference first came before a Division Bench and was then referred to a Full Bench. By its judgment dated April 2, 1953 the Full Bench answered the question in favour of the respondent firm. On a certificate of fitness granted by the High Court the Commissioner of Income tax, Madras, brought the present appeal to this Court. In Assam Bengal Cement Co., Ltd. vs The Commissioner of Income tax (3), this Court referred to the decision in Benarsidas Jagannath. In re.(4) and accepted the following broad principles for the purpose of discriminating between a capital and a revenue expenditure. 523 (1) The outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment [See Commissioners of Inland Revenue vs Granite City Steamship Company Ltd.(1)]. Such expenditure is regarded as on capital account, for it is incurred not in earning profits but in setting the profit earning machinery in motion. In my opinion this test does not apply in the present case where no profit earning machinery was set in motion. (2) Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade. [See Atherton vs British Insulated and Helsby Cables Ltd. (2)]. In elucidation of this principle it has been laid down in several decisions that by "enduring" is meant "enduring in the way that fixed capital endures" and it does not connote a benefit that endures in the sense that for a good number of years it relieves the assessee of a revenue payment. In Robert Addie & Sons Collieries Ltd. vs Commissioners of Inland Revenue (3) Lord Clyde formulated the same test in these words: "What is 'money wholly and exclusively laid out for the purposes of the trade ' in a question which must be determined upon the principles of ordinary commercial trading. It is necessary accordingly to attend to the true nature of the expenditure, and to ask one 's self the question, is it a part of the Company 's working expenses? is it expenditure laid out as part of the process of profit earning? or, on the other hand, is it a capital outlay? is it expenditure necessary for the acquisition of property or of rights of a permanent character, 524 the possession of which is a condition of carryin on its trade at all?" This test was adverted to by the Privy Council in Tata Hydro Electric Agencies Ltd. vs Commissioner of Income tax(1).In my opinion the application of this test makes it at once clear that the sum of Rs. 6111/ which the respondent firm spent was expenditure laid out as part of the process of profit earning; it was not a capital outlay, that is, expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which was a condition of carrying on its trade. Under the contract in question the respondent firm did not acquire any right to immovable property. It acquired no right in the bed of the sea or in the sea. The only right conferred on the respondent firm was the right to fish for, gather and carry away conch shells (in motion under the surface of the sea) of a specified type and size. The respondent firm was under an obligation to return to the sea conch shells less than 2 1/2 inches in diameter. The business of the respondent firm consisted in buying and selling conch shells. No manufacturing process was involved in it. Therefore, the stock in trade of the respondent firm was conch shells. It secured this stock in trade in many different ways, by purchase from divers, by purchase from Government and private parties, and also by gathering conch shells under the contract in question. In my opinion, the contract into which the respondent firm entered was merely for securing its stock in trade. It is indeed true that in considering whether an item of expenditure is of a capital or a revenue nature, one must consider the nature of the concern, the ordinary course of business usually adopted in that concern, and the object with which the expense is incurred. The true nature of the transaction must be collected from the entire 525 document with reference to all the relevant facts and circumstances. Having regard to the nature of the respondent firm 's business and the course adopted by it for carrying it on, it appears to me to be rather far fetched to hold that by the contract in question the respondent firm acquired property or right of a permanent character, the possession of which was a condition of carrying on its trade. To me it seems that the better view, in a business sense, is that the respondent firm merely acquired by means of the contract its stock in trade, rather than a source or enduring asset for producing the stock in trade. It was argued before us, as it was argued in the High Court, that what was acquired in the present case was the means of obtaining the stock in trade for the business rather than the stock in trade itself. I am unable to accept this argument as correct. The contract entered into by the respondent firm was wholly and exclusively for the purpose of obtaining conch shells, which were its stock in trade. As I have stated earlier, the contract granted no interest in the sea, sea bed, or sea water etc. It was simply a contract giving the grantee the right to pick and carry away conch shells of a specified type and size which of course implied the right to appropriate them as its own property. In my opinion, in a case of this nature no distinction can be drawn in a business sense between the right of picking and carrying away conch shells and the actual buying of them. It is not unusual for businessmen to secure, by means of a contract, a supply of raw materials or of goods which form their stock in trade, extending over several years for the payment of a lump sum down. Even if the conch shells were stored in a godown and the respondent firm was given a right to go and fetch them and so reduce them into its ownership, it could scarcely have been 526 suggested that the price paid was capital expenditure. I may explain what I have in mind by giving a simple illustration. Take the case of a fisher may who sells fish. Fish is his stock in trade. He man buy the fish he requires from other persons; or he may obtain the supply of fish he requires by catching the fish of a specified size and type in particular water over a short period under a contract entered into by him and take them away. I do not think that in a business sense any distinction can be made between the two means of obtaining the stock in trade. Both really amount to securing the stock in trade rather than acquiring an enduring asset or a permanent right for producing the stock in trade. And a business man, like the fisher man in the illustration given above, would indeed be surprised to learn that buying of fish for his business is revenue expenditure whereas catching fish in particular water under a contract entered into by him for the purpose of obtaining his stock in trade on payment of a lump sum down, is capital expenditure. (3) The test whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business does not arise in the present case and need not be considered. No different principles were laid down by my learned brethren in their decision in Pringle Industries Ltd. vs Commissioner of Income tax(1) and so far as that case is concerned, their decision must hold the field. The difficulty and difference of opinion that arise now relate to the application of those principles to the facts of the present case. One is reminded in this case of what Lord Macmillan said in Tata Hydro Electric Agencies Ltd. vs Commissioner of Income tax(2) at page 209: 527 "Their Lordships recognise and the decided cases show how difficult it is to discriminate between expenditure which is and expenditure which is not, incurred solely for the purpose of earning profits or gains. " Lord Greene (Master of the Rolls) expressed himself more strongly and adverting to the distinction between capital and income, said: "There have been many cases where this matter of capital or income has been debated. There have been many cases which fall upon the borderline: indeed, in many cases it is almost true to say that the spin of a coin would decide the matter almost as satisfactorily as an attempt to find reasons." [Vide Commissioners of Inland Revenue vs British Salmson Aero Engines Ltd.(1)]. Perhaps, the case before us is not as bad as the cases which the Master of the Rolls had in mind when he made the above observations. It is, however, a truism that each case must turn upon its own facts. Nevertheless the decisions are useful as illustrations of some relevant general principles. The nearest illustration that we can get is the decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax(2). That decision was binding on the Indian Courts at the time when it was given and as I think that it is still good law and is indistinguishable from the present case, I offer no apology for referring to it in great detail. The facts of that case were these. The assessees there carried on a business at several places as manufacturers and vendors of country made cigarettes known as bidis. These cigarettes were composed of tobacoo rolled in leaves of a tree known as tendu leaves, which were obtained by the assessees by entering into a number of 528 short term contracts with the Government and other owners of forests. Under the contracts, in consideration of a certain sum payable by instalments, the assessees were granted the exclusive right to pick and carry away the tendu leaves from the forest area described. The assesees were allowed to coppice small tendu plants a few months in advance to obtain good leaves and to pollard tendu trees a few months in advance to obtain better and bigger leaves. The picking of the leaves however had to start at once or practically at once and to proceed continuously. On these essential facts, the Privy Council held that the contracts were entered into by the assessees wholly and exclusively for the purpose of supplying themselves with one of the raw materials of their business, that they granted no interest in land, or in the trees or plants, that under them it was the tendu leaves and nothing but the tendu leaves that were acquired, that the right to pick the leaves or to go on to the land for the purpose was merely ancillary to the real purpose of the contracts and if not expressed would be implied by law in the sale of a growing crop, and that therefore the expenditure incurred in acquiring the raw material was in a business sense an expenditure on revenue account and not on capital, just as much as if the tendu leaves had been bought in a shop. I can find no distinction which would make any difference between the facts of that case and the facts of the present case. Let me compare the essential facts of these two cases and see whether there is any difference. (1) Two of the contracts were taken as typical of the rest by the Privy Council. One contract was for the period from September 5, 1939 to June 30, 1941 and the other was for the period from October 1, 1938 to June 30, 1941. Thus one of the contracts was for a period of about two years and the other contract for a period of about three years. 529 In the case under our consideration the period of the contract is three years. Indeed, there is no vital difference between the periods in the two cases. (2) In the case before us the contract area is described in a schedule. In the two contracts which were under consideration by the Privy Council the contract area was also indicated in a schedule. The boundaries of the forests in which tendu leaves could be plucked were delimited by the schedule. Same is the case with the contract before us. The contract area in which conch shells of a specified type and size can be picked and gathered is described in a schedule. Such description does not mean that the assessee gets any right other than the right to gather conch shells. In the Privy Council case the assessees were granted no interest in land or in the trees or plants; it was the tendu leaves and nothing but the tendu leaves that were acquired. In the case before us no interest was given in the sea bed or in the sea water or in any of the products thereof. Conch shells of a specified type and size and nothing but such conch shells were acquired by the contract. I do not think that the reference to the coast line off the South Arcot District makes any difference between the present case and the case on which the decision in Mohanlal Hargovind vs Commissioner of Income tax (1) was rendered. If in the matter of plucking of tendu leaves the expenditure under the contract was, in a business sense, expenditure on revenue account, I fail to see why a similar expenditure for gathering conch shells in motion under the surface of the sea near the coast line should not, in a business sense, be considered as expenditure on revenue account. This aspect of the case was emphasised by their Lordships in the following paragraph: 530 "It appears to their Lordships that there has been some misapprehension as to the true nature of these agreements and they wish to state at once what in their opinion is and what is not the effect of them. They are merely examples of many similar contracts entered into by the appellants wholly and exclusively for the purpose of their business, that purpose being to supply themselves with one of the raw materials of that business. The contracts grant no interest in land and no interest in the trees or plants themselves. They are simply and solely contracts giving to the grantees the right to pick and carry away leaves, which of course, implies the right to a appropriate them as their own property. " In the case under our consideration the only right granted to the respondent firm was to take and carry away conch shells of a specified type and size, which of course, implies the right to appropriate them as the respondent firm 's own property. The right to go into the sea and cast nets etc. was merely ancillary to the real purpose of the contract. Nor do I think that the circumstance that the contracts conferred an exclusive privilege or right is a matter of any significance. In Mohanlal Hargovind vs Commissioner of Income tax (1) the contracts were exclusive and their Lordships stated: "It is true that the rights under the contracts are exclusive but in such a case as this that is a matter which appears to their Lordships to be of no significance. These observations are as apt in their application to the present case as they were in the case before their Lordships of the Privy Council. (3) The Privy Council draw a distinction between cases relating to the purchase or leasing of 531 mines, quarries, deposits of brick earth, land with standing timber etc. On one side and the case under its consideration on the other. It referred to the decision in Alianza Co. vs Bell(1) and said: ". the present case resembles much more closely the case described and distinguished by Channell, J. at page 673 of the report in Alianza Co. vs Bell of the cost of material worked up in a manufactory. That side the learned Judge, is a current expenditure and does not become `a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum down secures a supply of the raw material for a period extending over several years '. " In Kauri Timber Co. Ltd. vs Commissioner of Taxes(2) the company 's business consisted in cutting and disposing of timber. It acquired in some cases timber bearing lands, in other cases it purchased the standing timber. The leases were for 99 years. So far as the cases where the land was acquired were concerned there could have been no doubt that the expenditure made in acquiring it was capital expenditure. In the case of the purchase of the standing timber what was acquired was an interest in land. The purchasers bought the trees which they could allow to remain standing as long as they liked. It was pointed out that so long as the timber at the option of the company remained upon the soil, it derived its sustenance and nutriment from it. The additional growths became ipso jure the property of the company. In these circumstances it was held that the expenditure was capital expenditure. In the case before us some reliance was placed by the appellant on the term that shells less than 2 1/4 inches in diameter brought inadvertently to shore had to be returned at once alive to the sea. 532 The argument was that such shells might later grow in size by receiving sustenance and nutriment from sea water and could be later gathered by the respondent firm when they reached the size of 2 1/4 inches in diameter or more. This, it was argued, brought the present case nearer the decision in Kauri Timber case (1). I am unable to agree. It is to be remembered that live shells move under the surface of the sea and they do not remain at the same place, as trees do. A shell less than 2 1/4 inches in diameter returned alive to the sea may move away from the contract area and may never be gathered by the respondent firm. In these circumstances the appellant is not entitled to call to his aid the test of "further vegetation" or "sustenance and nutriment" referred to in the Kauri Timber case (1). From whatever point of view we may look at the case, it seems to me that the facts of the present case are indistinguishable from those of the case in Mohanlal Hargovind vs Commissioner of Income tax(2) In Mohanlal Hargovind 's case (2) the right was to pluck tendu leaves; in our case the right was to gather conch shells of specified type and size. This distinction, it is obvious, makes no difference. In the High Court it was contended on behalf of the appellant that Mohanlal Hargovind 's case (2) related to the acquisition of raw materials whereas the present case relates to the acquisition of "chanks" by a dealer who sells them without subjecting them to any manufacturing process, and this distinction, it was contended, made the decision in Mohanlal Hargovind 's case (2) inapplicable to the present case. The High Court rejected this contention and in my opinion rightly. I agree with the High Court that on principle and in a business sense, there is no distinction between acquiring raw materials for a manufacturing business and acquiring or purchasing goods by a dealer for the purpose of sale, particularly when there is no question of any excavation 533 etc., in order to win the goods and make such goods parts of the stock in trade, a point which weighed with the Court of Appeal in Stow Bardolph Cravel Co. Ltd. vs Poole (1) and with my learned brethren in Pingle Industries Ltd. V. Commissioner of Income tax (2). No such point is present in this case. I have been unable to find any other distinction between the two cases which would make a difference in the application of the principles for discriminating between capital expenditure and revenue expenditure. To adopt again the language of Lord Green, I see no ground in principle or reason for differentiating the present case from the case in Mohanlal Hargovind vs Commissioner of Income tax (3). On behalf of the respondent firm a further question was agitated, namely, whether an allowance for the cost of gathering the conch shells by nets etc., should not be given, even though the rent paid under the contract was not allowable, under section 10 (2) (xv) of the Income tax Act and a reference was made in this connection to the decision in Hood Barrs vs Commissioners of Inland Revenue (4). I do not think that we are concerned with that matter in the present appeal. The only question which arises for decision is the one referred to the High Court. I have held that the High Court correctly answered the question which related to the payment of the sum of Rs. 6111/ only. The question having been correctly answered by the High Court, the appeal fails and must be dismissed with cost. HIDAYATULLAH, J. This appeal was heard with Pingle Industries, Ltd., Secunderabad vs The Commissioner of Income tax (5), in which judgment was delivered by us on April 26 1960. In accordance with the decision in Pingle Industries case (1), 534 this appeal was allowed. Later, a review petition of (No. 16 of 1960) was filed on the ground that this appeal was not governed by the decision in Pingle Industries case (1), and that as it was not fully argued, it should be reheard. It is unnecessary to go into the reasons why the rehearing was granted, except to say that there was perhaps a misunderstanding about the concessions made by counsel. We were, therefore, satisfied that we should grant the rehearing, and have since heard full arguments in this appeal. K. T. M. T. M. Abdul Kayoom and Hussain Sahib (respondent) is a registered firm, and carries on business in conch shells locally known as "chanks", which are found on the bed of the sea all along the coast line abutting on the South Arcot District. The respondent took on lease from the Director of Industries and Commerce, Madras "the exclusive right, liberty and authority to take and carry away all chanks founnd in the sea" for a period of three years ending on June 30, 1947. The consideration was Rs. 6, 111/ per year payable in advance. For the year of assessment, 1946 47 (the year of account ending June 30, 1945) the respondent in showing its profits from business sought to deduct Rs. 6,111/ on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business under section 10 (2) (XV) of the Income tax Act. This claim was disallowed by the Income tax Officer, and on appeal, by the Appellate Assistant Commissioner. On further appeal to the Appellate Tribunal, the respondent contended that the ruling of the Privy Council in Mohanlal Hargovind 's case (2) applied to the case, inasmuch as the payment was to secure the stock in trade for its business. The Appellate Tribunal, though it was of opinion that the Privy Council case applied, felt itself bound by the earlier Full Bench decision of the Madras High 535 Court in K.T.M.T.M. Abdul Kayoom Hussain Sahib vs Commissioner of Income tax, Madras (1) relating to this respondent, and dismissed the appeal. The Tribunal, however, acceded to a demand for a case, and referred the following question to the High Court for its decision : "Whether on the facts and circumstances of the case the payment of the sum of Rs. 6,111 made by the assessee under the terms of the agreement entered into with the Director of Industries and Commerce, Madras, on 9th November 1945 was not an item of revenue expenditure incurred in the course of carrying on the business of the assessee and, "therefore, allowable under the provisions of section 10 of the Indian Income tax Act". The reference went before a Divisional Bench, which referred the case for decision of a Full Bench. The Full Bench held that the case was covered by the Privy Council case above referred to, observing: "In our opinion, the facts in the case before the Judicial Committee are indistinguishable from the facts of the present case. In one case, the leaves had to be picked from trees by going upon the land, while in the other case the chanks had to be collected and gathered by dividing into the sea. It is impossible to construe the documents in the present case as conferring any interest in that portion of the sea from which the exclusive right of winning the chanks was conferred upon the assessee. " The High Court also did not see any difference between raw materials acquired for a manufacturing business and the acquisition of chanks in the present case, and held that the chanks were acquired as the stock in trade of the respondent and the transaction was tantamount to purchase of goods, 536 The High Court, however, certified the case as fit for appeal, and the Commissioner of Income tax has filed this appeal. The material terms of the agreement in the case are as follows : "1. The lessor hereby grants unto the lessees the full free and exclusive right, liberty and authority to fish or take and carry away all chank shells in the sea off the coast line of the South Arcot District including the French Kuppams of Pondicherry more particularly described in the schedule hereto to hold the premises to the lessees from the first day of July 1944 for a period of three years ending 30th June 1947 paying therefor the yearly rent of Rs. 6, 111 (rupees six thousand one hundred and eleven only) to be paid yearly in advance, the first payment to be made within fifteen days from the date of intimation of acceptance and the second and third payments to be made on or before the 15th June 1945 and 1946, respectively at the Government Treasury at Tuticorin or Madras. x x x 3. The lossee hereby covenants with the lessor as follows : x x x (ii) To deliver to the Assistant Director of Pearl and Chank Fisheries, Tuticorin all Velampuri shells that may be obtained by the lessees upon payment of their value as determined by the Assistant Director. (iii) To collect Chanks in nets and by means of diving as well. In the process of such collection of shell not to fish chank shells less than 2 1/4 inches in diameter if any chank shells less than 2 1/4 inches in diameter 537 be brought inadvertently to shore, to return at once alive to the sea all such undersized shells. (iv) Not at any time hereafter to transfer or underlet or part with possession of this grant or the rights and privileges hereby granted or any part thereof without the written consent of the lessor. x x x (vi) To report to the Assistant Director of Pearl and Chank Fisheries (South), Tuticorin the actual number of shells kept unsold in different stations after the expiry of the lease period. " An analysis of the agreement shows that the respondent obtained an exclusive right to fish for "chanks" by the method of diving and nets and to appropriate them except those below 2 inches in diameter, which had to be returned alive to the sea and Velampuri shells which had to be sold compulsorily to Government. The respondent had also to report to its lessors at the end of the term, the number of shells not sold. The right was exclusive, but was not capable of being transferred or underlet, and it was for a fairly long period. The coast line involved was also fairly long. There is no doubt that the payment of Rs. 6,111/ was an expenditure wholly and exclusively for the purpose of the business of selling shells, just as the payment to the divers and other sundry expenses were. But an expenditure for the purpose of the business may be of a capital nature, and if it is so, it cannot be claimed as a deduction. The question is whether this payment was of a capital nature. What is attributable to capital and what, to revenue has led to a long string of cases here and 538 in the English Courts. The decisions of this Court reported in Assam Bengal Cement Co., Ltd. vs Commissioner of Income tax and Pingle Industries case (1) have considered all the leading cases, and have also indicated the tests, which are usually applied in such cases. It is not necessary for us to cover the same ground again. Further, none of the tests is either exhaustive or universal. Each case depends on its own facts, and a close similarity between one case and another is not enough, because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo * by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, its broad resemblance to another case is not at all decisive. What is decisive is the nature of the business, the nature of the expenditure, the nature of the light acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases. A trader may spend money to acquire his raw materials, or his stock in trade, and the payment may often be on revenue account but not necessarily. A person selling goods by retail may be said to be acquiring his stock in trade when he buys such goods from a wholesaler. But the same cannot be said of another retailer who buys a monopoly right over a long period from a producer of those goods. The amount, he pays to secure the monopoly, through a part of the expenditure to secure his stock in trade is not of the same character as the price he pays in the first illustration. By that payment, he secures an enduring advantage and an asset which is a capital asset of his business. In the same way, if a manufacturer buys his raw materials he makes a revenue expenditure, but when he acquires a source from which he would derive his 539 raw materials for the enduring benefit of his business, he spends on the capital side. Thus, a manufacturer of wollen goods buys his wool buys his raw materials, but when he buys a sheep farm, he buys a capital asset. There is then no difference between purchase of a factory and the purchase of the sheep farm, because both are capital asset of enduring nature. The respondent in this case has tried to distinguish Pingle Industries case (1) and to bring its case within the ruling of the Privy Council in Mohanlal Hargovind 's case (2). When the former case was argued, the attempt was to bring it also within the rule of the Privy Council, but now, the differences between the two cases are recognised and Pingle Industries case (1) is said to be entirely different. In deciding the present appeal, it is hardly necessary to do more than analyses once again the facts and circumstances of these two cases to show why those two cases were differently decided, and the present case will then be easily disposed of, not on its similarity to another but on its own facts. We shall begin with the Privy Council. Mohanlal Hargovind and Co., was a firm of bidi manufacturers, which needs tendu leaves in which tobacco is wrapped to make bidis. Tendu leaves were thus the raw material of the business. Tendu leaves can be bought from dealers who sell tendu leaves in a large way. Now, what did the firm do ? It took leaves of forests with a right to pick the leaves. This right carried with it the right to coppice small tendu plants and to pollard the tendu trees. There was, however, no right in the trees or the land and the right to go over the land was merely ancillary. Looked at from the point of view of business, there was no more than a purchase of the leaves, and the leaves were needed as raw materials of the business. In deciding the case, the Judicial Committee discounted the right to 540 coppice small tendu plants and to pollard the tendu trees as a very insignificant right of cultivation necessary to improve the quality of the leaves, but which right ranked no higher than the right to spray a fruit tree. The right of entry upon the land was also considered ancillary to the main purpose of the contract, which was acquisition of tendu leaves and tendu leaves alone, and it was observed that even if this right of going on the land and plucking the leaves was not expressed in the contract, it would have been implied by law. Their Lordships then observed that the High Court diverted its view from these points, and attached too much importance to cases decided upon quite different facts. They then observed that "cases relating to the purchase or leasing of mines, quarries, deposits of brick earth, land with standing timber. " were of no assistance, and concluded: "If the tendu leaves had been stored in a merchant 's godown and the appellants had bought the right to go and fetch them and so reduce them into their possession and ownership it could scarcely have been suggested that the purchase price was capital expenditure. Their Lordships see no ground in principle or reason for differentiating the present case from that supposed." (p. 478) That case thus involved no right in land or trees; the licence to be on the land was merely an accessory right; the right of cultivation was insignificant. The term was short, and the collection of leaves was seasonal. Leaves once collected, the operation pro tempore was over till the fresh crop came. There was thus no acquisition of an enduring asset in the way capital endures; it was more a purchase of crops of two or three successive years shewered on an agreement to ensure the supply of raw materials, 541 Contrast this with the facts of Pingle Industries case (1). The business of the assessee there, was selling stone slabe called flag stones. These stones were first won from the quarries and then dressed and shaped and then sold. Now, what did the assessee do ? It took leases of stone quarries in a large number of villages for twelve years. Primarily, this was done to obtain stones for its business. It could have been a contract by which it would have been entitled to so many cubic feet of stones to be extracted in a particular period. It took long term leases of vast areas in several villages to ensure supplies for a considerable time. The leases were not limited by quantity, nor did they refer to any stones in particular. It could take all or it could take none; but it could not have carried away all the stones, if the supply outran its efforts. The stones were embedded in earth, layer upon layer, and had to be systematically extracted. Till the stones at the top were removed, it could not remove those at the bottom, and there were still more layers further below. In there circumstances, no specific quantity having been bought or sold either expressly or impliedly, the stones being immovable property or a part thereof and the contract being long teem contracts, Mohahlal Rargovind 's case (2) was held inapplicable, and it was held that the assessee in Pingle Industries case (1) had acquired an enduring asset and the expenditure was on capital account. These cases between them show adequately the dividing line, which exists between capital expenditure and revenue expenditure. To determine on which side of the line the particular expenditure falls, one may often put himself the question posed by Lord Clyde in Robert Addie and Sons Collieries Ltd. vs Commissioners Inland Revenue (3) 542 "It it part of the Company 's working expenses, is it expenditure laid out as part of the process of profit earning ? or, on the other hand, is it capital outlay, is it expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which is a condition of carrying on its trade at all?" The same question was again posed by the Judicial Committee in Tata Hydro Electric Agencies, Ltd. vs Commissioner of Income tax (1). The answer to this question in each of the two case of Mohanlal Hargovind (2) and Pingle Industries (3) is entirely different. The difference can be noticed easily, if we were to read here what Channell, J. said in Alianza Co. Ltd. vs Bell (4): "In the ordinary case, the cost of the material worked up in a manufactory is not a capital expenditure, it is a current expenditure and does not become a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum secures a supply of the raw material for a period extending over several years. .If it is merely a manufacturing business, then the procuring of the raw material would not be a capital expenditure. But if it is like the working of a particular mine, or bed of brick earth and converting the stuff into a marketable commodity, then, the money paid for the prime cost of the stuff so dealt with is just as much capital the money sunk in machinery or buildings. " The first part of the observation is applicable to Mohanlal Hargovind 's case (2) and the latter part, to Pingle Industries case (3). What is said of a manufacturing concern is equally applicable to a non manufacturing business. It is the quality of the payment taken with what is obtained, that is decisive of the character of the payment. 543 We may now pass on to the facts of the case before us. The respondent carried on the business of selling chanks. It obtained its supplies from divers, from whom it purchased the chanks, and having got them, perhaps cheap, it resold them at a profit. This is one mode in which it carried on its business. In this business, it was directly buying its stock in trade for resale. The other method was to acquire exclusive right to fish for chanks by employing divers and nets. The business then changed to something different. The sale was now of the product of another business, in which divers and equipment were first employed to get the shells. It thus took leases of extensive coastline with all the right to fish for chanks for some years. The shells were not the subject of the bargain at all, as were the tendu leaves; but the bargain was about the right to fisht. There can be no doubt that what it paid the divers when it bought chanks from them with the view of reselling them was expenditure laid out wholly and exclusively for the purpose of its business, which was not of a capital nature. That business was buying goods and reselling them at a profit. But a different kind of business was involved when it went in for fishing for chanks. To be able to fish for chanks in reserved waters it had to obtain the right first. It, therefore took lease of that right. To Mohanlal Hargovind, the leaves were raw materials, and that firm preferred to buy a number of crops over years rather than buy them as it went along. Hence the remark that the leaves were bought, as if they were in a shop. Under the lease which the respondent obtained, it had a right to take only chanks of particular dimensions and shape, but it had to fish for them and obtain them first. The rest of the chanks were not its property. The smaller chanks had to be returned alive to the sea, and Velampuri chanks had to be compulsorily sold to the state. Of Course, the smaller chanks put back into the sea 544 would grow, and if fished later, be its property to take, but till they grow, it had not claim. The chanks were on the bed of the sea. Their exact existence was not known, till the divers found them, or they got netted. Chanks which were there one day might have been washed back into the deep sea, and might never be washed back into a place where they would be within reach. Similarly, other chanks not there one day might come within reach on another day. All these matters make the case entirely different from the case of a purchase from the divers. In obtaining the lease, the respondent obtained a speculative right to fish for chanks which it hoped to obtain and which might be in large quantities or small, according to its luck. The respondent changed the nature of its business to fishing for chanks instead of buying them. To be able to fish, it had to arrange for an area to fish, and that arrangement had to be of some duration to be effective. This is not a case of so much clay or so much salt petre or a dump of tailings or leaves on the trees in a forest. The two modes in which the respondent did the business furnish adequate distinguishing characteristics. Here is an agreement to reserve a source, where the respondent hoped to find shells which, when found, became its stock in trade but which, insitu, were no more the firm 's than a shell in the deepest part of the ocean beyond the reach of its divers and nets. The expenses of fishing shells were its current expenses as also the expenses incurred over the purchase of shells from the divers. But to say that the payment of lease money for reserving an exclusive right to fish for chanks was on a par with payments of the other character is to err. It was possible to say of the former, as it was possible to say of the tendu leaves in Mohanlal Hargovind 's case (1), that the chanks were bought because the money paid was the price of the chanks. But it would be a straining of the imagination to say that the amount paid 545 for reserving the coastline for future fishing was the price of chanks, with which the respondent did its business. That amount was paid to obtain an enduring asset in the shape of an exclusive right to fish, and the payment was not related to the chanks, which it might or might not have brought to the surface in this speculative business. The rights were not trasferable, but if they were and the firm had sold them, the gain, if any, would have been on the capital side and not a realising of the chanks as stock in trade, because none had been bought by the firm, and none would have been sold by it. In our opinion, the decision of the High Court, with all due respect, was, therefore, erroneous, and the earlier decision of the Full Bench of the same High Court was right in the circumstances of the case. In the result, the appeal is allowed; but there will be no order about cost. BY COURT. In accordance with the majority judgment of the Court, the appeal is allowed, but there will be no order about costs.

The assessee firm carried on the business in purchase and sale of conch shells. It obtained a lease for 3 years for gathering specified types of shells from the sea along the coastline abutting on the South Arcot District. It sought to deduct the amount paid as lease money from its profits from business on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business. under section 10(2)(xy) of the Income Tax Act. ^ Held, (per kapur and Hidayatullah, JJ., Das, J. dissenting) that the expenditure was capital expenditure and could not be deducted from the profits. The business of the assessee was buying and selling shells but when it took the lease it went in for a new speculative business of fishing for shells. The amount paid for reserving the vast coastline for future fishing was not price paid for obtaining the stock in trade i.e. shells with which assessee did his business. The amount was paid to obtain an enduring asset in the shape of an exclusive right to fish and the payment was not related to the shells. Mohanlal Hargovind vs Commissioner of Income tax, C. P. & Berar, , distinguished Pringle Industries Ltd., Secunderabad vs Commissioner of Income tax, Hyderabad, [1960] 3 section C. R. 681, applied. Per Das, J. The expenditure was not capital expenditure and was deductible from the profits. It was not an expenditure for the acquisition of property or of rights of a permanent character, the possession of which was necessary for carrying on of the assessee 's trade By this lease the assessee acquired its stocks in trade rather than a source or enduring asset for producing the stock in trade. Mohanlal Hargovind vs Commissioner of Income tax, C. P. & Berar , applied. Pringle Industries Ltd., Secunderabad vs Commissioner of Income tax, Hyderabad, , distinguished.

% The State Government, by a notification dated November 6, 1961, issued under section 4 of the Land Acquisition Act, notified for acquisition lands belonging to the respondent. This was followed by a declaration dated November 18, 1965, under section 6 of the Act, and the notices calling upon the respondent to put its claims for compensation in respect of the lands sought to be acquired. Thereafter, no further action was taken in this behalf. In the meantime, the lands in question were encroached upon by a large number of trespassers who put up slums thereon. The respondent repeatedly asked the State Government to take steps to remove the encroachments and expedite the making of the award and payment of the compensation but no action was taken by the Government. The respondent thereupon filed a Writ Petition in the High Court for a writ of mandamus, directing the State Government to make the award under section 11 of the Act, and take possession of the lands after payment of the compensation to the respondent. On March 25, 1981, the State Government passed an order under section 48 of the Act, withdrawing the lands of the respondent from acquisition, and the respondent was, accordingly, informed of that decision. The respondent thereupon amended its writ petition to challenge the withdrawal order above said as mala fide and to pray for the quashing of the same. The writ petition was allowed by a Single Judge of the High Court and his decision was affirmed by a Division Bench of the High Court. Aggrieved, the State Government appealed to this Court, against the decision of the High Court. Allowing the appeal, the Court, ^ HELD: The High Court erred in striking down the order under section 48 of the Land Acquisition Act and compelling the State 591 Government to acquire the lands of the respondent. Under the scheme of the Act, neither the notification under section 4 nor the declaration under section 6 nor the notice under section 9 is sufficient to divest the original owner of, or other person interested in, the land of his rights therein. Section 16 makes it clear beyond doubt that the title to the land vests in the Government only when possession is taken by the Government, and till that point of time, the land continues to be with the original owner and he is also free (except where there is specific legislation to the contrary) to deal with the land just as he likes. So long as the possession is not taken over, the mere fact of a notification issued under section 4 or a declaration made under section 6, does not divest the owner of his rights in the land to take care of it and confer on the State Government any right whatsoever to interfere with the ownership of the land or safeguard the interests of the owner. Section 48 gives liberty to the State Government to withdraw from the acquisition at any stage before the possession of the land is taken by it. By such withdrawal, no irreparable prejudice is caused to the owner of the land, and, if at all the owner has suffered any damage in consequence of the acquisition proceedings or incurred costs in relation thereto, he will be compensated therefor under section 48(2). As held in Trustees of Bai Smarth Jain Shvetamber Murtipujak Ganodhaya Trust and Ors. vs State of Gujarat and another, AIR 1981 Gujarat 107, the State can be permitted to exercise its power of withdrawal unilaterally. Having regard to the scheme of the Act, it is difficult to see why the State Government should at all be compelled to give any cogent reasons for its decision not to go ahead with the acquisition of any land, as was the view of the High Court. It is well settled in the field of specific performance of contracts that no person will be compelled to acquire any land, as a breach of a contract can always be compensated for by damages. That is also the principle of section 48(2) of the Act. [594D H; 595A D] Even assuming that a withdrawal order under section 48 should be backed by reasons and should be bonafide, in the present case, the order is not vitiated in any manner. The Government had intended to acquire vacant land for the construction of houses, but his land had been over run by slum dwellers to such an extent that it was not possible for the Government to effectuate the intended purpose of acquisition. The Government cannot be compelled to go ahead with the acquisition. Where slum dwellers on a large scale occupy pieces of land, social and human problems of such a magnitude arise, that it is virtually impossible for municipalities, and no mean task for the Government, to get the lands vacated, and in view of these genuine difficulties if the Government is reluctant to go ahead with the acquisition, it can hardly 592 be blamed. The Court sees no justification to direct the Government to embark upon such a venture to acquire the land. Section 24 of the acts lays down the rule that the State will, generally speaking, pay for the land only in the condition in which it was on the date of issue f the notification under sec. 4, and that subsequent changes on the land will not be taken into account in the determination of the compensation. The fact that the Government exercised the power of withdrawal after the writ petition was filed, does not spell mala fides, once, the existence of circumstances, which justified the decision of the Government to withdraw, is acknowledged. Far from a decision to withdraw in such a case being considered mala fide, the Government would have been acting mala fide if, despite the clear knowledge that the land could not be used for its purpose, it had decided to go ahead with the acquisition. The State Government has definitely acted in the best interests of the public and public revenues and its decision could not be faulted. [595D F, H; 596B; F H] Appeal allowed. Orders impugned of the High Court set aside. n Rules issued by the High Court discharged. [597G] M/s. Majas Land Development Corpn. and another vs State of Maharashtra and others, AIR 1983 Bombay 188, referred to.

By a notification under the minimum wages were fixed for 'ordinary unskilled labour ' in certain Tea Plantations in Assam. The respondent Deputy Commissioner issued notices to the appellants that a number of employees were not paid in accordance with the prescribed rate, and required them to pay the outstanding wages with requisite amount of delayed compensation to the employees in conformity with section 20(3) of the Act. The appellants denied the liability stating that these employees were Lettera Challan workers who were incapable of performing a full normal working day 's work, so they were 'not ordinary unskilled labour '. The authority did not hold any enquiry or receive any evidence beyond meeting the managers of the appellants where the Government, Labour Officer was present and it held that in the absence of an order of exemption under section 26, Lettera Challan Labour (in spite of the amount of work performed) was to be treated as ordinary labour. The appellants filed civil suits which the Subordinate Judge dismissed holding that under the the orders of the Authority. were final and suits were barred. The High Court upheld the decision of the Subordinate Judge. Held: The appeals must be allowed Determination of the question whether the jurisdiction of civil courts is excluded or not depends on the terms of the particular statute under construction. Exclusion of jurisdiction is not to be readily inferred but such exclusion must either be explicitly expressed or clearly implied. On an analysis of the provisions of the Act under consideration, it is clear that although the Act provides that it is the duty of the authority to give proper hearing to the parties . allowing them to tender such evidence as they think proper before making an order which may have far reaching consequences and which is final under section 20(6) of the Act, the Act is not a complete Code, as there no provision for appeal or revision from the direction of the, authority under section 20(3); nor is any further scrutiny provided by any higher authority against the imposition of penalty,. The Act in terms does not bar the employer from instituting a suit when his claim is that he has been called upon to pay wages and compensation to persons who are not governed by the notification under the Act. In such circumstances it is impossible to hold that the legislature meant to exclude the jurisdiction of civil court. [265B; 266E F; 271E; 271H 272H] Secretary of State vs Mask & Co. 67 I.A. 222 Wolverhampton New Water Works Co. vs Hawkesford, ; , Pyx Granite Co. Ltd. vs Ministry of Housing and Local Government , Raleigh Investment Co. Ltd. vs Governor General in Council, 74 I.A, 50, Firm and Illuri Subbayya Chetty & Sons vs The State of Andhra Pradesh ; , Kala Bhandar vs Municipal 260 261 Committee; , , Kamala Mills Ltd. vs State of Bombay, ; , K. section Venkataraman & Co. vs State of Madras; , and Firm Radha Kishan (deceased) represented by Hari Kishan vs Administrator, Municipal Committee, Ludhiana, ; , referred to. "Lettera Challan" workers do not fall within the expression "Ordinary unskilled workers" which means such unskilled workers as work for the prescribed period of a full day. On the evidence adduced it is clear that the "lettera challan" labour only works for half the day and is unwilling to work for the prescribed period of full day. Such a case is covered by the proviso to section 15 and such labour is not entitled to wages for a full normal working day. [272F G]

The appellant firm imported dates from abroad partly by steamer and partly by country craft. At the relevant time import of dates by steamers had been prohibited by Government (1) [1945] 1 3 I.T.R. Supp. (2) ; 652 notification, and the consignments which were imported by steamer were, therefore, confiscated by the customs authorities under section 167, item 8, of the Sea Customs Act, i878, but under section 183 of the Act the appellant was given an option to pay Rs. 82,250 as penalty in lieu of confiscation. The appellant paid the amount and got the dates released. Before the Income tax authorities it claimed to deduct the amount paid as penalty as an allowable expenditure under section 1O(2)(XV) of the Indian Income tax Act, 1922, but the claim was rejected. It was contended that the order of confiscation was against the stock in trade and not against the person of the appellant firm and as the amount paid was expended for the release of the stock in trade, it was an allowable expenditure. Held, that the amount paid by the appellant by way of penalty for a breach of the law could not be considered to be an expenditure laid out wholly and exclusively for the purpose of the business and was not an allowable deduction under section 1O(2) (xv) of the Indian Income tax Act, 1922. Expenses which are permitted as deductions are such as are made in order to enable a person to carry on and earn profit in the business. It is not enough that the disbursements are made in the course of or arise out of or are concerned with or made out of the profits of the business but they must also be for the purpose of earning the profits of the business. An expenditure is not deductible unless it is a commercial loss in trade and a penalty imposed for breach of the law during the course of trade cannot on grounds of public policy be said to be a commercial expense for the purpose of a business or disbursement made for the purpose of earning the profits of such business. Case law reviewed.

The appellant assessee is a firm carrying on business of manufacturing ice and preservation of potatoes in its cold storage. By an assessment order dated July 5, 1961 it was assessed to income tax for the assessment year 1961 62 on a total income of Rs. 53,548/ . The Income Tax Officer, in his proceedings started on December 21, 1961 under section 34(1) of the 1922 Act, found certain property income and income to the extent of one lakh from potato transaction put through in the name of benami persons by the assessee had escaped assessment and therefore, by his order dated December 22, 1965 he brought them to tax. The said order of the Income Tax Officer was annulled in appeal, on May 10, 1967 on the ground that the initiation of reassessment was not justified. This order became final as the department did not take further steps. On July 14, 1967 the Income Tax Officer issued a notice under section 148 of the Income Tax Act, 1961 in respect of the self same assessment year after obtaining the sanction of the Commissioner of Income Tax. Pursuant to the notice the appellant filed a return under protest on August 14, 1967. The appellant challenged the said notice by filing a writ petition in the Allahabad High Court, inter alia on the ground that under section 297(2)(d)(ii) of the 1961 Act no reassessment proceedings could be undertaken under section 147 of the 1961 Act inasmuch as in respect of the self same escaped income, proceed ings under section 34(1) of the 1922 Act had been undertaken and were pending on April 1, 1962 when the 1961 Act came into force. The High Court rejected the contention on the ground that in order that section 297(2)(d)(ii) should apply, proceedings under section 34 of the 1922 Act must be legal proceedings with jurisdiction. Allowing the appeal by certificate, the Court ^ HELD : The factual pendency of the proceedings under Section 34 of the 1922 Act on the relevant date, and not their legality is material for purposes of section 297(2)(d)(ii) of the 1961 Act. [238 D E] In the instant case: (a) admittedly proceedings under section 34(1) of the 1922 Act in respect of the item of Rupees one lakh (which was said to have escaped assessment) were factually pending on April 1, 1962 and therefore, the notice under section 148 of the 1961 Act would be incompetent, and [239 C D] 237 (b) The initiation of the proceedings under section 34 by the Income Tax Officer cannot be regarded as being without jurisdiction and hence non est. The reassessment order made by the Income Tax Officer on December 22, 1965 clearly shows that he had initiated the proceedings (in respect of property income) under section 34(1) (b) i.e., in consequence of information gathered by him from Assistant Appellate Commissioner 's order for earlier year and not under section 34(1)(a). [239 F H] section B. Jain vs Mahendra, and Gujar Mal Modi vs Commissioner of Income Tax, ; applied.

This writ petition challenged the constitutional validity of the Swadeshi Cotton Mills Ltd. (Acquisition and Transfer of Undertakings) Act, 1986. The Central Government had passed an order for taking over the management of six undertakings of the Swadeshi Cotton Mills, in respect whereof there were proceedings in the High Court, and this Court by its judgment dated the 12th February, 1988, in M/s. Doyarpack Systems Pvt. Ltd. vs Union of India & Ors. SLPs (Civil) Nos. 4826 & 7405 of 1987 had disposed of the matter. The petitioners, claiming to be shareholders of the respondent No. 4 Swadeshi Cotton Mills Co. Ltd. and to have interest in its business, affairs and properties, filed this writ petition, contending that the effect of the decision of this Court above said was to take away valuable assets of the respondent No. 4, without paying any compensation therefor and to impose on respondent No. 4 liabilities without any corresponding assets available to discharge the liabilities, and further, that the acquisition virtually amounted to confiscation of the shares of respondent No. 5 and respondent No. 6 held by respondent No. 4, and that the rights of the shareholders of the respondent No. 4 were substantially damaged. The petitioners challenged the vires and constitutional validity of sections 3 and 4 of the Swadeshi Cotton Mills Ltd. (Acquisition and Transfer of Undertakings) Act 1986 ( 'The Act ') in so far as those sought to divest respondent No. 4 of the shares in respondent No. 5 and respondent No. 6 and certain excluded assets, contending that the Act was violative of Articles 14 and 19(1)(g) of the Constitution. Dismissing the petition, the Court, ^ HELD: The petitioners ' contentions were not tenable because all the contentions had been directly or indirectly dealt with in the judgment of this Court afore said. It was not correct that no public 739 purpose was served by acquisition. It was held that section 8 provides for payment of compensation in lumpsum and the transfer and vesting of whatever is comprised in section 3. It was incorrect to state that there was no compensation for taking over of the shares. It was found by the said judgment that the net wealth of the company was negative and, therefore, sections 3 and 4 could be meaningfully read if all the assets including the shares were considered to be taken over by the acquisition. That was the only irresistible conclusion that followed from the construction of the documents and the history of the Act. The Act in question was passed to ensure the principles enunciated in clauses (b) and (c) of Article 39 of the Constitution. In that context, it was held that to leave a company, the net wealth of which was negative at the time of take over of the management with the shares held by it as investment in other company, was not only to defeat the principles of Article 39(b) and (c) of the Constitution but it would permit the company to reap the fruits of its mismanagement. That would be as absurd situation. In this context, the contentions now sought to be urged were no longer open to the petitioners. It was held by the judgment of this Court aforementioned that there was a public purpose which was analysed and spelled out from the different provisions of the Act. There was compensation for the acquisition of the property. The contentions of the petitioners had been dealt with and repelled by the said judgment of this Court. The Court reiterated the reasoning of that judgment. [744B;746B;747F H] The acceptance of the petitioner 's case would mean that the State would pump in Rs.15 crores of public money to release the shares from its liabilities and then hand over the shares free from such liability back to the company when the net worth of the company at the time of take over of management was negative, and in the teeth of the present financial liabilities built up by the company the shares would inevitably have been sold in discharge of its liabilities and in any event the shares stood charged with the very liabilities which related to the undertakings of the company which were taken over by the Government. Therefore, it was incorrect to say that there was no public purpose for taking over these shares. It would be absurd to say that there was no compensation paid for the acquisition. The law as declared by this Court in Doypack Systems Pvt. Ltd. (supra) is binding on the petitioners and the question was no longer res integra in view of Article 141 of the Constitution. See the observations of this Court in M/s. Shenoy and Co. represented by its partner Bele Srinivasa Rao Street, Bangalore, and others vs The Commercial Tax Officer, Circle II, Bangalore and Ors., ; [752C E;753B C] 740 In view of the preamble of the Act which states and proclaims that the Act was passed to carry out the object of Article 39(b) and (c) of the Constitution, and in view of the scheme of the Act as analysed before the Court and as apparent from the judgment of this Court aforesaid, it is clearly manifest that the Act was passed for a public purpose, and for the acquisition of shares there was a public purpose. The acquisition subserved the object of the Act. Compensation for such acquisition has been provided for. No separate compensation need be provided for in the circumstances of the case for these shares. The factual basis for the legal challenge made in this writ petition was incorrect in the facts of this case. It was too late to contend that there was no compensation for the shares or that the acquisition of the shares amounted to confiscation or there was no public purpose in the Act. The petition was wholly devoid of any merit. [754G H; 755A B] M/s. Doypack Systems Pvt. Ltd. vs Union of India & Ors. , SLPs (Civil) Nos. 4826 and 7045 of 1987 decided by Supreme Court on 12.2.88; The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Ors., ; ; State of West Bengal vs Union of India, [1964] 1 SCR 371; Smt. Somvanti & Ors. vs The State of Punjab and Ors., ; M/s. Shenoy and Co. represented by its partner Bele Srinivasa Rao Street, Bangalore and Ors. vs The Commercial Tax Officer, Circle II Bangalore and Ors., ; and T. Govindraja Mudalier, etc. etc. vs The State of Tamil Nadu and Ors., ; , referred to.

The appellant was a private limited company incorporated with the object of taking over the business carried on by another company. By an agreement dated August 2, 1956, the appellant company agreed to purchase all the assets goodwill etc. of the vendors. By cl. 4 of the agreement it was provided that all assets of the vendors in respect of their business "shall be taken over at the book value standing in the books of accounts of the vendors" as on August 1, 1956. The Income tax Officer in proceedings for the assessment year 1958 59 found that in the books of the vendors the 'value of stock ' as on August 1, 1956 was Rs. 1,77,285 but in the books of the appellant company the opening stock taken one was valued on the same day at Rs. 2,10,225. The latter valuation also appeared in the Schedule annexed to the deed of transfer. The Income tax Officer observed that the valuation by the appellant company of the opening stock was in "clear violation of the agreement between the vendors and the Company". He accordingly added a sum of Rs. 33,000/ representing the difference between the value of the closing stock in the books of account of the vendors and the opening stock in the books of account of the Company. The order was confirmed in appeal by the Appellate Assistant Commissioner and by the Income tax Appellate Tribunal. In reference the High Court of Patna upheld the view taken by these authorities. A Division Bench of the High Court certified the case under section 66A(2) of the Indian Income tax Act, 1922, observing that the case fulfilled all the requirements of the said section and was a fit case for appeal to the Supreme Court. The Revenue contended in this Court that the certificate was incompetent as the question of law which had to be decided was not set out and no question of public or private importance had been disclosed. HELD : (i) In granting the certificate the High Court merely observed that is was 'a fit case for appeal to the Supreme Court ' : they did not indicate the grounds which persuaded them to hold that it was a fit case for appeal to this Court. It would be conducive to better administration of justice if in certifying a case under section 66A(2) of the Indian Income tax Act as a fit case for appeal, the High Court sets out the question of law which they regard as of public or private importance which falls to be decided by this Court. [543 G] (ii) It is true that under section 66(1) and (2) of the Indian Income tax Act, 1922 only a question of law may be referred to the High Court for opinion, but the right to obtain a certificate under section 66A(2) arises only when in the proposed appeal a question of great public and private importance arises. It cannot be held that because a question of law alone may be referred to the High Court under section 66 of the Indian Income tax Act. in the proposed appeal a question of law of great public or private importance necessarily arises. Any other view, would make every opinion of the High Court in a reference under section 66 appealable to this Court. [544 B C] 540 The practice followed in some of the High court of issuing certificates under section 66A(2) without recording reasons or grounds for certifying the case would not justify a departure in the present case from the practice laid down, many years ago by decision of the Judicial Committee of the Privy Council according to which a certificate under section 66A(2) which does not set out precisely the grounds or raise a question of great public or private importance does not comply with the requirements of the Act.[544 E] Commissioner of Income tax, Central Provinces of Berar vs Sir section M. Chitnavis, L.R. 59 I.A. 290, followed. Delhi Cloth and General Mills Company Ltd. vs Income tax Commissioner, Delhi, L.R. 54 I.A. 421, Banarsi Parshad vs Kashi Krishna Narain & Anr., L.R. 28 I.A. II, Radha Krishn Das vs Rai Krishn Chand, L.R. 48 I.A. 31 and Radhakrishna Ayyar vs Swaminatha Ayyar, L.R. 48 I.A. 31, applied. (iii)The appellant made no attempt to explain the discrepancy in the valuation of the stock transferred. The Income tax Officer was of the view that the company had inflated the opening stock so as to reduce the ultimate profits. That view was confirmed by the Appellate Assistant Commissioner and by the Tribunal. No question of law arose out of the order of the Tribunal. The reference itself was incompetent. [545 A B]

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.

Appeal No. 12 of 1952. Appeal from the Judgment and Order dated the 18th January, 1950, of the High Court of Judicature at Madras (Satyanarayana Rao and Viswanatha Sastri JJ.) in Case Referred No. 27 of 1947. O.T. G. Nambiar (section N. Mukherjee, with him) for the appellant. M.C. Setalvad, Attorney General for India, and C. K.Daphtary, Solicitor General for India (G. N. Joshi and P.A. Mehta, with them) for the respondent. December 22. The Judgment of the Court was delivered by MAHAJAN J. This is an appeal from the judgment of the High Court of Judicature at Madras dated 18th January, 1950, delivered on a reference by the Incometax .Appellate Tribunal under section 66(1) of the Indian Income tax Act, whereby the High Court answered the two questions referred in the affirmative. ' The appellant is a public limited company incorporated in the United Kingdom and owns a spinning and weaving mill located at Pondicherry in French Indial. The year of account of the appellant is the calendar year. In the year 1939 no sales of yarn or cloth manufactured by the company were effected in 456 British India, though in the previous year such sales were effected. All the purchases of cotton required for the mills were made in British India by Messrs. Best & Co., Ltd. Under an agreement between the appellant and Messrs. Best & Co., Ltd., Madras, dated 11th July, 1939, Messrs. Best & Co., Ltd. were constituted the agents of the appellant for the purposes of its business in India. Messrs. Best & Co., Ltd. have under the terms of the agreement full powers in connection with the business of the appellant in the matter of purchasing stock, signing bills and other negotiable instruments and receipts and settling, compounding or compromising any claim by or against the appellant. The agents are empowered to borrow money on behalf of the appellant and to make advances. They are also expected to secure the best commissions, brokerages, rebates, discounts and other allowances in respect of and in connection with the business of the appellant. They are enjoined to keep proper accounts of the appellant and to pay over to the appellant the sum standing to its credit. They are remunerated by a salary of Rs. 6,500 per mouth and a percentage commission on the profits made. During the relevant year all the purchases of cotton required for the mill at Pondicherry were made by the agents in British India and no purchases were made through any other agency. The agents exercised their judgment and skill and purchased such qualities and quantities of cotton and at such prices as they in their experience considered most advantageous in the interests of the company. Prior to 1939 40 the appellant was assessed to income tax in British India on the profits computed on a turnover basis earned by the sales in British India of the goods manufactured by the appellant. In the course of the assessment year 1939 40 the appellant stated that it discontinued its business in British India with effect from 1st April, 1939, and claimed relief under section 25`3) which was granted. In the course of his further enquiries the Income tax Officer found 'that though the appellant was not 457 selling its goods in British India and earning a profit thereby, it continued to have an active business connection in British India having regard to the way in which the business of purchasing goods and materials for them ills was carried on. There upon the Incometax officer held that such purchases of cotton in British India constituted a business connection in British India and that the profits attributable to the purchases were liable to tax under sections 42(1) and 42(3) of the Act. The net income of the company was computed to be Rs. 2,81,176 and ten per cent. of this sum was apportioned under section 42(3), of the Act as being the profits and gains reasonably attributable to that part of the business operations, which were carried out in British India. The appellant appealed against the said order of the Income tax Officer to the Appellate Assistant Commissioner who confirmed the order of the Income tax Officer. A further appeal by the appellant to the Tribunal was unsuccessful. At the instance of the appellant, the Tribunal stated a case and referred the following questions for the decision of the High Court under section 66(1) of the Act : " 1. Whether in the circumstances of this case the assessee company had any business connection in British India within the meaning of sections 42(1) and 42(3) of the Income tax Act ? 2.Whether any profits could reasonably be attributed to the purchase of entire cotton made in British India by the secretaries and agents of the assessee company within the meaning of sections 42(1) and 42(3) of the Income tax Act ? The High Court answered both these questions in the affirmative and, in our opinion, rightly. The learned counsel for the appellant reiterated before us the arguments that he had addressed in the High Court and contended that on the facts of this case there was no scope for the finding that any profits or. gains accrued to the assessee directly or 458 indirectly through or from any business connection in India. It was argued that a mere purchase of raw materials or goods in British India does not result in the accrual or arising of profits and that the profits on the sale of goods arise and accrue only at the place where the sales are effected and that in the present case, there being no sales effected in British India in the year of account 1939, no profits accrued or arose to the company in British India nor could ally profits be deemed to have accrued or arisen in British India. In support of his proposition, the learned counsel placed reliance on a number of cases, inter alia, on Board of Revenue vs Madras Export Co.(1), Jiwan Das vs Commissioner of Income tax, Lahore (2), Rahim vs Commissioner of Income tax(3), Commissioner of Incometax, of Income tax vs Little 's Oriental Balm Ltd.(5). Most of these decisions were given under the Act of 1922, before the insertion of section 42 (3) in the Act of 1922 by the amending Act of 1939. As against the cases relied upon by the learned counsel for the appellant, several authorities have been cited to us which have proceeded on the footing that even purchase of raw materials could be an operation in connection with a business and if it was carried on in British India it might make the profits attributable to such operation taxable under section 42 of the Indian Income tax Act. The case Rogers Pyatt Shellac Co. vs Secretary of State for India(6) is one of the leading decisions on this point. This case was decided under section 33 of the Indian Income tax Act, 1918, and the judgment shows that the principle followed in the case was similar to that which was subsequently embodied in section 42 (3) of the Income tax Act, 1922. The question referred to the High Court in that case was in these terms: "Is this company which purchased shellac and mica in India for sale in the open market in America (1) Mad. (2) (I929) 1. L. R. (3) A.I.R. 1949 Orissa 60. (4) A.T.R. (5) [1950) (6) (1925) I.L.R.52 Cal. 459 liable to be assessed to income tax and super tax under either Income tax Act VII of 1918 or Act XI of 1922 and the Super tax Act, VIII of 1917. " And it was answered in the affirmative. The same line of reasoning was adopted by the Rangoon High Court in Commissioner of Income tax Burma vs Steel Bros. Co. '(1). Among recent cases on this point which were decided under section 42 of the Income tax Act, 1922, can be mentioned the case of Motor Union Insurance Co. Ltd. vs Commissioner of Income tax, Bombay(2) and that of Webb Sons & Co. vs Commissioner of Income tax, East Punjab(3). In the last case, the assessee company which was incorporated in the United States of America was carrying on in America the business of manufacturing carpets. Its only business in British India was the purchase through its agent in British India, of wool as raw material for use in the manufacture of carpets. It was held that the purchase was an operation within the meaning of section 42 (3), and the profits from such purchases could be deemed to arise in British India and it was consequently assessable under section 42 (3) of the Indian Income tax Act. The questions referred to the High Court in this case and relevant to this enquiry were these: "(i) Is mere purchase of raw material an operation within the meaning of section 42 (3) of the Act? (ii)Can any profit arise out of mere purchase of raw material?" While answering these questions in the affirmative it was said: "It is clear that the purchase of raw material by a firm of manufacturers is one of the processes or operations which contributes to an appreciable degree to the ultimate profit which is realized on the sale of manufactured articles. " There is thus no uniformity of judicial opinion on the question that the mere act of purchase produces no profit. (1) Rang. (2) A.I.R. 1945 Bom. (3) [1950) 460 In our judgment, the contention of the learned counsel for the appellant, and on which his whole .argument is founded, that it is the act of sale alone from which the profits accrue or arise can no longer be sustained, and has to be repelled in view of the decision of this Court in Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai & Co.(1). That was a case that arose under the Excess Profits Tax Act, XV of 1940. A firm which was resident in British India and carried on the business of manufacturing and selling groundnut oil, and owned some oil mills within British India also owned a mill in Raichur in the Hyderabad State where oil was manufactured. The oil manufactured in Raichur was sold partly within the State of Hyderabad and partly in Bombay. It was held by this Court that the profits of that part of the business, viz., the manufacture of oil at the mill in Raichur accrued or arose in Raichur even though the manufactured oil was sold in Bombay and the price was received there, and accordingly, that part of the profits derived from sales in Bombay which was attributable to the manufacture of the oil in Raichur was exempt from excess profits tax under the proviso to section 5 of the Act. Reference in this case was made to the decision of the House of Lords in In re Commissioners of Taxation vs Kirk (2), wherein it was held that where income was in part derived from the extraction of ore from the soil of New South Wales Colony, and from the conversion in the latter colony of the crude ore into a merchantable product, this income was assessable under the New South Wales Land and Income Tax Assessment Act of 1895, section 15, sub sections 3 and 4, nowithstanding that the finished products were sold exclusively outside the colony. Lord Davey while delivering the judgment of the Privy Council observed as follows : "It appears to their Lordships that there are four processes in the earning or production of this income (I) the extraction of the ore from the soil ; (2) the (1) ; (2) 461 conversion of the crude ore into a merchantable product, which is a manufacturing process; (3) the sale of the merchantable product; (4) the receipt of the moneys arising from the sale. All these processes are necessary stages which terminate in 'money, and the income is the money resulting less the expenses attendant on all the stages. The first process seems to their Lordships clearly within sub section 3, and the second or manufacturing Process, if not within the meaning of ' trade ' in subsection 1, is certainly included in the words any others source whatever in sub section 4. So far as relates to these two processes, therefore, their Lordships think that the income was earned and arising and accruing in New South Wales. " On a parity of reasoning it can well be said in this case that the profits accrue or arise to the appellant from three business processes or operations, those being (1) the purchase of cotton in British India; (2) its conversion by the process of manufacture in Pondicherry into yarn or cloth ; and (3) the sale of the merchantable product, and those have to be apportioned between these three operations. The same line of reasoning was adopted by the Madras High Court in Bangalore Woollen, Cotton & Silk Mills Co. Ltd. vs Commissioner of Income tax, Madras(1). There it was held that the purchase of raw materials by the man aging agents in British India would be an operation within the meaning of section 42(3) and it was reasonable to attribute a portion of the profits to such purchases in British India. After a careful consideration of the decided cases on the subject and in view of the insertion of section 42 (3) in the Act of 1922 by the amending Act of 1939, we have reached the conclusion that in the present state of the law there is hardly any scope for maintaining the view contended for by the learned counsel for the appellant and we therefore agree with the High Court in repelling it. While maintaining the view taken by the High Court in this case we wish (1) 462 to point out that it is not every business activity of a manufacturer that comes within the expression "operation" to which the provisions of section 42(3) are attracted. These provisions have no application unless according to the known and accepted business notions and usages the particular activity is regarded as a well defined business operation. Activities which are not well defined or are of a casual or isolated character would not ordinarily fall within the ambit of this rule. Distribution of profits on different business operations or activities ought only to be made for sufficient and cogent reasons and the observations made here are limited to the facts and circumstances of this case. In a case where all that may be known is that a few transactions of purchase of raw materials have taken place in British India, it could not ordinarily be said that the isolated acts were in their nature " operations " within the meaning of that expression. In this case the raw materials were purchased systematically and habitually through an established agency having special skill and competency in selecting the goods to be purchased and fixing the time and place of purchase. Such activity appears to us to be well within the import of the term " operation " as used in section 42 (3) of the Act. It is not in the nature of an isolated transaction of purchase of raw materials. The first contention of the assessee is therefore negatived. The learned counsel argued in a rather half hearted manner that there was no business connection of the assessee in British India. This contention does not require serious consideration. An isolated transaction between a non resident and a resident in British India without any course of dealings such as might fairly be described as a business connection does not attract the application of section 42, but when there is a continuity of business relationship between the person in British India who helps to make the profits and the person outside British India, who receives or realizes the profits, such relationship does constitute business connection. In this case there 463 was a regular agency established in British India for the purchase of the entire raw materials required for the manufacture abroad and the agent was chosen by reason of his skill, reputation and experience in the line of trade. The terms of the agency stated in by earlier part of this judgment fully establish that Messrs. Best & Co. Ltd. were carrying on something almost akin to the business of a managing agency in India of the foreign company and the latter certainly had a connection with this agency. We therefore negative this contention of the learned counsel as well. For the reasons given above we uphold the view taken by the High Court and dismiss the appeal with costs. Appeal dismissed.

Though a few isolated transactions of purchase of raw mate rials in India by a manufacturer carrying on business outside India may not amount to the carrying on of an " operation " in India within the meaning of section 42 (3) of the Indian Income tax Act, where raw materials are purchased systematically and habitually in India through an established agency having special skill and competency in selecting the goods, such an activity will be an "operation" within a. 42 (3), and the portion of the profits 455 attributable to the purchases in India can be assessed to incometax under section 42(1) and (3) of the Indian Income tax Act. Bangalore Woollen, Cotton & Silk Mills Co. Ltd. vs Commis sioner of Income tax, Madras , Commissioner of Income tax, Bombay vs Ahmedbhai Umarbhai d Co. ([1950] S.C.R. 335), Commissioners of Taxation vs Kirk ([1900] A.C. 588), Rogers Pyatt Shellac Co. vs Secretary of State for India ([1925] I.L.R. and Webb Sons & Co. vs Commissioner of Incometax, East Punjab ([1950] relied on. An isolated transaction between a non resident and a resident in India without any course of dealings such as might fairly be described as a business connection does not attract the application of section 42, but when there is a continuity of business relationship between the person in India who helps to make the profits and the person outside India who receives or realises the profits, such relationship constitutes a business connection.

The respondent firm Harivallabhdas Kalidas was appointed the Managing Agent of Shri Ambika Mills Ltd., the appellant in the connected appeal by means of a Managing Agency Agreement the relevant portion of which ran thus: (2)(a) The Company shall pay each year to the said Firm either the commission of 5 (five) per cent on the total sale proceeds of yarn, and of all cloth, manufactured from cotton, 51 silk, jute, wool, waste and other fibres and sold by the company, or a commission of three pies per pound avoirdupois on the sale, whichever the said Firm choose to take, and also a commission of 10 (ten) per cent on the proceeds of sale of all other materials sold by the Company and 10 (ten) per cent on the bills of any ginning and pressing factories and on any other work done by the Company. " And by clause (5) it was provided: " (5) The remuneration payable to the said Firm under clause 2(a) shall be paid to the said Firm forthwith after the 31st day of December or such other date as the Directors may fix for the closing of the accounts of the Company in each year and after such accounts are passed by the company in General Meeting. " Subsequently, at the request of the Managed Company the Managing Agents agreed to charge commission at 3 per cent on sales instead Of 5 per cent for the year ending December 31, 1950 and a resolution to that effect was passed by the Managed Company and a formal agreement to that effect was executed. The income tax Authorities, however, taxed the Managing Agents for two assessment years on the basis that by entering into an agreement with the mills they had voluntarily relinquished certain sums of money as their commission which had accrued to them as income for the purpose of income tax. An appeal was taken to the Income tax Tribunal which held that the agreement between the Managing Agent and the Managed Company to receive remuneration at 3 per cent on the total sale was valid and took effect from January, 1, 1950 and the questions whether the commission accrued on the proceeds of every single sale or only when the assessee firm exercised its option to charge it on the total sale proceeds or on the weight of the yarn sold and whether the Managing Agents would get their commission after the whole profit was determined at the end of the year, were decided in favour of the Managing Agents. The High Court also on a reference made to it at the instance of the Commissioner of Income tax, answered the above mentioned question in favour of the Managing Agents. On appeal by the Incomee tax Commissioner by special leave, Held, that on a proper construction of the agreement, it was clear that there was no accrual of commission till the end of the year and that it did not accrue as and when the sales took place. The Managing Agents were to be paid at the end of the year and by agreeing to the modification of the agreement before then they had not voluntarily relinquished any portion of the commission. Commissioner of Income tax, Madras, vs K.R.M.T.T. Thiagaraja Chetty and Co., ; , E.D. Sasoon and Co. Ltd. vs The Commissioner of Income tax Bombay City, [1955] i S.C.R. 313 and Commissioner of Inland Revenue vs Gardner Mountain and D ' Ambrumenil Ltd., , not applicable.

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.

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

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 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

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.

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.

Civil Appeals Nos. 459 and 460 of 1960 Appeals by special leave from the award dated March 10, 1959, of the Industrial Tribunal, Assam, in Reference No. 16 of 1958. M. C. Setalvad, Attorney General for India, B. Sen, section N. Mukherji and B. N. Ghosh, for the management appellant (in C. A. No. 459 of 60) and the respondent (in C. A. No. 460 of 1960). section T. Desai, A. K. Dutt and Janardan Sharma, for the workmen respondents (in C. A. No. 459 of 60) and the appellants (in C. A. No. 460 of 1960). November 24. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. Civil Appeals Nos. 459 and 460 of 1960 are cross appeals and they arise out of an award pronounced by the Industrial Tribunal, Assam, in an industrial dispute referred by the Assam Government for its adjudication. This industrial dispute was raised against the management of the Tocklai Experimental Station (hereafter called the Station) by its workmen. Six out of the demands made by the workmen formed the subject matter of reference. In the present appeals we are concerned with three of them. Demand No. 1 (a) was that the employees ' junior staff of the Station should be given pension in lieu of the existing practice of paying gratuity. This demand has been rejected be the tribunal. The other demand made by the employees was No. 3(b) and it had reference to the claim for free housing accommodation or adequate allowance in lieu thereof. This demand has been partially allowed by the tribunal and it has directed that house allowance in each case shall be raised at the flat rate of Rs. 20/ instead of Rs. 101/ . The decision of the tribunal in respect of these two demands did not satisfy the workmen and so by special leave of this Court they have filed Civil Appeal No. 460 of 1960. The demand of the 560 junior staff for bonus which was resisted by the Station has been partially allowed by the tribunal. It has ordered that the Station shall give punja bonus at the same rate as the employees working for the Indian Tea Association at Calcutta are getting. This part of the award is challenged by the Station in its appeal by special leave by Civil Appeal No. 459 of 1960. That is how the two cross appeals arise. We will deal first with the Station 's Appeal in respect of bonus. The learned Attorney General contends that in making the demand for bonus the workmen have entirely misconceived the true position of the industrial law on the point, and he argues that the Assam Government was not justified in making the reference in the form it has been made and the tribunal was not justified in making the award in the manner it has done. The workmen made their demand for bonus in these words: "The Union requests the introduction of bonus for the Tocklai Staff on the following grounds". Then follow six grounds. It was urged that the Station is an arm of the tea industry and is maintained by the members of the I.T.A. who give bonus to their employees, that the Station exists and works for the advancement of the tea industry and increasing its profits and thus is an industry, that the I.T.A. employees at Calcutta office are given bonus, that the employees of the Bengal Chamber of Commerce receive bonus, that the employees of Shamshernagar and Tulsipara branches of this very Station used to be given bonus so long as these branches were functioning and that the personnel of the scientific research laboratories attached to many industrial concerns receive bonus, and so the workmen in the present case were entitled to make a claim in that behalf. In appreciating this claim it is necessary to state that the Station is a research institution established by the Indian Tea Association to make research for the purpose of improving the quality of 561 tea and its production and the said Station is managed by the parent Association and is maintained by means of voluntary subscriptions from members of the said Association. Broadly stated the ground on which the workmen claimed bonus was that the employees of the Association were receiving bonus and that the personnel of scientific research laboratories similarly situated in other industrial concerns were also given bonus. When the Assam Government made the present reference it included within the scope of the reference this claim of bonus along with the other claims made by the workmen. The issue referred for adjudication on this point was thus framed: "2(a). Whether the demand of the employees (Junior Staff) for bonus is justified ? If so, at what rate should the same be paid ?" The tribunal considered this demand and partially allowed it by directing that the workmen should be paid puja bonus at the same rate as the employees working in the I.T.A. at Calcutta are getting. In dealing with this question the tribunal has held that the Station is an industry within the meaning of the Industrial Disputes Act and so it could not resist the demand made by its workmen on the ground that it is an academic body devoted to research and as such outside the purview of the Act. This position is not disputed before us by the Station because it is concluded by a decision of this Court in The Ahmedabad Textile Industry 's Research Association vs The State of Bombay (1). The tribunal has, however, found in favour of the Station that it would be inexpedient, if not impossible, to apply the formula which governs the decision of industrial claims for the payment of bonus. "There are obvious difficulties", says the tribunal, "in applying the formula laid down by their Lordships of the Supreme Court to an experimental station run 562 by the Association"; but it added that "it could not be overlooked that payment of bonus to members of the experimental staff is being made by some companies". Then the tribunal referred to some instances where bonus is paid to workmen who, in the opinion of the tribunal, were similarly situated, and it came to the conclusion that refusing the workmen 's claim for bonus against the Station would amount to discrimination. The tribunal then took into account the fact that what is described as puja bonus is paid to members of the staff of the Bengal Chamber of Commerce because it was admitted before it that the junior staff of the Bengal Chamber of Commerce which presumably was also serving the I.T.A. at Calcutta was receiving a fixed annual gratuity characterised as puja bonus. The tribunal conceded that the claim for this kind of bonus "may not directly satisfy the requirements of law", but it added that "the fact that what was described as puja bonus was given at the sub stations and is also given to the clerical staff working at the I.T.A. at Calcutta, supports the demand to this extent at least that the same treatment may be meted out to them. " It is on this reasoning that the tribunal ultimately made the award in favour of the workmen directing the Station to pay puja bonus to its employees. It would be noticed that the demand originally made by the workmen appears to be in the nature of a demand for bonus which is usually described as industrial profit bonus the payment of which is governed by the application of the well known formula. Such a demand is invariably made, and has to be made, by reference to a particular year because the formula which determines claims for profit bonus postulates the examination of the available surplus in the hands of the employer from which bonus may be directed to be paid to the employees. A claim for profit bonus cannot 563 be validly made unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer during that year. It is unfortunate that this elementary aspect was overlooked by the workmen when they made the claim and has not been noticed even by the Assam Government when it made the reference in respect of this claim. This serious infirmity in the claim is present even in the award made by the tribunal because the award does not say for what year the bonus should be paid, and like the claim made by the workmen in very general terms for the introduction of bonus the award also seems to make a direction in similar terms for the payment of bonus. In our opinion, this is a patent infirmity in the award. Profit bonus, it is hardly necessary to emphasise, can be awarded only by reference to a relevant year and a claim for such bonus has, therefore, to be made from year to year and has to be settled either amicably between the parties or, if a reference is made, it has to be determined by industrial adjudication. A general claim for the introduction of profit bonus cannot be made or entertained in the form in which it has been done in the present proceedings. Besides, the other serious infirmity in the award is that when a claim for profit bonus was made the tribunal has proceeded to grant puja bonus and that too solely on the ground that the refusal to grant the said claim would amount to discrimination. In our opinion, the approach adopted by the tribunal in dealing with this alternative claim for puja bonus which was not made in the demand and which had not been expressly referred to the tribunal is entirely erroneous. The claim for puja bonus proceeds on entirely different considerations. Customary puja bonus undoubtedly prevails in many industries in Bengal but there are certain tests which have to be applied in 564 determining the validity of the claim. The amount by of way of puja bonus, it must be shown, has been consistently paid by the employer to his employees from year to year at the same rate, that it has been paid even in years of loss and that it has no relation to the profit made by the employer during the relevant year. The course of conduct spreading over a reasonably long period between the employer and the employees in the matter of payment of puja bonus is of considerable importance in dealing with the claim of customary puja bonus [Vide: The Graham Trading Co. (India) Ltd. vs Its Workmen (1)]. A claim for puja bonus can also be made in a proper case of the ground that the payment of such bonus is an implied term in the contract of employment [Vide: Messrs. Ispahani Ltd., Calcutta vs Ispahani Employees ' Union(2). Such a claim again would necessarily involve the consideration of several relevant facts none of which has been alleged or proved in the present proceedings. Therefore, the decision of the tribunal awarding puja bonus to the workmen cannot be sustained. Indeed, in awarding puja bonus to the workmen the tribunal has failed to consider that it was making out an entirely new and inconsistent case for the workmen and granting the said claim without any proof of the relevant facts which would support such a claim. It is rather surprising that even when the tribunal by its award wanted to grant the demand for puja bonus it did not think it necessary to clarify at what rate the said bonus was to be paid. The award is absolutely vague in that behalf and that is another infirmity in the award. Since that is the only point in Civil Appeal No. 459 of 1960 preferred by the Station we must hold that the appeal succeeds and must set aside the award made by the tribunal under issue No. 1 (a). Before we part with this appeal, however, we ought to add that after special leave was granted 565 to the Station to prefer its appeal it applied for stay of the award directing the payment of puja bonus and stay was granted by this Court on condition that the amount of puja bonus should be paid by the Station to its employees on their furnishing security to the satisfaction of the management. Accordingly the Station has paid to its workmen puja bonus for three years. We suggested to the learned Attorney General that in case his appeal were to succeed the Station may consider whether it would partially forego its claim to recover the amount already paid by it to its workmen, and the learned Attorney General, after consulting his client, has stated before us that the Station would forego one third of the total amount paid by it to its employees under the orders of this Court. This one third amount, we were told, is in the neighborhood of Rs. 65,000/ The learned Attorney General also stated that the balance of two third amount which it would recover from its employees can be paid by each one of them either by easy instalments or at the time when he would receive his gratuity or provident fund; the employee may exercise his option in that behalf. It appears that some of the employees who received the said amount have left the service of the Station and at that time have refunded the amount received by them. The Station would be prepared to give back to such employees one third of the said amount. In our opinion, the attitude adopted by the Station in this matter is very fair and it would relieve the workmen from their liability to return one third of the total amount received by them in pursuance of the orders of this Court. That takes us to Civil Appeal No. 460 of 1960 preferred by the workmen. Mr. section T. Desai, who argued this appeal, could not seriously press the workmen 's case against the refusal of the tribunal to allow their demand for pension in lieu of the existing practice of paying gratuity. On a consideration 566 of the relevant facts the tribunal came to the conclusion that this demand was not justified, and, in our opinion the conclusion of the tribunal is well founded. Then, as regards the other demand which is the subject matter of the appeal the tribunal has increased the house allowance at a flat rate of Rs. 20/ instead of Rs. 10/ and this increased rate has been paid by the Station as from the date when the award became enforceable. Mr. Desai contends that the tribunal should have made an award granting the demand for accommodation or in the alternative should have awarded larger amount by way of house allowance. We are not impressed by this argument. A demand for the provision of housing accommodation can be reasonably entertained where it appears that the financial position of the employer can bear the burden involved in the said demand. Under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot reasonably be placed solely on the shoulders of the employer. In due course the problem may have to be tackled by the industry in co operation with the State. The State will have to bear a part of that responsibility [Vide: The Patna Electric Supply Co. Ltd., Patna vs The Patna Electric Supply Workers ' Union (1))]. The tribunal has considered the financial position of the Station, the urgency of the damned made by the workmen, and has come to the conclusion that the demand for housing accommodation was not justified and that the ends of social justices would be met in the present case if a flat rate of enhancement of Rs. 20/ is awarded. It is true that the Station gives housing accommodation for members of the senior staff but as the tribunal has pointed out there are special reasons how more favourable terms have to be offered to senior research staff in order to get the services of properly trained and properly equipped personnel. In our opinion, the tribunal was right in refusing 567 to draw an analogy between the requirements of the senior research staff and the junior staff with whose claims the tribunal was dealing. Therefore, we are not satisfied that there is any substance in the grievance made by the workmen against the award passed by the tribunal in respect of house allowance. The result is Civil Appeal No. 460 of 1960 fails and is dismissed. There would be no order as to costs in both the appeals. Appeal No. 459 allowed. Appeal No. 460 dismissed.

The appellant, a research institution established for the purpose of improving the quality of tea, was managed by the India Tea Assciation. The employees made claims, inter 558 alia, for (1) free housing accommodation or adequate allowance in lieu thereof, and (2) grant of bonus. The tribunal, to which the matter was referred by the Government considered the financial position of the appellant and came to the conclusion that the demand for housing accommodation was not justified and that the ends of justice would be met if a flat rate of enhancement of Rs. 20/ was awarded. As regards the demand for bonus the tribunal felt that it would be inexpedient to apply the formula which governed the decision of industrial claims for the payment of bonus, but made an award directing the appellant to pay puja bonus to its employees on the ground that what was described as puja bonus was being given to workmen who were similarly situated as also to the clarical staff working at the Indian Tea Association at Calcutta and that refusing the workmen 's claim for bonus against the appellant would amount to discrimination. ^ Held, that a demand for the provision of housing accommodation can be reasonably entertained where it appeared that the financial position of the employer can bear the burden involved, that under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot be placed solely on the shoulders of the employer, and that in due course the problem would have to be tackled by the industry in cooperation with the State, which would have to bear a part of that responsibility. The Patna Electric Supply Co., Ltd. Patna vs The Patna Electric Supply Workers ' Union, [1959] Supp. S.C. R. 761, relied on. Held, further, that before a claim for the grant of puja bonus could be sustained it must be shown (1) that it was consistently paid by the employer to his employees from year to year at the same rate, and (2) that it had been paid even in years of loss and that it had no relation to the profit made by the employer during the relevant year. A claim for puja bonus could also be made on the ground that the payment of such bonus was an implied term in the contract of employment. The Graham Trading Co. (Indian) Ltd. vs Its Workmen, ; and M/s. Ispahani Ltd., Calcatta vs Ispahani Employees ' Union, [1960] 1 S.C.R. 24, followed. Industrial profit bonus which is governed by the application of the well known formula, cannot be awarded unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer for that year.

The , and the Minimum Wages Rules, framed thereunder, laid down the principle that the Government should provide for a day of 1 est to the workers for every period of 7 days and also to make provisions for making some payment in connection therewith. The dispute between the workers and employers of the present case related to (a) arrears of wages for Sunday, the "weekly off" day on which no work was done and (b) arrears of wages for work 37 done on Sundays which should have been given as a weekly off day but was not so given and no compensatory day was given in lieu thereof as contemplated under the Minimum Wages Rules. As regards arrears of wages for Sundays on which no work was done the workmen 's case was that they were entitled to payment for each such Sunday amounts equal to their average daily wages during the preceding week, that for the work done on Sundays without the compensatory "off day" they were entitled to three times the ordinary rate. The respondent 's case was that on a proper interpretation of r. 23 of the Minimum (Wages Central) Rules, 1960, the Workmen were not entitled to payment for Sundays on which no work was done and that in any case they had been constructively paid for Sundays inasmuch as the daily wages were fixed at I/26th of the monthly wages. The Industrial Tribunal rejected all the claims of the workmen. On appeal by special leave. ^ Held, that contravention of r. 23 of the Minimum Wages Rules was punishable under the but the Industrial Tribunal had no authority to impose penalty in the shape of making the employer pay in respect of work done on Sundays something more than what he would have otherwise to pay. Neither the nor the Rules contain any provision for such additional payment over and above what would be payable for over time work as such. The workmen therefore cannot get three times the ordinary rate. The phrase "for which" in r. 23 referred to the weekly holiday whether it was on a Sunday or on any other day of the week as permitted under the Rules. No distinction was made between the holiday on the first day of the week and holiday on one of the five days immediately before or after the said day. The scheme was for one holiday in the week and it was for that holiday that payment was provided. Trustees of the Port of Bombay vs Authority under the Payment of Wages Act, (1957) I L.L.J. 627, A. C. C. vs Labour Inspector, (1960) 1 L. L. J. 192 and Jaswani Sugar Mills vs Sub divisional Magistrate, , approved. The Central Government clearly intended under the Minimum Wages Rules that for work on a holiday something more than what was actually paid for six days of the week should be paid. This could not be defeated by a statement that in form six days wages were paid, but in fact and in substance seven days wages were paid. The plea of constructive payment must fail. The argument that r. 23 did not apply to the workmen of the present case after the introduction of the piece rate scheme introduced in this case must be rejected 38

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 Central Government constituted an Industrial Tribu nal under the , consisting of A, B, and C 381 for deciding certain disputes and the Tribunal commenced its sittings in September, 1949. On the 23rd November, 1949, the services of C were placed at the disposal of the Minis try of External Affairs as a member of the Indo Pakistan Boundary Disputes Tribunal, and the two remaining members, after an objection raised by one side, continued to sit and hear the disputes. On the 20th February, 1950, C returned from the Boundary Disputes Tribunal and began to sit again with the other two members and hear the further proceedings in the case of disputes which were part heard and not finally decided on that date. On the 20th May, 1950, the Government issued a notification that C had" resumed charge of his duties as a member of the All India Industrial Tribu nal". Some awards were made by A and B before the 20th February, 1950, and some awards were made after that date by A, B and C together. Held, per KANIA, C.J., MEHR CHAND MAHAJAN, DAS and Bose JJ. (FAZL ALI and PATANJALI SASTRI JJ. dissenting) : (i) when C was appointed as a member of the Boundary Disputes Tribunal, his services "ceased to be available" and there arose "a vacancy" within the meaning of Sec. 8 of the ; (ii) under the said section read with Rule 5 of the Industrial Disputes Rules, when a vacancy occurred it was obligatory on the Government to notify its decision as to whether it intended to fill up the vacancy or not, and if the Government decided not to fill up the vacancy, a notifi cation under Sec. 7 of the Act was essential to constitute the remaining members a Tribunal inasmuch as a Tribunal of three members is a different Tribunal altogether from a Tribunal consisting of two of them only; (iii) neither the fact that C began to sit again along with the two other members from the 20th. February, 1950, nor the notification of the 20th May, 1950, stating that C had "resumed charge of his duties as a member" of that Tribunal could be treated as an appointment to the vacancy created on C 's appointment as a member of the Boundary Disputes Tribunal; (iv) awards made by A and B after the services of C ceased to be available, and awards made after the 20th February, 1950, by A, B and C were not made by a Tribunal duly constituted under the Act and were void; (v) since the two remaining members were not a duly constituted Tribunal and the duty to work and decide was the joint responsibility of all the three members who originally constituted the Tribunal, the matter was one 01 absence of jurisdiction and not a mere irregularity in the conduct of proceedings, and the defect could not be cured by acquies cence or estoppel. 382 Per FAZL ALI and PATANJALI SASTRI JJ. (contra) There was a 'vacancy ' within the meaning of Sec. 8 of the Act when the services of C were placed at the disposal of the Bound ary Disputes Tribunal, which provided an occasion for the Government to exercise the discretion vested in it under Sec. 8 of the Act to fill up the vacancy or not. The fact that the Government decided not to fill up the vacancy, could not render the Tribunal an imperfectly constituted Tribunal, and the proceedings could validly be continued before the Tribunal in spite of the vacancy. Further, since the vacancy was a temporary one and was not filled up, C did not cease to be a member of the Tribunal and could therefore rejoin it as soon as he was free from the duties of his new office. Even if it be assumed that it was necessary for the Government to make an appointment under Sec. 8 (1), the requirements of that section were complied with, when C joined under the orders of the Government and that fact was also notified by the Government on the 20th May, 1950. Rule 5 of the Industrial Disputes Rules applies only when a Tribunal is initially constituted. It does not apply to appointments to fill vacancies. Per MUKHERJEA J. An Industrial Tribunal can be consti tuted only in accordance with the provisions of Sec. 7 of the and unless a Tribunal is proper ly constituted, it cannot be invested with jurisdiction to adjudicate on industrial disputes. Under sub sec. (2) of Sec. 7, the number of members constituting the Tribunal has to be determined by the appropriate Government and a change in the number of members could be made therefore only in pursuance of the provision contained in that sub section. As Sec. 8 does not lay down that, in case the services of a. member of the Tribunal cease to be available and the Govern ment does not choose to make a new appointment in his place, the remaining members should continue to form the 'tribunal, the constitution or reconstitution of the remaining members as a Tribunal could be made only under Sec. 7 of the Act and as there was n9 notification by the appropriate Government under Sec. 7 constituting the two remaining members a Tribu nal under the Act during the absence of C, the proceedings before these two members and the awards made and signed by them only during C 's absence were void. But, there was no necessity for a fresh notification and a fresh constitution of the Tribunal when the absent member returned as the original notification was still there unaltered and unamend ed, and by virtue of this notification alone, the three members would be competent to sit as a Tribunal and dis charge its duties. The Tribunal was thefore, properly constituted from the 20th February, 1950, and the awards made by all the three members after that date were not void for want of jurisdiction in the Tribunal.

The Standing Orders of the appellant 's establishment, duly certified under the , dealt, inter alia, with provisions relating to leave to be granted to the workmen. In I.C. 11 of 1955 the Industrial Tribunal by its award modified the said standing orders and made provisions for certain kinds of leave. The award came into operation on November 18, 1956 under section 19(3) read with section 17A(7) of the . On further disputes arising the parties entered on September 19, 1958 into a settlement under section 12(3) of the whereby in return for the revision of the scales of pay, the workmen agreed that for a period of three years commencing from January 1, 1958, they would not raise any dispute on certain matters including leave. This settlement was terminated by the workmen by notice dated August 14, 1961 under section 19(2) of the . In 1963 the State Government again referred to the Industrial Tribunal an industrial dispute between the appellant and the workmen. This dispute was registered as I.D. No. 8 of 1963 and the questions referred related to privilege leave, casual leave and sick leave. The appellant urged before the Tribunal that it was not competent to hear the reference because (i) the earlier award in I.C. 11 of 1955 which dealt with matters relating to leave had not been terminated by a notice under section 19(6) of the ; (ii) the Standing Orders in question could be modified only by the procedure under the Standing Orders, Act and not under the because the former Act was self sufficient in regard to the matters covered by it. The Tribunal and the High Court both rejected the appellant 's objections, whereupon, by special leave, appeal was filed in this Court. On behalf of the workmen it was stated that notice of termination of the earlier award under section 19(6) of the Industrial disputes Act had been given by them in a letter dated June 26, 1961. HELD:(i) When there is a subsisting award binding on the parties the Tribunal has no jurisdiction to consider the same points in a fresh reference. In the present case the earlier award had not been terminated and the reference was therefore incompetent. [588D] The letter of June 26, 1961 could not be treated as a notice under s.19(6) of the terminating the earlier award in I.C. 11 of 1955 because it did not convey any such intention. Moreover it was written while the settlement of September 19, 1958 by which the workmen had bound themselves not to raise any dispute regarding leave facilities for three years was still in force, for the notice of. termination of the settlement under section 19(2) was given by the workmen only on August 14, 1961. Until the said settlement was terminated the union of workmen had no right to make demands about leave facilities as it purported to do on June 26, 1961. [587G 588C] 582 The Workmen of Western India Match Co. Ltd. vs The Western India Match Co. Ltd., ; , referred to. (ii) The Standing Orders Act which has for its object, the defining with sufficient precision. the conditions of employment, under the industrial establishments and to make the said conditions known to the workmen, has provided more or less a speedy remedy to the workmen, for the purpose of having a standing order modified or for having any question relating to the application, or interpretation of a standing order. referred to a labour court. But there is no warrant for holding that merely because the Standing Orders Act is a selfcontained statute with regard to the matters mentioned therein, the jurisdiction of the Industrial Tribunal under the Act. to adjudicate upon the matters covered by the standing orders, has been in any manner abridged or taken away, It will always be open in a proper case, for the union or workmen to raise an 'industrial dispute ' as that expression is defined in section 2(k) of the , and if such a dispute is referred by the Government concerned for adjudication the Industrial Tribunal or Labour Court as the case may be will have jurisdiction to adjudicate upon the same. [595B D] Guest, Keen, Williams., Private Ltd. vs P. J. Sterling, ; , The Baualkot Cement Co. Ltd. vs R. K. Pathan, [1962] Supp. 2 S.C.R. 697 and Salem Electricity vs Employees. , distinguished.

Right from 1939, the demand of jute in the world market was rather lean and with a view to adjusting the production of the jute mills to the demand of the world market, various jute mills formed an Association styled as Indian Jute Mills Association and the appellant is one such member of the said Association. As per the objects of the Association a quinquenniel working time agreement was entered into between the members of the Association restricting the number of working hours per week, for which the mills shall be entitled to work their looms. The fourth working time Agreement was entered into between the members of the Association on 9th December, 1954 and it was to remain in force for a period of five years from 12th December 1954. As per the first clause of the fourth working time Agreement no signatory shall work more than forty five hours of work per week subject to alteration in accordance with the provisions of clauses 7(1)(2) and (3) and further subject inter alia to the provision of clause (10) and under that clause, a joint and several agreement could be made providing that throughout the duration of the working time agreement, members with registered complements of loom not exceeding 220 shall be entitled to work upto seventy two hours per week. Clause 6(a) enabled members to be registered as a "Group of Mills" if they happened to be under the control of the same managing agents or were combined by any arrangement or agreement and it was open to any member of the Group Mills so registered to utilise the allotment of hours of work per week of other members in the same group who were not fully utilising the hours of work allowable to them under the working time agreement, provided such transfer of hours of work was for a period not less than six months. Clause 6(b) further (J prescribed three other conditions precedent subject to which the allotment of hours of work transferred by one member to another could be utilised by the latter and two of them were: (i) All agreements to transfer shall, as a condition precedent to any rights being obtained by transferee, be submitted with an explanation to the Committee and Committee 's decision . whether the transfer shall be allowed shall be final and conclusive and (ii) If the Committee sanctions the transfer, it shall be a condition precedent to its utilisation that a certificate be issued and the transfer registered. This transaction of transfer of allotment of hours of work per week was commonly referred to as sale of looms hours by one member to another. The consequence of such 1371 transfer was that the hours of work per week transferred by a member were liable to be deducted from the working hours per week allowed to such member under the working time agreement and the member in whose favour such transfer was made entitled to utilise the number of working hours per week transferred to him in addition to the working hours per week allowed to him under the working time agreement. The assessee, under this clause purchased loom hours from four different jute manufacturing concerns which were signatories to the working time agreement, for the aggregate sum of Rs. 2,03,255/ during the year 1st August 1958 to 31st July 1959. In the course of the assessment year 1960 61 for which the relevant accounting year was the previous year 1st August 1958 to 31st July 1959, the assessee claimed this amount of Rs. 2,03,255/ as revenue expenditure on the ground that it was part of the cost of operating the looms which constituted the profit making apparatus of the assessee. claim was disallowed by the Income Tax officer, but on appeal, the Appellate Assistant Commissioner accepted the claim and allowed the deduction on the view that the assessee did not acquire any capital asset when it purchased the loom hours and the amount spent by it was incurred for running the business of working it with a view to producing day to day profits and it was part of operating cost or revenue cost of production. The Revenue preferred an appeal to the Tribunal, and, having lost before it, carried the matter before the High Court by a reference. The High Court, following the decision of the Supreme Court in Commissioner of Income Tax vs Maheshwari Devi Jute Mills Ltd., held that the amount paid by the assessee for purchase of the loom hours was in the nature of capital expenditure and was therefore not deductible under section 10(2) (xv) of the Income Tax Act. Hence the appeal by assessee by special leave. Allowing the appeal, the Court ^ HELD: 1. An expenditure incurred by an assessee can qualify for deduction under section 10(2)(xv) only if it is incurred wholly and exclusively for the purpose of his business, but even if it fulfills this requirement, it is nob enough; it must further be of revenue as distinguished from capital nature 2. Maheshwari Devi Jute Mills ' case was a converse case where the question was whether an amount received by the assessee for sale of loom hours was m the nature of capital receipt or revenue receipt and the Supreme Court took the view that it was in the nature of capital receipt and hence not taxable. The decision in Maheshwari Devi Jute Mills ' case cannot on this account be regarded as an authority for the proposition that payment made by an assessee for purchase of loom hours would be capital expenditure, because it is not a universally true proposition that what may be capital receipt in the hands of the payee must necessarily be capital expenditure in relation to the payer. The fact that a certain payment constitutes income or capital receipt in the hands of a recipient is not material in determining whether the payment is revenue or capital disbursement qua the payer. Whether it is capital expenditure or revenue expenditure would have to be determined having regard to the nature of the transaction and other relevant factors. [1378 G H, 1379 A D] H Race Course Betting Control Board vs Wild, 22 Tax Cases 182. quoted with approval. 1372 3. Again, Maheshwari Devi Jute Mills ' Case proceeded on the accepted basis that loom hours were a capital asset and the only issue debated was whether the transaction in question constituted sale of this asset or it represented exploitation of the asset by permitting its user by another while retaining ownership. No question was raised before the Court as to whether tho loom hours were an asset at all nor was any argument advanced as to what was the true nature of the transaction. This question is res integra and therefore this decision cannot be regarded as an authority for the proposition that The amount paid for purchase of loom hours was capital and not revenue expenditure. [1379 E, 1380 F] 4. It is quite clear from the terms of the working time agreement that the allotment of loom hours to different mills constituted merely a contractual restriction on the right of every mill under the general law to work its looms to their full capacity. If there had been no working time agreement, each mill would have been entitled to work its looms uninterruptedly for twenty four hours a day throughout the week, but that would have resulted in production of jute very much in excess of the demand in the world market, leading to unfair competition and precipitous fall in jute price and in the process, prejudicially affecting all the mills and therefore with a view to protecting the interest of the mills who were members of the Association, the working time agreement was entered into restricting the number of working hours per week for which each mill could work its looms. The allotment of working hours per week under the working time agreement was clearly not a right conferred on a mill, signatory to the working time agreement. It was rather a restriction voluntarily accepted by each still with a view to adjusting the production to the demand in the world market and this restriction could not possibly be regarded as an asset of such mill. This restriction necessarily had the effect of limiting the production of the mill and consequentially also the profit which the mill could otherwise make by working full looms hours. But a provision was made in clause 6(b) of the working time agreement that the whole or a part of the working hours per week could be transferred by one mill to another for a period of not less than six months and if such transfer was approved and registered by the Committee of the Association, the transferee mill would be entitled to utilise the number of working hours per week transferred to it in addition to the working hours per week allowed to it under the working time agreement, while the transferor mill could cease to be entitled to avail of the number of working hours per week so transferred and those would be liable to be deducted from the number of working hours per week otherwise allotted to it. The purchase of loom hours by a mill had therefore the effect of relating the restriction on the operation of looms to the extent of the number of working hours per week transferred to it, so that the transferer mill could work its looms for longer hours than permitted under the working time agreement and increase is profitability. The amount spent on purchase of looms hours thus represented consideration paid for being able to work the looms for a longer number of hours. Such payment for the purchase of loom hours cannot be regarded as expenditure on capital account. [1380 F H, 1381 A E] 6. The decided cases have, from time to time, evolved various tests for distinguishing between capital and revenue expenditure but no test is amount or conclusive. There is no all embracing formula which can provide a ready solution to the problem; no touchstone has been devised. Every case has to be decided on its own facts keeping in mind the broad picture of the whole 1373 Operation in respect of which the expenditure has been incurred. Two of these tests are: (a) The test of enduring benefit as laid down in British Insulated and . Helsby Cables Ltd. vs Atherton, 10 Tax Cases 155. Even this test must yield were there are special circumstances leading to a contrary decision There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none the less, be on revenue account and the test one during benefit may break down. It is not every advantage of enduring nature acquired by an assesses that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense. that it is only where the advantage is in the capital field that the expenditure would be disavowable on an application of this test. If the advantage consists merely in facilitating the assesses 's trading operations or enabling the management and conduct of the assesses 's business to be carried on more efficiently or more profitably while leaving the filed capital untouched. the expenditure would be on revenue account, even though tho advantage may endure for an indefinite future. The test of enduring benefit in therefore not a certain or conclusive test and it cannot be applied blindly and mechanically without regard to the particular facts and circumstances off a given case. [1381 E G, 1382 A E] commissioner of Taxes vs Nchanga Consolidated Copper Mines Ltd., followed. (b) The test based on distinction between fixed and circulating capital as applied in John Smith and Sons vs Moore, 12 Tax Cases, 266. So long as tho expenditure in question can be clearly referred to the acquisition of an asset which falls within one or the other of these two categories such a test would be a critical one. But this test also sometimes breaks down because there are many forms of expenditure which do not fall easily within these two categories and not infrequently, the line of demarcation is difficult to draw and leads to subtle distinctions between profit that is made "out of" assets and profit that is made "upon" assets or "with" assets. Moreover, there may be cases where expenditure though referable to or in connection with fixed capital is nevertheless allowable as revenue expenditure e.g. expenditure incurred in preserving or maintaining capital assets. This test is therefore clearly not one of universal application. [1383 A D] Commissioner of Taxes vs Nchanga Consolidated Copper Mines LTD [1965]58 ITR 241; followed. It is true that if disbursement is made for acquisition of a source of profit or income, it would ordinarily be in the nature of capital expenditure But it cannot be said in the present case that the assesses acquired a source d profit or income when it purchased loom hours. The source of profit or income was the profit making apparatus and this remained untouched and unaltered, There was no enlargement of the permanent structure of which the income would be the produce or fruit. What the assesses acquired wag merely an advantage in the nature of relation of restriction on working hours imposed by the working time agreement, so that the assesses could operate its profit earning structure for a longer number of hours. Undoubtedly the profit earn 1374 ing structure of the assesses was enabled to produce more goods, but that was not because of any addition or augmentation in the profit making structure but because the profit making structure could be operated for longer working hours. The expenditure incurred for this purpose was primarily and essentially related to the operation or working of the looms which constituted the profit earning apparatus of the assesses. It was an expenditure for operating or working the looms for longer working hours with a view to producing a larger quantity of goods and earning more income and was therefore in the nature of revenue expenditure. [1384 A D] 7. When dealing with cases where the question is whether expenditure incurred by an assesses is capital or revenue expenditure, the question must be viewed in the larger context of business necessity or expediency. If the outgoing expenditure is so related to the carrying on or the conduct of the business that it may be regarded as an internal part of the profit earning process and not for acquisition of an asset or a right of a permanent character. the possession of which is a condition of the carrying on of the business, the expenditure may be regarded as revenue expenditure. [1384 H, 1385 A C Nelletroms ' Property Ltd. vs Federal Commr. Of Taxation, ; ; Robert Addis & Sons Collieries Ltd. vs Inland Revenue 8 Tax Case, 671 quoted with approval. Bombay Steam Navigation Co. P. Ltd. vs Commissioner of Income Tax, ; followed. In the instant case (a) the payment made by the assesses for the purchase of loom hours was expenditure laid out as part of the process of profit earning. It was an outlay of a business in order to carry it on and to earn profit out of the expense as an expense of carrying it on. It was part of the cost of operating the profit earning apparatus and was clearly in the nature of revenue expenditure; and [1385 D E (b) the payment of Rs. 2,03,255/ made by the assesses for purchase of loom hours represented Revenue expenditure and was allowable as a deduction under section 10(2) (xv) of the Income Tax Act. [1387 C D] Commissioner of Income Tax v Nchanga Consolidated Copper Mines ltd. ; Commissioner of Taxes vs Curron Company 45 Tax Cases 18; followed.

Under the , the State Government referred to the Industrial Tribunal the question whether the nonemployment of certain workmen in the appel lant Company was justified, and if not what was the relief to which they were entitled. The employer and the workmen filed their respective statements before the Tribunal and the workmen sought an amendment which the Tribunal allowed. The employer challenged the amendment by way of a writ petition before the High Court. The High Court took the view that the amendment could be assailed while challenging the award itself. The award was made and the employer assailed the same in a writ petition filed before the High Court. The High Court confined the relief to 131 casual employees who have worked for more than 240 days and set aside the award in respect of 50 others since they did not complete 240 days of service. Aggrieved, both the employer and the workmen filed appeals before the Division Bench. The Division Bench found that until the amendment was made, the workmen had a different claim from what was ultimately pressed before the Tribunal, that there was great variation in the number of workmen for whom relief was claimed, and came to the conclusion that it was not proved that the employer terminated the services of any of the casual workers. Thus, the appeal of the employer was allowed and that of the workmen dismissed. Aggrieved, the workmen have filed these appeals by Special Leave. 14 Allowing the appeals in part, this Court, HELD: 1. The stand taken by the Union that work had not been provided on 13.10.1980 was wrong in view of the fact that a substantial number of casual workmen out of the 186 had really worked on the 13th and the two following days. The Union had mixed up its claim of confirmation with stop page of work leading to retrenchment. The Union obviously realised its mistake when the Company filed its Counter statement making a difinite assertion that bulk of the workmen had worked on 13th, 14th and 15th of October, 1980. The Tribunal did examine the question of confirmation on the basis of days of work put in by the workmen, It found that 131 persons out of the 186 worked for 240 days. The number of 186 was reduced to 181 on account of duplication or death. The remaining 50, according to the Tribunal, had not completed 240 days of work and were, therefore, not entitled to confirmation. [18C D] 2. While it is a fact that the workmen had made tall claims which they had failed to substantiate, it was for the Tribunal and the High Court to appreciate the material on record and decide as to which part of the claim was tenable. The finding of the Tribunal that 13 1 workmen had put in more than 240 days of work was arrived at on the basis of some evidence; it may be that better particulars and clear evidence should have been placed before the Tribunal. The Tribunal rightly gave the relief on the basis that Section 25F of the industrial Disputes Act had not been complied with. [18E H] 3. The claim of confirmation of 131 workmen as found by the Tribunal and upheld by the Single Judge of the High Court shall be restored. Relief of back wages in the facts and circumstances would, however, not be granted except to the extent it has been covered by two interim orders of this Court dated 14.2.1986 and 5.5.1988. Such payments as have been made shall not be recovered. [19B C] 4. Quantum of evidence of appreciation thereof for recording findings of fact would not come within the purview of High Court 's extraordinary jurisdiction under article 226 of the Constitution.

In conciliation proceedings in relation to the demands of one of the two unions (known as Sanghatana) of workers of the appellant company a settlement wat reached. At the instance of the second union (Telco Union) which was dissatisfied with the settlement, the Government referred the dispute to the tribunal. Before the tribunal the company contended that since 564 out of 635 daily rated workers to whom the settlement reached by the Sanghatana related, had assented to it, the dispute no longer survived. Rejecting the Telco Union 's is contention that the settlement was vitiated by duress, coercion or false promises, the tribunal held that it was binding on the parties under section 18 (1) read with section 2 (p) of the Industrial Disputes Act. The tribunal, however, held that it had not been proved by either party as to how many of the 564 workmen, who had assented to the settlement, were members of the Sanghatana. Although the tribunal found that the settlement was just and fair in most aspects it held that an increase in the additional daily wages was called for in respect of certain categories and calculated the increase separately for each grade. The tribunal refused to act upon the settlement. Allowing the appeal, ^ HELD: The declaration signed by 564 workers of the company constituted presumptive proof of the fact that the signatories to it were all members of the Sanghatana when they signed it. In the absence of any evidence that any of the signatories to the declaration was not one of the 635 workers or that any signature appearing in the declaration was forged or fictitious the assertion of each signatory that he was a member of the Sanghatana is to be presumed to be correct until it is shown to be false. The onus to prove the falsity of the assertion in the case of any particular workman rested on the Telco Union which made no attempt to discharge the burden. Out of 635 workmen, 564 signed the declaration. The fact that 400 workmen later on challenged the settlement only leads to the inference that at least 329 workmen changed sides afterwards. [932 H; 933A C] 930 The conclusion of the tribunal that the settlement was not just and fair is unsustainable. The settlement as a whole was just and fair. If the settlement had been arrived at by a vast majority of the concerned workmen with their eyes open and was accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers were not parties to it or refused to accept it or because the tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did. The question whether a settlement is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication. [933 G H] Herbertsons Limited vs Workmen of Hetbertsons Limited & others, [197 /] 2 S.C.R. 15 followed.